The study, “A Study on Enterprise Management, Business Environment, Employment Creation, Growth of the Enterprise and Cost Benefit Trend Over the Period of 05 (five) years,” was commissioned by Palli Karma-Sahayak Foundation (PKSF) under the Sustainable Enterprise Project (SEP) to explore the dynamics of microenterprises in Bangladesh, focusing on their management practices, business environments, and long-term growth. The research aimed to understand the economic impact of microenterprises in both agribusiness and manufacturing sectors, emphasizing their contributions to employment creation, sustainability, and profitability. Additionally, the study sought to evaluate the cost-benefit trends of enterprises over five years, identifying growth drivers and barriers.

The research also aimed to explore technological adoption, environmental compliance, and the financial performance of microenterprises, while making policy recommendations to support their growth and sustainability. The ultimate goal was to provide actionable insights for improving enterprise management and promoting sector-wide growth.

The subsectors under study included

1. Leather product (belt) and shoe making
2. Automobile workshop & machineries equipment under Light Engineering
3. Dairy products under food processing sector
4. Dry fish under food processing sector
5. Loom & Jamdani under Mini Garments
6. Buffalo rearing under Livestock sector
7. Beef fattening under Livestock sector
8. Dairy farm & poultry under Livestock sector
9. Fruits & vegetables under Horticulture sectors
10. Pisciculture under Aquaculture sectors

The main objective of the study was to assess the current socio-economic and environmental conditions of the microenterprises of 10 listed subsectors in agribusiness and manufacturing sector. The specific objectives included:

• To assess the current business and financial performance of the microenterprises of the 10 listed sub-sectors
• To identify which types of microenterprises had the highest growth potentials and the reasons behind it, and propose generic microenterprise models for each sector to promote the future growth of the sector.
• To examine the employment opportunity, job creation and retention situation of the microenterprise
• To assess the technological adoption status of the microenterprise and identify social and technological barriers that hinder the growth of microenterprise
• To examine whether the government policy supports are enough for the growth of microenterprise
• Formulate recommendations to strengthen the performance and growth of microenterprises and generate employment and income for micro-entrepreneurs

The scope of the study included:

1) Analyze the business and financial performance of enterprises in the listed sub-sectors, based on information collected through a survey questionnaire. This analysis  included:

a) Business growth resulting from the adoption of new technology or common services.
b) Cash flow analysis of microenterprises.
c) Availability and adequacy of documentation/financial statements.
d) Sources of finance and access to financial resources.
e) Enterprise size in terms of investment, sales, income, sources of funding, and employment creation.
f) Reasons for microenterprise expansion.
g) Financial inclusion assessment (covering both assets and liabilities).
h) Growth trends in investment, sales, income, and employment creation across two major categories: Agribusiness and Manufacturing.
i) Percentage of microenterprises reporting reinvestment of profits into processes or production over the past five years.
j) Percentage of microenterprises reporting reinvestment of profits to meet environmental compliance over the past five years.
k) Number of microenterprises engaged in pre-sale contract farming or dealing with wholesalers or larger firms within the last five years.

2) Gather and analyze information on operations and environmental conditions, including:

• Environmental issues related to business operations and the resulting impacts.
• Effects of natural disasters and the COVID-19 pandemic on microenterprises, as well as potential future risks under climate change.
• Marketing, promotional activities, branding, and certification practices in different sub-sectors.

3) Assess the sustainability of Sustainable Enterprise Project (SEP) investments in microenterprises across listed sub-sectors, particularly considering:

i) Threats from climate disasters.
ii) Challenges related to capital flows in rural areas, where SEP provides investment capital but does not offer long-term operational and maintenance support (i.e., financial sustainability assessments).
iii) Capacity of local institutions to manage and maintain “non-revenue-generating” infrastructure supported by SEP capital investments.

4) Develop a stepwise strategy for the growth of the microenterprise sector across the listed sub-sectors of the country:

• Step 1: Consolidate naturally developed capabilities, primarily catering to the domestic market.
• Step 2: Facilitate the entry of microenterprises into export markets.
• Step 3: Enhance the capacity of microenterprises to thrive in the global market.

Key Highlights of the Assignment

DM WATCH LIMITED successfully conducted a comprehensive study, delivering key insights on microenterprise dynamics in Bangladesh. The services provided by the team included:

1. Initial Consultation and Project Design:
   • Conducted initial discussions with project stakeholders to define the scope and objectives of the study.
   • Designed the overall study framework and methodology, integrating both quantitative and qualitative approaches.
2. Preparation and Validation:
   • Undertook a thorough desk review of existing literature and sectoral data.
   • Prepared and submitted an inception report detailing methodologies, tools, and timelines.
   • Finalized the study design and tools through stakeholder feedback and a validation workshop.
3. Data Collection and Analysis:
   • Developed and field-tested data collection tools, including survey questionnaires and interview guidelines.
   • Trained enumerators on data collection protocols, ensuring high-quality data collection.
   • Conducted extensive fieldwork across relevant sectors, including 2312 microenterprise survey, 22 Key Informant Interviews (KIIs), 10 Focus Group Discussions (FGDs), and 10 case studies.
   • Cleaned, coded, and analyzed both qualitative and quantitative data using statistical software and thematic analysis techniques.
4. Comprehensive Assessment:
   • Assessed business performance, financial management, and employment generation within the sectors.
   • Evaluated technological adoption, environmental compliance, and policy support.
   • Identified growth potential and developed sector-specific business models.
5. Stakeholder Engagement:
   • Conducted reflection and validation workshops to align findings with stakeholder expectations.
   • Engaged with government and non-government stakeholders to ensure inclusive recommendations.
6. Reporting and Dissemination:
   • Prepared and submitted a detailed draft report, incorporating feedback from stakeholders.
   • Finalized and submitted the comprehensive report, which included strategic recommendations and policy suggestions.
   • Presented findings in two dissemination workshops to PKSF staff and a national audience.