For any budding entrepreneur with good ideas, access to capital is critical for survival of the dream, as without it the very existence of the small business sector within the country would become extinct.
Citing capital access as an important issue for small businesses, President of the Small Business Association of The Bahamas (SBAB), Mr. Johnny Outten said for far too long, there have been many aspiring entrepeneurs with great ideas for the perfect business, but because their plan lacked capital, the business never came into being.
The Bahamas, he said, has a very small venture capital pool. Mix this with the fact that commercial institutions are reluctant to lend funds, and one can observe why many businesses fail.
A major endeavour of the Small Business Association for the new year is the implementation of a 'Venture Capital Fund', – a goal of their strategic plan.
The fund, whose framework is expected to be completed in 3-4 years, once properly set up and managed, will permit venture capitalists to come and invest in a particular business or any number of businesses over a short period of time.
The fund will be set up in such a way that apart from receiving the capital, the entrepreneur or small business person will be given the technical support to help start up the business properly, and after the entrepreneur achieves good financial grounding, the venture capitalist can expect a return on the investment.
"With this fund, businesses will have other alternatives or means of obtaining funding," Mr. Outten said, adding that "these items are available in developed countries but is not available here."
Stating that in the midst of a time when business in the country is seemingly grinding to a halt, Vice-president of SBAB, John Michael Clarke noted that if businesses don't have access to the capital they need then they can't grow.
"We understand that in small environments such as ours, the bank is not likely to take great risks, but at the same time, there are no real mechanisms for innovators to be really rewarded," said Mr. Clarke.
"In other countries, venture capital is available for those seeking good ideas; here in The Bahamas, you may have good ideas, but if you don't have the cash, the idea is dead."
Another area the Association will focus on is the FTAA. The aim is to make the public aware of what's really going on. SBAB is in the process of forming a group that will review various aspects of the FTAA and how it affects small businesses in The Bahamas and the country as a whole.
"We are going to lobby for inclusion; there is a committee that the Government had formed that is looking into the FTAA and for some reason small businesses have been left out," Mr. Outten said. "We need to voice our views and let our concerns be known."
Mr. Outten said that ironically, successful governments have always paid lip-service to small businesses and the development of this sector, but for some reason the sector is still not respected or seen as a vital contributor to the economy.
In larger developing countries, small businesses account for 50% – 60% of employment. Even though adequate statistics are not kept on the small businesses in the country, it accounts for about 65% of employment.
While Mr. Outten believes the FTAA will present some challenges for small businesses, he also believes it will present some opportunities.
"The challenge for us in the Small Business Association is to get our members ready for the competition that we hope would come along with free trade," he said, "and to be proactive and prepared in their thinking to branch out or merge with other business to acquire a foundation to survive or succeed."
Small businesses are a significant force in the economy of The Bahamas. Many small business owners realize that while they may be driving the economy, they do not have a powerful advocate who can present their views to government.
The Small Business Association of The Bahamas (SBAB) was formed by small business owners to address these issues. It is a new organization geared toward serving and promoting the small business sector of The Bahamas.
Small Businesses have been identified as companies with fewer than fifty employees, and with revenues of less than five million dollars annually.
By Lisa Albury, The Nassau Guardian
