Introduction

The Center for Business Promotion and Entrepreneurship in Sandomierz, Poland is a non-profit foundation, founded in 1991 to help lead and accelerate the post-communist economic transition in rural southeast Poland. Its early programs concentrated on agribusiness development. In recent years its efforts expanded into general business development as well as into public sector economic and development planning. The Center's overall focus is to help individuals and communities harness private enterprise and democratic principles as a means to sustainable economic and social development.

The Center's highly-qualified staff provides consulting, training services and technical assistance to small and medium-sized businesses, entrepreneurs, farmers, organizations, and local governments. In 2004, the Center continued to concentrate its efforts in the following major program areas:

The Center cooperates with a range of local agencies as well as with international agencies. It is a prominent and active member of the National Small and Medium Enterprise (SME) Services Network. The Network, established by the Polish Agency for Enterprise Development, is a leading Polish agency promoting cooperation among public administration bodies and non-governmental organizations. Through it the Center has access to a range of programs providing advisory, training and information services for small and medium enterprises, all geared to helping them increase their competitiveness within the European Union.

During 2004, the Center's BAS program work contributed to the creation of more than 100 new job positions. Almost 450 short-term advisory services were delivered to owners, and prospective owners, of small and medium-scale businesses. More than 1200 people were trained through a broad range of programs generally focused on entrepreneurial skills development and business operation.

Developing Local Business Capacity

Expanding from its base in Sandomierz, in 2002/3 the Center established local Business Support Centers in four cities: Busko Zdrój, Staszów, Ostrowiec Św. and Połaniec, centers of four poviats (sub-regions) within Świętkorzyskie Voivodship. This program was financed through an SME support program run by Świętkorzyskie Voivodship's Unemployment Office. Though this program ended in 2003, the Center decided to continue operation of two of them (in Busko Zdrój and Staszów). Seeing the deep needs, and the benefits, of having these local offices to support business development and generally strengthen the local SME sector, in 2004 the Center additionally re-established its local office in Ostrowiec Św. The six staff members manning these three offices received intensive training programs in consulting skills, enabling them to actively participate in all Center programs implemented during 2004.

In early 2004 the Center applied for and received six-month renewal funding from the next phase of the "Temporary Employment Services" program run by the Świętokrzyskie Voivodship's Unemployment Office. Services were provided in poviats: Sandomierski (2 projects), Staszowski (1 project), Buski (2 projects). Through this program, implemented from February to August 2004, the Center contributed to the development of temporary job positions for 83 people in 21 companies. Importantly, the program achieved long-term results: six months after program completion over 60% of the jobs had become permanent positions.

Significant efforts of the Center and its satellite offices in 2004 went to direct support to businessmen and local governments in preparing application documents to different structural funds and supporting EU programs. During 2004, the Center's BAS Program assisted 49 small and medium-scale entrepreneurs and farmers in completing financial analyses, business plans, feasibility and investment studies. These are expected to attract $323,000 in direct financing from EU supporting programs, $1,100,000 in direct financing from structural funds and $1,095,000 in commercial credit for assisted businesses. Overall, planned investments will create more than 400 new job positions. Completed documentations included:

Business education and training activities

In 2004 the Center's BAS program continued providing education and training activities that help:

Polish accession to the European Union gives a wide range of opportunities for not-for-profit organizations supporting SMEs. In 2004 the Center designed an integrated program of training and advisory services for business start-ups in four parts of Świętkorzyskie region combined with direct forms of financial support. This proposal will be submitted at the beginning of 2005 to one of seven operational programs that will be implementing the 2004 -2006 National Development Plan, the Integrated Regional Operational Program (IROP), whose main goal is "to create the conditions for the increase of competitiveness of the regions and prevention of the marginalization of some areas, in such a way as to enhance the long term economic development of the country, its economic, social and territorial cohesion, as well as integration with the European Union."

As a member of the National SME Services Network the Center, in cooperation with regional banks, provided a series of informational meetings and seminars focused on co-financing new investments and enterprises from structural funds and bank credits. Available opportunities for mixed financing were presented to more than 80 representatives of the business community and local government.

The Center actively pursued cooperation with other organizations, especially with members of the National SME Services Network. One meeting for 9 regional members of the National SME Services Network was organized by the Center's staff in our training and conference facility in Sandomierz. A Center's senior staff member serves as a member of the Coordination Board of the National SME Services Network and attended four Board meetings focused on new challenges facing nongovernmental organizations supporting business development.

Youth Empowerment

Supporting Women in Business and Public Life

In 2004 the Center continued its support of the Society of Active Women (in Polish it is Towarzystwo Aktywnych Kobiet - "TAK," which means YES), a program that aims to encourage and assist women to overcome social and economic barriers to entry and participation in the business world, and support them in building both their personal and business skills and networks. In 2004, the Center led 5 meetings attended by about 75 women, members of the TAK program. The most interesting meetings in the opinion of participants were those focused on programs supporting small and micro-enterprises. In 2004 the Center's Program Coordinator made strong efforts to gain new external financial support for activities undertaken within TAK initiative, however, they thus far have failed to yield success.

Developing Consulting Strength and Resources

In 2004 the Center continued building its external network of technically qualified consultants, capable of helping the Center respond to specialized requests from clients, and further helped these individuals improve their own skills. During the reporting period we successfully made use of 4 consultants, specialists in construction and technical aspects of investment, to provide services within the PHARE 2001 "Program of Enterprises Development." Two others supported the Center in preparing advanced analyses of the domestic and international market for wood products, part of the local development plan prepared for poviat Nisko. Our project supporting youth in planning their individual professional careers and building professional capabilities is implemented in cooperation with four external trainers experienced in this area.

Developing a loan fund

Our Center has long recognized the lack of the loan capital available for SMEs as one of the major obstacles in development of a prosperous business community in the region. Despite gradual improvements in commercial finance, there remains a deep need for access to loans based on reasonable conditions for young businesses and start-ups. Banks shy away from these clients, because they lack a sound business history. Direct lending to SMEs by banks is focused on well-established businesses.

In 2001, the Center, in a consortium with two other organizations, won a competitive bid for providing business development loans, as a part of governmental support to employees terminated from the region's shrinking heavy industries. The Center, as well as the other collaborating agencies, found only limited interest in this program from within the targeted population group, but observed great interest in the program among entrepreneurs and unemployed people from other economic sectors. The program was extended to serve them. Subsequently during the years 2001 - 2002 of program implementation, the consortia approved 74 loans to SME starts-ups and entrepreneurs totaling more than US$1,000,000. These credits helped to open 37 new businesses and created 158 job positions. While this program was ended, the past three years has convinced us of the continuing need for such a local loan fund.

In 2004 the Center proposed to renew and expand its own loan fund. With generous support from a private US foundation the Center was able to develop a new Loan Fund program offering loans up to US $40,000 for a period of up to 3 years. The interest rate is sub-market. The pure interest rate charged is 7,62 %; in addition to a 3 % commission and charges for loan application documents and loan appraisal services. Late fees would be charged in accordance with prevailing standard practices. This new program will start early in 2005.

Local Government and Community Development

Both local economic development and the growth and strengthening of democracy require efficient and effective local government. This in turn requires clear and strong communications and relationships among all components of the local community. The overall objective is to create and demonstrate mechanisms and procedures for gminas' effective management in cooperation with the local community.

In the beginning of 2004 the Center prepared a new offer of services for local governments including information on structural funds available for them, and made direct presentations to 19 local authorities. These promotional activities resulted in two contracts, to prepare Local Development Plans for poviat Nisko and for gmina Łoniów. Both exercises applied the Center's proven method of active participation and cooperation of local partners of common interest and achieved consensus incorporating varied local perspectives into the final plan.

In 2004 the Center increased its focus on developing activities to promote and strengthen civil society at the local level. As a member of the Association for Non-Governmental Initiatives Forum, the Center has access to a range of advanced training programs to further develop its own staffs' consulting skills. Through this organization, in 2003 one of the Center's senior staff members improved her consulting skills via an advanced training course in the subject of structural funds available for NGOs after Polish accession to the EU. In 2004 she delivered 35 advisory services and provided 6 informational seminars and meetings to local nongovernmental organizations, mostly in the subject of structural funds. In the second part of the year, the Center actively supported the Local Tourism Organization -- an association made up of private enterprises, NGOs and local government -- in applying for the initial phase of the "Leader +" program, which would fund the continued strengthening of this "Local Activity Group" as a means to drive forward further local initiatives.

In 2004 the Center strengthened its direct cooperation with local NGOs, working together on two different initiatives: 1) developing practical skills and attitudes among a group of 77 residents of homeless shelters, financed by the Polish Agency for Enterprise Development, and 2) supporting youth from Sandomierz high school in a project to protect local historical monuments, funded by the Leonardo da Vinci Program.

Late in 2004 the Center applied for funding support to the fourth installment of the program "Act Locally," announced by Academy for the Development of Philanthropy in Poland. This program supports non-governmental organizations and civic initiatives acting to the benefit of specific local communities, and will select a limited number of organizations strategically placed in Poland to serve as grantmaking organizations, making grants up to US$15,000 to finance local initiatives. The Center's proposal was accepted; we will start activities early in 2005, after completing a mandatory orientation and training program.

Accordingly, in 2004 our activities continued:

The Center is an affiliated member of the network of AGRO-INFO European Union Informational Centers, focused on organizing and disseminating EU information among local communities. In 2004 the Center received financial support to further develop its institutional capabilities in providing informational services. Staff members of the Center's local offices completed advanced training workshops preparing them to provide informational services and help local communities interested in applying for structural funds and other supporting programs. The Center responded to more than 300 individuals in specific requests for information, and informed 200 participants of 15 seminars it organized in four poviats of Świętkorzyskie voivodship. Additionally, the Center made use of these funds to assess the needs for this information among the rural citizens of our region. Based on the 362 inquiry responses to our questionnaires, we prepared a range of tailored informational brochures and leaflets as well as web pages on both general and specific issues on the EU and Poland's integration.

Additionally, within another initiative, "How to make effective use of EU membership for the development of rural areas in Świętkorzyskie voivodship," the Center delivered information to another 300 people, participants of four conferences and training workshops devoted to problems of agriculture and the rural economy.

International Consulting and Training Services

In recent years the Center has sought to widen its cooperation with international non-government agencies working in Central and Eastern Europe and former Soviet states. We have designed and provided customized on-site training services and study tour visits in Poland for individuals and groups of agricultural producers and processors, business entrepreneurs, business associations, and business consultants, among others. These training programs are a combination of the practical -- site visits to progressive producers, processing companies, etc; and the theoretical -- workshops, research institute visits, guest speakers and discussions.

In 2004, the Center, interested in undertaking closer cooperation with Danish partners, joined with the Aarhus Business College to prepare and submit to the "Access" program a proposal to strengthen business skills among rural women. Unfortunately, it was not funded.

Training and Conferences Services Development

Our modern residential training and conference center, Hotel Basztowy, was developed to:

Hotel Basztowy was opened in the Fall of 2002. It offers high-quality conference and training facilities and accommodations at reasonable prices. The accommodations are intended to cater to and attract a wide variety of visitors to Sandomierz:

The facility fits very well with the needs of the City and the broader region, as well as the Foundations' mission. In 2004, it achieved a 56.5 percent occupancy rate, exceeding year 2003 (52 percent) and both its business plan's projections and the national average of 39 percent. In 2004 the facility added one full-time job, bringing its total staff complement to 20.

In 2004, hotel management concentrated on marketing activities, training for the hotel staff, and looking for opportunities for financing new investments in technical infrastructure to improve the quality of services provided within facility. Late in 2004 the Center applied to Phare 2002, Regional Support Program for SMEs, Investment Grants for 50% of the costs of modernizations, totaling 30,000 EUR, planned for 2005.

Institutional Development and Marketing

Center staff was very active in seeking focused programmatic funding of the BAS, EU integration, and local government activities, producing and submitting 26 major formal grant proposals to a range of potential funders. Additionally, general and introductory marketing and fund-raising meetings were held with a wide range of agencies. The Center also bid on a range of fee-for-service opportunities to work with area companies, and public and private agencies.

Polish accession to the EU opened new opportunities for the Center to improve its institutional capacity and develop innovative services for SMEs. One of major proposals prepared in the end of 2004, was submitted to a program provided under sub-measure 1.1.2 "Support to emergence of national/regional networks of business support institutions" which is included in one of five measures implemented under Priority I of the Sectoral Operational Program - Improvement of the Competitiveness of Enterprises" 2004-2006. If approved, two-years proposal will help us establish next two local offices in two cities: Stalowa Wola and Opatów, centers of two poviats (sub-regions) within Świętkorzyskie and Podkarpackie Voivodship. We will modernize the Center's technical equipment, including computers and training tools such as overhead projectors laptops, etc. All staff members will intensively improve their consulting skills on the advanced training courses as well as will develop the Center's long term strategic development plan. Theses activities will strengthen the Center as a business supporting organization. At the same time we will design and provide complex of training courses and technical assistance for local entrepreneurs supporting them in business activities and developing their competitiveness on the market.

During 2004 the Center's management continued work to strengthen its relations with the members of the Center's Board of Directors, in order to get the maximum assistance possible. The regularly scheduled semi-annual Board meetings, devoted to analyzing in detail the Center's activities and providing guidance and advice for the future, are supplemented by an organized series of contacts, both formal and informal, to further build Board-Center relations.

In 2003, the Center initiated work on the renewal process for its existing quality assurance (ISO) certification for providing training and advisory services. In the first part 2004 the Center successfully completed the process of recertification, provided by Polish Agency for Enterprise Development.

In Poland, a gmina is the lowest level of democratic self-government.

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