Consulting Services: Self-Help Manual For Business Membership Organisations

MSME Umbrella Programme
Self-Help Manual for Business Membership Organisations
Consulting Services
This self-help manual was developed by:
Alexanderstr. 10, D-53111 Bonn

Tel: +49 (0) 228 98238 – 0
E-Mail: info@sequa.de
Internet: www.sequa.de
Authors: Brinda Balakrishnan, Consultant

R. Vijayalakshmi, Additional Director, TFSC
Overall Coordination: Elke Demtschück, Consultant
On behalf of :
Deutsche Gesellschaft für
Internationale Zusammenarbeit (GIZ) GmbH
B-5/1, Safdarjung Enclave, New Delhi 110 029, India
T : +91 11 4949 5353 | F : +91 11 49495391 | Email : amit.kumar@giz.de
Responsible
Amit Kumar
New Delhi, March 2014
Copyright @GIZ
Disclaimer:
This manual developed by named authors do not necessarily reflect the views of the GIZ . The information has been
created and compiled from reliable documented and published references/resources, as cited in the publication.
Table of Contents
Contents Page No
1. Background 01
2. Rationale 05
3. Service Delivery Step by Step 09
3.1. Analysing Current Situation of the BMO 11
3.2 How to Define Target Group and Consulting Service Demand 17
3.3. Capacities for Providing the Consulting Service 19
3. 4. Criteria for Selecting New Services 22
3.5. How to Market New Consulting Services 24
3.6. Monitoring 28
4. How to Successfully Run Consulting Services 31
4.1. Consulting Service Process 33
4.2. Prerequisites for Effective Consulting Service 34
4.3 Possible Consulting Services 35
4.4 Selection of Appropriate Consulting Service 38
4.5. Tools to Calculate Costs and Determine Fees 40
4.6 Recommendations for Effective Consulting Services 42
References 44
List of Figures
Figure 1: Structure of this Manual 08
Figure 2: Chapter 3: Service Delivery Step by Step 10
Figure 3: Break Even Analysis 16
Figure 4: Service Delivery Step by Step 30
Figure 5: Consulting service process flow 34
Figure 6: Levels of Business Matching Consulting Services 36
List of Tables
Table 1: Scope of Income Generation Services 11
Table 2: Stock Taking Grid 13
Table 3: Cost Effectiveness-Case Study on Conducting a 15
Buyer-Seller Meet as a Consulting Service
Table 4: Break Even Analysis 16
Table 5: Assessment of your own Capacities to Deliver Consulting Services 19
Table 6: Possible Partner Organisations 21
Table 7: Decision-making Grid for Introducing New Consulting Services 22
Table 8: Charging Fees for Consulting Services 23
Table 9: Action Plan for Developing New Consulting Services 24
Table 10: Marketing Service Options 24
Table 11. Advantages and Disadvantages of Various Communication Channel Options 26
Table 12: Scope of Consulting Services and Delivery 37
Table 13: Cost Calculation for a Project Report 41
1. Background
1. Background
This self-help manual has been developed by sequa gGmbH within the project 'Capacity
Development of Business Membership Organisations in India' that is part of the MSME Umbrella
Programme implemented jointly by GIZ ((Deutsche Gesellschaft für Internationale
Zusammenarbeit), office of DC MSME & SIDBI in India.
The term “Business Membership Organisations” (BMOs) refers to various organisations where
companies or individual entrepreneurs - and sometimes other - business organisations are members.
BMO exist to provide their members with benefits and services, which add value to their
businesses and practices. They are able to do this in economic way by pooling collaborative expertise,
knowledge and resources focused on a particular industry or sector. BMOs represent a platform
where even competing members come together in collaboration to gain the advantages of:
• Economies of scale, for example when a law is proposed, rather than all the companies in
membership having to contact lawyers and lobbyists independently, the association representing
the common interest can do it once on behalf of all members, collating the information,
suggestions and opinions, accessing more resource than any single member on their own could
provide.
• Sectoral /Regional/Industrial viewpoint – BMOs are perceived as voices of the group or

cluster they represent. They have the platform to speak on their behalf without favouring the
viewpoint of any one member. BMOs provide Government and other authorities a considered
macro perspective and not limited to commercial short-term bias and interest of any individual
member. This influencing position of BMO’s with governments then acts as a powerful asset
with members as well. As the membership grows so does the BMO's authority, and with
increased authority and influence BMO membership recruitment becomes easier.
• Act as Trust Centres – Due to the responsible and trustworthy position with their members,
Government / Regulatory Authorities and other Organisations, BMO’s being in a position to
collect relevant information and provide services to the concerned, can act as Trust Centres.
Objective, scope and target groups
The objective of this manual is to help and guide representatives in management positions being
Presidents, office bearers, committee members and administrative staff in their endeavours to add
new services to their existing portfolio or to expand the existing scope. The self-help material can be
used by all Indian BMOs and Industrial Associations at District level.
02 Self-Help Manual for Business Membership Organisations: Consulting Services

In this Self Help series five different manuals have been produced and made available covering the
five service areas of BMOs namely 1. Management of membership base in BMOs, 2. Information
services, 3. Training services, 4. Consulting services, 5. Services related to Trade Fairs and
Exhibitions.
Not every recommendation will be applicable to every BMO. Regional or organisational differences,
especially with regard to the specific stage of a BMO's development, will always have some bearing
on the concrete form in which management is provided and the process by which new services are
introduced. Similarly, the proposals made for solving the problems most commonly encountered in
dealing with new services, will not lead to a clean sweep of every single problem. However, they have
been tried and tested, proven in practice, as is the case with all other recommendations made in this
manual.
Self-Help Manual for Business Membership Organisations Consulting Services 03

2. Rationale
2. Rationale
Let's ask the question why a SME would want to become a member of a BMO. It could be for their
representation and influence as the “voice of the sector” to whom they can go for issues and
concerns related to their businesses. Some may find it a networking platform where other non-
competitive discussions may take freely and information provided can be relied upon. Taking this
forward, the SME would clearly see advantages of economies of scale in getting cheaper advisory
and consulting services than if they had to get it independently. It also provides an opportunity
for collaboration between SMEs in areas of technology diffusion and standardisation. Due to
these characteristics, it follows that members regard BMOs as natural providers of consulting
services, even on payment basis.
It can therefore be argued that BMOs have competitive advantages in the facilitation or
provision of certain business development services. BMOs complement rather than compete
with other commercial service providers with each other, by adding to the specificity and relevance
of the service for its members. However, most BMOs in India offer only a limited range of services
in this area. This is mainly on account of paucity of financial and human resources as well as the
know-how needed to upgrade and diversify their service portfolio.
BMOs, especially the smaller ones tend to restrict their source of funds to membership dues, small
service fees, and some subsidies. The credibility and membership base however, gets expanded only
by value added services provided. BMOs add value when their services are focused towards
client needs, are relevant and are unique in comparison to the same or similar service
provided by other professional agencies. Such services would be income generating and a fee
charged by the BMO would not be resisted by the members as they see the value created by it for
them. Such services could be information, consulting, advocacy, networking with reputed agencies
etc. Some of the services may also be benefitted further by international cooperation programmes,
which are easier at BMO level than at SME level.
Importance for BMOs
From the BMO's side there are also good reasons for dealing with income-generating services:
Ø
Developing consulting services could provide a reliable long-term source of funding. This
could be offered to both members and non-members, keeping a differential rate. The
differential higher rate could itself be a reason why non-members would be interested to
become members and thereby increase the revenue generated by an increased membership
base.

Ø
Good and professional services can thus, retain members and also attract new ones.
Ø
Fee-based services raise autonomy as they function independent of the economic political
climate. Being developed on the basis of member's demand/need analysis guarantee
revenue generation and help BMO's financial sustainability.
Ø
Members feel better supported if they have access to various demand- oriented
services at their BMO. The better the services, the greater the number of enterprises
wanting to become members.
Ø
They allow cross-subsidisation for other services. If sufficient income is earned from the
services, then other activities aimed at attracting and serving members, e.g. advocacy or
social welfare activities can be done with the surplus generated from these consulting
services.
Ø
The development of consulting services may initially require external expertise, if not
available within the BMO, but managing a newly introduced service would provide staff a
concrete hands-on experience that would enable development of the staff capabilities as
well.
Structure of the Manual
This manual aims at assisting smaller BMOs in India to initiate or further develop their Consulting
and Advisory services as an income generating source. It is a fact that especially the smaller BMOs
tend to restrict their source of funds to membership dues, some small service fees, subsidies and in
some cases engaging in international cooperation programmes, although these sources do not have a
self-sustaining potential. Moreover, BMOs believe or rather assume that members would not pay if
additional services were offered at a cost. Nevertheless, in many cases they are willing to, if the
service is beneficial, differentiating in terms of quality and helping to raise competitiveness, become
more productive or efficient.
The term “income generating services” applies to introduction of new chargeable services,
expansion of existing ones to better fit customers' need and to changing from free to fee-based
services. Consulting Services are one value creating option available with BMOs to use them as
chargeable services.
The structure of this manual is as follows:
Ø
Chapter 3 deals with the whole process of Consulting Services development and
delivery from analysing the current situation to monitoring outcome and success in more
general terms.
Ø
Chapter 4 identifies specific tools for selecting the consulting and advisory needs and
calculating competitive charges for it, criteria for selecting the expertise and management of
the service delivery.
Self-Help Manual for Business Membership Organisations: Consulting Services 07

Figure 1: Structure of this Manual
Chapter 3 Chapter 4
• Current services, cost calculation • Information service process
• Target group, service demand • Prerequisites for effective
• Capacities to deliver services, possible selection
partners, competitors
• Selection of appropriate
• Tools for selecting new information services information service
• Marketing information services • Recommendations
• Monitoring
General tools for Specific services
service delivery and related tools

3. Service Delivery Step by Step
3. Service Delivery Step by Step
This chapter guides BMOs through the process of introducing income-generating services from the
very beginning, facilitating a series of useful tools, analysis and supporting materials.
It starts sub chapter 3.1, with an analysis of the services your BMO is currently rendering, followed
by tools on how to determine whether the services you are rendering to your members are profitable
or not. In 3.2 some hints are given on how to determine which customers to serve and how to know
their needs and expectations concerning consulting services. Sub chapter 3.3 deals with a self-
assessment of your capacities to render consulting services, the identification of possible partner and
competitors to better determine which services could be most promising for you in the current
environment. A tool how to choose various consulting services is presented in 3.4. Advice and
proposals on how to market new consulting services you will find in 3.5. Monitoring process and
results of service delivery will help you to constantly improve quality of your services. You will find
some templates for monitoring in sub chapter 3.6.
Don't worry it won't take too much time to go through all these steps.
Figure 2: Chapter 3: Service Delivery Step by Step
Your Target Capacities Selecting

Current group + to new Marketing Monitoring
Situation demand Deliver services
Analysing To whom Your own How to Marketing How to

services you you will capacities choose tools know
are offer Partners and promising to attract you have
rendering services competitors services customers been
at the and what is for your doing a
moment the demand? services good job?
Go to Go to Go to Go to Go to Go to
chapter chapter chapter chapter chapter chapter
3.1 3.2 3.3 3.4 3.5 3.6

Chapter 3 will help you to answer the following to questions:
• Do the Consulting Services provided have a differentiating value addition different from
what is available off the shelf ?
• Are these services cost effective?
• Are the new Consulting Services you have in mind required by your customers and in what
context?
• Are these consulting services providing a competitive edge and relevant in the current day
context?
• With whom could you partner to make these consulting services available or accessible and
in the format demanded?
• Is there a duplication with other parallel consulting services?
• Are you adequately equipped to deliver these services – both in terms of capacity and
competence? What are the most appropriate channels to market the prospective consulting
service?
3.1. First step: Analysing Current Situation of the BMO
Let’s first understand what services BMO membership entails? Membership services can be
classified into trade and market development, training, advice and consulting, information and
networking, office facilities and infrastructure services, and at times a communication channel for
government related functions. To make it more specific and relating the same with its potential for
Income Generation, the table below highlights the scope of consulting services for BMOs.
Table 1: Scope of Income Generation Services
No Purpose Service Income Generation Potential

1 Representing members'/sectors' Business Advocacy Charges only to cover costs
interests at all levels of the legislative
and regulatory process
2 Public relations and communications Information Costs covered with membership
fees-if information is of generic
use for all both internal clients
and external
3 Promotion of market opportunities Information On charged basis
4 Supplying information and providing Information & On charged basis
advice or specific consultancy to Consulting
members
5 Promotion of innovation and Information & On charged basis by usage- lower
technology transfer Consulting than market on account accessibility
and established network benefits
6 Offering commercial benefits Consulting On charged basis by usage – lower
than market using influence and
economies of scale benefits
7 Working proactively to improve Consulting Meet the Advisors services on
members'/sectors' financial health, quarterly, six monthly or annual
profitability and competitiveness- charges.

No Purpose Service Income Generation Potential
8 Promotion of standards and quality Consulting & Training On charged basis by usage
of service
9 Training and education Training & Consulting On charged basis by usage
10 HR Services Training & Consulting On charged basis

11 Preparation of DPR services/ Market Consulting On charged basis
Research report
12 Strategic Planning Consulting On charged basis
13 Facilitating financial schemes of the Consulting On charged basis by usage
government
14 Infrastructural support Consulting On charged basis by usage
15 Buyer-Seller meet Consulting On charged basis
16 Advisory services-specific to Consulting On charged basis prescribed on
sector/industry/unit quarterly/six monthly/annual fees
17 Handholding services Consulting On charged basis by usage
Before you take any measure to introduce new consulting services or further develop existing ones,
you should first have a careful look at you current activities.
Such stocktaking has three main advantages:
1. It helps you to know whether the service is cost effective - generating income or losses.
2. It provides an overview on all the services, which may be
currently delivered free but could be made fee based and
/or whether the fee can be increased by enhancing the
quality and value contribution of the service to your
members.
3. In consequence, the analysis of the current situation
makes it easier to determine fields for further
development of income generating services and easier to
decide upon concrete measures.
Assessing the financial sustainability of the existing
services is a precondition before deciding on other services that the BMO's can consider for income
generation and increasing membership base.
It is recommended to use the stocktaking grid in table 2 for analysing the situation your BMO is
facing at the moment. The stocktaking grid has a double function in this respect: first, it serves as an
important input to any discussion on the introduction of new services. Secondly, however, if you
regularly complement and update the form it becomes an important control instrument for BMO
management.

Table 2: Stock Taking Grid
Year xxxx Year yyyy

No Service/Activity Income Costs Surplus/ Income Costs Surplus/
Deficit Deficit
1 Information
Services
• Service 1
• Service 2
2 Co-operation
services
• Service /
Event 1
• Service /
Event 2
3 Advice and
consultancy
• Service 1
• Service 2
4 Training
• Seminar 1
• Seminar 2
5 Fairs
• Event 1
• Event 2
6 Office facilities
and infrastructure
services
• Secretarial
services
• Rental of
premises
• Internet /
PC access
• Others
7 Access to credit
and business
start-up
• Service 1
• Service 2
Note: If you do not render any or all of these services, leave the corresponding part blank

The stocktaking analysis should integrate the cost effectiveness of the services offered by the BMO
with the content, volume and quality of these services. Questions need to be asked like:
• Have you checked whether these services are demand oriented?
• What have been the reactions of the members on these services?
• Is there a method of gauging the value contribution of these services?
• Do the members feel better supported having access to these services?
• Do these have a universal appeal or are they specific to certain segments?
• Are these services cost effective?
• Is there a better way of providing these services?
• Are they competitive and relevant in the current day context?
• Is the BMO adequately equipped to deliver these services – both in terms of capacity and
competence?
In essence BMOs need to assess their own strengths and weaknesses of the services they offer, their
positioning vis-a-vis their competitors, their own capacity and competence to deliver value and the
cost effectiveness of the same. These are the fields this chapter is dealing with.
It is important to consider and avoid some typical errors while doing the stocktaking analysis:
- Short time frame for analysis:
A too short time frame is sometimes dedicated to the analysis, leading to an unrepresentative
view of the income/cost structure. At least one or two calendar years should be considered
when doing this analysis.
- Lack of communication between different hierarchical levels:
There are two typical situations. In the first, the results of the analysis, conducted by office
bearers, are not shared with the Secretariat. Decision making and action taking turns
difficult. Second, elected officers decide on services without asking professional staff for
detailed and reliable information on the current situation and might take wrong decisions.
Therefore, please make sure all relevant persons are involved in the process to take into
consideration all necessary information and details.
- Lack of follow-up to analysis:
A very common mistake is that the results disappear in a drawer, being no longer used.
Contrarily, the analysis should be used as a regular monitoring instrument, providing
information on the financial contributions of the various services of the overall BMO's
income. With information at hand, the BMO management can make more sound decisions
on services to keep and which to leave.
How to know whether you are making profit or loss with a service?
It is a fact that many BMOs do not consider all cost items of the services they are rendering to their
members, just because they are not aware of all of them. In consequence, some BMOs do

involuntarily make a loss as they calculate fees that are not cost covering. Before you determine fees
for any new service you want to introduce, you should first carefully review all costs related to that
particular service. If not, you might offer your service at a loss.
The following case study visualises such a situation.
Table 3: Cost Effectiveness-Case Study on conducting a Buyer-Seller Meet as a

Consulting Service
Buyer Seller Meets:

Buyer seller meets can be organised, while the buyers from other countries visit India. This will be
better sourced through the local chamber of the corresponding country. A BMO in North India
organised an Indo Korean Buyer seller meet. A nominal fee of INR 250 charged from the SME
Members. The event was publicised through emails/bulletins, so that more members take
advantage of this.
Costs in INR Income in INR
Variable costs*: Ø
INR 250 x 45 = 11,250
Ø
Refreshments = INR.300 x 60 = 18,000 45 Members are expected to attend this event
on payment basis and other 15 members
Ø Admin cost (inclusive of = 10,000
internet, other communication
comprise of Buyers, Invitees - on non
and manpower costs) payment basis
Fixed costs: = 7,000
Total income per event: INR 11,250
Total cost per event: INR 35,000
Income – expenditure = Net profit/ loss
35,000 – 11,250 = 23,750 (Net loss)
* Variable costs: normally the part of the costs that varies with quantum of the service which may be
in man-hours/man-days. They rise as service rendered increases and fall as service used decreases.
* Fixed costs: comprise costs such as rent, marketing/advertising, and office equipment/ supplies,
which tend to remain the same regardless of production output.
Fixed costs and variable costs together comprise total cost.
Lessons from the Case Study

Lesson 1: When the buyers from other countries come, it is preferred to organise the event at the
hotel and the cost is higher.
Lesson 2: The event fee is much less priced compared to the approximate expenditure.
Lesson 3: Any event should neither be under priced nor overpriced. It should be charged to
provide profit to the BMO and at the same time target more members to reap the benefits of the
service.
How much would you need to charge to achieve cost coverage? The following table shows how to
calculate:

Table 4: Break Even Analysis
Total Cost = Fixed + Variable Cost incurred for INR 35,000 (from table 3)
the Event
No. of Members participating in the event on 45

payment basis
Fee per member needed to cover the total cost INR 800
Total Income assuming 45 members participate INR 36,000 (800x45)

on payment basis
Surplus generated from the event INR 1000 (36000-35000)
This would then give a profit margin of INR 3500 (38,500-35,000)

The graph in figure 4 visualises the relation between fixed costs that keep the same, variable costs that
depend on the number of products / services and the profit.
Figure 3: Break Even Analysis
£ A
P
Break-Even Variable
Point Costs
B
Loss Profit
Fixed
Costs
Q
O Output
How to determine an adequate price for your services, high enough to cover the costs and low
enough so that enterprises are willing to purchase that service? Besides the costs, you should also
take into consideration others providing same or similar consulting service to avoid establishing an
unrealistic fee for your service. What others charge or the price for comparable services will
influence your member's willingness to pay for the service. Comparing with your competitors'
prices based on the value addition you make can help you avoid establishing an unrealistic fee for the
services you might provide. What competitors charge or the price for comparable services will
influence your member's willingness to pay for the service.

Another important factor is the price image of your target group. Do they consider low prices as
standing for low quality? Expensive services as not having been created for SMEs? And what about
free services? Could they be perceived as insignificant, optional, unessential, etc.? Such deliberations
might help you to set service fees that cover your costs and are competitive in the service market you
are in or want to serve.
After having completed this analysis of all services you are currently offering, you are now in a better
position to decide realistically on the effort you can make to expand your income generating services
or to introduce them to your members and other entrepreneurs.
With a general picture of the services you are currently offering at hand, you can in the same way
analyse for new consulting services you wish to introduce.
3.2 How to Define Target Group and Consulting Service Demand
First of all, think about the criteria you want to use when identifying your target group. Here are
some examples:
• Would you like to offer your new consulting services only to smaller enterprises or are they
meaningful for the whole range of your membership?
• Are there subgroups of members, e.g. branches for whom a particular consulting service is
better suited than for others? And if yes, could you design a tailor-made consulting or
advisory service for these specific groups of enterprises or will your consulting services be
more generic? Then you should define your target group broader.
• Do you want to render your consulting services predominantly to members or do you wish
to attract non-members with your services as well? Non-members will require additional
information e.g. about your organisation.
• What do you consider as geographical area of consulting services? The place where your
BMO is located and known? Places nearby as well? A whole region?
In principle, the following instruments can be applied for conducting an analysis of service demand:
1. Visit to enterprises:
This most intensive form of analysis of demand has the advantage that the needs of the member
enterprise can be evaluated in a more first hand manner. Sending own staff to visit member
enterprises will increase the visibility of the BMO and will be appreciated very much by the
members. However, this instrument is very costly as much time has to be invested and travel cost
might be considerable.
2. Feedback from service and event users:
Usually, services should be regularly evaluated by the users, e.g. customers who have already
purchased one of your consulting or advisory services. In the feedback you should also ask what
other services they would be interested in. Every other event organised by your BMO such as
business lunches, exhibitions etc., can be used to poll the needs of members. When doing so, the
following factors should be taken into consideration:
- Always conduct the survey in writing.

- Don't modify the form for a period of at least one year. This permits a documentation of
changes in the opinion of members on the information services.
- Design the questionnaire in such a way that it can be completed in 5-10 minutes. Otherwise,
respondents may not be willing to answer to all questions.
3. Feedback from working groups / committees:
Many BMOs are running working groups or advisory committees on certain topics. These groups or
committees usually are comprised of member companies that are experts in the topic. Consequently,
these groups are a good source of information on the service needs of member enterprises.
4. Feedback from yearly members' survey
A regularly survey on members' satisfaction can also be used to ask them for further service needs, to
identify a growing demand and to get a feeling for new service areas to be developed. You might use
the survey as well to ask members the fees they are willing to pay for a specific new service.
To aid consulting services diagnostic tools can be developed to help SMEs identify areas of
improvement so that they can be cost effective and achieve operational efficiency. Such tools can also
provide SMEs with a specific focus that can be based on local requirements, industry or sector
specific, functional expertise, products / services or on current issues / concerns. For example,
General Diagnostics could relate:
• Start –up advisory service
• Consultation on regulation matters that affect SMEs
• Advisory service on company and business updating activities
• Advice on filing of annual returns
• Advice on Government licensing requirements
• Business Development – one to one support from business advisers and in-depth
consultancy
Focused Consultancy could be on specific issues like:
• Financial Management
• Human Resources Management
• IT Services
• Overseas market development services including assistance in the search of local and
overseas potential partners or alliances for business ventures
• Credit Risk Management Advisory
• Advisory assistance to SMEs through analysis, advice, training, action plans and
implementation assistance.

3.3. Capacities to Deliver Consulting Services
Your capacity to deliver these consulting services needs to be assessed not only in terms of collating
or building expertise in the area but also in terms of infrastructure, equipment, manpower resource
(both financial and non-financial)and time availability.
Now you might know the demand of your current and potential for more consulting services. But
what about your capacities to broaden delivery of consulting services, introducing new ones and
expanding the existing ones? Your BMO’s service portfolio will be influenced by your capabilities
and experiences, the competition and demand in service markets, the necessary financial and
personnel resources, and the potential short and long-term benefits. The chosen area and method of
service provision will also influence the scope of generating alliances with consulting agencies,
seeking sponsors and tying up with national and international donor agencies.
The assessment sheet given below could be used to assess the capacity to deliver a particular
consulting service.
Table 5: Assessment of your own Capacities to Deliver Consulting Services

Criteria / Indicator Capacity
Tick where appropriate High Medium Low
Expertise available
Unused capacities within BMO who are available for :
• Coordinating
• Networking with partners OR
• Providing the advisory service
Need of hiring additional staff to introduce a new service
Service Experience of these persons
Experience with organising service delivery
Financial resources
Overall financial situation
(secured for the immediate future =high, currently breaking
even=medium, running at a loss = low)
Income from services
Revenue streams generated from other sources
Other:
Service production facilities
In-house equipment for rendering services
(fully equipped + in house training venue = high, fully
equipped with no in house venue = medium, only some/no in-
house equipment = low)
Co-operation possibilities with external partners (universities,
government agencies, consultants to complement existing
capacities)

The assessment helps you to answer questions like:
• Do you have the financial resources to support the service? If not, is external funding
available?
• Does the secretariat have the expertise to develop the service using existing manpower
resources? If not, is external expertise available?
• Once established, does the secretariat have the manpower to man the service? Is there a
need to recruit more staff ? Can the BMO afford additional staff ?
• Can the service be outsourced to a third party?
• Is there a need for specialised equipment for the service?
Given below is a success story of case example of a techno economic viability report provided as a
consulting service:
Case example 1 – A SME in Pollachi in Tamil Nadu, India was manufacturing biscuits and
supplying Glucose biscuits. They wanted to expand the unit, as demanded by a leading biscuit
manufacturing company. When they approached the Nationalised Bank, they needed a proper
technical advice and guidance along with a report for which the SME approached a BMO who
could help them through an expert. Accordingly, the inputs about the production capacity,
machineries used etc., were taken and based on the details, the expert of the BMO prepared a
viability report and handed over to the SME. They got a good amount of loan from the Bank and
the unit is now a successful expanding SME, which was possible through this consulting service.
Choosing partners
You might need partners for professional service delivery. Those might be public consulting
agencies, private service providers, research institutes, who could provide you with specific
knowledge or expertise you don't have. Although cooperation might be useful and recommendable,
you have to be careful when choosing a partner. Is he/she really an expert on the services or aspects
you require? Does the person's expertise really provide additional assets? Does he/she work with the
target group you are addressing? Does he/she deliver on time? Is the person reliable and have a good
reputation? What about the fees being charged? Do you feel they are justified?
In addition, be careful with your commitment and the conditions of the partnership.
Normally the consulting services are calculated based on the tool under 3.4 so that the BMO gets a
margin of at least 10% as revenue. But there are services like Trade Delegations/Buyer seller meets
etc., the Government of India through Ministry of MSME and National Small Industries
Corporation provides funding to the organizers provided a proper proposal with budgets are sent in
advance. These can be explored upon and information is available on http://www.msme.gov.in and
http://www.nsic.co.in.
A list could be maintained by the BMO keeping the contact details of the partner organisations who
can be called upon for expertise and shared with the members.

Table 6: Possible Partner Organisations
No Service / Activity Partner organisations contact details

1 Preparation of DPR services/ Market Preparation of DPR services/ Market
Research report for a cluster Research report for a cluster
2 Buyer-Seller meet NSIC and Ministry of MSME
3 Seminars –workshops by experts Donor funding or
Sponsoring by member enterprises or
Sponsoring by large companies
4 HR Services Engage a HR firm
5 Advisory services Engage a panel of experts
6 ……. ……
Competitor analysis
The competitor analysis focuses on the strengths and weakness of your BMO compared to other
service providers (other BMOs, consulting firms, training institutes, private firms and independent
consultants etc.) in the market. To conduct a competitor analysis, use the institutional assessment
form that you have completed earlier for your own BMO, and screen the strengths and weaknesses
of those service providers offering the same or similar services. Fill in one assessment form for each
competitor. If you lack the information to qualify a particular question on the form:
P
Conduct some market survey about your competitors,
P
Talk to friends in the business community who have availed of similar services,
P
Study the website and promotional materials of others providing same or similar consulting
services,
P
Inquire about their price list, and
P
Make a snap survey in your target market for a particular consulting service to understand
your potential customers – both members and non-members.
To summarise, capacity assessment for consulting service would be based on the following:
i. Competence and expertise available both within the BMO and through established
networks
ii. Infrastructure including space and related facilities
iii. Cost effectiveness in terms of value creation if engaged in any other income generating
service
The assessment helps you to answer questions like:
• Do you have the financial resources to support the service? If not, is external funding
available?
• Does the secretariat have the expertise to develop the service using existing manpower
resources? If not, is external expertise available?

• Once established, does the secretariat have the manpower to man the service? Is there a
need to recruit more staff ? Can the BMO afford additional staff ?
• Can the service be outsourced to a third party?
• Is there a need for specialised equipment for the service?
3.4. Criteria for Selecting New Services
A comparison of the analysis of current situation with the results of the demand of your customers
and taking into consideration your competition, now permits a decision on how to introduce
consulting a service or expand the existing range of consulting services. However, be sure to stay
focused! Many BMOs lose direction by trying to introduce too many new activities/services at one
time. Instead, one should concentrate on 2-3 services, basing the decision on the following criteria:
- Are the new consulting services going to raise income for your BMO?
- Do your members demand that service or they would likely do so in near future?
- What resources are required (capital, know-how, personnel)?
- Are new services interrelated to the ones you are already offering and can synergy effects be
achieved?
- Are the services in line with the mandate of your organisation, the annual plans and the
declared objectives of the Board?
The decision-making grid on the next page will help you to make your choice.
Table 7: Decision-making Grid for Introducing New Consulting Services
Decision-Making Factors A B C D
Complete Predom- Not really Complete
yes inantly No
Service is highly useful to members
Service will be profitable within 1-6 months
Service will be profitable within 12 months
Little competition in market for this
new service
Service can be fully introduced with
available staff
No need to build up additional know-how
No additional investments necessary
Total
Changing from free-to fee-based services might provoke some concerns in your BMO. Here are
some solutions:

Table 8: Charging Fees for Consulting Services
What are the concerns? What are the solutions?

• There is not enough • Check whether definition of target groups, demand
demand. analysis and assessment of competitors were properly
done. The target groups should also look at non-members.
If there is still no demand, withdraw the service.
• During an introductory • This is feasible if used as a promotion tool. However, you
phase the consulting service should define right from the start how long the service will
may be started lower or be introduced at the discounted price and what date you
discounted offer price. will introduce what fees.
• Members expect services • Establish a clear-cut policy what services are free of charge
for free in return for their for members and what services have to be paid for.
membership fees and are • For fee-based services make a difference between members
not willing to pay an and non-members, thus creating an incentive to become a
additional service fee. member.
• Other similar organizations • Do not enter the market or make clear what the difference
are offering the same of your service is.
service also for free.
• The service has always been • Give reasons for your new policy (e.g. better quality,
offered for free, members reduced revenues from other sources like public subsidies,
will not be willing to pay. trying to avoid windfall gains).
• Be aware that a reduction of clients due to introduction of
fees is not necessarily a problem. The core issue is to have
enough demand to cover the cost of your service.
Once a decision has been taken to expand services, it is important to have a system of permanent
search on new service topics. There is no need to introduce new instruments. Previously discussed
steps of service development can also be used for systematically identifying new service topics:
- The results of the analysis of demand can as well be used to identify new service topics.
- Client's evaluation: As explained before, clients should be regularly asked to evaluate the
usefulness and impact of services offered. This evaluation should always be used to ask
clients for proposals regarding new services.
Finally, it is recommended to prepare an action plan for developing new services, whether it is about
adding new aspects to existing ones or introducing complete new ones. You might use the following
template to adapt it to your own need.

Table 9: Action Plan for Developing New Consulting Services
Strategic Action Action Steps Together with Responsible Time Frame Preliminary
Budget Items
Service 1
Service 2
Service 3
3.5. How to Market New Services

The goal is to make the Consulting and Advisory Service of the BMO visible, recognisable and
known to its member. It should have staff who enjoy full trust of the members, and it should
become the option and place where they would choose to turn first when they need advice, because
of the good quality of service and because they think of the BMO as “their own” organisation. In
order to accomplish this goal, it is necessary to inform all SMEs both members and prospective ones
on services offered and prospective services within the BMO. Since we are talking about a large
number of members, most of them being mall sized enterprises, you should select those channels
of information and promotion that are able to reach the largest possible number of
businesses, with least possible invested resources allocated solely to promotion.
As you are a membership based organisation, consider starting from the already established
processes to reach out to your members. For instance, those could include the following:
• Include a banner or description on your website / information board,
• Add a box to a Newsletter, that is regularly being circulated,
• Present the new service on the occasion of annual/monthly gatherings of your organisation,
• Organise a knowledge-sharing seminar for enterprises who might be interested in your new
service.
There are different ways of marketing, the personal selling seems to be the most effective, but also
expensive one, as it requires a lot of time. Direct marketing reaches a broader number of members.
Table 10: Marketing Service Options

No Service Activity
1 HR services Sending emails to the members
2 Preparation of DPR services/ Market Present in relevant forums about the
Research report expertise available
3 Strategic Planning Organise a forum of members to present
the concept and the advantages of the same
4 Financial Health of members -do-
5 Facilitating financial schemes of the Present in relevant forum
government
6 Infrastructural support Through emails to the members

No Service Activity
7 Buyer-Seller meet Through emails
8 Counselling services or meet the Advisor Through emails/publish it in news bulletins
9 Handholding services Through emails/presentations in
various forums.
Events organised by BMOs, such as trade fairs, are financially much less demanding, but also a very
efficient channel. Advisors need to make their presence felt here and promotion of BMO consulting
services can be done by simply distributing flyers. Flyers that promote consulting services may just
present the advisory service as such and list necessary contact data or detail out the specific field of
expertise, which contain brief answers to frequently asked questions, and point directly to the person
of advisor, who is in charge of resolving this type of problems.
Personal Selling
Face-to-face promotion and selling of consulting services would be possible in the general forum
meetings and also when certain advisory services are of particular interest to specific members.
These members would need to be contacted personally. This strategy can promote the BMO as well,
while simultaneously educating clients, responding to their questions, demonstrating care and
obtaining information that can be fed into future marketing activities.
Direct marketing
Directly links an association with potential customers through regular communication channels
like newsletters, website and pamphlets. It allows for flexibility, is low-cost and allows for a creative
strategy that is less visible to competitors. It would have the most impact when applied by BMOs
with databases that allow market segmentation and analysis.
It would be possible to publish the names of advisors and their fields of specialization, and special
articles that would discuss the work of advisors/consultants and the specialised service. Articles
written by advisors, dedicated to specific professional issues, also indirectly contribute to promotion,
because they discuss issues that interest a large number of SMEs, and they do it in a professional, yet
simple manner. This serves to promote the adaptability of advice to the needs of SMEs. Previous
experience has shown that this is really a good way of promotion, as members really read such
articles.
Depending on the breadth and requirement needs of the consulting service, one might choose local
newspapers, which may contribute to disseminating this information among SMEs of a certain
area. Articles published may discuss current developments from the field of advisory activities, such
as organisation of seminars.
Broadcasts on local radio stations also have a large influence. Radio could be another option.
Some entrepreneurs are known to broadcast practical information about their products and services
and may even have a long-standing cooperation with radio stations for steady broadcasts. There, it
would be possible to invite guest visits of advisors and programmes, in which they would answer
telephone questions of the audience. Limited budget for promotion will probably not make it
possible to advertise on the television, at least not directly. Indirectly, one could use current topics as
an opportunity for comment by the members of the BMO.

When using direct marketing approach, the feedback or interest generated or expressed can be used
as an input to refine or modify the content of the consulting/advisory services.
Use of other communication channels
Depending on budget and other resources available, it is advisable to stick to more focused and
narrowly targeted media, such as specialized magazines, dedicated events, editorials, and success
stories.
Along with all these formal ways of promotion, recognisability of the Consulting/Advisory Service
of the BMO as a good quality solution to problems of SMEs also depends on the satisfaction of the
users who have availed service, which could then spread by the “word of mouth”.
It is then important to keep in mind the advantages and drawbacks of each communication channel
while marketing your consulting service. The table on the following page provides an overview.
Table 11. Advantages and Disadvantages of Various Communication Channel Options
Communication Pros Cons

Channel
Announcements • Flexible, for instance, last minute • Depending on how often your
on your BMOs announcements might be placed members visit your website, might
website • Not expensive be not very effective
• Easy to produce • Maybe not all of your members are
used to check the internet for
• Good for your positioning information
Monthly • Direct access to target group • Has only effects if the newsletter
newsletter • Official tone is interesting enough to be read
by your members
• Excellent positioning
Social media • If carefully chosen, you might • Due to information overkill, your
reach a huge number of message might not reach and get
customers at the same time due attention
Print ads in the • Must be in local not national • Not a targeted approach,
general press press informing the general public isn't
• More tangible, older target the goal of the campaign
group • Limited readership
• Can reach larger than intended • Poor printed image quality
audience • No control over placement
• Easy to switch out
• Different rates and sizes
Print ads in • Most direct access to target • Also visible for the competition
specialized group • Trickier to control the timing,
press • Ads are relevant longer because because of frequency
people do not discard the • Easier to synchronise with
magazines (immediately on first dedicated events (trade fairs,
reading association gatherings etc)
• Positioned in a proper context,
placed next to relevant content

Communication Pros Cons
Channel
Advertorials or • Cheap, • Could be considered opinionated,
pamphlet • More in-depth, less reliable and less accessible
inserts • Harder to retain the message (for
• More context
the audience)
• More personal
• Timely and easily coordinated
with other initiatives
Radio • Cheaper, could be a nice • May have difficult intended target
advertising supplement to a broader media reach
advertising campaign, but • Does not last, exposure to message
generally not effective by itself is only during its immediate
• Interactive, when in a program delivery
with people calling
Television ads • Illustrative • Expensive

• If local, could be reach wider • Too centralized
audience, who in turn could • Have a shorter life spam
pressure SME owners to find
out about it
PowerPoint + • Easier to produce globally and • Tend to be more descriptive and

posters + pass on less catchy
brochures • Ready to be used shall an • More appropriate for Middle
occasion present itself management than CEO level
Information • More effective • Tend to be more descriptive and

sessions + • Closer to target less catchy
client referrals • More appropriate for Middle
• Familiar and trusted
(socialization) management than CEO level
• Influential
• Allows two way discussion
• Adds credibility to stories
Some other recommendations:

Minimise interference
Interference refers to the “noise” made by promotional messages sent by your direct competitors in
the market place, and any other supplier seeking the attention of your potential customer. If the
noise level is high (read: if your customers receive many interfering promotional messages), their
attention is likely to be distracted. As a result, they might not comprehend the contents of your own
message, or, they might not be induced to respond to it.
To maintain the noise level at sustainable levels, carefully choose communication channels
(“frequencies”) that are not already overloaded with messages from other providers. Also, make sure

that your message cannot be easily confused with messages sent by other provider. To avoid
confusion, clearly distinguish your offer from the competition. The logo and credibility factors of
you as a BMO providing the same service must be established.
Tone and style of your messages
The overall tone of the campaign should match the target group: businessmen and SME owners. A
preferred tone would be personal, business oriented, ideally from a peer of the target group.
Personal stories (interviews with CEOs of successfully rendered services) advertorials, speeches,
experience sharing activities, advertisements in specialised press and industry newsletters are all
options. Putting up success stories on the website would attract more users for your consulting
service and provide scope for income generation.
Small-scale entrepreneurs are usually not receptive to long and complicated messages. In most cases,
their prime interest in listening to your message is to find out whether and how they can access the
BMOs consulting and advisory services and its immediate impact on their business.
Be patient
If you have opted for direct marketing, and after you have made initial contact with your clients, do
not expect them to come back to you themselves. They simply might be too busy to respond, being
undecided about the benefit of the service or between various similar products, or they might have
simply misplaced your promotional insert. Don't take a chance. Take the initiative and contact your
potential clients after you have first contacted them.
Do not expect your customers and members to readily accept your offer. Your service requires the
client to make a serious investment, both in terms of money and time. You will have to persuade
them that the initial investment will pay off shortly, and that you will be around to assist in the
implementation process. Even if you convince your potential clients initially in right earnest, expect
some more effort to convey the message to their superiors!
3.6. Monitoring
BMOs usually spend little time on monitoring and evaluation when developing services. A systematic
evaluation is often neglected during day-to-day-operation, even though this is highly significant for
- The quality of the future range of services and
- Income generation.
Evaluation comprises first of all the process of obtaining feedback of the service users on the
usefulness and the impact of a particular service, in order to determine the value of the service.
Questionnaires
Questionnaires are the most common technique used by BMOs to collect feedback from clients. In
order to save time and resources it is recommendable to use standardised questionnaires that
• Ask the service users to answer a series of yes or no questions, e.g. would you recommend
the service to another member company of the BMO?

• Ask service users to rate certain aspects of the service, e.g. amount of knowledge and skills
acquired, quality of hand-outs using a scale ranging from one (poor, very much below
expectation) to five (excellent, very much above expectation).
• Ask clients at the end an open-ended question such as what do you suggest to improve the
service or what other service should we introduce?
A model questionnaire is given below that can be modified suitably by the BMO. This kind of
standardised questionnaires should always be distributed directly at the end of delivering the
consulting service; otherwise the number of questionnaires that are filled out and returned will be
very low.
FEEDBACK FORM ON CONSULTING SERVICE
Name & Address of the SME..........................................................................................................................
Assignment No ...................................................................................................................................................
Description ..........................................................................................................................................................
Consultant / Team Leader ................................................................................................................................
How do you rate the quality of deliverables in this consulting /advisory service?
Excellent Good Average Fair Poor
What was the value addition as a result of this consulting /advisory of your organisation?
What is your opinion about the cost of the consulting /advisory?

Are you satisfied with the cost effectiveness?
What is your opinion about the individual time schedule / timelines and overall time schedule /
timelines?
Please provide any other qualitative opinion and any suggestions to improvise the service.
Date Signature of owner / Representative of SME

The figure below summarises chapter 3 in a flow chart.
Figure 4: Service Delivery Step by Step
ASSESSMENT of
ANALYSIS own
of other CAPABILITIES in
DEMAND
Consulting/Advis terms of ;
DEFINITION SIDE
STATUS QUO of TARGET ANALYSIS ory Providers in i. Human resources
ANALYSIS GROUP as terms of : ii. Financial resources
Analysis of the i. all members i. Content iii. Competence
services currently ii. subgroups ii. Scope Service factors like
rendered in terms value creation and
iii. Non members iii. Accessability
of : time availability
iv. delivery
i. content,
mechanism
expertise, depth,
range & quality Tools to Decision making
calculate fee to grid to consider
ii. cost effectiveness ACTION PLAN be charged for expanding or
the service introducing a new
iii. competence & (Table 9) consulting/
(Table 8) Advisory service
capacity
(Table 7 )

4. How to Successfully Run
Consulting Services
4. How to Successfully Run
Consulting Services
In general, you might think of various approaches to consulting services as lying somewhere
along a continuum, with an 'expert' or prescriptive approach at one end, and a facilitative approach at
the other. In the expert approach, the BMO provides expert advice or assistance to the members
based on their exposure to and relationship with the government and other regulatory and legislative
bodies. With a facilitative approach, the BMO focuses less on specific or technical expert knowledge,
and more on the process of consultation itself. It may be in the form of providing a platform where
members can share external expertise. BMOs have the advantage of better access to specialised
expertise with their networks.
1. Prescriptive Approach
Suggestive in-house business advisory and consulting services could be:
i. Linking members to different strategic partners to address the total needs of BMO's current
and potential clients.
ii. In-house empaneled consultants who can give relevant guidance and strategic advice
available on specific days in a month. The fees to the consultants could be paid from the
fees levied from members. Members could have the choice of availing these services on
fortnightly, half-yearly or annual fee structure basis.
iii. Advance support for companies visiting overseas markets either individually or as part of
international trade missions or when participating in an exhibition.
2. Facilitative Approach
i. Market screening and identifying potential for products and services if BMO caters to a
particular product or market segment,
ii. Market research in tune with deliverables or standards prescribed by trade development
organisations,
iii. Market entry strategies,
iv. Identification and qualification of partners i.e. agents/distributors, value added retailers,
suppliers, strategic partners, technology transfer and even to some extent potential joint
ventures,
v. Lead generation and developing business strategy in Indian market,

vi. Arrangements of one to one meetings with key business entities, banks, financial institutions,
investors and potential partners,
vii. Support for Networking Events-Round Tables and conduct of one to one meetings with key
business.
Whatever approach is taken, you must adhere to the following four principles to ensure your
credibility:
Focus on the relationship: Understanding the expectations of SMEs, their organization set up and
all other stakeholders,
Clearly define role: for both SME clients, other stakeholders and consulting team,
Visualize success: Helping the SME see the end at the beginning,
You advise, they decide: Client is the best person to decide, as they are key to the existence of BMO
being a service provider.
4.1. Consulting Service Process

The process of providing consulting services by BMOs should primarily focus on the practical
aspects of consultation. This can be introduced using the six steps explained below:
Step 1: Understanding client member needs and exploring the potential for a collaborative
framework. The constraints perceived by both the service provider and the client member should
also be discussed.
Step 2: Establishing a relationship between recipients of the service and the service provider. This
step specifies the desired outcomes and expectations in terms of specific terms. It would facilitate
identifying the resources needed, timeliness, costs and accountability.
Step 3: Identifying areas of concern, problem, information or knowledge gaps before embarking on
designing the service content and delivery. This is the data gathering and data analysis stage. Here
you find out what is the situation at present, what it should be, what the gap is, and whether or not it
is worth working on.
Step 4: Planning the work in terms of who will do what, when, where, how and with what
resources.
Step 5: Providing Consulting -Advisory service
Step 6: Evaluation/Termination. The client member and the service provider look back at the
application and utility of the service. A decision is taken whether the relationship can be terminated
or extended further for some other areas or concerns.
The steps are presented in the following figure highlighting the actions to be taken in each step.

Figure 5: Consulting Service Process Flow
Assess
needs of
members
Reassess
Design
cost effec-tiveness
structure that
of consulting
caters to majority
services
Take
feedback Implement with
and evaluate resources
satisfaction and facilities
level
4.2. Prerequisites for Effective Consulting Service

BMOs need to appreciate and ensure the following prerequisites before initiating the consulting or
advisory service:
1. Define the scope of the service. This must be done to be able to list out all the incremental
efforts that impact the cost of the service.
2. List out all elements in the service process delivery. This would enable the BMO to take
into consideration all variables essential to designing the consulting/advisory service system.
The scope of any consulting/advisory service is linked intimately to the proposed step by
step processes and systems that the service is going to deliver. Regardless of whether the
service is a new one or one provided earlier, it is important know the profitable and
unprofitable parts of the service. This would help the BMO ensure the cost effectiveness of
the service provided and to ensure that the service continues to be income generating.
3. Capacity and competent support to deliver the service. The competence refers to the
speciality related skills and knowledge that are required for the consulting /advisory service
being offered. It is credibility of the competence that would attract member/clients to
choose the service provided by the BMO. It would always be advantageous for the BMO to
have a panel of experts rather than depend on one expert. BMOs need to do a quick
assessment and some questions need to be asked like :
• What skills and expertise have been found most valuable in running a successful
consulting service?

• Before starting a new consultancy/advisory service, are there any absolutely essential
things that need to be known and understood in order to ensure a value addition to
both members and the BMO?
• Do we have a sufficient panel of experts and networking partners?
• Is the breadth and range of consultancy service sufficient enough to be of use to all our
members?
• Is the depth of the service adequate enough to be a value addition to the
client/member?
4.3. Possible Consulting Services
The type of consulting services to be provided can be categorised as:
• Generic or functional like those related to economic, legislative, regulatory, socio-political
and market environment. These services can be based on a one-time effort in consolidating
expertise and periodic updating as when required.
• Business matching services: customised to member needs and requirements. This would
require detailed and specialised expertise.
The above categorisation allows for segregating the consulting services under four levels. Category A
would be level I & II service, which can be provided easily using the BMO's in-house expertise.
These are more generic and applicable to all members. Category B consulting /advisory services can
be at level II, III and IV with level IV being the most sophisticated and matching business needs of
the members . Level II services are more focused, offering specific services using in-house expertise.
You can charge for all Category B services. Examples of all 4 levels of consulting services is
explained in the figure 4 below identifying the various consulting services and how the BMO's can
organise its delivery depending on the level in terms of complexity, expertise and time.

Figure 6: Levels of Business Matching Consulting Services
Web Designing
Trade/Business related seminars,
LEVEL I Easy to implement conferences & workshops
Offering commercial benefits
Networking and providing
linkages to specialist service
providers for a cluster in a
collaborative framework at
BMO level
Buyer Seller Meets
LEVEL II In-house expertise Inbound & Outbound missions,
participation facilitation in trade
fairs/exhibitions
HR services
Strategic Planning
Proactively engaging in
developing market opportunities
Practical advice & solution
related to legislative & regulatory
processes
Supplying information and
providing advice or specific
consultancy to members
Promotion of innovation and
technology transfer
Ask me services
Working proactively to improve
members'/sectors' financial
health, profitability and
LEVEL III Outside expertise sought competitiveness-
Promotion of standards and
quality of service
Preparation of DPR services/
Market Research report
Facilitating financial schemes of
the government
Infrastructural support
Market contact services
Advisory services-specific to
sector/industry/unit
Handholding services
LEVEL IV Difficult to implement Partner Identification Services
Market Research
Market Selection
Joint venture & business
collaboration
Some of the consulting services that even small BMOs can start are detailed in the following table 12
highlighting the resources required and the delivery mechanisms.

Table 12: Scope of Consulting Services and Delivery
Consulting Services
Service Resource Delivery
Web designing Local based expertise Design and development of
websites of the SMEs
individually to promote
their marketing
Business Promotion In built capacity of BMOs Trade/ Business Related Seminars
services based on information services and conferences collaborating
and networks with industry experts Overseas
Business Missions Partnership
Development Sector and country
specific delegations Buyer-Seller
meet
Practical advice on In built capacity of BMO's Continuous updates and
legislative and regulatory based on experience availability of relevant reference
process information access and materials and linkages to the
networks officials dealing with the same
Business Information – In built capacity of BMO's All information pertaining to

‘Ask Me’ services based on information access start-up of an industry or
and experience of sharing just simple but specific queries
the same that can be answered with the
information access available with
the BMO
Proactively engaging in In built capacity of BMO's Focused sector specific market
developing market based on information networks trends through emails
opportunities and institutionalised
collaborations.
Counselling services in The SME seeking professional Supplying information and
the form of "Meet-the- and expert advice specific to providing advice or/and
Advisors" or join the an industry or market segment advisory service for potential
SMEs mentorship Industry/product/market
programme specific consultancy to members.
Promotion of innovation Use of information access and This will be more specific to an
and technology transfer networks SME or a cluster
Offering commercial In-house using the concept of Negotiating on behalf of all
benefits economies of scale and members
negotiating a discounted price
with a vendor that all members
call avail of.
Working proactively to In-house or using outside Using management and OD
improve members'/ experts but being made practices with BMOs own
sectors' financial health, available at a lower price experts or using outside
profitability and experts.
competitiveness-

Consulting Services
Service Resource Delivery
Promotion of standards Access to information and List of schemes pertaining to
and quality of service institutions associated with it the SME from both Central and
State Governments.
HR Services and In house expertise along with Hands-on expertise along with
Strategic Planning outside experts specialists to be facilitated at
the members' site.
Preparation of DPR In-house expertise Using same and similar efforts
services/ Market made in the past and dovetailing
Research report it to members needs
Facilitating financial Access to associated agencies, Having a checklist and

schemes of the information and experience documentation references and
government using the same for sharing with
members
Infrastructural support Allowing use of common This could be partly free and
facilities partly paid based on usage.
Like space or specific use of
equipment.
4.4. Selection of Appropriate Consulting Service

A selection needs to be made based on (i) cost effectiveness and (ii) the value addition that the
members get out of the consulting/advisory services provided by the BMO.
Some of the possible services with case examples are given below.

1. Target group driven consulting service
Case example No.2 - The aspiring entrepreneurs seek various types of consulting service like
the type of industry to start, sourcing of raw materials, availability of finance/ loans from the
Banks, Machinery suppliers etc., At the same time, the existing entrepreneurs look for consultancy
like diversification of industry, preparation of viability reports etc, To cater to these type of
consultancy services, counselling service to SMEs, was operated like a 'poly clinic' concept.
The panel of experts were made available to the SMEs on a particular day and time e.g. If an
SME requires information on Export procedures and documentation, the Export consultant is
available on Monday morning every week, who would be able to help the SME with the details of
IE Code, Export Credit Guarantee scheme etc. Like this viz. sector based experts Rubber, Food,
and Chemical were available on specific time and day in a week. The SMEs who came for initial
advisory also availed the other services of this BMO. The BMO charged a nominal fee from the
SME and also paid honorarium to the Experts who spent their time. The success and utility of
this type of service depends on real good experts being empanelled with the BMO.
2. Market Research
Case Example No 3: When a woman entrepreneur wanted to start a paper bag manufacturing
unit, she approached a BMO to do a market research about the usage of plastic bags in various
shops in a particular area, so that she could replace it with paper bags.
That was the time, when the Government was also imposing ban on usage of plastic to save
environment.
She approached the BMO at the right time and the BMO took up the market survey and
subsequently conducted the research on how many shops uses plastic bags, the size of the bags,
the consumption of bags in that area per month etc. The findings of this survey and study report
helped the Woman Entrepreneur to venture into the Paper Bag unit and position it in the prime
outlets of the city.
3. Infrastructure support
Case example No 4 –A BMO functioning in South India is a shining example where

infrastructure support is provided to market the products of artisans/SMEs.
The artisans manufacture various products like Handicrafts, Textiles, herbal cosmetics etc., The
Association has its own space, which is being rented out to these artisans and the rent is collected.
Since the building is in a prime location, the SMEs / artisans could market their products very
well. It is very difficult for an artisan to pay very huge amount as rent to occupy a prime place,
instead this model works out well to market the products.
Case Example No 5 - A BMO in North India has provided space within their office for women
entrepreneurs to display their products and also allow sale of entrepreneur's products including
those of start up enterprises. The activity is managed by women representatives on rotation basis,
leaving them time to concentrate on their business.

4. Handholding services
Case example No 6 -An SME manufacturing essential oils approached a leading BMO in North
India. Normally the Handholding service is provided from concept to completion. The SME
approached the BMO for identifying overseas market for its products. BMO utilised its
information networks and also the expertise available with the BMO. Accordingly, the product
details were collected from the SME and made as a catalogue and sent to the overseas buyers
through the information network. Later BMO developed a website for the SME so that the
communication with the buyer is fast and they also could get first-hand information of the
products.
As and when the enquiry is received from the overseas buyers, the experts provide consultancy on
Export pricing, Packaging, opening of Letter of Credit etc. Through this hand holding
facilitation, the SME could initially get the first export order in Europe. They subsequently got
orders from other countries also.
Lessons learnt:
Hand holding service provided with the right balance of consulting and information service
could help achieve real success.
4.5. Tools to Calculate Costs and Determine Fees

The basic framework would be the same as the tool suggested in 3.4 but we shall use each of the
specific service suggested above and do it as an example.
While introducing the various consulting services, BMOs should taken into account of the fact that
not all services would cost the same, because some of the services can be provided with the in-house
capacities and some of them would have to be outsourced and then provided. Decision on how
consulting/advisory activity will be financed fully depends on the competence on the part of the
BMO that organises advisory services. It depends on the organisation of advisory and consulting
activities, on the employed advisors, and on many other circumstances. Particularly important to
mention are available resources, which depend on the total revenues, the possibility of raising
finances from other sources (local government budgets, special projects etc.), as well as possibilities
and readiness of SMEs to participate in paying for such services. Nevertheless, ways of financing
should be harmonized to a certain extent.
It would be possible to define a certain scope and level of services, which would be free of charge
and always available for SME member as well as for non - members of the BMO on payment of
prescribed fees. While the initial simple consultation could be free of charge, but it could be linked to
payment of the membership fee. In this respect, it would be possible to use 'membership card' as
“smart card”, which would contain data on payment of the BMO membership fee and the amount
of “discount” for using the consulting/advisory services. This would of course be possible in large
membership base BMOs.
Improving advisory work and introducing more complex forms of consultation (e.g. through
detailed analysis of the facility, preparation for drafting of the business plan etc.) would require
deciding on the way and criteria of covering increased costs and the price of such advice.

Co-payment, meaning partial payment of the price of consultation by SMEs should also be
considered in cases of “Group Consultations”, like seminar for a cluster of SMEs. Here, it is also
necessary to define projects, conditions and criteria, which would allow for paying a part of the price
from the government schemes, another part from the revenues of the BMO system, and the third
part by co-payment of the SME themselves. For example, there is a scheme on Lean Manufacturing
Implementation for a cluster of SMEs in a specific sector. This scheme is operated by National
Productivity Council and the SMEs have to pay an 'x' sum and the Government will provide some
funds for implementation of this. The BMO can provide this consulting service through a lean
manufacturing expert and the SMEs can pay some fixed of amount as consulting fee to the BMO
out of the sum that they will be getting from the Government. The assignment needs to be
monitored by the BMO, till it gets implemented to the fullest satisfaction of the SMEs.
Costing of one service is shown as an example.
Preparation of Detailed Project Report
At the outset, in house capabilities need to be built. There are several organisations which provide
training on preparation of Project reports/Business plans. The BMO Secretariat should be provided
with such training. Sometimes, technical details could be sought from the service providers or
through specific databases, which provide authentic data and supplement it along with the internal
expertise.
Table 13: Cost Calculation for a Project Report

Costs: INR Income: INR
Variable costs*: Income received from member = 45,000
• Man days for making the report 10 x 1000 =10,000
• Admin cost = 5,000 Income – expenditure = Net profit/loss
(inclusive of internet and other communication 45000 – 35000 = 10000 (Net Profit)
and manpower costs)
Fixed costs*:
• Computer 30000 (for 10 days)* so = 10,000
• In-house expertise 30000 per month.
Out of which 10 days used. So the cost is = 10,000
Total cost per report = INR

35,000
(*assumed)

4.6. Recommendations for Effective Consulting Services
Table 14 below gives a summarised checklist for the consulting services discussed and some essentials
Do's that need to be worked upon before starting the service.
No Service / Activity Checklists Dos
1 HR services The database of Collect the service fee both

employers/employees need from the employers/job
to be maintained seekers
2 Preparation of DPR Experts' panel with sector In-house strength to be built
services/ Market specification need to be
Research report maintained
3 Strategic Planning The concept for the The SMEs need to be made
members need to be understood of the
effectively prepared advantages of this service
4 Financial Health of The concept for the The SMEs need to be

members members need to be informed about of the
effectively prepared by the advantages of this service
BMO
5 Facilitating financial The schemes to be selected Compiling and updating the
schemes of the depending upon the needs of scheme details regularly on
government the members half yearly basis is most
important
6 Infrastructural support Understand the requirement Space selection whether to
of the members manufacture /market the
products of the members
need to be analysed first
hand
7 Buyer-Seller meet Selection of buyers and Planning of such events need

sellers need to be selected, to be done well in advance
based on the demands of the
member sellers.
8 Counselling services Experts based on the sectors The timing of the expert
need to be chosen availability to be made known
to members regularly
9 Handholding services The information networks The requirement of the

and the experts member to be well
synchronisation to be done understood and the experts
effectively to be tied according to this

In addition to the above requirements related to the specific consulting service, the following aspects
are essential to make the services income generating activity for the BMO.
1. Strong support and commitment from the office bearers of the BMO. For the
Consulting advisory unit to become fully operational and revenue generating may take about
two to three years. Some activities as stated earlier may be non-revenue generating in the
initial years but a time line needs to be planned for the same and as fee gets charged or
raised the quality of the service also must get enhanced. The reputation and credibility of
the service would affect the reputation of the BMO and consequently increase or decrease
the membership base.
2. Responsiveness to the needs of the members and continuously upgrade the quality of the
service. The secretariat must be proactive and adopt a customer oriented and marketing
approach.
3. Need to promote and publicise the activities initiated and those that have created
advantages and provided value addition to the members.
4. Establish good networks and working relationship with partners and stakeholders.
5. The ultimate credibility comes from the professional attitude and commitment on the past
of the staff.

References
MSME/ GIZ /sequa/ SIDBI Authors: Elke Demtschück, Jürgen Henkel: Trainer Manual on
Income Generation Services for BMO, May 2013
EU/ sequa, Authors: Sanja Želinski Matunec, Olga Lui, MA, Ivo Marin, Slaven Jakeli : How to
introduce Business Advisory Services, November, 2006
http://www.msme.gov.in and http://www.nsic.co.in.

Notes
Notes
Deutsche Gesellschaft für
Internationale Zusammenarbeit (GIZ) GmbH
B-5/1, Safdarjung Enclave,
New Delhi 110 029, India
T : +91 11 4949 5353
F : +91 11 49495391
E : msme-india@giz.de
I : www.giz.de

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MSME Umbrella Programme

Self-Help Manual for Business Membership Organisations

Alexanderstr. 10, D-53111 Bonn

Authors: Brinda Balakrishnan, Consultant

3. Service Delivery Step by Step 09

3.1. Analysing Current Situation of the BMO 11

3.2 How to Define Target Group and Consulting Service Demand 17

3.3. Capacities for Providing the Consulting Service 19

3. 4. Criteria for Selecting New Services 22

3.5. How to Market New Consulting Services 24

4. How to Successfully Run Consulting Services 31

4.1. Consulting Service Process 33

4.2. Prerequisites for Effective Consulting Service 34

4.3 Possible Consulting Services 35

4.4 Selection of Appropriate Consulting Service 38

4.5. Tools to Calculate Costs and Determine Fees 40

4.6 Recommendations for Effective Consulting Services 42

• Sectoral /Regional/Industrial viewpoint – BMOs are perceived as voices of the group or

Objective, scope and target groups

02 Self-Help Manual for Business Membership Organisations: Consulting Services

Self-Help Manual for Business Membership Organisations Consulting Services 03

Importance for BMOs

06 Self-Help Manual for Business Membership Organisations: Consulting Services

Structure of the Manual

The structure of this manual is as follows:

Self-Help Manual for Business Membership Organisations: Consulting Services 07

08 Self-Help Manual for Business Membership Organisations: Consulting Services

Figure 2: Chapter 3: Service Delivery Step by Step

Your Target Capacities Selecting

Analysing To whom Your own How to Marketing How to

10 Self-Help Manual for Business Membership Organisations: Consulting Services

Table 1: Scope of Income Generation Services

No Purpose Service Income Generation Potential

Self-Help Manual for Business Membership Organisations: Consulting Services 11

10 HR Services Training & Consulting On charged basis

12 Self-Help Manual for Business Membership Organisations: Consulting Services

Year xxxx Year yyyy

Self-Help Manual for Business Membership Organisations: Consulting Services 13

14 Self-Help Manual for Business Membership Organisations: Consulting Services

Table 3: Cost Effectiveness-Case Study on conducting a Buyer-Seller Meet as a

Buyer Seller Meets:

Costs in INR Income in INR

Lessons from the Case Study

Self-Help Manual for Business Membership Organisations: Consulting Services 15

No. of Members participating in the event on 45

Total Income assuming 45 members participate INR 36,000 (800x45)

This would then give a profit margin of INR 3500 (38,500-35,000)

Figure 3: Break Even Analysis

16 Self-Help Manual for Business Membership Organisations: Consulting Services

Self-Help Manual for Business Membership Organisations: Consulting Services 17

18 Self-Help Manual for Business Membership Organisations: Consulting Services

Table 5: Assessment of your own Capacities to Deliver Consulting Services

Self-Help Manual for Business Membership Organisations: Consulting Services 19

20 Self-Help Manual for Business Membership Organisations: Consulting Services

No Service / Activity Partner organisations contact details

Self-Help Manual for Business Membership Organisations: Consulting Services 21

Table 7: Decision-making Grid for Introducing New Consulting Services

22 Self-Help Manual for Business Membership Organisations: Consulting Services

What are the concerns? What are the solutions?

Self-Help Manual for Business Membership Organisations: Consulting Services 23

3.5. How to Market New Services

Table 10: Marketing Service Options

24 Self-Help Manual for Business Membership Organisations: Consulting Services