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Interpretation of PUM’s application criteria

Since the actual situation might sometimes give room for interpretation, the way PUM’s application criteria are applied is explained here. If you have specific questions in this field, please contact the PUM representative in your country.

Private sector
Companies are privately owned. In case of >50% private ownership, applications are readily approved especially when further privatisation is expected. Companies with less than 50% private ownership are not accepted unless a decision to completely privatise the firm has already been taken. With regards to applications for ‘enabling environment’ missions, we accept that organisations are often state-owned (see also under 9). We also require >50% private ownership for organisations in the healthcare sector.

Local ownership
Foreign ownership gives companies the opportunity to ‘learn’ from their mother company or foreign shareholder/entrepreneur. PUM is meant for companies that do not have such opportunities. Subsidiary companies of multinational companies and companies with more than 50% foreign ownership are refused entry into the PUM programme. Similarly, a franchise company that can receive the requested assistance from the franchisor can not apply. If the owner is not a national, but comes from a developing country in the region, the application can be accepted. Applications from ‘non-national’ owners from developed countries are only accepted if the owner is a permanent resident in the country where the company is registered.

Not too young a company
Although PUM support is highly attractive for start-ups, we do not accept applications from these companies, because it is a well-known fact that a large majority of ‘first-time’ starters usually fail within two years, thus significantly reducing the effectiveness of the PUM programme. However, if the start-up is based on existing operations, with sufficient back-up of capital, management, market networks and technical know-how, the outlook is more positive. Applications from such starters (usually new ventures of existing enterprises) will be accepted if and when PUM can offer useful assistance.

SME definition
The PUM programme is meant for those companies within the SME sector that cannot afford to source expertise commercially. A company has between 10 and 250 full-time employees (full-time equivalent, fte). Part-time and seasonal employees should be included proportionally (e.g. two employees who work for 50% count as 1 fte).

Applications from companies with fewer than 10 employees are only accepted in exceptional circumstances, such as atypical company structures in a region, potential growth of the company, etc.

Applications from companies that fall within the above categories, but are part of a holding or a group of companies, are subject to further scrutiny. The extent to which such subsidiary can benefit from the holding or group in terms of exchange of know-how and financial support will determine the eligibility for the PUM programme.

For small companies attention should be placed upon the cost-benefit ratio of a project. A project has a minimum duration and the expert should be able to spend his/her time fruitfully until the end of the project. Small projects/clients could be combined or be served with a seminar. The effectiveness of the PUM program (promotion of employment and economic development) is greater with larger enterprises, as they provide more stable employment, bring innovations and contribute to national taxes. Priority will thus be given to larger enterprises within the categories in the table above. Please check also the sector specific criteria further in this document as they provide extra criteria for minimum company size.

Although the applicant is free to determine the duration of a mission, there is a minimum and maximum duration. The duration of missions has a minimum of 10 working days (European/ Mediterranean countries 7 working days) and a maximum of 1 month (the average duration is 2-3 weeks). Furthermore, the duration is also the subject of negotiation between the expert (who can judge how long is needed) and the applicant. A minimum stay is needed because the PUM program aims at improving overall performance of companies. This requires more work than the usually limited specific request from the applicant. Solving the immediate issue usually breaks the ice and allows the expert to address other managerial issues. In more European-oriented cultures, a 7 working days minimum is kept, while a minimum of 10 working days is maintained for far-away countries with a more divergent culture.

Financial situation
Companies that apply for PUM assistance pay for the local costs of the expert (board and lodging, local transport, interpreter costs (if necessary), etc.). Although a PUM mission is thus not for free, it does cost an enterprise much less than commercial expertise. Improving the company’s performance (turnover, profitability) will over time result in the ability to pay for expertise. Our pricing policy can be found here.

For sound management advice, the financial situation of a company should be as clear as possible from the start. That is why, in the application form, we request data on turnover and balance total (or equity). This reflects the financial capability of a firm and its potential to invest in future developments.

Commitment of the entrepreneur & content of a PUM project
In order to be able to carry out a successful project, the owner/entrepreneur of the company should be fully committed to provide correct information beforehand, receive a PUM expert, consequently implement recommendations after the expert has left and provide relevant data to measure the effectiveness of a mission. Since most companies do not know what it means to receive an adviser/expert and what to expect from him/her, it is hard to determine commitment. Nevertheless, too many missions fail because of lack of interest of the owner. In all instances, the owner/entrepreneur should be involved - one way or the other - in discussing the application and its consequences. By signing the application form and agreeing to a PUM mission, it is regarded that such commitment is accepted (we sometimes notice that unauthorised staff apply and sign for missions). It is the main task of a local representative to identify and stimulate the commitment of an entrepreneur for a PUM mission. When we have doubts about the commitment of the customer we might propose to start with distant support before organising a mission.

During the first mission, the expert will make a work plan that firstly addresses the issue(s) that the owner wants him to address; secondly, the expert looks at the overall performance of the firm and addresses specific issues that also hamper the company’s operations and growth and/or issues concerning corporate social responsibility (CSR). Together with the entrepreneur, he/she agrees on the (implementation of the) work plan for the company’s improvement including the necessary follow-up missions after the first one. That work plan is included in the expert’s report and discussed in depth at the debriefing.

In principle when an entrepreneur asks the expert to come back (or asks another PUM expert) it signifies that he has seen the added value of relevant expertise and ‘hands-on’ know how. We require the entrepreneur to have actually implemented most of the recommendations of the first mission before the second mission will be launched.

Problem definition
For a good understanding of an application and hence the selection of an appropriate expert, the quality of the information given is of the utmost importance. It cannot be emphasized enough how important it is to have a good description of the issue that the expert has to address. After agreeing on an application (and before the actual mission), it is recommended that the applicant communicates directly with the expert on details of the issue, the mission and the work program. PUM supports enterprises by sharing knowledge. To avoid single-use of expertise, it may occur that, depending on the type of required assistance (e.g. design of a building or website), not the initial applicant but their local partner (e.g. architect or web designer) will be considered for PUM assistance. We sometimes propose to start with distant support before organising a mission.

Enabling environment
Enabling environment is defined as support for those organisations that have as their main role and responsibility the improvement of the private sector. Such organisations can be privately or publicly owned. The main areas of support are then:

  • education, only for vocational training institutes and initiated by the private sector
  • management (business support organisations)
  • representative (employers associations)
  • research and development institutes
  • general (chambers of commerce)
  • infrastructural organisations