Below is the interview of the Chairman of the Board of the Small and Medium Business Development Agency (SMBDA) Orkhan Mammadov to “Fins.az”.
The Small and Medium Business Development Agency (SMBDA) provides business entities with a wide range of support and services. One of such support tools is the domestic market research mechanism. In what areas has the Agency performed the domestic market research so far?
The state provides support to entrepreneurs, especially micro, small, and medium businesses (SMBs), in performing domestic market research to stimulate competitive production. This support is provided by SMBDA. Thus, the Agency provides SMBs with information and financial support in performing domestic market research. The state finances 80 and 50% of the cost of each domestic market research performed based on requests of micro and small business entities, respectively. Within this support mechanism, medium enterprises can take advantage of free pieces of training, seminars, and informational support. In general, the amount of support for SMBs for single domestic market research is up to AZN 20,000. SMBs may apply to the Agency for domestic market research in the areas of their interest directly or electronically by filling in the appropriate application form on the SMBDA website.
To date, 12 domestic market studies in various sectors of the economy have been performed at the entrepreneurs’ requests, the results of which have been provided to them in the form of reports. Business entities, who have taken advantage of the domestic market research mechanism, started manufacturing equipment used in the field of smart homes and building automation in Baku and thermal and self-adhesive sticker paper in Mingachevir. Currently, consulting companies are performing 4 domestic market studies at the entrepreneurs’ requests on the SMBDA’s order.
Along with marketing research at the entrepreneurs’ requests, domestic market research is also performed at the SMBDA’s initiative. Currently, 9 domestic market studies are underway in the fields of optical glasses, paints, portable refrigerated warehouses, textile factories, household waste containers, advertising media, motor chemical services and products, personal and corporate clothing, and oil change in cars and trucks. Entrepreneurs can view the studies performed at the Agency’s initiative on the SMBDA website www.smb.gov.az and use them to create new businesses, expand their activities, and manufacture new products.
SMBDA finances education, science, research, and support projects of SMBs. When will the next grant competition take place?
Education, scientific, research, and support projects of SMBs are funded to support them according to the Resolution of the Cabinet of Ministers dated September 30, 2020. This support is provided through competitions held by SMBDA at least twice a year. This year, the first competition has already passed; 15 projects in appropriate areas have been financed. Projects cover areas such as fuel economy, development of various devices and software, waste recycling, waste-free production, obtaining international certificates and patents, as well as providing employment for women. AZN 14 to 20 thousand were allocated for each project. The agency is interested in the sustainability and usefulness of projects for the SMB sector, as well as the development of the mechanism as an effective support measure. The Agency monitors implementing the projects and using the funds for their intended purpose; monitoring is performed to ensure transparency and accountability. The next competition is scheduled for the second half of 2021.
How many business entities have already received “Startup” certificates?
Measures are being taken to develop the startup ecosystem; to do this, a number of projects and support tools are being considered. SMBDA has started issuing “Startup” certificates to micro and small businesses since May this year. Micro and small businesses that have received “Startup” certificates are exempt from income tax and tax on income from innovation activity for 3 years from the date of issue of this document. Along with providing tax incentives, the certificate also allows startups to channel income for improving and developing their projects. The “Startup” certificate also increases the interest of local and foreign investors in the startup and facilitates access to overseas markets. To date, SMBDA has issued “Startup” certificates to 19 business entities. The “Startup” certified projects cover areas such as innovative production plants in the agricultural sector, financial technologies, logistics, insurance services, e-commerce, and online platforms offering innovative solutions. Currently, the Agency continues accepting applications for “Startup” certificates. At least once a month, SMBDA arranges a meeting of the Expert Council to evaluate projects, and information on the results adopted according to the Council's conclusion becomes available to the public.
What support mechanisms are in place to improve the services provided to SMBs and raise their knowledge and business awareness?
SMB houses are a unique model in terms of improving and raising the efficiency of services provided to entrepreneurs, ensuring promptness and convenience in this area. Currently, Khachmaz and Yevlakh SMB houses provide entrepreneurs with the required government-to-business (G2B) and business-to-business (B2B) services in a single space. The SMB houses, which are part of the Small and Medium Business Development Agency (SMBDA), provide entrepreneurs with the government agencies’ services on taxes, property matters, access to utilities, food safety, agriculture, advertising, postal services, and issuance of certificates of origin, licenses, and permits, as well as necessary business services such as banking, insurance, leasing, translation, and design. In general, in Khachmaz and Yevlakh SMB houses, about 20 government and private organizations provide entrepreneurs with more than 200 “G2B” and “B2B” services. The level of satisfaction of entrepreneurs with the services provided is monitored through an electronic system.
From January to September this year, about 29,500 entrepreneurs used the services of state and private structures in the Khachmaz and Yevlakh SMB houses. Of the services provided to SMBs, 27031 were G2B and 2412 - B2B ones. The level of satisfaction of entrepreneurs with the services provided in the SMB houses is 98%.
Small and Medium Business development centers (SMBDC) were created to improve the knowledge and skills of business entities and potential entrepreneurs wishing to build their own businesses. About 20 SMBDCs, which are part of the SMBDA structure, provide entrepreneurs with business-oriented training and consulting services, support the creation of SMB networks, inform them on the existing state support mechanisms for business, as well as the SMBDA’s support tools.
In January-September 2021, SMBDCs performed 1,077 in-person and online pieces of training, attended by more than 14,500 SMBs, those wishing to start their own business, and startups. During this period, consulting services have been provided to more than 1200 entrepreneurs. Potential entrepreneurs in different regions, interested in entrepreneurship and needing appropriate consulting services and training, including women, young people with business ideas, and those wishing to start a family business, as well as SMBs wishing to develop their business, can use the support and services of the centers. All services provided by SMB development centers are free of charge.
Recently, another SMB support mechanism was launched - a video training platform.
The video training platform has been created built based on an innovative approach and modern experience to empower businessmen in learning and education and speed up the implementation of best business practices. The platform will allow entrepreneurs and those wishing to start their own businesses to save time and money and use the services of professional teachers, regardless of their location. The platform currently posts 180 training videos on topics such as starting a business, “soft skills”, corporate law, project management, finance, sales, marketing, tourism, and arrangement of export, as well as case presentations and self-assessment tests. SMBs, startups, and those wishing to start their own business can take advantage of free video training and check their knowledge through self-assessment tests by registering on the website www.kobim.az. The platform will be systematically updated to meet the needs of entrepreneurs and will post new training videos.
For what purpose has the online trade portal www.kobmarket.az been created? How is the platform regulated, and what innovations are planned for the future?
Today, electronic platforms support the growth of sales by expanding the entrepreneurs’ opportunities for access to the markets. Online sales platforms are driving the development of e-commerce, accelerating the digitalization of SMBs and consumers, and the growth of non-cash payments.
The www.kobmarket.az portal was created with the SMBDA’s support to expand sales opportunities for entrepreneurs, especially micro and small enterprises. Entrepreneurs registered on the portal have already created more than 90 online stores and have placed about 1,500 products.
To open an online store on the portal, there is a simple registration procedure that allows entrepreneurs to quickly open an online store and expand their sales opportunities. An entrepreneur can get the necessary information on the sale as a portal report. The portal allows users to use a single payment system and delivery service.
Currently, measures are being taken to encourage micro, small, and medium businesses to use the online sales platform www.kobmarket.az. Guided by the main principle of satisfaction of entrepreneurs and customers, the portal is working over introducing innovations in the implementation of the latest electronic solutions and expanding sales through the platform. Appropriate measures are being taken to place services on the portal along with goods.
The “SMB Friend” mechanism is also of interest to entrepreneurs.
The “SMB Friend” mechanism is one of the Agency’s effective support tools. Entrepreneurs express great interest in SMB friends, successfully fulfilling the mission of a friend of an entrepreneur. SMB friends provide entrepreneurs with support and services at place, concerning the protection of their interests, training, and implementing investment initiatives. SMB friends provide comprehensive state support at places in creating new and developing existing SMBs in cities and regions of their coverage, provide entrepreneurs with the required information, consulting, and legal support, coordinate them with public and private agencies, help them in access to existing financial resources and markets, etc. SMB friends also study the entrepreneurs’ needs for development and proposals through surveys and hold regular thematic meetings with SMBs within the framework of the public-private partnership platform. Currently, 36 SMB friends operate in 26 cities and regions of the country.
What other innovations and measures to support SMBs are expected in the nearest future?
In line with the development trends of the day, the Agency is currently working on digitizing entrepreneurship and expanding access to sales markets and financial resources. Herewith, continuing work to expand the coverage of the network of SMB houses and SMB friends, which today is a successful mechanism for supporting SMBs, increasing their business knowledge and skills, and expanding sales opportunities, is one of the key elements of the Agency's strategic program.
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