Small Businesses still having a hard time
Lorna Callender, SKNVibes
BASSETERRE, St. Kitts. TOO SMALL TO SUCCEED? One wonders if this is the other side of the TOO BIG TO FAIL coin we often read about during recent attempts to rescue big businesses in the USA.
In St. Kitts, small business owners voiced their grievances last week, and though some recorded reasonable success, they spoke of so many challenges that we are forced to ask, “Are small businesses here too small to succeed?”
According to them, a strong indomitable spirit is not enough, for the challenges are great and they are not operating on a level playing field.
Start-up financing is still a major problem and even though we may hear that the Development Bank is there for small businesses, these entrepreneurs claim that the Development Bank requires so many forms and business plans which they are ill-equipped to produce without incurring more expense; also their rates were not attractive enough for a beginner. There is definitely a need for grants or soft loans.
It was still difficult, according to them to acquire small plots of land. Some reported that they had been applying every year for at least six years now.
Transportation was also a major challenge. Unless they had a vehicle to transport and market their goods within the island, they were unable to market their goods effectively especially if they had perishable products.
It was even more difficult to transport their goods to neighbouring islands. Apart from the Dominican boats, there are no regular ferries criss-crossing the islands which they could take advantage of.
They note, further, that they are also unable to import materials from Caricom states again for lack of transport. Resource materials from Guyana, which are often cheaper could not be directly routed here but had to pass through Miami. When freight charges were added, they were no longer cheaper.
Present freight charges were also quite prohibitive for them
Small business owners further bemoaned the fact that non-citizens coming in to St. Kitts to start businesses similar to theirs were granted concessions and tax exemptions in some cases while they got no such advantages. How could they operate competitively with the dice so heavily stacked against them in their own country, they ask.
Those operating in agriculture expressed the need to have help with irrigation if they were ever to produce enough for export. They needed help with some sort of Insurance or compensation for crop loss due to natural disasters
These entrepreneurs invariably have to do everything for themselves. It is difficult to recruit persons to help them at this early stage and having to cope with all aspects of the business was extremely stressful. Administrative assistance and Legal aid would be most welcome. Such assistance is often provided by the secretariat of a Small Business Association but such an association no longer exists here although some cooperatives are being formed.
It was also an uphill task to get locals to patronise local products especially if their packaging was inferior or there was no bar-coding. They called for more education on this.
Not able to patent their products, craftsmen found that innovative ideas were easily stolen and mass produced elsewhere.
Finally, they admit, especially those in building construction and sales, to being unable to overcome competition from the Chinese. Because China is now a signatory to the Caribbean Development Bank, they can now tender for construction jobs in Caribbean. Their labour costs invariably undercut those of locals.
CARICOM has recognised that Small Businesses provide as much as 40% of the GDP in some larger countries and is commissioning the production of three manuals to assist Small Businesses and help to generate growth in the economy.
Here to talk with small business owners were the consultants Dr. Hansel Beckford and Ms Sandra Shirley of the University of the West Indies (UWI) Jamaica.. Funding had been provided through EU and the Caribbean Development Bank (CDB) to enable them to gather information to produce three manuals – 1. Financial and Technical matters 2. Legal and Administrative and 3. Business agility.
Entrepreneurs were invited to share their experiences openly and confidentially. Their successes and challenges were voiced but from the summary above, it is clear that small businesses are still having a hard time. Unless they are assisted and buttressed against failure, we may yet find that in this economic environment, with an uneven playing field, that they may in fact be too small to succeed.
