Optimism for Start Ups Attracts Young Entrepreneurs to Sustainable Businesses

Entrepreneurship Development Programme
From Facebook chats to an urban mushroom farm

Looking back at the hours spent swapping stories on Facebook five years ago, 26-year-old Almaz Tegene had no idea that her new online friend, Solome Mekonnen, would end up being her business partner.

Almaz, Selome and Asratemariam Sileshi are three young women, who find themselves part of a new breed of Ethiopian entrepreneurs who are being supported through an Entrepreneurship Development Programme (EDP) launched by Prime Minister Hailemariam Desalegn in February 2013.

The EDP has since attracted the support of development partners such as Canada’s Department of Foreign Affairs, Trade and Development (DFATD) which provided USD 5.8million to the programme in April 2014.

“Canada is proud to help create jobs by promoting the growth of small businesses in Ethiopia, especially businesses owned by women,” said Christian Paradis, Canadian Minister of International Development and La Francophonie at the time of the announcement of the partnership between Canada and UNDP on entrepreneurship.

Over 20,000 Ethiopians have gone through an entrepreneurship training workshop since the Entrepreneurship Development Centre (EDC) was set up following the launch of the EDP in 2013.

Highlights

  • In August 2014 UNDP and Microsoft Sign Private Sector Partnership Deal to Empower 200,000 Entrepreneurs in Ethiopia
  • Over 8,000micro, small and medium business have accessed business development services
  • Over 27,000 new jobs have been created following training provided to budding entrepreneurs
  • Through a partnership with the Office of the First Lady and CAWEE, the EDC is supporting 1,500 young women to have access to the export market

Both Selome and Almaz have gone through the intensive entrepreneurship training workshop and subsequent Business Advisory Service (BDS) support provided by the EDC.

While exploring business ideas five months’ ago, the group of friends finally settled on Selome’s long time passion for including mushrooms into her every meal. The number of people requesting Selome to buy them some when she next goes shopping for mushroom ignited an idea of starting an urban mushroom production business.   

  The mushrooms are grown on a bed of wooden crates in the backrooms of a condominium in Addis Ababa

“We raised 26,000 birr ($1300) from our savings, bought a share and invested in starting the new business,” Almaz said, "Our next challenge was securing a place for the production.”  Fortunately, Asratemariam had a small condominium which the new businesswomen converted into an urban mushroom farm.

The price of one kilo of mushroom goes for 50-70 birr ($2.5-3.5) and they sell 90 kilograms every week to restaurants, mushroom seed producers, small supermarkets and friends. By October this year, they plan to expand their business to produce 900 kilograms a week that would go for around 45,000 birr ($2250) in the market.

The young women have not yet seen a return on their investments but believe that once they step up production in October things will look up. Once this happens the three women plan on finally paying themselves a salary.

In two years’ time Almaz and her friends plan to set up a specialized restaurant that offers all things mushroom. In the meantime, the socially responsible entrepreneurs are exploring ways of using their business to expand the free lunch programme for 74 disadvantaged children and teens at a neighbourhood school that they had lobbied their close friends to support. “We are concerned that a meal a day is not enough for children.” Asratemariam reflects, “So we are looking for sponsors to provide the children with bread and mushroom sandwich during breakfast.” The young entrepreneurs frankly admit that this approach helps them to accomplish two things; feeding the children and also getting another market to introduce their produces.

“Entrepreneurs are passionate, positive, adaptable, and ambitious; They can spark change.” said UNDP Ethiopia’s Resident Representative Eugene Owusu explaining UNDP’s commitment to use the Entrepreneurship Development Programme as a key tool in tackling poverty reduction and promoting resilience in the country.

Start Up Highlights

Alemu Zeleke, a young university lecturer had also gone through the training and BDS. In September when the school year starts, Alemu will no longer go back to the classroom will devote his full time to the new poultry farm he has set up on the outskirts of Addis Ababa with the support of the local council, which has given him the use of 800sqm land for free. “Going through the entrepreneurship training was like finally pulling the trigger for me”, Alemu said explaining that while he theoretically knew poultry farming was profitable he had been pessimistic about his chances of succeeding. Five months and 10,000 eggs since opening up the poultry farm Alemu has increased his running capital from the initial 37,000 birr to 80,000 birr. He said he now lives under the new motto, “Less chalk and talk and more practical”
Abebech Amabew, a self-motivated mother-of-three businesswoman, is using her entrepreneurship training by EDC to turn her strong traditional culinary knowledge into a sound business. Abebech has gone from leaving free sample bottles of Kochikocha, a hot Chilli paste, with supermarkets to selling over 100kgs of the paste a week with buyers driving miles to pick up their supply from her shop in the outskirts of Addis Ababa. Abebech now has a small restaurant exclusively providing traditional Oromo dishes and has her eyes set on opening a traditional lodge and securing a factory to produce the Kochikocha at scale for export. Abebech’s running capital has grown in two years from 10,000birr to 1.5 million birr.
Six months ago Lulit Mekonnen started a bamboo business in a small workshop she constructed at a compound owned by her parents. Looking at the promise the business offers, Lulit is determined to go for mass production. “Manufacturing manually causes lots of wastages at each stage, she said, “If we use machines, we will save our time, wastage and improve our product quality.” Lulit is planning to use up to 10,000USD from her savings to order machines from abroad so she can go into mass manufacturing. “The machineries would ultimately give me the opportunity to manufacture the bamboo bicycles I have dreamt about”.

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