Rodrigo Brito created the Entrepreneurs Alliance to develop, together with small businesses, infrastructure and quality services to increase income and profit in low-income communities that are normally excluded from the market. The Alliance facilitates a support network with businessmen, students, free-lancers, corporations, and the government, to assure the sustainability of small business entrepreneurs in low- income communities.
The New Idea
A society that not only grows but develops by combining growth, income distribution, inclusion, and the enlargement of internal production and consumption is what gives strength to the Entrepreneurs Alliance. Through the Alliance, Rodrigo and other entrepreneurs provide infrastructure and services to existing and promising businesses, as well as low-income community groups developing income generation opportunities.
Entrepreneurs Alliance qualifies, advises, and follows-up on small businesses and community groups with a specific approach that provides support for current business challenges. There is a methodology to “develop cells”, and each cell is composed of young, mature entrepreneurs who exchange experiences and support. While part of a cell, each entrepreneur builds his/her capabilities, and helps to build the capacity of entrepreneurs from different communities. The themes elaborated in this process vary from the development of a business to ethics to personal motivation. Within the cell, an entrepreneur has access to technology, equipment, and computers.
A primary challenge for businesses is to reach financial sustainability, and Rodrigo has developed different forms of fundraising, such as microcredit and partnering with successful entrepreneurs, who are “investing angels” for projects. Since producers and consumers are often far apart, the Alliance supports the distribution of small business goods. Another solution is a Solidarious Store—a place for Alliance entrepreneurs to display and sell their products.
To guarantee the infrastructure needed for his work, Rodrigo connects with entrepreneurial groups in the community and has built a network of volunteers, students, and other social actors, including the government, interested to assist in the process.
Micro and small sized companies are Brazil's economic mainstay; considering the number of jobs they generate, and their geographical spread. In the Brazilian Service of Support to Micro and Small Companies (Sebrae) databank, this sector represents 25 percent of Brazil’s GDP; generates 14 million jobs or 60 percent of all formal jobs in the country; accounts for 99 percent of the 6 million existing legal establishments; and is responsible for 99.8 percent of the companies annually created. In spite of this sectors tremendous importance to the economy, 70 percent of small businesses do not survive more than three years.
Even with these difficulties, between the years of 1995 and 2000, companies with less than 100 workers created 96 percent of new job openings in Brazil (a number that would take around 100 years for large companies to reach), and were responsible for 19.2 percent of the employment growth, while big and medium companies achieved only 0.6 percent. Micro and small companies make up a significant share of such enterprises (around 2/3), which testifies to Brazilians entrepreneurial nature and the lower-incomes search for economic sustainability. In these communities, people opening businesses may not think on a grand scale or understand business. Several micro-enterprises aim to provide the services of a single person—i.e., sewing, car maintenance and repair, electrical fixtures, hairdressing, handicrafts, or even specialty food sold from homes. These products cater only to the local market, are sold at very low prices, and have limited add value. It should be noted that 95 percent of these businesses do not have access to the official credit system, particularly financing for production purposes. This exclusion is explained by the difficulties small businesses face to meet required financing guarantees, as well as by the privileges financial institutions enjoy vis-à-vis the investment and finance market.
Additionally, initiatives that will qualify these entrepreneurs are sparse. Those that exist use a cold-hearted methodology and are far from the local reality. They are ineffective with time and resources and generate feelings of disillusionment among people; unable to see things improving. Sebrae's efforts do not act directly with communities, but through their offices. Sebrae’s staff is not prepared to deal with low-income groups and most consulting and qualifications offered by their offices require a fee, are highly technical, and do not offer follow up. In many cases, the initiatives support only one entrepreneur, in one process or area—i.e., microcredit—on a technical qualification or market problem.
The challenge seems to be developing tools and strategies that fit the needs of such enterprises, are capable of providing financial micro services, easy access to the technical knowledge required by this population, and market opportunities.
The Entrepreneurs Alliance brings together people from low-income communities engaged in small enterprises, such as small handcrafts, and enables them to receive training, knowledge, and funding. The Alliance seeks to develop partnerships between these entrepreneurs and large corporations, universities, and the public sector to ensure that they and community groups have access to technology, income-generation possibilities, information, investments, and production.
All activities developed by the Alliance are connected with the support network created by the project. The first group of activities focuses primarily on the entrepreneurs and community groups that are identifying the interests and needs of local entrepreneurs. The process begins with door-to-door visits, talks, and meetings in the communities. After this initial analysis, a capacity-building process on issues and themes of the community follows, which includes discussions on inspiring and motivating themes from the Alliance. For groups of approximately 12 participants that are just beginning, the Alliance creates a “development cell” focused on the design, creation, and development of the new businesses, with research, business plan and a qualification on systems for production in a small/medium scale. For performing entrepreneurs, the Alliance creates a “support cell” to focus on specific issues (finances, selling boost, etc.). Both cells are referred to a Planning Core, for microcredit access and marketing support. It also helps to build the partnerships that will support and empower these businesses. Finally, these groups are involved in entrepreneurship and production networks. The mature groups begin to advise the start-ups. Credit loans are a collective responsibility, with all group members signing and being accountable for the money landed—usually around R$200 to $500. Default rates are currently at 10 percent, and the total in loans granted is over R$23,000.
The second line of action and strategies developed by the Alliance is “Income and Labor Generation Alliance”, which creates partnerships with citizen organizations, universities, corporations, and individuals that focus on entrepreneurship and income and labor generation. The “Entrepreneurship and Wealth at the Pyramid Base” program is directed at the construction of projects where small-scale entrepreneurs may perform as suppliers, assisting corporations to develop services and products for low-income communities.
Conscious of the huge challenges these groups face to distribute their goods and create demand for their products in the community, Entrepreneurs Alliance created central markets to sell the products and the brand, Solidarious. The central markets receive requests and direct them to the entrepreneurs. The Solidarious brand is being designed, and it will be a place where all goods produced by the group are displayed. Each product will be identified with the community that produced it. Besides this brand, which will empower them as a group and make it easier to sell their products directly to consumers, each entrepreneur or community group will be able to display their products with their own brand.
Through partnership with universities, the Alliance seeks not only to develop a relationship with the students and with the students’ organization, but also with professors, so that they may assist entrepreneurs with marketing, design, pharmacy, law, and pedagogy. The partnership with Positive University Center is an example of such a partnership, as professors and students from the marketing and design courses help entrepreneurs develop their products, brands, and logos. The Alliance has also developed important partnerships with individuals—businessmen are attracted to the process and become investors, or “social angels.” They meet the entrepreneurs, analyze, and sponsor groups and entrepreneurs by providing microcredit, and the creation of an Investment Fund, (for entrepreneurs), that realizes direct lost fund investments in businesses and projects elaborated by the group.
Rodrigo believes that it is necessary to create critical thinking, well-informed and connected entrepreneurs to fight for better public policies; lack of information is a main reason these businesses are unsustainable. Therefore, the Alliance created the third working line of action called “Critical Mass Dissemination”—a program that spreads information and knowledge in different mass medias, such as television, Internet, radio, and magazines, to educate and inform people around themes like launching, development and growth of small business, and corporate initiatives and their consequences for Brazil. Additionally, seminars, events, and awards, are organized so entrepreneurs can exchange experiences with each other. To be able to develop these activities, Entrepreneurs Alliance made partnerships with four television channels, three magazines, created the Ozires Silva Entrepreneurship Award, a state Forum, and two national Junior Company Congresses.
The Alliance is also connected with other networks, and aims to increase the impact of its work as well as the creation of partnerships with other communities and projects, like the Business Political Participation Network, Brazilians Right to Sell and Marketing Association, Avinas’ Network, Paraná C3 Network, and Business Leaders in Politics Network. To show how difficult the environment in Brazil is for entrepreneurs, and how this effects development, Rodrigo is writing a book and making a documentary “Living Borders” that will present entrepreneurship and social development cases, stories and testimonies of entrepreneurs’ challenges and talents. The Alliance also aims to influence public policy by partnering with fomenting groups, such as FINEP, SEBRAE, municipal and state secretariats, as well as federal departments that deal with topics related to work and labor, economic and social development, social assistance, solidary economy, fair trade, and poverty relief efforts. Today, Entrepreneur Alliance supports 16 community groups (12 to 15 people each), two cooperatives, and is negotiating the openings two franchises in another region.
Since childhood, Rodrigo showed great interest in history, informal education, and the creative process of self and social development. At university, he was especially interested in how relationships were formed in different environments. In business school, he quickly became involved with a student business organization that dealt with varied issues, supporting groups in their development, and at the same time, learning through the process. He started work with this student organization and was soon challenged with organizing and launching an event for 700 people in only 14 days. The event was a success and Rodrigo was promoted to Director of Human Development. Rodrigo accomplished a series of research and consulting projects for small businesses and other entrepreneurship initiatives. An excellent example of his work was the redesign of Paraná’s ADVBs University Student Top Award (www.advbpr.com.br). This award recognizes projects and social ideas of university students, changed from being a trophy, to the development of academic papers. The award had R$120,000 prize given to launch a project, PhD, or exchange. The biggest project led by Rodrigo was a National Meeting of Students Business Organizations in Curitiba, a completely new initiative in his home state. After a 10-month effort, it resulted in 1,150 people from all over Brazil, established a variety of partnerships, and R$300,000 in resources from enrollments.
In 2002, Rodrigo was introduced to “Entrepreneurs of Dreams” by Ashoka Fellow Egídio Guerra, and against everyone’s opinion decided with three other friends from the student organization where he worked, to open the first replication of this initiative in another state. From the beginning, the process was difficult and disorganized. Rodrigo had no models, materials, or documents that could make it easier and faster. But in spite of the difficulties, the Paraná initiative began to develop business plans and reports for other states and provided others interested in doing the same, with a guide document, or had people that had started this initiative in another state write and share their experiences. During this project, Rodrigo was a volunteer for over a year, worked with more than nine communities, created the social fashion incubator with ten companies of young entrepreneurs from the region, and also fomented the creation of a Sewing Cooperative, with an all-age group from the region.
At the end of 2004 Rodrigo wanted to start a new organization that would reflect the experiences he had with “Entrepreneurs of Dreams.” He believed the development of these communities still needed large investments in technical knowledge, scale, less segmentation, and an investment in the stage that was right before the incubation process, like the development of research, capacity-building workshops, analysis, as well as a view of the entrepreneur’s responsibilities. Rodrigo saw the necessity to put young and more mature individuals, as well as mature entrepreneurs with beginners, since he knew these encounters brought positive results for all involved in the process.
Almost as a consequence of those learning experiences, the Entrepreneurs Alliance was created. Besides work with the Alliance, Rodrigo is part of the Volunteer Center from Curitiba, whose members include businessmen, government workers, and others in the third sector. He is part of the Managing Comite of Paraná’s, Industry Federation from Paranás State Business Citizenship Council, composed of businessmen and executives from corporations and industries in Paraná. Rodrigo is also in Paraná’s C3 Board—a network that unites 81 small-scale businesses from Paraná, and is a member of Brazil’s Selling and Marketing Leaders Association Board. On all these committees and boards, Rodrigo is the youngest member involved, which helps to create exchange opportunities for the Alliance with other organizations and to establish a dialogue with different sectors. The Alliance works directly with the business sector and the citizen sector—identifying with both.