GET IN & STAY IN THE SME GAME

GET IN & STAY IN THE SME GAME

 

June 18, 2013

 

Article by Mark A. Turnquest

 

New entrepreneurs must get into the game by conducting a comprehensive market search before they develop practical business plans. Existing small and medium sized enterprise (SMEs) owners must stay in the game by executing their business plans in an effective and efficient manner.

It is quite evident by now that the country is broke, with a 70% debt to GDP Ratio in sight.  We are borrowing heavily now to borrow light in the future. Bahamians must become more entrepreneurial and do not wait for the government to set their destiny. Only the serious attention to develop the SME sector can save our nation from financial collapse.

Both government and the private sector should realize by now that focusing on top archaic down economic strategies to improve Tourism, Financial Services and Construction Industries for almost 40 years has failed miserably and now the cupboard is empty and the cookie jar is on the floor broken and empty.

The innovative bottom up economic clustering strategy to improve the SME sector should be the only way to go in the future. This means focusing on arts and craft, movie and television production, 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 mainly in the family islands.  All roads to economic diversification and growth should lead to the Family Islands. Bahamians must return to their forefathers’ islands and start complimentary businesses because New Providence is too crowded and economically maxed out.

However, new entrepreneurs and existing SMEs owners should feel excited and be optimistic because a market research is being conducted to identify the problems and opportunities of the SME sector. After the completion of the market research, a strategic plan will be formulated to delineate national policies on how to grow the SME sector and diversify the economy (from the bottom up).

 

In addition, The SME Development Act, the cornerstone that drives the development and sustainability of the sector, is one step closer to becoming legislated in the next parliamentary session. The SME Act will be administered by SME Development Agency which will concentrate on training, networking, research, identifying opportunities, administrative support and partnering with local and international funding organizations.

Conducting comprehensive market research, developing and executing business plans in an effective and efficient, formulating clustering strategies, Family Island development, the SME Act and SME Development Act will be the main topics discussed at the Entrepreneur Empowerment Workshop that I will be hosting on Saturday June 29, 2013. For more information contact me tel. # 3426-6748 / 427-3640 or email: markaturmquest@gmail.com,

 

 

Budget Tax Rises 'Necessary Evil'

 

Budget Tax Rises 'Necessary Evil'

 

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

A LEADING small business consultant yesterday called on the Government to “be creative” and examine the Family island development model, telling Tribune Business there were potential untapped revenue streams in the culture and heritage sectors.

While many businesses have expressed concern over new and increased Government taxes, Mark Turnquest, principal of Mark A. Turnquest Consulting, described them as a “necessary evil”.

“Due to the economic environment and the lack of a diversified economic model, we have to rely on what I call recurrent revenues from existing revenue streams,” he said.

“What we need is a bottom-up approach of creating new revenue streams from creative markets in agriculture, fisheries, information technology, craft, Junkanoo and those other exciting new revenue streams, because the existing model we have now is maxed out.

“All you can do is keep on taxing through import taxes, Excise taxes, real property tax and Business License. What the Government really needs to do is reexamine the Family Island development model,” Mr Turnquest added.

“I know Bimini is there, and they are only looking at one or two, but they have to look at the others in terms of the existing heritage and culture, and the revenue potential they can create. All they have to do is key in some infrastructure development. You are looking at 15 islands with no major economic impact.”

Mr Turnquest called on the Government to “meet SME’s in the middle”.

“The taxes could not be avoided,” he added. “The new Value Added Tax (VAT) is another tax the small man is going to feel one way or the other. That’s the problem; you’re taxing the same base. The Government needs to meet SME’s in the middle. They aren’t serious about us. That is why continue taxing the small man the way they do, there is no creativity,”

Mr Turnquest said there was a rise in entrepreneurial spirit in the Bahamas, but what was needed was the right funding mechanisms.

“Right now, the SMEDA is coming on, but we need to have a serious discussion on this national funding mechanism or scheme so we can make sure that persons who get in business receive the funding, in addition to all the marketing and accounting support so that they can be shepherded for at least a year,” he added.

“Entrepreneurs are still in a fight but we just need some creativity on all levels.”

 

Ninety Per Cent Of Small Firms' to 'Forego' New Finance Market

  

Ninety Per Cent Of Small Firms' to 'Forego' New Finance Market

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

 

Ninety per cent of Bahamian small and medium-sized businesses will likely miss out on the financing opportunities offered by BISX’s proposed commercial paper market due to “indiscipline”, a leading consultant warned yesterday.

 

Mark Turnquest, of Mark A. Turnquest Consulting, told Tribune Business that the failure of many companies to keep proper accounting records, or have a “stable business model”, meant few would be attractive to commercial paper investors.

 

Praising the Bahamas International Securities Exchange’s (BISX) proposed short-term corporate finance platform as ‘a really creative, innovative approach”, Mr Turnquest said there were likely to be few qualifying issuers.

 

“The only problem is that 90 per cent of small and medium-sized businesses do not keep good accounting records, as they are not disciplined,” the small business adviser told Tribune Business.

 

“That is going to be one of the shortfalls. That is one of the major problems. This opportunity might forego a lot of small and medium-sized businesses because the consistency of accounting records is not in place.”

 

Without any trustworthy indication of a business’s profits and cash flow, investors are unlikely to buy its issued commercial paper because they will be unsure of whether their investment will be repaid.

 

BISX has been eyeing the creation of a commercial paper market as an alternative - and cheaper - source of short-term financing than commercial banks.

 

It is akin to trade financing - a mechanism for Bahamian companies to issue short-term debt securities to buyers as a way of overcoming temporary cash flow issues.

 

Effectively, BISX would be facilitating an alternative to bank overdrafts, bridging loans and letters of credit (LOC) for creditworthy companies, who could demonstrate that they had assets and incoming cash flow to repay their financiers.

 

But Mr Turnquest added: “Another major problem is that small businesses do not follow a lot of consistent procedures in how they do business.

 

“The business model is not how it’s supposed to be, and opportunity is going to pass them by because they’re not committed to actually having consistent accounting and other record keeping procedures.

 

“Their business model is not consistent. They do it one way this month, another way the next month. There has to be a series of consistent accounting procedures.”

 

Mr Turnquest said this also explained why commercial banks and other established lenders were so reluctant to lend to Bahamian small businesses, “as they don’t know how to consistently do business the right way”.

 

“You can’t blame the financial markets; you have to lay it on ourselves; the small businessman. They have to be lot more proactive and a lot more sincere, as a lot of them are not doing business the right way,” he added.

 

While Bahamian entrepreneurs were now more optimistic than they had been in 2012, Mr Turnquest said this had yet to translate into increased sales.

 

“It’s a little better than last year,” he added. “My clients in business, they are more optimistic mentally,” he added. “However, sales have not increased tremendously. They are in a better state mentally than last year, but one or two of my clients are not breaking even.”

 

Mr Turnquest told Tribune Business that his own consulting business had to be “so creative to save” itself, packaging services and employing innovative marketing strategies.

 

“Things are just stale, and there’s nothing glamorous going on,” he said. “There are no signs of economic growth. Based on my clientele, there’s no growth.”

Family Island Growth Needed For 80,000 Population Shift

  

Family Island Growth Needed For 80,000 Population Shift

By NATARIO McKENZIE

Tribune Business 
Reporter

nmckenzie@tribunemedia.net

A leading small business consultant yesterday called for more incentives to foster Family Island development, telling Tribune Business that New Providence had “maxed out” and a population shift off at least 80,000 was needed.

Mark A Turnquest, of Mark A. Turnquest & Company, said Family Island development was key to this nation’s economic progress.

“The Family Islands are the key to the progress of the entire Bahamas because Nassau is maxed out,” he said.

“Clearly we are in that position now based on this existing model that Nassau is the hub for the whole Bahamas. We really need to look at all the Family Islands and try to get people to move back to the islands and start businesses there.

“We can’t go on and not take major consideration of the economic impact of each island, and determine, based on its heritage, culture and economic capacity, development strategies for each island individually, so we can move businesses to those islands.”

Ensuring that the necessary infrastructure is in place is key to a healthy business environment, Mr Turnquest added.

“We have to make sure that infrastructure is in place. The roads are one of the most important things that need to be addressed,” Mr Turnquest said.

“The businesses of the Family Islands can proposer once you are serious in diversifying the economy by addressing the needs of the Family Island business people, and bring more economic value by providing more funding and concessions for individuals who want to start businesses in the islands.

“I feel we need to move at least 80,000 people out of Nassau, and once those people move to the Family Islands in the next three to five years it would reduce the burden on this island.”