There are several ways to create, boost, empower, and guide a business, and some terms such as origination, incubation, acceleration, and business mentoring are increasingly in use, especially because of the growth of small businesses and also informal investors in Brazil.
According to the Brazilian Micro and Small Business Support Service (Sebrae), Brazil today has about 9 million micro and small enterprises, which together represent 27% of the country’s total GDP. Included in this number are the Individual Microentrepreneurs (MEI), a category that was created with the main purpose of removing from informality millions of Brazilians who worked on their own without any support from the law, granting them labor rights and protection.
On the other hand, last year, the country achieved the highest rate of informal investors since 2009, according to the Global Entrepreneurship Monitor (GEM) survey. In 2022, about 15 million people – representing 10.7% of the adult population –informally invested in companies in which they were not shareholders or owners.
For Sebrae, “the main reasons for the good performance of small companies in the Brazilian economy are the improvement of the business environment, the increase in the education of the population, and the expansion of the consumer market, with the growth of the buying power of the middle class.” Having said all that, we will now get to some of the main business definitions.
Origination
This is when a project, business and association is created or originated. The experience of Raízes that illustrates this process of origination well was with Sabores do Morro. At the request of the Vale Foundation, we developed an income generation project with women from Morro d’Água Quente in Catas Altas – Minas Gerais. It lasted 15 months, ending in September 2015, and achieved results which were above all expectations.
The Sabores do Morro Fair even became a yearly festival. Through micro sponsorships, we have been able to sustain the monitoring of the work, formalizing the Sabores do Morro Association, launching the Route of Flavors and the calendar of fairs back in 2017. These cultural actions remain to this day.
Incubation
The incubation process offers technical, managerial and supplementary training to entrepreneurial people, facilitating technological development and access to markets and investments. By Sebrae’s definition, incubators are the main formation locus of innovative small businesses. They are institutions that help micro and small companies which are brand new or already in operation. One of the criteria is that these businesses have as their main characteristic the offer of products and services with a significant degree of differentiation.
This was the case of our work with Flores do Carmo, an informal group of women weavers from Senhora do Carmo, district of Itabira, in the interior of Minas Gerais, which arose as an informal hobby for the ladies. Little did they know that the products could generate income and improve lives for them and their families.
After the incubation – with management training activities, advice on product design, local identity research, prototyping and launch of the first collection – the Flores do Carmo collective even created an e-commerce website, where they continue to market their exclusive pieces.
Acceleration
Acceleration, in turn, serves more already developed businesses, which, from this intervention, can become even more competitive and sustainable. Sebrae defines a business accelerator as a company whose main objective is to contribute to the development of an enterprise.
Raizes works with 30 initiatives selected for the Socio-biodiversity Business Acceleration program promoted by the United Nations Development Program (UNDP), with the support of the Humanize Institute. As an executive partner, our role is to promote free virtual mentoring on entrepreneurship, business management sessions, innovation, sustainability, communication and marketing.
Business Mentoring
The business mentoring stage consists of following the development of a company regardless of the phase they find themselves currently in. According to the administrators portal, “mentoring is focused on helping to achieve goals, improving the business in order to find a more promising path, and targeting the progress, personal and professional growth of the mentee.”
Here at Raízes, we are experts in each of these steps and have already supported over 190 businesses. So, if you want to invest in businesses and originate, incubate, accelerate or mentor some of them, count on our partnership! You can send us an email to [email protected] or a message through our LinkedIn or Instagram pages.
