Blurring small biz lines

BUSINESS FINANCE

Small businesses traditionally have difficulty accessing finance to either start a business or expand an existing venture. In the less developed regions of Trinidad commercial banks are not usually a major source of finance for small businesses, so provision of finance to businesses will have to be extended by organisations like National Entrepre-neurship Development Company (NEDCO), Microfin Caribbean Limited, Helping Ourselves Prosper Economically (HOPE), Micro-Enterprise loan facility (MEL), Youth Business of Trinidad and Tobago (YBTT) and credit unions in the region.

Perhaps, most regions can benefit from a programme such as MIPED which was introduced in Mayaro with bpTT as sponsor. There are areas such as the south west peninsula which deserve special attention and a South West Business Development Fund can be created to finance businesses located in that region with contributions from the Government and companies resident in the area.

TRAINING

It has been established that relevant skills and business training help in achieving business success. Thus, any business promotion programme to be launched in areas outside of the main cities must have a significant component of training. The existing programmes that are relevant to such regions include: the Comm-unity Education Programme of the Ministry of Community Development, Culture and Gender Affairs which offers 44 courses at community centres in several areas, the Multisector Skills Training (MUST) programme and the National Skills Development Programme (NSDP). These training resources must be harnessed for application in regions such as the south west and a coordinated approach to training adopted based on identified business opportunities. A survey of the residents of La Brea showed that small business development training was critical in order for the residents to capitalise on indirect and spin-off jobs and greater collaboration and coordination among training providers operating in the area. The residents insisted that training should include entrepreneurship, especially in the arts, sport and culture. The Community Development Fund which targets Non Governmental, Community Based and Faith Based Organisations runs free courses on “Starting and Operating a Successful Community Based Micro Enterprise” and these should be promoted more vigorously.

MARKETING

Small businesses lack marketing savvy and facilities are usually not available to assist. Special attention must be paid to this area of need and organisations such as the Business Development Company (BDC) have to be brought in to facilitate the marketing of the products and services of the small businesses in those areas that require such assistance. The BDC recently launched an online SME commerce portal dedicated to helping local small businesses become more competitive and expand into new markets. This facility should be made widely available to small businesses throughout the country.

SUPPORT SERVICES

A precondition to the development of the small business opportunities identified in this report is the provision of business support services to both start up and existing businesses in the south west. In particular, advisory services in the area of business planning, accessing finance, accounting, law, regulatory requirements and government agencies requirements should be provided. The establishment of small business incubators should be examined where business accommodation and services can be provided in a building or complex of buildings. Such facilities can be negotiated with the industrial companies in the south west.

An objective assessment will reveal that there are small business opportunities with considerable development potential covering an array of business activities based on both existing natural resources and service needs. In regions such as the south west peninsula there are business opportunities based on the resources of the land, forests, wetlands, marine and riverine environment and cultural heritage.

The service sector has become the largest economic sector in the developed countries and is growing rapidly in middle income countries such as Trinidad and Tobago. Business opportunities abound in the service sector, as the local population grows in sophistication and is exposed to the consumer needs of developed countries. Such opportunities are available in the areas of tourism, industry, households and personal services.

FILLING THE GAP

The challenge of small business development in regions such as the south west is the filling of the gap between opportunity identification and business start-up. There is an acknowledged process for realising this objective which involves the formulation of precise business specifications and matching the business to potential small business operators.

There are proven techniques for achieving this match up which include: system for business profile preparation; screening of potential small business persons; establishment of business incubators; facilitation of community based businesses; formation of business partnerships, networks and other collaborative arrangements based on complementary skills; youth in business programmes and provision of mentoring and advisory services.

A special intervention is required in order to implement these initiatives in the lagging regions of the country including the north east, south west peninsula and south east. Such an intervention is vital if small business development is to take place because of the challenges regarding the demographics and education levels of the population of these areas.

There already exists a range of such services provided by varied public and private organisations in Trinidad and Tobago. The obvious requirement is for the implementation of a coordinated system of delivery of the business development and support services.

The problem of access to finance for small business development must also be tackled in a deliberate manner. The agencies involved in business lending to individuals such as NEDCO and those which target communities such as MEL and the Community Development Fund must be mobilised in these regions if any significant impact is to be registered.

The views expressed in this column are not necessarily those of Guardian Life of the Caribbean Limited.