Startups are always the change maker/leader of economies and when it comes to employability it’s no difference. New businesses are the only solution to the problem of rising unemployment. Startups are the backbone of the economy. They develop the required entrepreneurial skills in the youth and create numerous employment opportunities for deserving and needy candidates.
And in that sense, Somali startups are doing great providing a model in which how startups contribute to decrease unemployability, creating new jobs and improving the overall economic status of Somalia.
We will now showcase two case studies published by Shuraako which demonstrate the impact of startups on Somali economics and the jobs created by both startups after being backed up by Shuraako and participating in Work in Progress! (WiP!) Alliance
Tayo – Uniforms & Embroidery
Tayo Uniforms and Embroidery was established by Amina Aden Mohamed in 2012. With operations based in Hargeisa, Somaliland, Tayo manufactures high-quality and affordable uniforms and distributes them to schools throughout the Somali regions. Although most of Tayo’s operations and customers are in Hargeisa. Tayo also supplies uniforms to government schools in other regions of Somaliland and Somalia. Tayo spearheaded a nascent apparel industry catering to the growing demand from schools and other institutions while creating skilled jobs for women and youth.
Before Tayo began operations, the Somali uniform market was scattered and undefined. Although there was high demand for custom uniforms, suppliers mostly comprised small-scale tailors and the uniforms were often low quality and imported from overseas. Ms. Aden saw an opportunity to produce high-quality uniforms locally to meet the growing demand. Tayo quickly gained a large customer base and a reputation throughout the Somali regions for its outstanding quality and reasonable prices. Tayo needed to scale its operations to satisfy the purchase orders that were pouring in, especially during the busy back-to-school season. Ms. Aden soon had 25 full-time employees and needed to train them on the new equipment she was acquiring. She also had to fix broken embroidery machines and train staff on how to maintain the equipment in the event of future breakdowns.
As part of her participation in the Work in Progress (WiP!) program, a three-year capacity-building program funded by the Ministry of Foreign Affairs in the Netherlands as a part of Local Employment in Africa for Development (LEAD), Ms. Aden attended business development workshops where expert consultants helped her establish a plan to efficiently scale her business. Ms. Aden gleaned expertise from expert management consultants and representatives from peer organizations with experience managing large staffs. Shuraako helped Ms. Aden to identify areas where grant funding for technical assistance could have the greatest impact and split the cost of a new embroidery machine with the company. Shuraako also helped Tayo identify an international technician who trained staff on how to fix the machines in case of subsequent malfunctions.
Tayo scaled operations, and with its expansion, hired and trained additional women and youth employees. After participating in WiP! Ms. Aden utilized her management skills to educate 40 women from the local community in tailoring. After the training, Tayo employed 14 of these women and also helped others gain skilled jobs in the tailoring sector. Ms. Aden’s superior management skills are now widely recognized in Hargeisa as she is the chair of the Somaliland Women in Business Association,and in achieving this, has become a role model for other Somali female entrepreneurs. Last year, Tayo provided uniforms to 14 schools and is now in the process of signing contracts with nine more, servicing about 20,000 students, or about 9 percent of the estimated 210,000 students in Somaliland. Tayo is on track to secure 50 percent of Somaliland’s uniform market by 2020.
French Pastry – Bakery
French Pastry is a commercial bakery established in 2012 that manufactures and sells baked goods to restaurants, retailers, and residents in Hargeisa, Somaliland. The bakery is owned by Yahye Yousuf, an entrepreneur who realized there was growing demand for fresh, high-quality baked goods in restaurants and homes throughout Somaliland. The bakery’s main customers are predominately small shops owned by women. French Pastry has thus created a positive impact in the markets where it works, generating income opportunities and jobs for women and small-scale entrepreneurs. Mr. Yousuf got a grant through the World Bank’s Somaliland Business Fund project, which gave the company the seed money it needed to start operations.
Most bakeries in Somaliland are small-scale businesses that manufacture only traditional-style breads and cannot produce baked goods at a commercial volume. The baked goods market in Somaliland also lacked variety and quality as there was little training available to develop baking skills and test new products. French Pastry recognized these market opportunities and came up with a business plan to meet market demand. The bakery soon started producing baked goods on a daily basis and even introduced new products to the market, including cupcakes, sliced bread, croissants, and other sweet bakery products, to massive success. Because of their unique approach using quality ingredients to produce a variety of products at a high volume, the demand for French Pastry’s goods grew at a fast rate. Mr. Yousuf soon realized that to successfully meet the growing demand and scale the business, he needed more expertise organizing the business structure and developing management skills. French Pastry wanted to improve its overall business strategy by increasing revenue and production capacity to meet consumer demand in Hargeisa and beyond.
French Pastry applied for the Oxfam-funded and Shuraako-managed Work in Progress! (WIP!) program, a management skills development program that helps entrepreneurs like Mr. Yousuf professionalize operations, develop skills, and execute business plans. The program offered French Pastry’s management staff consultation with mentors and technical support from experts to improve French Pastry’s business model. The WIP! program helped French Pastry grow operations by providing technical support and improving processes, resulting in greater output of products and expansion of the customer base. The program addressed challenges and offered solutions to improve its sales strategy, product and package development, and management skills. With that, the WiP! program got the bakery ready for investment.
French Pastry’s expansion plan was pitched to investors in June 2017 after receiving an investment, the bakery purchased a dough mixer, commercial oven, packaging and marketing materials, and a van to increase production capacity and expand its market outside of Hargeisa. The loan also enabled the bakery to move to a bigger location with a specialized production plant, allowing the bakery to increase its output. The management training received from the WIP! program has enabled the bakery to improve its relationship with its retail customers, giving the company a competitive advantage over other local producers. The investment in the bakery increased its sales by 43% and its profits by 107%. The investment also had a positive impact on the community by creating 6 jobs for women and youth. French Pastry now offers affordable products to the community, thereby reducing Somaliland’s reliance on imported products.
The 4-year project started in January 2020 and will run until December 2023 with a budget of € 11.2 million. WiP! is financed by the LEAD (Local Employment for African Development) program of the Ministry of Foreign Affairs of the Netherlands. The first 4-year phase of WiP! was implemented during 2016-2019 with a budget of € 10.4 million. For more information about the project and its achievements, please see various Work in Progress! reports.