Evaluation of the USAID-Kosovo SME and Agriculture - Economic ...

Development Associates, Inc.1.6 For enterprises assisted, increase operational profitability 20 by not less than5% per month, reported month to month by enterprise count of those above5% profit increase.Targets: year 4: 90 ATD: 714 LOP: 360A. The concept of increased profit from assisted enterprises is critical indemonstrating the results of SME business advice. It is predicated onlonger-term relationships with enterprises, so that assistance is provided,the enterprise grows and is increasingly profitable, and figures areavailable to demonstrate that success. As the enterprise base of long-termclients shrinks—due to the revised KBS priorities and fee-for-servicerequirements, the numbers of enterprises in the reporting base declines.Thus the numbers no longer capture the concept of all benefits that haveaccrued to the enterprise cohort assisted by the project. Continuing salesand profit figures are unlikely to be available from enterprises that KBSassists one-time on a fee-for-service basis.B. Month to Month profit comparisons would be interesting if provided forthe same firm, each month. But the indicator is a count of all firms in theKBS client base which achieve a 5% profit growth one month over theprevious month. The measure as taken for one firm is a compound numberwhich puts exceedingly high demands on individual enterpriseperformance. If the business has a profit of $1,000 in month one, 36months later, to satisfy a 5% per month profit growth each month, it wouldneed to earn $5,791.82 This would move the enterprise from an annualprofit rate of $12,000 to an annual profit rate of $69,501 in 3 years. Thisindicator is counted by noting each instance of one firm achieving a 5%profit increase over the prior month. Twenty firms were on the list inAugust 2003, 41 firms on the list in December 2003. Eight firms were onboth lists. The following table of shows the complications in using thisindicator:Firm August 2003 December 2003Ending Profit Beginning profitAdi 28,100 19,350Tandems 5,800 5,150Maja Nesovic 3,280 4,170Liria-Maliqi 23,446 16,841Ribnjak 2,100 1,600Bazim Wood 750 390Mladenovic 800 1,000DTS Kondi 9,850 12,80020 Operational profitability is thought to be Earnings before Interest, Taxes and Depreciation (EBITD).Evaluation of the USAID/Kosovo SME 47 May 2004and Agriculture/Agribusiness ProgramsVolume I