Micro Businesses Need Coaching, Not Just Capital, to Upgrade
MSMEs, which mostly consist of micro businesses, need coaching to be able to upgrade. It is hoped that coaching will help business players understand and utilize technology for new opportunities.
By
SHARON PATRICIA
·5 minutes read
Micro, Small and Medium Enterprises (MSMEs), which mostly consist of micro businesses, need coaching to be able to upgrade. It is hoped that coaching will help business players understand and utilize technology for new opportunities.
The picture of business players in Indonesia, especially those in micro and small ventures, is still identical with that of informal enterprises. The absence of legal entity status and the limited use of technology affect the income of these business actors.
In an effort to improve the performance of micro and small businesses (MSEs), it is necessary to provide help, including coaching, capital assistance and marketing assistance. If this effort goes well, it should increase the income of MSEs.
Statistics Indonesia (BPS) recorded in its 2016 economic census that out of the 26 million non-agricultural MSEs, 93.45 percent had no legal status. In addition, just 6.22 percent of MSEs used computers, and only 9.76 percent used the internet.
The quality of education among MSE proprietors in general is still low. More than 40 percent of them have an elementary school education or below, while those with high school and vocational high school education are 30 percent. In addition, only 4.11 percent of UMK actors attend training.
Similarly, 2018 data from the Cooperatives and Small and Medium Enterprises Ministry (Kemenkop and UKM) shows that there were 64.19 million micro, small and medium enterprises (MSMEs). Micro businesses dominate at 63.36 million (98.68 percent), small businesses at 783,132 (1.22 percent) and medium businesses at 60,702 (0.09 percent).
The MSME Association noted that there had been an increase in the number of businesses that had transitioned to digital services during the COVID-19 epidemic, from 13 percent to 25 percent. This means that about 16 million MSMEs out of the total 64.19 million business players had entered the digital market. These businesses still need more coaching to be able to upgrade. Some of this coaching was carried out by Fokus UMKM, an institution established in 2015 that has trained about 15,000 MSMEs in the archipelago.
Fokus UMKM Jakarta chapter chairman Roy Baskoro said the fact that most business players were still at the micro level showed an unhealthy situation. Such a condition showed that MSEs in the country were still managed unprofessionally.
"Our friends at these micro businesses are the ‘chief of everything officers’, which means they are single fighters. All activities, including training, purchasing, production, packaging and shipping, they conduct by themselves," Baskoro said when contacted by Kompas on Thursday (18/06/2020).
Another obstacle comes from businesses’ limited use of technology, including mobile phones. "They still have difficulty downloading various apps. They’re gaptek [with little knowledge of technology]," said Baskoro.
Given this situation, coaching and mentoring is an important step to help these businesses upgrade. They need help to understand how to use and utilize technology and the internet.
MSME coaching, said Baskoro, was carried out in various ways, from managing Facebook and Instagram accounts related to information on mentoring programs to organizing an event called the MSME Festival. At present, the MSME Festival is about unique selling propositions (USP).
"There are about 70 MSMEs involved in this activity, which runs until June 28. In the event, businesses have been given the opportunity to promote their products through live Instagram broadcasts that we are holding every afternoon," Baskoro said.
Seventy SMEs who participated in the MSME Festival received direct assistance from coaches who understood the world of entrepreneurship. In this case, the mentors helped businesses coordinate the products they wanted to display.
Siti Aisyah, 27, one of the UMKM coaches, said assistance needed to be given to help SMEs understand the competitive edge of their products and the digital world. There were still many of them who did not have the awareness to move into the digital sphere.
"This is especially the case for SME players who are 35 years old or older. There is even a mother who once said, \'I\'m not used to dealing with this [cellphone]. I usually deal with ulekan [mortar and pestle]\'. They are the people we must teach," said Aisyah, who coached 20 SME proprietors.
Atik Hendika Lyusta, 30, an MSME coach who assists 16 business players in the Jakarta and Central Java regions, shared a similar story. According to her, the activities in the MSME Festival were a place for SMEs to learn about the digital world.
"Thus, we’ve asked them to choose three products that they want to promote through social media. In addition, we’ve also invited them to learn to promote their products through Instagram Live," said Atik.
The SMEs will also be given assistance in registering for a digital wallet account. SMEs will use the Quick Response Code Indonesian Standard (QRIS) as a digital wallet to conduct transactions with consumers.
Mintarsih, 53, one of the MSME proprietors receiving coaching in Jakarta, said the assistance had really helped her develop. Her decoupage, woven bags are now being promoted on social media.
"I\'m actually a gaptek person, but I know being online is a very promising new opportunity. I will also be scheduled for product promotion on Instagram Live. I am nervous but happy," said Mintarsih.
Guiding SME players is the duty of the government. The businesses must be provided with assistance, not only in capital, but also in training and coaching. Without it, the business actors who form the backbone of the Indonesian economy will find it difficult to reach a higher scale.