Income Generating Activity(IGA)

SELECTION

OBJECTIVES:

At the completion of this session, the participants will be able to

Develop confident about their ability to become self-reliant

through own initiatives, including start-up of income generating activities.
Determine the mistakes that many people make in the selection of their IGA
Be able to describe the major points that should be considered before
selecting an IGA from many alternatives.
Confidently explain why they have chosen a specific IGA.

IMPORTANT POINTS to be considered before one can start an IGA.

1. Market: Can I sell the products of this IGA?

2. Knowledge, skills and

right attitudes: Do I have the knowledge, skills and right attitudes needed to operate
this activity?

3. Capital: Do I have enough money to start-up and operate the IGA?

4. Income: Is the IGA profitable?

Can I get sufficient income for a living from operating the IGA?

5. Family expenses: Will the income from the IGA, when added to other family
income, be enough to pay household expenses or meet household
needs?
 C
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Skills
EXPENSES

Market

This Selection of IGA session is fundamental for the next stages for IGA operation, and
at this stage the participants may feel shaky. The trainer should strive to make them clear
and actively involve at this point by using facilitation skills and telling stories. The
following can be told and of course other relevant stories can be told here.

Can I operate the activity?

Trainer probes more on the four aspects under question 1 namely:- skills, knowledge,
time & seasonality . Emphasize that skills & knowledge refer to; knowing what tools
& equipment, raw materials, production method is needed & how to use them.

Tools and equipment

 What equipment and tools will be required?
 How many do I need of each?
 Where can I get them?
 Can they be borrowed or hired?
 How will I transport it?
 Will the equipment need repair?
 Who will do the repair?

Raw materials
 What raw materials and other inputs will be required?
 What quantity and quality do I need?
  Can I get these inputs locally?
 How will I transport these items to the production site?

Production
 What will be the production method?
 Am I experienced with this method?
 Do I know how to solve any problem that might arise?
 Do I know where to get help?
 Where will the activity operate?
 Is this site suitable?
 If any energy source is needed, is it available?

Labor
 How much time is required for this activity?
 Can my family members and I spare this amount of time?
 Will I need any workers with special skills?
 If so, are these people available?

Others, Like

 Can the activity operate year round?

 If it is seasonal, what alternative do I have for the off season?
 Do I need to communicate with the Government or any other offices?
 If so, do I know where to go, whom to talk to and what to discuss?

Conclude the first important point, by telling participants that, if they know what
equipment to use, the raw materials and where to get them, the method of production and
the labor required to do the work, then most of questions about knowledge and skill
factors required to operate the IGA(s) will be answered.

Will the people buy my products? Can I sell the products?

Ask participants to mention what they consider when marketing their products? After their
responses emphasize the following:

Products
• What product or products do I want to produce?
• Are my product necessities or luxuries?
• Are they familiar to the people or new?

Buyers
• Who are the buyers of my products?
• What quality do buyers want? Can I provide this quality?
 • What quantity is generally bought by each buyer?
• How frequently do they buy? Daily, weekly or monthly?
• Does their demand vary in accordance with season?
• Does their demand vary according to their wealth?

Sellers
• Are there any other sellers of the same products in the area I want to serve? How
many?
• Who are they?
• Where do they sell?
• How do they produce?
• How do they attract customers?
• What is the price charged by other sellers?
• What special advantages do any of the competitors have?
• What special advantages do I have?
Screening of IGA Ideas

Funnel model for Screening of IGA Ideas

A minimum of 15 IGA Ideas

Brainstorming by each group or 3
individually.

♦ Market
♦ Skills
Screening/ ♦ Capital (starting &
running)
Filtering ♦ Income (Profitable)
♦ Family Expenses

Best IGA idea

 Income Generating Activity (IGA)
PLANNING

OBJECTIVES:

On the completion of this session, the participants will be able to

Describe two important areas of a business plan: The tasks that must be
accomplished and the resources that are required.
Explain why planning is essential.
Identify, for their chosen IGA, the tasks that must be accomplished, who will do
what and how much time they will take.
Determine, for their chosen IGA, the quantity of resources needed for the start-up &
operation, and the total capital requirement.
STEP 1: Defining Concepts

STEP 2: Demonstrations

STEP 3: Identification of How much Resource

STEP 4: Discussions based on participants' selected IGA

Use the questions below to guide the participant.

1. Which IGA have you selected?

2. Why did you decide upon this IGA?
3. Did you think about whether you have the right skills and knowledge?
4. Did you think about where and how you will sell your product?
5. Did you calculate the amount of money that you can earn from this IGA?
6. Did you think about the amount of money that is needed for start-up and
working costs, and where you will obtain it?
7. Did you consider whether or not the income from your IGA is needed for
weekly family expenses?

STEP 5: Planning for starting IGA

STEP 6: Playing a Planning Game

STEP 7: Detail Activity Planning

STEP 8: Resource Planning

Explain to the participants that at this point they must make sure that they can obtain and
pay for all the resources that they need for the desired quantity of production.

Explain that resource planning relates mainly to answering the following types of question:

What do I need?
How many do I need?
How much will it cost?
When do I need to buy it?

Discuss the types of Resources; relate these basic questions to each of the principal resource
categories. Through discussion, the following questions that should be considered during the
resource planning stage should be covered:

 Equipment and Tools

o What equipment and tools are required?

o How many do I need of each?
o Do I need to buy all these items?
 o Can they be rented or borrowed?
o When do I need to have these items?
o How much does each cost?
o How much money do I need for all necessary equipment?
o How much do I have to pay for transport of these items to my production
place/site?

 Raw Materials

o What raw materials are required?

o What quantity of raw materials do I need for the expected quantity of salable
goods?
o When do I need to buy each item?
o How much does each of these raw materials cost?
o How much money do I need for all raw materials for one production cycle?
o How much do I have to pay for transport of these items to my production
place/site?

 Other Inputs

o Do I need any other inputs?

o What items, and how much of each?
o When do I need to buy these other inputs?
o How much do these items cost?

 Selling Costs

o Do I have to transport the products to the market?

o Do I have to pay a market tax?
 MANAGING IGA

OBJECTIVES:

On the completion of this session, the participants will be able to

Define marketing in simple terms; describe the importance of marketing and List the four
parts of marketing mix.
Explain the importance of managing the cash that flows into the IGA from the sale of products.
Describe the four areas where incoming cash should be allocated.
Determine the amount of money from the IGA that should be allocated for personal
expense and savings, after other working costs are covered.
Decide how to keep the different categories of money separate.
Minimize the risks to the well being of the family and the IGA.

Market analysis

Define marketing
Knowing about your customers
Know about your competitors
Financial Management

Situation Analysis
Budgeting