Only SMEs Can Save Our Nation From Financial Collapse in 2013

 

December 18, 2012

By Mark A. Turnquest

 

 TOP DOWN ECONOMIC STRATEGIES ARE THE PAST

 

National policies makers have focused on top down economic strategies to improve Tourism, Financial Services and Construction Industries for almost 40 years. However, after all is said and done, The Bahamas as of December 2012 is in economic distress because of the following:

·         Sovereign rating  was down-graded from BBB1 to BBB (Standard and Poor’s) and from          A3 to Baa1 (Moody’s)

 

·         Almost 5 Billion national debt, grown from 31.7%  of GDP in 2007 to 53% of GDP in 2012

·         550 million plus deficit (expected to grow to 671 million (2013/14)

·         15% Unemployment rate (could elevate up to 20% in 2013)

·         Low GDP (8 Billion) and low projected economic growth (2.5%)

·         A social welfare society (an enormous increase in social safety net transfers)

·         A stagnated Tourism, Financial Services and Construction Industries

·         An unmotivated and demoralized small business sector

The former government had mismanaged the economy with a double edged sword in 2007-2012 and made the recent recession worse. The former Minister of State of Finance and his colleagues formulated failed top down economic strategies in recent years, namely:     the costly dredging of the Nassau Harbour, unsuccessful air travel rebates, unwarranted tax increase in the vulnerable automobile industry and terminating concessions in the manufacturing industry. In addition, the former Minister of Works spearheaded the catastrophic road works project. As a result, the small and medium sized enterprises (SMEs) were neglected and hundreds closed. The ultimate destruction was that SMEs contribution to GDP declined from 5 % (2007) to 2% (2012).

Top down strategies, which focus on improving the tourism, financial services and construction industries, did not significantly increase GDP (8 Billion) to cover national expenses and reduce the national debt / deficit. To cover recurrent expenses, reduce national deficit and debt our annually GDP needs to be in the vicinity of 12 Billion.

Along with tax (property, income, value added) reform and economic diversification, the only way our country is going to obtain an annual GDP of 12 Billion is to focus on bottom up economic strategies to improve the SME sector.

 

BOTTOM UP ECONOMIC STRATEGIES ARE THE FUTURE

 

THERE MUST BE A RISE OF THE SMALL BUSINESSMAN! National policies makers over the years casually indicated that small businesses are the pillars of our economy and that there must be a focus on economic diversification. However, as of May, 2012 there were not significant evidences that they were serious about trying to improve the small business sector and diversify the economy. However, the new government understands that bottom up economic strategies to improve the SME sector is the way to go in the future. This is evident because of the following:

·         The legislation of the Small Business Act in 2013

·         The creation of the Small Business Development Agency in 2013

·         Conducting a market research in order to improve the SME sector

·         Formulating a long overdue strategic plan for SME development

·         The fair road works compensation program

·         The renewal of concessions for manufacturers

·         Formulating new innovative agriculture strategies

·         A new strategic approach to develop SMEs in the Family Islands

·         Focus on reviving dormant industries and enhancing existing ones

·         Formulating clustering strategies for productive and creative markets

·         Formulating a creative national financial lending mechanism for SMEs

Only the serous attention to develop the SME sector can save our nation from financial collapse. Moody’s and Standard and Poor’s will improve our Sovereign rating in 2013 because the PLP government is conducting the necessary bottom up economic strategies to correct the failed top down economic strategies by the former FNM government.

To help develop our SME sector you can contact me at 326-6748 / 427-3640, email: markaturnquest@gmail.com, website: http://www.markturnquestconsulting.com

 

 

BAHAMAS SMALL BUSINESS ACT & AGENCY COMING IN 2013

NEIL HARTNELL INTERVIEWED MARK A. TURNQUEST

NOVEMBER 2012

#Tribune Business Editor

#Appointing an eight-member private sector committee to drive the Small and Medium-Sized Enterprise Development Bill forward has created “some light at the end of the tunnel”, a well-known consultant yesterday revealing that 75 per cent of his clients in the sector were “struggling”.

#Mark Turnquest, of Mark A. Turnquest & Company, said that while the Government’s decision to appoint himself and seven other persons to the committee offered hope, many small businesses and entrepreneurs had adopted a ‘we’ll believe it when we say it’ attitude.

#Acknowledging the continued weakness of many Bahamian-owned small and medium-sized (SME) enterprises, Mr Turnquest told Tribune Business he had been forced to cut the fees he charged for developing business plans by between 33-66 per cent.

#And, while growth and optimism were unlikely in the short-term, Mr Turnquest said the Bill promised to usher in a “better business climate” for Bahamian SMEs by September 2013.

#The legislation will create the Small and Medium-Sized Enterprise Development Agency (SMEDA) as a ‘one-stop shop’ to facilitate all the industry’s needs, and Mr Turnquest told this newspaper that it was being structured to resist the political fall-out from changes in government.

#Disclosing that the Government had appointed the committee, featuring six men and two women, two weeks ago, Mr Turnquest said they were currently focused on assessing small business needs and consulting with those in the sector.

#Pledging that the committee would consult with the various industry associations, plus small businesses in New Providence and the Family Islands, early next year, he told Tribune Business: “We can see the light at the end of the tunnel.

#“We can see that by next year the small business community will be in a far better position.... Right now, our country is not in a good position economically. A lot of times, people agree that small businesses are the driving force, but only recently are we making an effort to bring together the small business consultants in the field who can assist the Government.”

#Apart from being hit by the recession, many Nassau-based small businesses have also had to contend with the disruption caused by the New Providence Road Improvement Project.

#“I see a lot of businesses not open and people losing interest,” Mr Turnquest said. “I spoke to a lot of my customers about the Small and Medium-Seized Enterprise Development Act, but a lot of them are not in a position to recover because the financing mechanisms are not available right now.

#“Lending institutions need to focus on new, high risk enterprises. That is one of the challenges right now. A lot of organisations have indicated they are going to lend money, but they are not practising what they preach.”

#And he further told Tribune Business: “Of my clients, 75 per cent of them are struggling.

#“All of them have under 10 people employed. That’s my market. Unfortunately, a lot of them have not yet started rehiring. Many of my clients had to go back to work in their shops; they have to work directly in the management of their companies and be there. They have not benefited from any recovery.

#“Only 25 per cent of my clients have started hiring one or two people back again.”

#Mr Turnquest said the struggles of the past four-five years had taken their toll on small business psychology, sapping the entrepreneurial spirit of many in the sector.

#“I found out that their demeanour, enthusiastic behaviour, is not there,” he told Tribune Business of many clients.

#“Presently, I’m doing a lot of planning and innovative-type marketing to see how I can attract new business myself. I, as a planner, have to do extra work to get my business back to where it is to survive.

#“I went from a $750 fee for a business plan down to $500. New start-ups, I’m charging $250. My average price for a business plan is $250-=$500. No one has the means to pay more.”

#Describing 2012 as “another year of drought”, Mr Turnquest added: “One of my clients has a pre-owned, used car business, and their sales are 30-40 per cent less than last year. That indicates people can afford less.

#“Coming into the Christmas holidays, my clients are not optimistic at all. They don’t anticipate holiday sales will cover them for the major losses they’ve faced for the past year-and-a-half.

#“I tell them that the Small Business Act and SMEDA will be hear next year. They’re not enthusiastic about that. While I told them it’s going to create a better business climate, they’re saying they’ve been suffering for too long, government has failed them for too long. They want to see it happen to believe it.”

#Mr Turnquest said the committee would advise the Government on what was needed to create a “productive small business sector”, adding that the groundwork for the legislation and SMEDA’s structure was now taking place.

#“Small business owners can feel confident now that by September next year they will have some type of facility where they will receive training, marketing and operational support,” he added.

#SMEDA, Mr Turnquest said, would “identify the best funding mechanisms” for Bahamian small businesses, be that local or overseas sources.

#This would also reduce the burden on the Bahamas Development Bank, government-sponsored venture capital fund and the Bahamas Agricultural and Industrial Corporation (BAIC).

#The intention, Mr Turnquest said, was that all these agencies would have their own mandate, with SMEDA focused on small businesses.

#Adding that the private sector would “drive” SMEDA, he said of its control: “Eventually there will be less government and more private sector..... The legal framework will go beyond political changes every five years.”

#Pointing out that he would never have agreed to sit on the Government’s committee unless he was sure “something meaningful” would result, Mr Turnquest said: “We’ll make sure that when changes in government take place, they’ll never interfere with business growth and economic development in the Bahamas.”

 

SMES NEEDS INNOVATIVE FINANCIAL FUNDING

NEIL HARTNELL INTERVIEWED MARK A. TURNQUEST

 

SEPTEMBER 2012

#Tribune Business Editor

#A leading small business consultant told Tribune Business he has “lost at least 50 per cent” of his client base over the last three years, as he urged potential microlenders to focus on the technology, manufacturing and creative sectors.

#Mark Turnquest, principal of Mark A. Turnquest Consulting and a BAIC Board member, pointing to 16 business clients who wanted to expand but could not due to an inability to obtain financing, said no new Bahamian entrepreneurs or small businesses were replacing those who had been lost during the recession.

#Praising Progressive Consumer Services and Transfer Solutions Providers (Mango) for their renewed focus on the microfinance and lending market, Mr Turnquest said credit advanced to small businesses must be linked to job creation and cover more than just start-up costs.

#“I’m so happy, so grateful to Mango and Progressive for thinking about small people, because right now the banks are not willing to lend money,” Mr Turnquest told Tribune Business.

#“Right now, we need it, and once we have it you will see a lot of businesses popping up that have the potential to hire a lot of people.

#“I have lost at least 50 per cent of my client base over the last three years because they’ve gone out of business, and the new ones and entrepreneurs are very few and far between right now because they can’t get the money.

#“I can produce a great business plan for my clients, but if they can’t get the financing, it’s no go. If they do not get the money, I am useless. I can make them business ready, but because they don’t have the financing I have a very low rate of success with new entrepreneurs. That’s how the market is. The cupboard is bare when it comes to business financing.”

#With the recession, unemployment and a high level of non-performing loans making commercial banks especially cautious on business lending, Mr Turnquest said innovative entrepreneurs were having a particularly hard time.

#“I have a lot of customers who have innovative businesses, but the banks say they’re too risky because they are ‘out-of-the-box’ type ideas,” he added.

#“They can’t seek financing because their risk profile is higher than normal....

#“I have 16 businesses wanting to expand in creative segments such as food processing exporting. That’s a major multi-million dollar agricultural sector where everything is done under one roof.”

#Suggesting that the private and public sectors combined needed to create a net 700 new jobs every month for the next three years to get the unemployment numbers down to a respectable level, Mr Turnquest said micro and small business lending needed to be tied to the use of technology and alternative energy by the borrower, plus job creation.

#And he argued that the sums advanced by lenders needed to be at least $25,000-$30,000 to make a meaningful difference. If credit was limited, it would be “wasted” on start-up costs and “not be beneficial in the long-run”.

#“Spread the costs over a lot of people and give them a chance,” Mr Turnquest argued.

#“I would like them [Mango and Progressive] to focus on technology, manufacturing and the creative industries. They are seriously underserved in the marketplace, and they could provide a lot of jobs.

#“They [Progressive and Mango] have to be comprehensive and want to serve every high risk business.”

#Noting that the Bahamas had lost at least two percentage points in agriculture’s share of Bahamian GDP, which had fallen from 5 per cent to 3 per cent, Mr Turnquest urged his countrymen to invest in local businesses.

#“We need domestic investment most importantly - Bahamians need to invest in domestic businesses,” he told Tribune Business.

#“I’m going to sit down and talk with the Mango people to show what the position is in the market, and my client base. We also need the small business community to up their game in terms of transparency and accountability.”

 

RELAX LENDING REGULATORY CONTRAINTS FOR SMES

NEIL HARTNELL INTERVIEWED MARK A.TURNQUEST

MAY 2012

#Tribune Business Editor

#The Bahamian authorities have been urged to relax legal and regulatory constraints to provide small businesses with “vital” access to international capital, a leading consultant telling Tribune Business the sector was currently “in ruins”.

#Mark Turnquest, head of Mark A. Turnquest Consulting, called on both the Government and Central Bank of the Bahamas to ease National Investment Policy and exchange control regulations, respectively, so that Bahamian companies and entrepreneurs could partner with international investors and gain access to much-needed investment capital that would sustain their efforts.

#He also told Tribune Business there needed to be better collaboration and co-ordination between the various government agencies, such as the Bahamas Development Bank and Bahamas Entrepreneurial Venture Fund, that are involved in small business financing and assistance, describing the current situation as too fragmented and involving numerous ‘overlaps’.

#And, calling for better business services and support networks to underpin initiatives such as the former Ingraham administration’s Jump Start programme, Mr Turnquest said “motivating” risk-taking in the small business sector was critical to the Bahamas’ economic recovery.

#Arguing that a $4.356 billion national debt and expanding fiscal deficit made it virtually impossible for the Government to provide the required financing, Mr Turnquest said: “The Central Bank needs to relax how we source our funding, so foreign investors can invest in small local industries and partner with young Bahamians who have talent and want to expand.”

#Describing such a move as “so vital” to the expansion of Bahamian business ownership through a thriving small business sector, he added: “The international market is willing to invest in local manufacturing and innovative industries in the Bahamas, but due to constraints and too much red tape it’s difficult for the small businessman to access this funding.”

#While the Government’s National Investment Policy mandates that certain industries and economic sectors are reserved for 100 per cent Bahamian ownership only, Mr Turnquest said that joint ventures/financing from international investors could be structured so there was no change in equity ownership. Preference shares and other debt instruments, he added, were possibilities.

#Asked by Tribune Business as to whether any international ‘angel’ investors or venture capitalists would be interested in financing Bahamian small businesses and entrepreneurs, Mr Turnquest said an article he previously wrote in the Bahamas Investor magazine had generated numerous inquiries.

#“People were calling me as to what the climate is here for investment,” he recalled. “I got a lot of positive feedback, because it exposed the business community to the international marketplace.”

#Again calling for the creation of a $15-$20 million Small and Medium-Sized Enterprise Fund, which would draw its original capital from a combination of commercial banks and other sources, and be run by the private sector, Mr Turnquest said the former Ingraham administration had failed to “invest in business support services” to support its small business lending activities.

#“The most they had with Self Starters was six successful businesses out of 100,” he added. “The Jump Start programme had no business support agency, so it will not be long before those people find financial difficulty.

#“My recommendation was always to establish a collaboration between the Bahamas Entrepreneurial Venture Fund, BAIC, Bahamas Development Bank and Self-Starter programme to set up some kind of Small Business Development Agency that could pool resources and come up with one national vision for small business development,” Mr Turnquest told Tribune Business. “You could then set the base for those kinds of business.”

#The Ingraham administration left in place legislation largely along the lines of Mr Turnquest’s thinking, a Small and Medium-Sized Enterprises Development Bill, which had as its centrepiece a Small and Medium-Sized Business Development Agency (SMEDA). It remains to be seen what the new government does with this.

#As for the current condition of the Bahamian small business sector, Mr Turnquest estimated that prior to the New Providence Road Improvement Project going full force, the recession had been claiming five victims per month.

#Projecting that at least 200-300 companies had gone out of business since 2007, he added: “The roadworks itself took about 115 between Robinson Road, Market Street, Blue Hills and Prince Charles Drive. What the recession started, the roadworks finished.... The small business sector is presently in ruins.”

#But, calling on Bahamian small businesses and entrepreneurs to take responsibility for their own fates, Mr Turnquest told Tribune Business: “We cannot rely on the Government.

#“The only way we can try and develop this economy is to get the small businessman mentally motivated to want to take that risk. Everyone has to be more accountable and responsible, get their accounting records straight, develop a marketing strategy and a creative business mindset that thinks about exceptional goods and services. Customer service has to be at a high level.

#“Products must be innovative, and you have to manage your costs and expenses. You have to know everything you sell will not produce a profit. Monitor your expenses and put accounting controls in place. We need to be extra creative now for the economy to move on.”

 

THE BAHAMAS’ SMALL BUSINESS SECTOR IS IN RUINS

Prepared By Mark A. Turnquest (July 2012)

After analyzing The Bahamas’ economic conditions for the past three years and reviewing international watchdog agencies (Moody, IFC/World Bank, Standard & Poors) reports, it is imperative that the public and private sectors focus on small and medium size development (SME) Development and economic diversification. It is the only sensible approach to grow our economy in a sustainable manner, increase GDP and the entrepreneurial spirit; reduce unemployment, national debt and crime. In order to correct these problems there must be public and private sector partnership which will conduct a strategic analysis on how to make this little country, GREAT!

WHAT ARE AFFECTING THE GROWTH OF THE SME SECTOR?

(1) NATIONAL DEBT

The reality is that the national debt is almost 5 billion (50% of GDP). We spend almost 20% (298 million) of our budget on servicing our national debt.

(2) UNEMPLOYMENT

40,000 Bahamians are either unemployed, underemployed or are discouraged workers. The unemployment rate in New Providence is 15.1% and Grand Bahama is 21.2% (The Bahamas overall is 15.9%). There have been 26,000 job losses over the last 5 years.

(3) CRIME

Our crime challenges are tremendously affecting the business community (via break-ins and armed robberies) and we have four years of consecutive murder rate records.

(4) DECLINE IN COMPETITIVENESS

Several International credit rating agencies have downgraded The Bahamas’ sovereign credit rating and competitiveness in 2011 and suggested that our government raise taxes, formulate some type of value added tax system, slow down government spending, and mostly importantly, diversify our economy.

Unfortunately, The Bahamas has lost its economic competitiveness and creativity in comparison to our Caribbean neighbors in recent years. Our country has regress in the important categories of: (A) Ease of Doing Business,            (B) Starting a Business, (C) Sovereign Credit Rating and (D) Human Resource Index.

(5) INDUSTRIES CHALLENGES

Our Tourism product is uninteresting and not exciting; our financial services offering lack new innovation and our construction boost is benefiting foreigners. These three industries: Tourism, Financial Services and Construction and related industries contribute over 90% of GDP (6.5 Billion) and 80% of our employment level (152,000). We are still importing    over 500 million dollars in agricultural products and our manufacturing sector is stagnated.

(6) ROAD WORKS PROJECT & PROLONGED RECESSION

The SME sector is stagnant and contribution to GDP has deteriorated from 5% (2007)-3% (2011) because of the great recession, failed economic policies, the road improvement project, money borrowing crunch, lack of opportunities and a contracted economy.

(7) FAILED ECONOMIC POLICIES

Stakeholders who are responsible for SME Development have failed to improve our economy beyond mediocrity by not developing a Strategic Plan for SME Development. Although over the past seven years (2005- 2011) the public and private sectors collaborated with the intent to provide some form of a SME framework development      e.g. Domestic Investment Plan, SME Development Act which both have failed to become formulated and now the SME sector is in a hopeless position in mid 2012.

(8) NO FAMILY ISLAND DEVELOPMENT VISION

 Each Family Island should be analyzed to determine its economic, social and cultural potential, so that financial and other incentives can be offered to Bahamians who want to open complementary businesses and reside permanently on a Family Island.

·       This initiative will increase

·       the employment rate,

·       improve the infrastructure of the Family Islands,

·       encourage Bahamians to reside there permanently

·       and entice more domestic

·       and foreign tourists to the various islands.

Every redevelopment plans must preserve the natural, heritage and cultural resources of each island.

(9) NO SME DEVELOPMENT ACT (SDA)

The SDA, from a domestic perspective, will provide the foundation on which to improve the economic conditions of The Bahamas. From an international perspective, it will attract foreign investors who want to partner with local entrepreneurs in fields such as e-commerce, manufacturing, agriculture, and information technology. These industries are tremendously underserved and underdeveloped. These types of investments would diversify the Bahamian economy, which relies heavily on tourism and financial services.

The SDA will revitalize the entrepreneurial spirit in all islands of The Bahamas and will outline policies and initiatives that would assist in the development of SMEs–a major driving force of the economy. All current incentives, concession and legislation that are afforded to small businesses should be modified and encompass in the SDA.

(10) NO SME DEVELOPMENT CENTRE (SDC).

The new SME development centre must be developed and structured to eliminate financial and non-financial decision making based on political influences when formulating national economic policies. The SDC will establish and identify the roles and responsibilities of a Regulatory and Advisory Board that would oversee the enforcement of the SME Developing ACT (SDA).
Public and private sector executives will be selected to this Board. Members of this Board will be mandated not to make decisions based on political; gender or cultural motives. This Board will have the authority to make recommendations to modify particulars of the SDA based on economic conditions or the request of stakeholders.

(11) NO NATIONAL FUNDING SCHEME

A 15-20 million SME fund needs to be developed by local and foreign investors. Government need to eliminate legislations that make it almost impossible for SMEs to access international funding.  In addition, government, local and international lending institutions must partner to extend meaningful financial support to SMEs. Lenders need to focus on packaging loans extended to SME that have built-in accounting management, human resources and marketing support programs at an affordable cost for at least a year.

In conclusion, the PLP government must

1.  Swiftly attack this economic crisis by developing a National Strategic Plan for SME Development that focuses on sustainable economic growth and economic diversification.

2.  In addition, there must me more public –private partnership (PPT) when developing economic policies because it would prevent unnecessary roadblocks for entrepreneurial advancement that are difficult to reverse. 

I would like for SME owners to contact me so that we can collaborate to improve the economic conditions in The Bahamas  To contact me call 326-6748 / 427-3640 or log on to www.markturnquestconsulting.com.

BAHAMAS SME DEVELOPMENT


&

ECONOMIC DIVERSIFICATION PLANS – AN IMPERATIVE

Prepared By Mark A. Turnquest (May 2012)

After analyzing The Bahamas’ economic condition for the past three years and reviewing international watchdog agencies (Moody, IFC/World Bank, Standard & Poors) reports, it is imperative that the public and private sector focus on SME Development and economic diversification. It is the only sensible approach to grow our economy in a sustainable manner, increase GDP and the entrepreneurial spirit; reduce unemployment, national debt and crime.

WHAT ARE THE REQUIREMENTS TO DIVERSIFY & GROW OUR ECONOMY?

The only way to improve the overall living conditions of The Bahamas is to develop a National Strategic Plan for SME Development and Economic Diversification. This plan should articulate ten (10) main methods on how to improve the economic conditions of The Bahamas:

(1) COMMIT TO THEORY OF ECONOMIC GROWTH AND DEVELOPMENT

There are many models to choose from: The Linear –Stages Theory, Rostow’s Stages of Growth Theory, The Harod Domer Growth Model, Structural Change Models, The Lewis Theory of Development, Neoclassical Growth Theory, The New Growth Theory, and Motivation For The New Growth Theory etc. These models should be analyzed and determine which one is best suited for the Bahamas and constantly be adjusted base of economic conditions.

(2) FORMULATE A SUSTAINABLE CLUSTERING STRATEGY FOR PRODUCTIVE AND CREATIVE MARKETS

Clusters have the potential to affect competition in three ways, by: increasing the productivity of the companies in the cluster, driving innovation in the field, and stimulating new businesses in the field. Create clustering strategies for entrepreneurial ventures that develops innovative products, delivery systems, operational structures and marketing strategies in film making, agro-processing, fashion design, e-commerce, information technology, agriculture, art, e-learning, multi-media production, manufacturing, education, horticulture, software development, fly fishing, art and authentically Bahamian handicraft.

(3) PREPARE A SUSTAINABLE FAMILY ISLAND DEVELOPMENT PROGRAM

Each Family Island should be analyzed to determine its economic, social and cultural potential, so that financial and other incentives can be offered to Bahamians who want to open complementary businesses and reside permanently on a Family Island. This initiative will increase the employment rate, improve the infrastructure of the Family Islands, encourage Bahamians to reside there permanently and entice more domestic and foreign tourists to the various islands. Every redevelopment plans must preserve the natural, heritage and cultural resources of each island.

(4) CREATE A NATIONAL BUSINESS SUCCESS MODEL FOR SMEs

A national business success model will increase the national economic value of SMEs in The Bahamas. In addition, its purpose is to synchronize and unify the efforts of the government, financial lending institutions, non-governmental organizations (NGOs), SMEs and other stakeholders as it relates to small business development in The Bahamas. Most importantly, a business success model will identify how local and international investors and entrepreneurs can qualify for incentive and stimulus programmes when it comes to financial and non-financial assistance for introducing / developing innovative products and services

(5) A NATIONAL FUNDING SCHEME

A 15-20 million SME fund needs to be developed by local and foreign investors. Government need to eliminate legislations that make it almost impossible for SMEs to access international funding. In addition, government, local and international lending institutions must partner to extend meaningful financial support to SMEs. Lenders need to focus on packaging loans extended to SME that have built-in accounting management, human resources and marketing support programs at an affordable cost for at least a year.

(6) FORMULATE A SME DEVELOPMENT ACT (SDA)

The SDA, from a domestic perspective, will provide the foundation on which to improve the economic conditions of The Bahamas. From an international perspective, it will attract foreign investors who want to partner with local entrepreneurs in fields such as e-commerce, manufacturing, agriculture, and information technology. These industries are tremendously underserved and underdeveloped. These types of investments would diversify the Bahamian economy, which relies heavily on tourism and financial services.

(7) CREATE NEW MARKET OPPORTUNITIES

Medical, health and wellness, sports tourism, e-commerce, Information and Communication Technology (ICT), apiculture (bees agriculture), green energy production, innovative manufacturing and agriculture (coconuts etc) markets must be effectively and efficiently exploited in order to successfully grow and diversify the economy.

(8) REVITALIZE EXISTING AND REVIVING DORMANT INDUSTRIES

The Government must be more proactive and find ways to reduce the high electricity cost and other constraints that are killing SMEs and hampering the revival of dormant industries. A comprehensive incentive and concession plan should be developed to stimulate economic development. The government and its partners should focus on revitalizing the cultural tourism, agriculture, fishing, fish farming and manufacturing industries and reviving the hemp, sisal, sponging and forestry industries.

(9) CREATE A SME DEVELOPMENT CENTRE (SDC).

The new SME development centre must be developed and structured to eliminate financial and non-financial decision making based on political influences when formulating national economic policies. The SDC will establish and identify the roles and responsibilities of a Regulatory and Advisory Board that would oversee the enforcement of the SME Developing ACT (SDA).
Public and private sector executives will be selected to this Board. Members of this Board will be mandated not to make decisions based on political; gender or cultural motives. This Board will have the authority to make recommendations to modify particulars of the SDA based on economic conditions or the request of stakeholders.

(10) CREATE A MINISTRY/DEPARTMENT OF COMMERCE

My advice to the government is to create a Ministry of Commerce without incurring any costs or expenses. Simply transfer a few existing staff from the Ministry of Finance and empower the present Minister of State for Finance to head it. If additional persons are needed, I am optimistic that business persons from the private sector would volunteer their services (on an advisory board) to improve the economic conditions of the Bahamas because it would be in their best interests to do so. I would be a volunteer if asked.

After the May 7, 2012 general election, the new government must swiftly attack this economic crisis by developing a National Strategic Plan for SME Development and Economic Diversification that focuses on sustainable economic growth. In addition, there must me more public –private partnership (PPT) when developing economic policies because it would prevent unnecessary roadblocks for entrepreneurial advancement that are difficult to reverse.

To assist in the formulation of the National Strategic Plan for SME Development and Economic Diversification please feel free to contact Mark A. Turnquest at: Telephone: (242) 326-6748 / 427-3640, email markaturnquest@gmail.com or web site www.markturnquestconsulting.com.

'STIMULATE' SMALL BUSINESS THROUGH $15-$20M FUND

Published On : Monday, January 23, 2012

By NEIL HARTNELL

Tribune Business Editor

A $15-20 million Small Business Development Fund would be enough to "stimulate" the sector's development and further financing, a well-known consultant telling Tribune Business it should double its Bahamian GDP share to 10 per cent in "three-five years".

Telling Tribune Business that the Government and others had been "talking for too long" when it came to Bahamian small business and entrepreneurial development, Mark Turnquest said an overall development framework for the sector was required to unleash - and direct - financing and other support mechanisms.

The head of Mark A. Turnquest Consulting, a well-known small business consultant, said a Small Business Development Fund would be formed by "pooling" finance from the likes of commercial banks, angel investors, venture capitalists and philanthropists.

Urging that there be no government involvement in the Fund's decisions, Mr Turnquest said it should focus on start-ups and small businesses with the ability to hire persons, and those with the ability to export goods and services.

With the fast-approaching general election in danger of postponing the Government's much-trumpeted Small Business Development Bill, perhaps indefinitely, Mr Turnquest urged the administration to at least hold the necessary consultation with industry leaders and stakeholders prior to going to the polls.

"If the PLP gets into power, they will not look at what's been done, and we'll all have to wait three years as they start all over again," Mr Turnquest said. "If we don't have the consultation in process, they have to start all over again."

Staging private sector consultations now, Mr Turnquest said, would at least provide "some type of reference" point. So, if the Government did change, the new administration "don't have to reinvent the wheel".

The most important development, he added, was for the Bahamas to devise and implement a "small business development framework". This would create an institutional element that could even encourage partnerships between Bahamian and international persons/organisations when it came to financing and supporting small business development.

Calling for Bahamian and foreign lenders to "pool resources in a Small Business Development Fund", Mr Turnquest said: "It would have to have about $15-$20 million to start with, and after that everything will fall into place.

"A lot of people, even in the Bahamas, have money to invest, but they do not have a structure to assist them. The framework is actually a stimulus package where it will develop small business in the Bahamas. Currently, there's no direction."

The Small Business Development Fund would be guided by this framework, Mr Turnquest said. He said it should "focus on developing innovative companies who hire a sufficient amount of people, and economic growth.

"Everyone is talking about job creation, but there's no strategy. You fund businesses who can hire 25 people, pay taxes and develop themselves so they can export goods and services. That's how we improve the 5 per cent of GDP share we have now. We should be at least 10 per cent in the next three years."

Calling for a focus on small business exports, Mr Turnquest said the Small Business Development Fund had to be run by banks, financiers and private sector executives who understood lending and what to look for in business plans.

"The banks have not been interested in small business development. That's not their focus. But they have a lot of people who understand how to lend to small business. All they need is a policy framework to tell them what to do," he added, urging that there be no government representatives on the Small Business Development Fund.

"Let's focus," Mr Turnquest told Tribune Business, "We've been talking too long. We're talking every day about small business. We want the political parties to stop the gamesmanship on small business, and come up with sound business proposals on how they're going to change the environment in the short and long-term."