Published On:Wednesday, July 27, 2011
By NEIL HARTNELL
Tribune Business Editor
A 'NATIONAL SMALL and Medium-Sized Enterprise Funding Scheme' was yesterday touted as "the only way" to finance a viable entrepreneurial sector, a leading consultant telling Tribune Business that the business community lacked a sustainable "middle class".
Mark Turnquest, head of Mark A. Turnquest Consulting, an adviser to many small and medium-sized companies, argued that just like Bahamian society there was a "big gap between the have's and have not's" in the business community, contrasting major employers such as Atlantis with locally-owned Over-the-Hill businesses that were "suffering".
"We don't have middle class businesses," Mr Turnquest told Tribune Business. "The medium-sized enterprises are the most important ones, as they can hire more people and are more sustainable. That is what we lack."
Welcoming the imminent arrival of the Small and Medium-Sized Enterprises Development Bill, which the Government hopes to have ready when Parliament returns, Mr Turnquest accused both major parties of using the Bahamian business ownership concept as a "political ploy", and of failing to "understand the market" for such companies.
"We are weak when it comes to having a lot of viable businesses, and that's because of a lack of commitment by both the PLP and FNM to focus on small business development from a sustainability point of view."
Mr Turnquest, who sets out his thoughts on the Small and Medium-Sized Enterprises Development Bill and its implementation in a column in tomorrow's Tribune Business, added that rather than focus on more 'Mom and Pop' stores, the Bahamas should instead target "creative markets" that would generate export earnings.
Arguing that the Bahamas was not maximising its export potential, Mr Turnquest told Tribune Business that focusing small and medium-sized business development in this area was "the only way" to grow their current 5 per cent share of per annum gross domestic product (GDP).
"The emphasis is not actually focused on creative markets," he said. "Markets dealing with e-commerce, information technology (IT), innovative manufacturing.
"Those creative economies, if we can actually invest more in the productive processes, we can diversify the economy more. Because we can't export the way we should, there's too much of a burden on the local economy. We are weak in exporting our talents.
"The Government needs to focus on creating avenues for the export of authentic creative products. That's what we need. I'm not an advocate for too many 'Mom and Pop' stores. To increase the 5 per cent share of GDP small and medium-sized businesses have now, we have to be more innovative in exporting and bringing more money into the country."
Reiterating that the Government's Jump Start programme, which would provide a maximum of $7,500 per entrepreneur to start their own business was not enough to ensure such ventures were sustainable, Mr Turnquest urged that this initiative be "packaged" with other available financing sources - banks, 'angel investors' and other local/international capital sources.
"I don't believe in the grant process of $7,500 at all," he told Tribune Business. "Not only is it not enough, but I challenge the Government to work with the banks, investors with international funding, to package those with the lending policies they have.
"I can tell you from experience that this $7,500 they are going to give entrepreneurs has to be packaged together. Otherwise it is going to get the entrepreneur into trouble. It's almost going to be a waste, and it's not actually going to benefit the economy in the long run."
The maximum Jump Start grant, Mr Turnquest said, was just enough to cover a first and last month's rent and enable a businessman to start operations. Yet to ensure the venture lasted for "six months' down the line", he argued that another $30,000 in financing was required, especially "to stop the competition beating up on you".
The small business consultant suggested that the $7,500 grant almost be used as "a downpayment" to obtain other forms of financing, leading to his call for a National Small and Medium-Sized Enterprise Funding Scheme that brought together all potential funding partners.
"I am an advocate for some type of Small and Medium-Sized Enterprise Funding Scheme, where you have to identify the requirements of new and existing businesses, their financing needs, and how they will benefit from receiving the money," Mr Turnquest told Tribune Business.
"You only give money to companies and entrepreneurs who have the capacity to pay it back. I feel there needs to be one lending scheme, where people are put into different sectors based on the business cycle. This all needs to be under one roof, rather than put together by individuals not in synergy."
Apart from bringing together the commercial banks, foreign and local 'angel investors' and other potential private sector financiers, Mr Turnquest said such a scheme should also seek to unify the various government agencies - such as the Bahamas Agricultural Industrial Corporation (BAIC), Bahamas Development Bank (BDB) and Bahamas Entrepreneurial Venture Fund.
This would eliminate duplication and enhance productivity through combining resources, with Mr Turnquest also urging the Government to do more to allow potential foreign financiers of small and medium-sized enterprises access to the Bahamian market.
"I'm an advocate for foreign financial institutions having access to our local market," he added. "The local market cannot sometimes afford the amount of money needed to drive the SME market.
"There are a lot of foreign investors out there, but because of the Central Bank exchange control regulations, think they can't. If they can relax that and involve individuals who want to invest in the Bahamas, we would be in a better position."
By NEIL HARTNELL
Tribune Business Editor
A 'NATIONAL SMALL and Medium-Sized Enterprise Funding Scheme' was yesterday touted as "the only way" to finance a viable entrepreneurial sector, a leading consultant telling Tribune Business that the business community lacked a sustainable "middle class".
Mark Turnquest, head of Mark A. Turnquest Consulting, an adviser to many small and medium-sized companies, argued that just like Bahamian society there was a "big gap between the have's and have not's" in the business community, contrasting major employers such as Atlantis with locally-owned Over-the-Hill businesses that were "suffering".
"We don't have middle class businesses," Mr Turnquest told Tribune Business. "The medium-sized enterprises are the most important ones, as they can hire more people and are more sustainable. That is what we lack."
Welcoming the imminent arrival of the Small and Medium-Sized Enterprises Development Bill, which the Government hopes to have ready when Parliament returns, Mr Turnquest accused both major parties of using the Bahamian business ownership concept as a "political ploy", and of failing to "understand the market" for such companies.
"We are weak when it comes to having a lot of viable businesses, and that's because of a lack of commitment by both the PLP and FNM to focus on small business development from a sustainability point of view."
Mr Turnquest, who sets out his thoughts on the Small and Medium-Sized Enterprises Development Bill and its implementation in a column in tomorrow's Tribune Business, added that rather than focus on more 'Mom and Pop' stores, the Bahamas should instead target "creative markets" that would generate export earnings.
Arguing that the Bahamas was not maximising its export potential, Mr Turnquest told Tribune Business that focusing small and medium-sized business development in this area was "the only way" to grow their current 5 per cent share of per annum gross domestic product (GDP).
"The emphasis is not actually focused on creative markets," he said. "Markets dealing with e-commerce, information technology (IT), innovative manufacturing.
"Those creative economies, if we can actually invest more in the productive processes, we can diversify the economy more. Because we can't export the way we should, there's too much of a burden on the local economy. We are weak in exporting our talents.
"The Government needs to focus on creating avenues for the export of authentic creative products. That's what we need. I'm not an advocate for too many 'Mom and Pop' stores. To increase the 5 per cent share of GDP small and medium-sized businesses have now, we have to be more innovative in exporting and bringing more money into the country."
Reiterating that the Government's Jump Start programme, which would provide a maximum of $7,500 per entrepreneur to start their own business was not enough to ensure such ventures were sustainable, Mr Turnquest urged that this initiative be "packaged" with other available financing sources - banks, 'angel investors' and other local/international capital sources.
"I don't believe in the grant process of $7,500 at all," he told Tribune Business. "Not only is it not enough, but I challenge the Government to work with the banks, investors with international funding, to package those with the lending policies they have.
"I can tell you from experience that this $7,500 they are going to give entrepreneurs has to be packaged together. Otherwise it is going to get the entrepreneur into trouble. It's almost going to be a waste, and it's not actually going to benefit the economy in the long run."
The maximum Jump Start grant, Mr Turnquest said, was just enough to cover a first and last month's rent and enable a businessman to start operations. Yet to ensure the venture lasted for "six months' down the line", he argued that another $30,000 in financing was required, especially "to stop the competition beating up on you".
The small business consultant suggested that the $7,500 grant almost be used as "a downpayment" to obtain other forms of financing, leading to his call for a National Small and Medium-Sized Enterprise Funding Scheme that brought together all potential funding partners.
"I am an advocate for some type of Small and Medium-Sized Enterprise Funding Scheme, where you have to identify the requirements of new and existing businesses, their financing needs, and how they will benefit from receiving the money," Mr Turnquest told Tribune Business.
"You only give money to companies and entrepreneurs who have the capacity to pay it back. I feel there needs to be one lending scheme, where people are put into different sectors based on the business cycle. This all needs to be under one roof, rather than put together by individuals not in synergy."
Apart from bringing together the commercial banks, foreign and local 'angel investors' and other potential private sector financiers, Mr Turnquest said such a scheme should also seek to unify the various government agencies - such as the Bahamas Agricultural Industrial Corporation (BAIC), Bahamas Development Bank (BDB) and Bahamas Entrepreneurial Venture Fund.
This would eliminate duplication and enhance productivity through combining resources, with Mr Turnquest also urging the Government to do more to allow potential foreign financiers of small and medium-sized enterprises access to the Bahamian market.
"I'm an advocate for foreign financial institutions having access to our local market," he added. "The local market cannot sometimes afford the amount of money needed to drive the SME market.
"There are a lot of foreign investors out there, but because of the Central Bank exchange control regulations, think they can't. If they can relax that and involve individuals who want to invest in the Bahamas, we would be in a better position."
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