1) The Small Business Incubator of the Nehemiah Network aims to help disadvantaged individuals start and grow sustainable businesses by providing training, mentoring, and investment capital. 2) The incubator identifies entrepreneurs with viable business ideas and assesses their plans before providing training and creating formal plans. Successful candidates then receive an investment and ongoing support through mentoring and partnerships. 3) This intensive level of support is costly but aims to create real impact by establishing scalable businesses. The incubator is exploring an equity investment model where it takes an ownership stake in businesses to be more focused on growth and make the model financially sustainable long-term.

1. Code-P1
Small Business Incubator
case study
May 2012
Zadok Prescott

2. Nehemiah Network is a double-edged vision, helping the poor by
supporting small NGOs and growing small businesses
The
The
advantaged
advantaged
T BN
f oc
us
Small
Business
Small
incubator
NGOs
Those who can’t help The disadvantaged
The disadvantaged
Those who can
themselves help themselves
P2

3. The thinking behind the process for the Small Business arm of NN
came from a few home “truths” about small businesses
The vast majority of people need a job –
1 only a small percentage of people have the
necessary characteristics to run a business
Even if someone has what 1. Training
2 it takes, it does not come
without two key things: 2. Experience
Cash doesn’t answer business
3 problems, but once problems are
fixed, capital is often needed kick-start
growth
P3

4. To create sustainable impact, we need to identify real
entrepreneurs with the potential to grow a real business
P4

5. Once we’ve found them, we need to give them much more support
than the traditional micro-finance offering
Identify
Entrepreneurs
Mentor or Train & create
Partnership Business Plan
Loan or
Investment
P5

6. Business Process Animation
Publicise
Nehemiah
Network
Publicise
P6

7. Business Process Animation
Applications
Nehemiah
Network
Applications
P7

8. Business Process Animation
Applications
Filter:
Nehemiah
assessment of
applications
Interview
candidates
P8

9. Business Process Animation
Interview
candidates
Nehemiah
Interview
Business training
candidates
P9

10. Business Process Animation
Business training
(Produce Business
Plans)
Nehemiah
Assessment of
Business plans
Investment in
businesses
P10

11. Business Process Animation
Nehemiah
Mentoring and
partnership to grow
businesses
Investment in
businesses
P11

12. Can this intensive support approach be sustainable?
► As this ‘due diligence’ and ongoing support is a costly and time-
consuming approach, we need to have a long term sustainability
horizon.
► The standard micro-finance business model cannot afford the quality of
support that we believe will create sustainable change – the level of
interest required would be unmanageable – Group savings schemes
can only take you so far...
► We are investigating a model of equity investment – or
partnership, whereby the micro-finance organisation takes a stake of
ownership in the small businesses, and is therefore much more
focussed on growing real, scalable businesses, rather than supporting
cottage industry
P12

13. In the short-term, philanthropic capital is needed to launch the
process, but as the businesses grow, this could become a pipeline
for a more traditional equity investment fund
Philanthropic
funds
N.N
N.N. selects entrepreneurs
with viable, scalable
business plans and invests
Share of Profits Businesses
to sustain N.N.
Entrepreneur has option
With N.N. investment and to re-invest share of
support, businesses profits to buy more
create profits equity (which grows
business)
Profits
P13

14. P14

15. P15

16. P16