The Value of Ideas
There are many good business ideas in Ethiopia. But potential entrepreneurs often do not know how to create value out of them by transforming the idea into a real business. Through a Business Plan Competition, the Engineering Capacity Building Program (ecbp) in collaboration with FirstConsult and an international investor, sourced 20 great ideas (out of hundreds of ‘good’ ones) by 20 entrepreneurs and invited them to participate in a “real” business plan workshop together with the investor. The entrepreneurs were selected because they had spotted an opportunity to provide Ethiopia with a new, innovative and value-adding product or service.
A week of selling the business idea, refining the financial planning, and analyzing market potentials culminated with the presentation of the ten best business plans before a jury. Two winners – Behailu Kebede and Tilahun Zegeye – received 25,000 EUR each in the form of equity investments into their companies, which are essential oils and mushroom spawn production companies respectively.
The other 18 entrepreneurs, while not financial winners, still benefited from the workshop. “I was not chosen in the end by the jury,” explained Aziza Hagos, one of the participants, “but I am so happy about this opportunity because I learned a lot and managed to make my business idea a better one. I profited not only from the dialogue with the international investor, but also from the discussions and the sharing with the other participants.”
Why did the international investor, Felix Ahlers, a manager of a frozen food company in Germany, choose this way to invest into Ethiopia? “I have been buying coffee from Ethiopia for a while now and I have always been impressed by the potential of this country and its people. So I decided I wanted to help young, promising entrepreneurs. ecbp and FirstConsult supported me to put this idea into practice by running the competition, the registration of the companies, and Nebil Kellow from FirstConsult was the co-trainer of my workshop.” Mr. Ahlers now owns 35% of each of the two companies that were founded with his seed capital and is interested to invest more via this medium.
In addition, a holding company was established that will enable other investors to finance more ideas. “This model of a social investor with a clear business focus and a commitment to support Ethiopia is a great and very creative way to provide financing for good ideas,” says Valerie Schuster from ecbp, “we hope it can serve as an example for other investors and entrepreneurs.”
Bringing together the idea and the capital in a business plan competition is a win-win scenario for the investor and the entrepreneur. The third win is for Ethiopia, which through ecbp and FirstConsult, has found a way to maximize the value of ideas.