Business and Trade Development Program (VEGA)

DEVELOPMENT CHALLENGES Bulgaria’s private sector, especially small and medium enterprises, faces increasing competition from the global marketplace. Poised to enter the EU, these companies will look to refine their processes and develop new products and services that will help them compete in this expanded market. The Bulgarian marketplace does not have the strong network of Business Support Organizations (BSOs) needed to provide critical technical and managerial support that would enable companies to make these refinements. Given SMEs driving role in the areas of economic growth, employment and innovation, it is imperative that a network of sustainable, indigenous BSOs exist to provide the necessary value-added support to Bulgaria’s SMEs so that they can remain competitive in a constantly changing environment.

GOAL The mission of VEGA/BTD is to encourage strategic and operational business development, facilitate access to credit, identify international investment opportunities and promote international trade linkages in private-sector industry sectors with high growth potential. The overarching objective is to contribute to higher profits, new jobs and a rising standard of living for all Bulgarians.

PROJECT DESCRIPTION VEGA/BTD has provided assistance to the BSO and SME communities in three ways:

1. Strengthening the capacity of local (BSOs) to provide sustainable, market-oriented solutions for their SME clients. This is done primarily through volunteer technical assistance and local consulting capacity.
2. Focusing attention and building awareness of key weaknesses and capacity building opportunities a specific market sector or geographical area (e.g. community participation and brand development in tourism).
3. Distributing small grants of up to $5,000 with 50% matching for SMEs and BSOs with a strong viable business development plan and demonstrated leadership

At the end of 2005, VEGA/BTD added a new component — the Economic Growth and Investment Program (EGIP). EGIP enables VEGA/BTD to coordinate projects with government agencies effectively and to pursue more intensively sectors of the economy with high-potential impact for jobs, revenue and investment growth in SMEs. EGIP is focusing mainly on Tourism, ICT and Financial Services. It also promotes dynamic and efficient public-private dialogue by providing targeted support to both national and local Bulgarian government agencies committed to SME growth and promotion. This is done through a variety of vehicles including: education and training, investment promotion and development, project implementation support and assistance to industry-specific clusters and associations active in the local economy. The vehicles VEGA/BTD uses most commonly include:

Volunteer-based technical assistance projects: Volunteer Experts (VE) typically serve 21–28-day, in-country assignments, assisting BSOs with the improvement of internal management and operational capacity, as well as the development of new products or services to enhance competitiveness. The VEs cover a broad range of topics within each of the focus sectors. Examples of these include Cross-Cultural Training; Customer Service; Attracting Foreign Investment, and; Mergers and Acquisitions. These programs are all demand-driven based upon requests from BSOs seeking to facilitate the growth of the Bulgarian SME community

International consultants: In some circumstances, high potential impact activities may also utilize the expertise of paid international consultants on short-term assignments. This generally happens when an activity is highly technical or a volunteer expert cannot be found that meets the project requirements.

Local consultants: Since developing local capacity is a goal of VEGA-BTD, a key component of development of the local BSO network is to utilize existing local capacity for short-term assignments in response to BSO and SME technical assistance needs. Whenever possible, a Bulgarian consultant is paired with international technical experts. The EGIP component has a strong emphasis on utilizing Bulgarian consultants.

Long-term Business Advisors (LTBA): LTBA are placed with local BSOs for 12-month assignments to provide full-time advisory services to a host BSO in meeting the needs of its clients. Currently three volunteers are working in Bulgaria for local BSOs and local tourism business association.

Events, Conferences and Seminars: These events provide fora for participants in a particular market sector to learn about and develop new approaches to address weaknesses or constraints in the marketplace and to identify and take advantage of emerging opportunities. Sector Assessments are completed in the areas of BSOs and Tourism.

Small grants: The small grant fund supports BSOs implementing innovative activities benefiting SMEs, and their SME clients. The grant fund provides direct, non-repayable financial support to BSOs and their SME clients/members with a demonstrated financial need. The types of activities supported by small grants include Marketing, Food Safety Certification (HACCP), New Product and Service Development, Financial Products and Services, and Sustainable Tourism in USAID’s sector areas. Example uses of the Grant Fund money include: Attending specialized conferences or tradeshows; Participating in quality and environmental assurance programs (HACCP); Accessing market research information; Creating marketing and promotional materials, and; Strengthening general business performance and strategy.

Authentic Bulgaria Initiative: The Quality Mark “Authentic Bulgaria”, introduced in the end of 2006, aims to provide an alternative to mass tourism and change Bulgaria’s image abroad as a low-quality tourist destination. The quality mark indicates to visitors that the hotel will offer professional and quality service, combined with unique Bulgarian hospitality, culture, and cuisine. Each certified site, whether a large hotel, small family hotel or guesthouse, has undergone an independent assessment process that considers customer service, facilities and amenities, interior design and ambience, marketing and business planning.

AN EXAMPLE OF HOW VEGA/BTD PROVIDES TECHNICAL ASSISTANCE A VEGA/BTD MBA. Volunteer Advisor, Maury Wray, worked as a full-time employee with the Business Center Serdon for one year, assisting in the development and the formulation of financial plans for their clients and improving its in-house financial management tools. In the first few months of her assignment with BCS, Maury updated the company’s website with relevant information. She managed to build trust among the team members at Serdon and, together with the Director of BSC, she participated in meetings for almost all projects in development. Maury actively participated in off-site events as a representative of the company and tried to find a way to improve the BSO’s exiting sales strategy. She also worked to increase the capacity of the BSO’s staff through several internal trainings on time management, workload scheduling, marketing, Excel, and presentation skills. The direct result of these trainings was an improvement and optimization of workflow in the office. Maury also introduced concepts like long-term business planning and cash flow projections based on a revolving credit model, which have become part of the operational model of the organization. Due to her assistance, one non-profit organization, Eyes on Four Paws, won first place in the Counterpart International Social Enterprise Business Plan Competition, sponsored by USAID. As a result of VEGA’s assistance, the BSO increased its revenues by 31% and four new jobs were created. Business Center Serdon conducted a series of consultations with investors (18) that resulted in the development of seven business linkages with investors who brought almost $1 million into Bulgaria. The BSO successfully improved eight of the consulting services it offers to SMEs and its client base increased by 15%.

^{Last updated: 18 September 2007}