HANDICRAFT

TRAINING GUIDE
ILO - ASEAN Small Business Competitiveness

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ILO – ASEAN Small Business Competitiv eness Programme ii
Small Business Competitiveness by International Labour Organization (ILO – SBC) is
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ILO – ASEAN Small Business Competitiv eness Programme iii

Table of Contents
About C-BED ................................................................ vi
About The Handicraft Package: ...................................................................................... vi
Message to The Group ...................................................................................................... vii

Session 1: Introductions ............................................... 1

Activity 1A: Getting to Know Each Other ......................................................................... 1

Session 2: Creating Systems ....................................... 5

Activity 2A: Case Study 1 .................................................................................................... 5
Activity 2B: Case Study 2..................................................................................................... 6
Activity 2C: Comparing Systems ........................................................................................ 7
Activity 2D: Using Systems ................................................................................................... 8
Activity 2E: Personal Action Plans ...................................................................................... 8

Session 3: You and Your Product.............................. 11

Activity 3A: Your Strengths and Skills ...............................................................................11
Activity 3B: Summary of Strengths and Weaknesses .....................................................12
Activity 3C: Discussing Strengths And Weaknesses .......................................................14
Activity 3D: Personal Action Plans ...................................................................................14

Session 4: Your Product From the Final Owner’s Point

of View ........................................................................ 17
Activity 4A: Final Owners ...................................................................................................17
Activity 4B: End Consumer vs. Retailers ..........................................................................18
Activity 4C: Customer Service ..........................................................................................20
Activity 4D: Target Market and Customer Match .........................................................22
Activity 4E: Market Research ............................................................................................23
Activity 4F: The Right Market for Your Product ...............................................................24
Activity 4G: Personal Action Plans ...................................................................................26

Session 5: Market-led Product Development ......... 29

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 Activity 5A: Market- vs Product-led Development........................................................29
Activity 5B: Reassessing Your Products ............................................................................30
Activity 5C: Perceived Value ...........................................................................................32
Activity 5D: Coming up With New Designs .....................................................................34
Activity 5E: Personal Action Plans ....................................................................................38

Session 6: Improving Production and Quality Control

..................................................................................... 41
Activity 6A: Scheduling Production and Using Gantt charts .......................................42
Activity 6B: Dealing with Bottlenecks ..............................................................................43
Activity 6C: Quality Control ..............................................................................................45
Activity 6D: Personal Action Plans ...................................................................................47

Session 7: Costing and Pricing .................................. 51

Activity 7A: Difference Between Cost and Price...........................................................51
Activity 7B: Costs ................................................................................................................52
Activity 7C: Importance of Recordkeeping ...................................................................53
Activity 7D: Pricing .............................................................................................................54
Activity 7E: Personal action plans ....................................................................................54

Session 8: Reasons to turn Down an Order .............. 57

Activity 8A: Turning Down and Order .............................................................................57
Activity 8B: Personal Action Plans ....................................................................................59

Session 9: Priority Action Plans ................................. 61

Activity 9A: Prioritized Actions ..........................................................................................61

Flipcharts:.................................................................... 63
Activity 2C ...........................................................................................................................63

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About C-BED
Community-Based Enterprise Development (C-BED) is a low cost, innovative training
programme designed by the International Labour Organization (ILO) to support skills
development and empowerment in local communiti es for improvements in
livelihoods, productivity and working conditions.

As an approach to training, C-BED is unique in that the programme is built around

peer-to-peer, activity based learning methods with no role for teachers, experts, or
external consultants specialised in the skill area. Instead, C -BED participants work
together through a series of activities and discussions guided only b y simple step-by-
step instructions in the training manual. New knowledge, skills and competencies are
developed through the interactions between participants and sharing of existing
local knowledge and experience. In this way the programme is a low cost, s ustainable
option for any organization or community.

The C-BED programme is structured around two core training packages designed to
develop competencies for business start -up and operation through a focus on
marketing, financial management, and action pl anning. These are the C-BED for
Aspiring Entrepreneurs and C-BED for Small Business Operators. Additionally, a
growing suite of tools to strengthen business competencies and enhance skills for
specific sectors is in continual development. These packages ca n be implemented
as either stand-alone trainings or integrated in modular format into existing
programmes.

About The Handicraft Package:

The training package:

The Handicraft package should be used to help aspiring and current handicraft
manufacturers start and improve their businesses. It focuses on key business principles
to build on from what participants already know from managing their handicraft
businesses and helps them to learn more. It can also build on from the learning in
other C-BED tools namely SBO or AE. Participants bring experience to share and leave
with a priority action plan (at least 3 actions to introduce improvements to their
business). At the end of the training participants will have:
Enhanced and advanced existing knowledge on handicraft manufacturing
development
Strengthened critical competences to analyse job prospects or current
conditions of work
Affirmed the potential of enterprise development
Identified steps and actions to improve a business or launch a business idea

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 Decided on actions for the future
Started planning effective collaborations and associations

The Good Practice Guide:

During the training day participants will be introduced to and become familiar with
the Good Practice Guide (GPG), which they will then be a ble to use to further their
learning and to support them in setting up or improving their businesses. The GPG
contains best practices, tools and extra activities that supplement those covered in
the training to further support the participants in setting u p or improving their
businesses. The exercises may depend on the GPG but if the participants do not have
this guide this should not prevent them from moving forward, if necessary skip that
activity. Look out for this icon:

Here you should refer to the Good Practice Guide for more information

Message to The Group

At the end of this C-BED training you will have a clear plan for the practical steps you
can take to start or improve your business. Your understanding of the basic principles
of doing business will be much stronger and you will have begun relationships wi th
others in your community that can potentially support or cooperate with you to
achieve mutual success in the future.

The style of this training is different to traditional education approaches. There will be
no teacher, trainer or expert to assist you. Instead, you will work together as a team
to follow the simple step-by-step instructions for discussions and activities in your
training guide. Because there is no group leader, all group members should take a
turn reading the information and instructions out loud to the group, and all group
members share responsibility for monitoring time. In this new style of training, we will
learn from each other by sharing ideas and opinions, skills, knowledge and
experience. For this to work, all group members must participate in discussions.

Before and after the training you will be asked to complete a survey to understand
the impact of the training. This information will be kept confidential and is used to
improve the training materials and organization of future programs. Some trainees
may also be contacted in the future after 3, 6 or 12 months for another survey to learn
about your business plans.

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The instructions in the training guide are easy to follow and suggested timing for each
step is provided. Look out for these signs:

When you see this sign, read aloud

When you see this sign, you are reading

instructions and doing activities

When you see this sign, share with the group

This sign gives you the estimated time for the

session

Use the flipchart as outlined in Appendix 1, if you don’t have a

flipchart use extra paper or the Training Guide

Before you begin the training, follow the simple steps below to get organized.
Fill out the pre-training survey. Ask the organizers if you don’t have a copy or
have not already filled it in.
Organize into small groups of 5-7. The organizers will guide you in how best to
do this.
Identify one group member to volunteer to start the training as ‘Group
‘Reader’. The ‘Group Reader’s’ role is to read the information and activity
instructions out loud to the group. Any group member with basic literacy can
be the ‘Group Reader’ and you should aim to share this role among group
members throughout the training.

All group members are responsible for monitoring time but one group member should
be nominated for each session to remind the group when the suggested time for a
step has been reached. You do not strictly need to follow the suggested timing but
you will need to manage your time for the total training. If one activity lasts longer
than the suggested timing, try to save time in other activities to keep the balance.

All group members will receive the same training guide. Individual work can be
completed in these guides as well as group work. Groups may also like to complete
activities together on flipchart paper if available.

Enjoy The Training!

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 Session 1:
Introductions

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Session 1: Introductions

20 Mins

Session overview:

In this session you will get to know one another and the style of learning in this training.
We learn without teachers. You help each other by sharing your different experiences
and ask questions if you don’t understand an activity. The objectives of this session
are to:
Identify the training sessions, timing for the day, expectations (e.g., action
planning) and the workshop arrangements (e.g. breaks, water)
List the names of some of the trainees
Understand the style of learning for this course, including activities and group
work
Understand the importance of contributing ideas and suggestions
Understand your unique competitive advantage and how you present that,
and how that will help you succeed

Activity 1A: Getting to Know Each Other

In Activity 1A, you will do some brief introductions

so you can get to know one another.

20 Mins

1. Each person introduces themselves by providing:

Full name and any nickname you prefer to use during the session
Business address
How long your business has existed (if applicable)
Your purpose for attending this session and how you expect it to help your
business

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 2. Each person shares a photo, handicraft item, business card or drawing of their
best selling product for others to see. Place this on the wall or in the middle of
the table, or allow others to see it on your mobile phone. Ideally, each person
has brought two of his or her products to the training. Show these to the group
too. We will use these later on in some exercises.
3. Fill in this sheet below (if not now, then during tea breaks and lunch time)

Table 1A: Participant Information

Phone number /
Participant Name Business Address
Email address

In this activity you have gotten to know who your

peers are and a little about their businesses.

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 Session 2:
Creating
System

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Session 2: Creating Systems

45 Mins 2 1, 2, & 3

Session overview

In this session, we will hear two examples that show us the value of using systems to
operate a successful handicrafts business. These will help us to discuss the benefits of
using systems. We’ll compare the operations of two businesses, one using systems and
one that doesn’t. The two stories will show the value of using systems to plan and
operate a successful handcraft business, and lead into discussions about the benefits
of using systems. You will complete 5 activities.

Activity 2A: Case Study 1

[5mins] Dara, the owner of a handcraft production workshop with 4

employees, is exhausted. He works constantly but no matter how
much he does, he’s falling further and further behind and more in
debt. He keeps adding new products to his line, but can’t figure out
why he always has to borrow money to pay his bills. He’s afraid to
add up how much he owes and doesn’t even remember all the
people he’s borrowed from. Now his best retailers are starting to drop
him from their stores, and his suppliers are demanding all the back
payments he owes before they’ll deliver any more raw materials. If
he can’t get more wood he may have to cancel an order he has,
and the retailer said if he did that one more time he’d never buy
from him again.

While he doesn’t know about different woods or have advanced carving skills, Dara
has beginner skills and hired experienced carvers. If they left he couldn’t produce
any more. Last month he also started making beaded glass necklaces after he
overheard some fashionable women talking about how much they’d paid for
necklaces they’d bought in the capital city department store. His employees hate
making them, complaining they can’t see the eye of the needle, and their fingers are
too large to hold onto the beads while trying to thread them; and they keep dropping

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the expensive beads on the floor. He has no idea how many he’s lost, but thinks it’s a
lot. Last week his young son came into the shop and slipped on one, luckily he wasn’t
seriously hurt.

Yesterday he saw some great hand woven pillows in a shop and thought he’d cut his
losses on the necklaces and make pillows. He doesn’t have a sewing machine and
none of his carvers know how to sew, but he doesn’t think it will be hard, it’s only four
straight seams!

Last week his best carver quit without warning, even though Dara owes him back
wages. He heard he got a job at another workshop and is making a higher salary.
Dara suspects his other workers want to leave too. They used to suggest new wood
designs and help him properly dry the wood so it wouldn’t warp or crack, but they
aren’t talking with him anymore. He thinks maybe he should delay paying them so
they’ll have to stay if they want their money later.

Activity 2B: Case Study 2

Would someone else like to read the second example to us?

[5mins] As a young child, Nui learned how to dye and block print fabric from her
mother and grandmother. She studied painting and traditional design in school, and
her family has a treasure trove of original designs fr om her great grandmother that
everyone in the village loves. She opened a block-printing workshop with her mother
and grandmother after consulting her uncle, a respected businessman. He offered to
train her in his business, and after working under his guidance for six months, she’d
learned the importance of having repeatable systems, how to keep records, and how
to do market research. When they both felt she was ready to start her workshop, they
drew up a contract detailing how she’d pay back the money her uncl e lent her to
buy her first supplies.

The three women agreed that Nui would be in charge of running the business while
her mother would manage printing and her grandmother would be the chief
designer. For the first year, Nui spent most of her time away from the workshop,
meeting suppliers and retailers and building relationships, and studying what else is
on the market and how it’s selling. The first six months were rough until sales picked
up and payments started coming in regularly; but the women had planned and saved

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for that so they could pay their bills. They’re proud that they made a small profit their
first year, and have never been late on a payment to Nui uncle.

Since all three women know how to design and print, her mother and grandmother
can help each other, and Nui can help them both whenever there’s a big or rush
order. So far they’ve had one large order, which they delivered two days ahead of
the promised delivery date. The retailer said it was exactly as he ordered it, and his
customers loved it. He wants to place a repeat order as soon as he’s made the final
payment for this one. He also asked if she could also make handmade soaps, which
are a hit with the teenage girls, but Nui politely explained that even though it’s a very
profitable product, it’s not right for her, and gave the retailer the name of someone
who makes them, which he appreciated.

She is however, interested in expanding into block printed clothing. Once she’s
finished paying off the loan to her uncle she’s planning on taking out a loan from the
bank to buy a sewing machine. Her uncle offered to cosign the loan and the banker
said her loan repayment history shows she is a good credit risk. Meanwhile, she’s
taking lessons from the most skilled seamstress in the area. The seamstr ess has said
she’d like to come work for Nui when she is ready to hire a sewer.

Activity 2C: Comparing Systems

In this activity we will discuss what we mean by

systems and compare the two stories.

10 Mins

1. List as many things as possible that Dara is doing wrong in his business and list
as many things as possible that Nui is doing right. Write these on the flipcharts.
2. After we have done this, we can turn to Section 2 of the Good Practice Guide
to learn more about systems. The Group Reader will read us the information
about systems below.

A system is a set of organized, detailed procedures created to accomplish a task:

Do a specific activity, perform a duty, solve a problem efficiently and with
consistent quality. A good system does not have to be complicated, the easier it
is to follow the better. A system often starts with a checklist of clear, step -by-step

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 things to do. A good system will help you run your business and achieve your goals
in a logical, repeatable, and efficient way with the least amount of disruptions.

3. Discuss what systems Nui is using in her business and write these on the Flipchart
2.
4. Discuss what systems Dara could immediately start to implement in his business
to improve it. Are there other systems that he would need to put in place over
time? Record these on Flipchart 3

In this activity we have compared a business that uses systems to one that doesn’t
and noted some of the systems that are being used and that could be used.

Activity 2D: Using Systems

In this activity we will discuss some of the things that we can use
systems for.

10 Mins

1. Continuing on the bottom half of the same page we just read, we see some
areas where systems can help artisans succeed. Does anyone have any
systems they’re using right now in any of these areas?
2. Discuss and record the discussion on the Flipchart
3. Be sure to discuss how the system has helped you too.

In this session we have looked at what systems are, how they are used and how they
can help us.

Activity 2E: Personal Action Plans

In the final activity of this session we decide on some concrete actions

to improve or create systems in our businesses. Keeping in mind all the
things we’ve discussed so far about creating systems, take a few minutes
to record your thoughts.

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 10 Mins

1. Each of us uses Table 2E: Personal action plan to write 1 -3 changes that we
would make to improve systems in our businesses. Are there any improvements
you would like to make based on what we have learned in the previous
activities? If so, decide what systems you will implement or improve.
2. Record how you will make these changes
3. Record by when will you make these changes?
4. Finally, state who will be responsible for this change?

Table 2E: Priority Action Plan

How will I make Who is

My changes When?
the changes? responsible?

In this session you heard two case studies that illustrated the value of
having systems in place for running your handicraft business. Systems
should be simple and easy to follow. Refer to section 1 of your GPG for
more information.

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 Session 3:
You and
Your Product

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Session 3: You and Your Product

60mins 2

Session overview:

In this session, we will begin to assess our business strengths and weaknesses in order
to better assess these and our products. In the examples we saw that Nui maintained
control of her business growth by carefully assessing her skills and resources befor e
starting to expand her business. You will complete 4 activities.

Activity 3A: Your Strengths and Skills

In this activity you will list your main strengths and skills.

10 Mins

1. For now, please list just one or two of your main skills and strengths in each
column. You can refer to the page before the chart in the GPG for some ideas
about what kind of information can go on the chart.
 Table 3A: Strengths and Weaknesses

Your
Do you
workspace:
Who are What work year Do you
What are equipment,
you and What do materials round, or have other
your tools,
who works you make? do you seasonally. sources of
skills? utilities do
with you? use? full- or part- income?
you have
time?
and use?

In this activity we listed some of our skills and strengths.

Activity 3B: Summary of Strengths and Weaknesses

In this activity we will look at our strengths and

weaknesses.

5 Mins

1. In Table 3B (which you can also find in your GPG), please summarize on it what
you just learned about your single most important capability and shortcoming .

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 For example, I am the most technically skilled wood carver in my district, but
there’s a shortage of good wood, and it often warps and cracks. Try to t hink
of your own most important ones.

Table 3B: Your strengths and weaknesses

My strengths My weaknesses

In this activity, we looked at both our strengths and weaknesses.

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Activity 3C: Discussing Strengths And Weaknesses

In this activity you will discuss your strength and weaknesses together.

30 Mins

1. Show each other what you filled in the previous worksheets. Make sure you
each have someone else’s completed activity.
2. Study the person’s strength and weaknesses
3. Brainstorm together what other major strengths you could use to your
advantage that you might have overlooked.
4. Record the suggestions that you might get.
5. You can do this with a different people in the group to get as many ideas as
possible. Work with a new person every 2 or 3 minutes.

In this activity we looked at what other strengths we might have and what
we should work on. Did anyone get any new ideas for their business? It is
important for artisans to share with one another for inspiration.

Activity 3D: Personal Action Plans

In the final activity of this session we decide on some concrete actions to

improve or create systems in our businesses. Keeping in mind all the things
we’ve discussed so far about our businesses, and ourselves take a few
minutes to record your thoughts.

10 Mins

1. Each of us uses Table 3D: Personal action plan to write 1 -3 changes that we
would make to improve systems in our businesses. Are there any improvements

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 you would like to make based on what we have learned in the previous
activities? If so, decide what systems you will implement or improve.
2. Record how you will make these changes
3. By when will you make these changes?
4. Who will be responsible for this change?

Table 3D Priority Action Plan

How will I make Who is

My changes When?
the changes? responsible?

In this session you focused on your strengths and weaknesses, and what
you have at hand to help you to make a success of your business. You can
find more information in Section 2.1 of your GPG.

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 Session 4:
Your Product From
the Final Owner’s
of View

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Session 4: Your Product From the
Final Owner’s Point of View

75 2,
Mins
3&4

Session overview

The purpose of this session is to understand the real reasons people buy, by thinking
about products from the final owner’s point of view. You will complete 7 activities.
The objectives of this session are as follows:
To think about the final owner’s needs and wants before product development
Choose your target market, and know the difference between it and the final
customer
Understand the importance of exceptional customer service
Know how to research your market.

Activity 4A: Final Owners

In Activity 4A you will learn about your final owner, the person who will
actually own and use your product.

Why do people buy what they do? This answer is: people don’t buy products; they
buy solutions to their problems. Problems include what they think or feel they need,
or what they want. For example, they may have a need to hang something on the
wall. The need isn’t to buy nails, glue or tape, but to have the best solution that will
attach the object to the wall with the least amount of damage.

You can have the most magnificent product in the world, but unless someone needs
or wants it enough to pay money for it, you won’t make a sale. That’s why you must
know as much as possible about who you sell your products to, and who the final

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person is who ultimately owns and uses your products. We need to know as much as
possible about all the different people who will have temporary and permanent
ownership of the product. We need to know their problems and how we can solve
them. We need to understand their needs and wants.

10 Mins

1. In your groups, share your thoughts about this.

2. What experience do you have with why people buy what they do?
3. You can share from your experience as both a seller and a consumer.

In this activity you reflected on the needs and wants of your final customer
but also understood that it is important to know the needs and wants of all
your buyers whether they have temporary or final ownership of the
product. Refer to Section 2.2. of your GPG for more information.

Activity 4B: End Consumer vs. Retailers

In Activity 4B you will reflect on the different between your end consumer
and a retailers.

Your end consumer buys products they like, want or need. A retailer buys products
she can sell at a profit. Unless you retail yourselves and sell directly to the final owner,
you probably wholesale to a shopkeeper, who in turn sells to the end consumer or to
someone who buys something to give as a gift. They have different needs and wants,
and you have to understand both your customer and the shop owner’s customer to
be successful. The retail shop owner is running a business just like you, and has the
same kinds of business concerns. Like you, the shopkeeper is in business to make a
profit, and needs access to the right merchandise, or products, that their target
market will buy - the end customer we just talked about. You can think of your
products as the retail shop’s raw materials: they need to be the right kind, quality,
price, consistency, and availability.

Your target market is whom you sell directly to. Choosing the right market to sell to is
just as important as making the right products
.

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 10mins

1. Complete Table 4B to help you to think about your customers

2. Differentiate between the final owners and retailers
3. Think about what their interests are to complete the table
4. Try to keep in mind aspects that we have already discussed such as reliability,
price and consistency
5. Define your target market based on the outcome this exercise

Table 4B: Target Market

Retailers Final Owners

Do you have these

Yes No Yes No
customers ?

What do they like from

your product ?

What do they like from

your services ?

How can you answer to

their needs (in terms of
products)?

How can you answer to

their needs (in terms of
services)?

In this activity you looked at who your target market is and who to
understand them better. Your GPG has more information in Section 3.

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Activity 4C: Customer Service

In Activity 4C you will review the important of good customer service for
a successful handicrafts business.

[5mins]

At the top of every company’s list is the need to work with reliable suppliers. Like you,
shopkeepers work very hard for not enough money, and have intense competition
they must outsmart. How reliable a supplier you are is just as critical to them as it is to
you, and can even be more important than having the latest designs.

In this activity the group reader will read some more information about Nui and how
she made her business successful before you complete the exercise.

Nui realizes that a good relationship her buyers is very important and want to ensure
that she is a good supplier. She has one big client Mr Kunia who buys up to 70 per
cent of products. Her key to success is that she understand that Mr Kunia is in a very
competitive industry and when she designs new products she does so for the end
buyer, helping Mr Kunia to stay ahead of his competitors.

It is not rare that Mr. Kurnia comes up with big order, sometimes almost doubling her
average production rate. For these occasions, Nui has her system that she applies
consistently. She has already agreed with Mr. Kurnia that he would give her notice at
least 1 month in advance of the expected delivery date if he would like to order
above her production rate, instead of 2 weeks notice as in normal times. She would
in turn as well give him generous discount for bigger orders. In other times, she would
offer him discount in payment terms: he can pay two weeks later instead of one week.
With both parties agreeing to this term, she can be sure that she can deliver the
correct items, and on time. She wants to deliver the right product and be reliable for
delivery so as not to disappoint her buyers. When she is unable to attain her target,
she makes sure that she gives notice to Mr. Kurnia or her other buyers much in
advance explaining the unforeseen problems or event happening, so that the buyers
can look for other suppliers in time. When she’s unsure about some of the buyers’
expectation, she does not hesitate to ask. She does not give false promise and would
like to make her buyers’ life easier. Nui now has a good reputation for quality products
and reliable delivery.

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 60 Mins

1. Discuss in your groups what would you advice yourself and fellow handicrafts
producers to do to remain a reputable supplier.
2. Use the keywords below to construct your advice. The group reader will read
these aloud.
3. Use at least 4 of the key words and record your ideas in Table 4C.

Table 4C: Customer service

Keywords:
• Reliability
• Trust
• Innovation
• Helpful/resourceful
• Responsive
• Quality
• Communication
• Reputation

Advice:

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 In this activity you reflected on what would make you a good supplier
and how to provide good customer service and gain a good reputation.

Activity 4D: Target Market and Customer Match

In this activity you will review your target market and customer match.
Ensuring a good match will help to ensure good supply.

1. Use Table 4D below to help you identify what the best market and
customer match is for you
2. Fill out the table to help you identify your target market

Table 4D: Best Market and Customer Match

Who buys my
products?

Who uses my
products? (the end
consumer)

My target market:
what kind of shop?

Where is my target
market located?

What is my
competitive
advantage?

What can I do now

to improve my
business?

ILO – ASEAN Small Business Competitiv eness Programme 22

 Together with the exercises you completed earlier you should have a
better ideas of what makes your business unique and how you can deliver
good service to your customers by knowing more about your market. Look
at Section 4.1 of your GPG for more informati on.

Activity 4E: Market Research

In this activity you will reflect on how you can learn more about your
customers through market research.

One of the best ways to learn what products your market will buy from you is to ask.
If you are a reliable producer and a good business partner, the wholesaler or buyer
you sell to will be very happy to give you information to improve your products, for
when your products sells more, he sells more, and you both make more money. He
will also be impressed with your professionalism and desire to learn and will consid er
you a good business partner.

Once you’ve developed a successful and trusting relationship, your buyer will be
more willing to give you accurate information about their customers, the competition,
and industry trends, to help you provide better products for his customers. Some of
the things you might want to ask about include:
Who will want to buy what you can make and why? What i s their lifestyle, where
do they live?
What are the typical things they buy the most? Why?
What changes are needed so your product is more desirable?
Will enough people want to buy what you make so it worth your while to
produce it?
What are your major com petitors making? What can you make that’s different
and better?
What is the typical price range for your type of products? How much sells in a
set amount of time?
What are the typical sales and payment terms?

ILO – ASEAN Small Business Competitiv eness Programme 23

 10 Mins

1. In your groups, brainstorm some other ideas about how you can get
information about your market and final buyer
2. What other kinds of information would be helpful to you and where could you
get it?
3. Record your ideas in the space below

Table 4E: Market research

In this activity you looked at market research and how it can help you to
learn more about your customer. You brainstormed some ideas about what
to ask and how to go about this.

Activity 4F: The Right Market for Your Product

Now you have reflected on your market, it is important that you carefully
select the right market for your product. Activity 4F will give you an idea of
the types of questions you should answer to understand which product is
for which buyer.

10 Mins

1. Break into groups of 2 or 3.

2. Help each to complete this exercise
3. Use Table 4F for a product that you want to sell to help you learn more about
your market and decide what it wants and to decide if it is right for you
4. Answer the questions in column 1. You can repeat this for your different
products.

ILO – ASEAN Small Business Competitiv eness Programme 24

 Table 4F: Which Market is Right for Your Product

Product:

Buyer 1 Buyer 2 Buyer 3 Buyer 4 Yes/no

Which end-
buyer would
buy this?

What
changes do I
need to
make to sell
more?

Is the market
big enough
to be
worthwhile?

What price
will this sell
for?

How much
profit will I
make?

How much of
my product
sells in a set
amount of
time?

What’s the
closest
competitive
product?

Who’s my
competition?

ILO – ASEAN Small Business Competitiv eness Programme 25

 What else
can the shop
sell that it
doesn’t have
and that I
can make?

Other

Other

Other

Other

In this activity you reflected on ensuring the match between your market
and your product is good.

Activity 4G: Personal Action Plans

In the final activity of this session we decide on some concrete actions to

improve customer service based on your improved understanding of you
market. Keeping in mind all the things we’ve discussed so far, take a few
minutes to record your thoughts.

10 Mins

1. Each of us uses Table 4G: Personal action plan to write 1 -3 changes that we
would make to customer service in our businesses. Are there any improvements
you would like to make based on what we have learned in the previous
activities? If so, decide what systems you will implement or improve.
2. Record how you will make these changes
3. Record by when will you make these changes?
4. Finally, state who will be responsible for this change

ILO – ASEAN Small Business Competitiv eness Programme 26

 Table 4G: Priority Action Plan
My changes How will I make When? Who is
the changes? responsible?

In this session you reflected on your target market and looked at what this
meant for customer service. You can find more information about this in
Section 3 and 4 of your GPG.

ILO – ASEAN Small Business Competitiv eness Programme 27

 Session 5:
Market-led
Product
Development

ILO – ASEAN Small Business Competitiv eness Programme 28

Session 5: Market-led Product
Development

120 Mins 5

Session overview:

The purpose of this session is to understand the value of market -led product
development and to begin to practice it. You will complete 8 activities. The objectives
of this session are as follows:
Understand the difference between market -directed and product-directed
product development
Be able to decide if you need to change your products, and how
Understand what perceived value is and how to work with it
Understand ways to increase the prices consumers are willing to pay

Activity 5A: Market- vs Product-led Development

In this activity you will look at the difference between market - and product-
led development

Market-led product development involves choosing and understanding your market

first, then designing for it where as product-led product development involves m aking
products first, then looking for a market that might buy it . Market-led product
development is about being market focused.

ILO – ASEAN Small Business Competitiv eness Programme 29

 5 Mins

1. Discuss in your groups some examples of market - and product- led product
development
2. Think back to the case studies of Dara and Nui you heard in the beginning of
training and think about how they developed their products

In this activity you reflected on the difference between market - and

product-led product development.

Activity 5B: Reassessing Your Products

In Activity 5B you will look at whether or not your need to change your
products. There are a number of different reasons why you need to change
your products. These could be market or business related.

Markets and consumer wants and needs are not static. They change over time.
Tastes and trends change all the time. What’s fashionable today is outdated
tomorrow.
Their economic situation changes so they can afford to spend more or less.
They need something for a specific event, like a birthday present or the
holidays.
People get older and need different things.
People just want something new or different

Adapting to changes in your business

You may also need to develop new products because of changes in your business.
For example:
Some raw materials are no longer avail able, have gotten more expensive, or
have changed.
Your workforce has gotten smaller or bigger, and people have more or fewer
skills.
You need to differentiate from the competition.
You need to offset sales seasonality (something only sells at a certain ti me of
year).

ILO – ASEAN Small Business Competitiv eness Programme 30

 10 Mins

1. In your groups, discuss each item in Table 5B.

2. Decide whether you need to change to products due to a change in the
business or in the market.
3. Complete Table 5B by placing a tick in the market or business column

Table 5B: Adapting to Change

You need to change your products due to changes
Market Business
in:

Example: Tastes and trends change all the time.

What’s fashionable today is outdated tomorrow.

You need to differentiate from the competition.

Their economic situation changes so they can afford

to spend more or less.

They need something for a specific event, like a

birthday present or the holidays.

Your workforce has gotten smaller or bigger, and

people have more or fewer skills.

Tastes and trends change all the time. What’s

fashionable today is outdated tomorrow.

People get older and need different things.

Some raw materials are no longer available, have

gotten more expensive, or have changed.

People just want something new or different.

You need to offset sales seasonality (something only

sells at a certain time of year).

ILO – ASEAN Small Business Competitiv eness Programme 31

 In this activity you reflected on changes in your business or market and how
they drive the need for product changes. You should reflect over this
question at home to decide whether or not you need to make changes to
your products.

Activity 5C: Perceived Value

In this activity you will get to understand more about perceived value and
what you can do to increase the perceived value of your products. This
can be done with little additional expense.

Perceived value is what something is understood to be valued at, what it seems to

be worth, and what people generally are willing to pay for it. It may have no relation
to its real value based on costs.

How can you make your products more valuable in the eyes of the consumer and
charge higher prices? You can improve the quality of your products and do other
things that make them seem worth more, but that will only increase your cos ts a little.
Value-added is more than the extra cost incurred increases the perceived value of
something. If we increase our costs by as much as we increase the value, we don’t
gain anything. Some of the things you can do without greatly increasing costs include:
Updating the design and style,
Make products functional in addition to being decorative
Use several materials or patterns, more than one production technique
Make different things from other producers
Make sure your products look like they are lovingly handmade. Qualit y and
finish are most important.
Promotional materials that explain your product inform the consumer and get
them interested in buying it. Use hangtags to describe the cultural importance
of your design; to explain how it is made and its traditional uses.
Boxed sets and beautiful packaging increase perceived value, yet don’t add
a lot to the cost.
Sets of matching things
Display can also affect perceived value

ILO – ASEAN Small Business Competitiv eness Programme 32

 15 Mins

1. In your groups, discuss how you have increased the perceived value of any
products
2. Share with the groups what you did and what it was that the customers liked
about this
3. Take notes in order to reflect back on this discussion. Use the space provided
below.

Table 5C: Perceived Value

In this activity you reflected on perceived value and how this can
increase the price you are able to charge without adding too much to
your costs. Think about how you could apply this to your own products.

ILO – ASEAN Small Business Competitiv eness Programme 33

Activity 5D: Coming up With New Designs

After you’ve researched your market and you know what your customers
need and want, how do you develop new products and adapt your
current ones to make them more desirable and sal eable? Activity 5D will
explore how to come up with new designs.

Ideas for coming up with new designs based on old designs:

Old products can be improved and/or updated.
Expand your product line into a collection, a set, a line extension.
Improve quality of existing products.
Add new colors, shapes and sizes.
Make things that coordinate (go together, not match) with each other.

Or you can develop entirely new things. What do you already have that is unique or
better than what your competition has?
Design, artistic, traditional, and cultural r esources
Raw Materials
Skills and human resources
Machinery and technology
Can you turn a disadvantage into an advantage?
Can you increase perceived value?

We have collected all the products that you brought in today. You are going to
discuss the items. To begin Activity 5D, we’ll read the instructions below.

60 Mins

1. Move over to the table where the products have been collected.
2. Discuss which items you think are selling well and which items are not.
3. Once you have reached on consensus in your groups. Move those you think
are not selling well over to one side of the table and those that are to the other
side.
4. One-by-one each artisan will let us know which of their products is selling well
and which isn’t. If you are comfortable please also share the sel ling price of
the product. Ask the group for advice and suggestions to improve your
products so they will sell better. Record these suggestions in Table 5D (1) and
5D(2). You used these tables earlier but you can now get additional input from
the group to improve your product and market assessment.

ILO – ASEAN Small Business Competitiv eness Programme 34

 5. Each group should reflect on why they might have placed the product on the
wrong side of the table e.g. saying that it would not sell well when it was in fact
selling well.
6. Once each person has a turn, together you can spend some time
brainstorming about new products. Building off each others ideas is a great
way to get inspiration. Keep reflecting back over the information you heard at
the beginning of this activity about coming up with new designs.

Table 5D (1): Best Market and Customer Match

Who buys my
products?

Who uses my
products? (the end
consumer)

My target market:
what kind of shop?

Where is my target
market located?

What is my
competitive
advantage?

What can I do now

to improve my
business?

ILO – ASEAN Small Business Competitiv eness Programme 35

 Table 5D(2): Which Market is Right for Your Product
Product:
Buyer 1 Buyer 2 Buyer 3 Buyer 4 Yes/no

Which end-
buyer would
buy this?

What
changes do I
need to make
to sell more?

Is the market
big enough to
be
worthwhile?

What price
will this sell
for?

How much
profit will I
make?

How much of
my product
sells in a set
amount of
time?

What’s the
closest
competitive
product?

ILO – ASEAN Small Business Competitiv eness Programme 36

 Who’s my
competition?

What else can

the shop sell
that it doesn’t
have and that
I can make?

Other

Other

Other

Other

In this activity, each person got a chance to discuss two products that
they brought in. With the help of your peers, this activity helped you to
better understand why some of your products might be selling better than
others.

ILO – ASEAN Small Business Competitiv eness Programme 37

Activity 5E: Personal Action Plans

In the final activity of this session we decide on some concrete actions to

improve product design. Keeping in mind all the things we’ve discussed
so far, take a few minutes to record your thoughts .

10 Mins

1. Each of us uses Table 5E: Personal action plan to write 1-3 changes that you
would make to your product designs. Are there any improvements you would
like to make based on what we have learned in the previous activities? If so,
decide what systems you will implement or improve.
2. Record how you will make these changes
3. Record by when will you make these changes?
4. Finally, state who will be responsible for this change?

Table 5E: Priority Action Plan

How will I make Who is

My changes When?
the changes? responsible?

In this session you reflected on products and how you can improve them
and therefore improve sales. You worked in groups to get feedback
about your products, discussed why certain products might sell better
than others, and learned about how to design new products for your
market. For more information please refer to Section 5 of your GPG.

ILO – ASEAN Small Business Competitiv eness Programme 38

ILO – ASEAN Small Business Competitiv eness Programme 39
 Session 6:
Improving
Production and
Quality Control

ILO – ASEAN Small Business Competitiv eness Programme 40

Session 6: Improving Production
and Quality Control

50 Mins 7&8

Session overview:

The purpose of this session is to learn about systems that help improve production,
and the importance of quality control. You will complete 6 activities. The objectives
of the session are as follows:

Objectives: By the end of this session trainees wi ll be able to:

Understand that safety comes first, no matter what
Understand to work backwards to schedule production
Have some ideas for how to handle disasters and bottlenecks
Understand the systems and tools to control quality
Always make and keep a duplicate sample.

While you discuss improving production and quality in this session. Always remember
that safety should come first.

All manufacturing businesses, including small handcrafts enterprises, need to deliver

high quality products, bring their products to market in a timely manner, reduce costs,
manage change emergencies, and be profitable. “Production” refers to all the steps
involved in making a product, from the first contact with the raw materials to the
finished product ready for packing and shipping.

Efficient production will help you compete better. When your physical workspace and
your work flow are organized for maximum efficiency, you: Produce the most amount
of uniform, quality-controlled product, in the least amount of time, for the least cost;
thereby increasing your profit.

ILO – ASEAN Small Business Competitiv eness Programme 41

Activity 6A: Scheduling Production and Using Gantt
charts

In this activity you will look at the concept of working backwards to

schedule production and explore the use of Gantt charts to help you to
schedule production.

Why work backwards? By starting with the customer’s delivery date and working
backwards to the very first step in producing the order, you can map out all the steps
that need to be completed, the order they need to be performed in, and how mu ch
time each takes.

A Gantt chart is a bar or line chart with time shown along the horizontal, and tasks
along the vertical. Starting from the delivery date, and working backwards to when
you need to order supplies and set up your workshop, it will help you plan and visualize
the steps required to make the product, the order they need to be performed in, how
long each takes, and most importantly, when you need to start in order to be finished
on time.

10 Mins

1. Split into groups of 3 people

2. The group reader will read the scenario below and you will complete the Gantt
chart for Nui.

It is now 15 th of November, Nui would like to make her Gantt chart until the end
of the year.

She is currently making printed bags for company A and she is cur rently in
negotiation to secure deal with company B for their orders of 1000 Christmas-
themed T-shirts by the end of December. For the order from company A, she is
now finishing her design, and would then propose it to the customer and upon
their approval starts the production process. For the production process, she
will need have the blocks prepared (3 days), buy raw materials (1 day), print
the design on the large textiles (3days), cut the textile according to the design
and then to sew it (3 days). The whole production process may take about 10
working days and the products will be boxed and shipped to the customers.
The delivery will be done with normal shipping (5 days) and Company is
expecting the products to arrive by 15 th of December. Company B, will need

ILO – ASEAN Small Business Competitiv eness Programme 42

 the T-shirts to be sent by 30 th of December. The production process will take
more or less the same, but each t -shirts will need to be tagged and wrapped
in plastics, making it a bit longer to pack. And in order to buy raw material, she
will need to wait for the first down payment to be paid. She takes also a mental
note that there’d be a Thursday in the first week of December when it will be
national holiday. She expects some of her worker to take leave on the Friday.
Of course, there would be holi days around Christmas (25 th -26 th ). She has some
people that does the printing, some make patterns and cut, and another one
to sew. When should they start producing the T-shirts?

3. Complete the Gantt Chart in Table 6A according to this information. Or use a

blank piece of paper.
4. Once you are done, compare you chart to the others in your group
5. What are some of the key points Nui should give more attention to?

Table 6A: Gantt Chart

Number Activity Wk Wk Wk Wk 4 Wk Wk Wk Wk Due
of days 1 2 3 5 6 7 8 date
1

2.

3.

4.

5.

6.

7.

8.

9.

In this activity you looked at using a Gantt chart to schedule production.

Activity 6B: Dealing with Bottlenecks

ILO – ASEAN Small Business Competitiv eness Programme 43

 In this activity you will look at how to deal with production bottlenecks.

Production bottlenecks mostly come from the production process, people, and
uncontrollable externals like weather or natural disasters.

Disaster affects both you and your customer. Whatever the problem, immediately
notify your buyer. Remember how we em phasized how critical customer service is,
meaning “reliability, consistent quality, and exceptional communications.” If you
practice this, your buyer will respect your professionalism, honesty and promptness in
communicating, and will save the order if possible. But even if this order can't be
saved, you will maintain the relationship and probably get another in the future.

10 Mins

1. In your groups, brainstorm some causes of bottlenecks in production

2. Brainstorm some ways to solve the bottleneck or what to do. Record these in
Table 6B.
3. Share any experiences you had with bottlenecks and discuss how you handled
them
4. Share if you would have done anything differently base d on what you have
learned or now know

ILO – ASEAN Small Business Competitiv eness Programme 44

 Table 6B: Production Bottlenecks
Common causes

Solutions or what to do:

In this activity you learned about production bottlenecks and shared

your experiences of bottlenecks with the group in order to learn from
your peers and strive for better customer service.

Activity 6C: Quality Control

In this activity you will review the concept of quality control and look
over a checklist to help you to improve quality control.

Quality control is how you ensure that products are uniform and of consistent quality
and meet or exceed the standards that have been set by your customers. If buyers
can’t actually get what they ordered when they need it, the product’s design and
price won’t matter! Efficient production and accurate quality control systems will
enable you to meet buyers’ expectations and needs and increase your bus iness.

Quality control should take place at every stage of pro duction, starting with your raw
materials, and not only at the end of the production line . The earlier you catch a
problem, the sooner you can solve it and prevent it from becoming bigger or from
ruining production. If you have a quality issue that can’t be fixed, catching it sooner

ILO – ASEAN Small Business Competitiv eness Programme 45

enables you to stop production right away instead of continui ng to invest in
something that can’t be sold

One key aspect of quality control is making a duplicate sample. This way you can
ensure that the customer gets exactly what they expect and save yourself time.

10 Mins

1. In your groups review the checklist in Table 6C.

2. Discuss anything you don’t understand and try to add some additional items
to the table.

Table 6C: Sample Quality Control Checklist Y/N

Do the colorus match the colors requested in the order?

Do they match the sample?
Colours
Is the color consistent in all products? Do the dyes crack, rub off or
fade?

Are the quality of the materials identical to the sample?

Materials Is the quality consistent in all the products produced for the
purchase order?

Does your product smell of stain, paint, fumigants, textile ink, soil,
repellents, mold or cigarette smoke? Chances are your buyers will
Odours
notice these orders and complain. Be sure to air products
adequately before packing for delivery.

Are the products the same size as the original sample or order
request?
Size and
Are the dimensions accurately duplicated in production?
dimensions
Is the weight of the finished product the same as the original
sample?

Have the requested finishes and embellishments been added?

Finishes Are they exactly like those on the control sample and purchase
order?

ILO – ASEAN Small Business Competitiv eness Programme 46

 Are you using trained, skilled artisans and appropriate tools and
Construction
technology to deliver a quality product?

Is the climate in the storage area controlled? Is there mold?

Storage
Insects? Is the moisture level adequate?

Packaging Is the quality of the label, tags, and wrapping or bag as requested?

Are the packing materials in good condition? Are the boxes strong
Packing enough to withstand rough handling? Are the contents safe from
the effects of water?

If you are working against a deadline, has the rush compromised

Rush orders
the quality of the quality of the product?

Other

Other
Other

In this activity you reflected on the importance of quality control.

Activity 6D: Personal Action Plans

In the final activity of this session we decide on some concrete actions

to improve production and quality control. Keeping in mind all the things
we’ve discussed so far, take a few minutes to record your thoughts .

10 Mins

1. Each of us uses Table 6D: Personal action plan to write 1 -3 changes that you
would make to your production process and quality control. Are there any
improvements you would like to make based on what we have learned in the
previous activities? If so, decide what you will implement or improve.
2. Record how you will make these changes

ILO – ASEAN Small Business Competitiv eness Programme 47

 3. Record by when will you make these changes?
4. Finally, state who will be responsible for this change?

Table 6D: Priority Action Plan

How will I make Who is

My changes When?
the changes? responsible?

In this session you reflected on production and quality control. Taking into
account that safety should always come first you looked at planning
production and ensuring quality through out the whole process. For more
information, please refer to your GPG Section 7 and 8.

ILO – ASEAN Small Business Competitiv eness Programme 48

ILO – ASEAN Small Business Competitiv eness Programme 49
 Session 7:
Costing
and Price

ILO – ASEAN Small Business Competitiv eness Programme 50

Session 7: Costing and Pricing

60 mins 9

Session overview:

The purpose of this session is to understand how to accurately cost and successfully
price your products. You will complete 6 activities. The objectives for this session are
as follows:
Know the difference between costing and pricing
Understand the importance of good record keeping
Understand ways to reduce costs and increase prices.

Activity 7A: Difference Between Cost and Price

[5mins]

Before you sell your products to the market, you need to know what
it costs you to make them so you can know the price you need to sell
them for to make money.

If you don’t know the true cost of making your product, how can you know how much
profit you make when you sell it or if you are making a profit at all, or if you are even
losing money? If you underestimate your costs, you may think you are getting a good
price for your product but you may actually be losing money. Do you find you are
selling well but never have any money in your pocket? Your costs may be higher than
you think.

Costing is the process of adding up all of the expenses involved in producing and
selling a product. Your costs are everything that goes into making your product and
running your business.

ILO – ASEAN Small Business Competitiv eness Programme 51

Activity 7B: Costs

[10 Mins]

Indirect costs are all the expenses you have to operate your business
that you wouldn’t have if you were working for someone else or not
working at all. Most, but not all of your indirect costs are overhead.
For example, some of your water and electricity is used to produce
your products, and some to run your business.

What are other indirect costs might you have? Do you make phone calls for your
business, do you mail letters (don’t forget paper), do you take the bus to town or drive
your vehicle to sell your products? These are expenses you want to get back w hen
you sell.

Overhead: rent, utilities, taxes and fees, licenses, insurance, etc.

Machinery maintenance and repairs
Administrative expenses, like bookkeeping, shipping and postage
Office supplies: paper, pens, computers, fax machines
Transportation and fuel used to pick up materials and deliver your products
New product development expenses (raw materials, labo ur, overhead)
Selling and distribution costs: marketing and promotion costs, including
attending fairs and shows shipping or delivery costs to get your product to the
market or buyer
Housekeeping costs
Social security costs
If you cover your workers’ transportation costs to your workshop
Costs associated with attending crafts fairs and other sales and promotional
events.

Fixed costs are things that are the same each time regardless of changes to
production, like rent, fixed salaries, and insurance premiums. The same fixed amount
will be entered each time into your records.

Variable costs are costs that change with changes to production: your raw materials,
hourly or daily wages paid only for the amount of time worked, and utilities like
electricity that may go up or down. These need to be calculated each time you do
your recordkeeping.

ILO – ASEAN Small Business Competitiv eness Programme 52

 5 Mins

1. In your groups, discuss why you think it is important to understand the

differences in types of cost
2. How will this help you to contribute to a successful business?

Activity 7C: Importance of Recordkeeping

[10mins]

Is it really necessary to separate costs into different types, and to maintain

accurate records? Wouldn’t you rather spend your time designing and
producing moneymaking products?

Well, without proper records, how do you even know if you’re recovering all your costs
when you sell your products, much less making money?

You can only recover ALL of your business expenses by accounting for them in the
prices you sell your products for. If for example, you don’t factor in the cost of
electricity into your selli ng price, you may not have the money to pay the bill. How
will you operate your workshop without lights and machinery?

So how do you know how much of the monthly electric bill to allocate to each
product? There are two basic methods:
Adding a set amount to the sales price of each item, or
Adding a percentage of indirect costs to each item.

The point is you must account for all your costs, and a consistent and accurate
recordkeeping system will enable you and your accountant or bookkeeper to do that.

ILO – ASEAN Small Business Competitiv eness Programme 53

Activity 7D: Pricing

Pricing is the process of figuring out how much you can sell your
product for, how much money you can get for it. It is an art. To pick
your selling price, you take all the costs of producing and marketing
your product, add in your profit margin, and try to find a middle
ground between what you want to charge, what the market will
typically pay, and what your competitors charge for comparable
things.

Remember, perceived value may have no relation to the real cost. You may find that
for you to make money, you need to get a higher price than the market is willing to
pay you. This means the market does not value your product enough to pay you what
you need. This is very common, and you should not take this personally, it happens all
the time, to artisans and to all businesses. Everyone wants a bargain, to pay as little
as possible and to get as much as possible, and of course you want the opposite - to
get as much money for as little work as possible. So how can you increase the price
the market will pay for your products? First try to reduce costs, without compromising
quality or safety.

10 Mins

1. Gather around the table of products again.

2. In your groups, brainstorm some ways to lower costs and increase the prices of
the products on the table

Activity 7E: Personal action plans

In the final activity of this session you decide on some concrete actions
to improve costing and pricing of your products. Keeping in mind all the
things we’ve discussed so far, take a few minutes to record your thoughts.

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 10 Mins

1. Each of us uses Table 7E: Personal action plan to write 1 -3 changes that you
would make to your costing and pricing. Are there any improvements you
would like to make based on what we have learned in the previous activities?
If so, decide what you will implement or improve.
2. Record how you will make these changes
3. Record by when will you make these changes?
4. Finally, state who will be responsible for this change?

Table 7E: Priority Action Plan

My changes How will I make When? Who is
the changes? responsible?

In this session you reflected on costing and pricing. For more information,
please refer to your GPG Section 9.

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 Session 8:
Reasons to Turn
Down an Order

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Session 8: Reasons to turn Down
an Order

10 Mins 10

Session overview:

The purpose of this session is to understand that there might be times when it is better
to turn down and order. This may seem counterintuitive but is can be the best thing
for your business.

Activity 8A: Turning Down and Order

Here are some good reasons to turn down an order:

• There is no profit. An exception might be to keep your factory producing and
not shut down and keep your trained staff when a new, profitable order is soon
coming. It would cost more to find and train new people, and start up again.
• The buyer owes you money. It’s not your job to finance your customer’s cash
flow, just as your suppliers will not continue to supply you with more and more
raw materials if you haven’t paid for the ones before. All past due payments
for previous orders must be paid in full before you deliver anything else.
• It’s too big for you to handle: It’s too big and complicated for your expertise
and there’s a good chance you’ll get it wrong.
• It’s a one-time huge order: You’ll have to hire people and invest in training and
equipment that you won’t need again.
• It’s the wrong buyer/market segment for you.
• The payment terms are not good for you.
• The terms and price are too good to be true: could this be a warning?
• You don’t have the ability to finance production and will have to go into debt.
• You don’t have time in the production schedule to deliver it on time.
• It conflicts with other orders you already have.
• It violates an exclusive agreement you have with another buyer.

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 • It’s not what you make. You don’t have the e xpertise.
• You are discontinuing the item.
• The customer will be impossible to satisfy.

10 mins

1. In your groups, share any experiences that you have with turning down an
order
2. Are there times when you accepted and order that you should have turned
down?
3. Draft a response to a customer whose order you need to turn down
4. Record your thoughts and answers in Table 8A

Table 8A: Turning down an order

Discussion

Draft response to a customer whose order you need to turn down:

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Activity 8B: Personal Action Plans

In the final activity of this session you decide on some concrete actions
on when to turn down orders. Keeping in mind all the things we’ve
discussed so far, take a few minutes to record your thoughts .

10 Mins

1. Each of us uses Table 8B: Personal action plan to write 1-3 changes that you
would make about when not to accept orders. Are there any improvements
you would like to make based on what we have learned in the previous
activities? If so, decide what you will implement or improve.
2. Record how you will make these changes
3. Record by when will you make these changes?
4. Finally, state who will be responsible for this change?

Table 8B: Priority Action Plan

My changes How will I make the When? Who is responsible?
changes?

In this session you reflected on when it would be in the best interests of your
business to turn down and order. You can find more information about this
in your GPG in section 10.

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 Session 9:
Priority Action
Plans

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Session 9: Priority Action Plans

40 mins

Session overview:

With the workload that comes with running a small business, i t’s not always easy to
actually implement the changes you would like. In this session you look at the work
you completed during this training and create a simple action plan to improve your
businesses. You complete a single activity

Activity 9A: Prioritized Actions

You will work step-by-step, session-by-session to prioritize the actions you

have listed in the previous sessions.

40 Mins

1. You talk in a group. Everyone says what he or she found in each of the
activities. You start from the first activity.
2. For the next step you use Table 9 A: Priority action plan. Individually you look at
the action plans you completed for each ses sion and choose which of the
changes you will introduce first and when, in a week, in a month, in two
months? List at least 3 actions [15mins]
3. Each of us present their Priority Action Plan and the group shares their ideas of
whether the priority of actions should be changed or if they are good the way
they have been set. Each participant has 5 minutes. [25mins]
4. As a group, you can use additional time to decide whether you will meet
again, after the training to practice some of the activities, such as costin g. You
can also plan to meet on a regular basis and talk about how are you doing
with the changes you are introducing

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 Table 9A: Priority action plan

My priority How will I make Who is

When?
changes the changes? responsible?

Prioritizing actions, the activity you completed at the end of the

training, is a very important step. It pushes you to decide how to apply
what you have learned in this training into your work and lives. You can
use it together with the Training Guide and GPG to do revisions and
motivate yourselves to take actions. There has not been time to cover
all the sections contained in the GPG today. You will find additional
Sections on purchase orders, and competitive advantage that you can
cover in your own time.

This is the end of the training. You can now complete the evaluation. In few months
there will be some follow up too.

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Flipcharts:
Activity 2C
Flipchart 1
What is Nui doing right, Dara doing wrong?

Nui Dara
1. 1.
2. 2.
3. 3.
4. 4.
5. 5.
6. 6.
7. 7.

Flipchart 2
Nui’s Systems

1.
2.
3.
4.
5.
6.
7.

Flipchart 3
What can Dara do:

Now Over time

1. 1.
2. 2.
3. 3.
4. 4.
5. 5.
6. 6.
7. 7.

Activity 2D

Flipchart 4

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 Use Systems to:
Assess who you are and what you can make
Determine the best market and customer match for you
Learn about and understand your market and customer
Do market-led product development
Improve production and quality control
Record keeping
Calculate your costs and set your prices
Efficient and reliable Customer Service
Decide whether to accept or turn down an order

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ILO – ASEAN Small Business Competitiv eness Programme 65
 www.sme-tools.org

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