79 F Clouds
Tuesday, Dec 06 2022, 10:05 PM
Close Ad
Back To Listing

‘CONFLUENCE OF CHALLENGES’ FOR CAYMAN SMALL BUSINESSES

The Panel 14 Feb, 2022 Follow News

‘CONFLUENCE OF CHALLENGES’ FOR CAYMAN SMALL BUSINESSES

By Staff Writer

 

Pathways to profit for small businesses in Cayman, despite the challenges they face, are being exemplified by Chris Goddard, owner and CEO of Winners Circle sports goods outlet.

Appearing on the Caymanian Times weekly discussion programme, The Panel, Mr Goddard underscored the importance of small business to Cayman’s economy and society.

However, he is concerned that small businesses are encountering challenges on a scale unlike that faced by their larger counterparts.

According to the young Caymanian entrepreneur, the situation is compounded by the COVID-19 pandemic resulting in what he termed “a confluence of challenges” for small businesses.

“The nature of small business is such that the principles normally have to wear many hats...and what happened during COVID is we had a confluence of challenges that they all came together. You had logistical supply chain challenges, you had HR challenges, illness, or potential illness, regulatory challenges because the regulations are surrounding the illnesses on a pandemic. And we had to have empathy, caring, a strong strong emotional IQ in order to keep your staff with you, understand what they're dealing with and appreciate the challenges they're facing.”

 

RED TAPE

He said these are in addition to the normal hurdles already faced by small businesses daily.

“There are times when you're calling particular entities in government for information pertaining to your business and nobody answers the phone. It could take hours out of your day, just trying to check on one particular thing. Something as simple as that makes a big difference because you could be spending that time more productively,” Mr Goddard related.

But projecting the 'can-do' spirit which has been the hallmark of his success, Mr Goddard offered insights based on personal experience that the respective government divisions and the banking sector could adopt.

One such example is business licences.

“It would be wonderful if we can fill out a form submitted and get a three-year license. It's not so difficult to do (but) we have to continually do it every year, every year. If you have the front-loaded, that's great for government coffers, and they just fill up the paperwork once. Some of these things could cut down under red tape if we are able to pay online,” he suggested.

Acknowledging that the government is now making now steps in that direction, he welcomed the forward-thinking.

“One thing that I know the government is working on which will be very helpful as a customs online system. If we're able to pay online, you don't have to take time, you know, to go up to customs to coordinate that payment and so on. That would be very helpful as well.”

 

FINANCING HURDLES

Start-up funding for small enterprises was another key discussion topic with interventions from the guest and the panellists on the challenges faced in the crucial first step in getting small businesses established and then helping them to thrive in a competitive environment.

Goddard: “I have a couple of friends who are into the trades in terms of plumbing, electrical, you know, those types of technical trades. They can get you excellent references to show that they know their job. And sometimes it's just a situation where they need, you know, $2,500 or $5,000 to buy tools to get started. And they will approach financial institutions and they will not get that assistance.”

In this aspect, the role of a small business association was deemed as critical, as posited by panellist Mario Ebanks.

“There's certainly tremendous opportunities for small businesses to receive counselling, mentoring assistance with business plans, getting applications for financing."

He also wondered about special financing avenues for small enterprises via the government-owned Cayman Islands Development Bank (CIDB) in addition to the commercial banks.

 

SEEKING SOLUTIONS

In response, Chris Goddard felt it called for a collaborative effort by the government and the banking sector.

“I think all should work together. The government can have a small business development centre and work in tandem with the development bank because financing the small business is almost non-existent,” he said.

“If you just show up to a bank with a business plan, a regular commercial bank, you have a very limited chance of being able to start a business unless you have significant collateral already in place. And at the end of the day, what banks really look for, they want to see proven cash flow to pay back those loans.”

Host and Caymanian Times editor Ralph Lewis, a veteran banker and former manager of the CIDB, brought his informed perspective to the discussion.

Noting that while there has been support for small businesses during the pandemic via government grants, soft loans and training, he said the situation now requires a different approach with “a commitment for a number of years”.

“Financing is a decision made by the lenders, and they're based on risk. Yes, small businesses are very high risk, but we have to look at Caymanian small business owners differently because you have to give them a chance. They may not have all the boxes ticked or assets that they need, but you know what this person is genuine. They may not have a lot of cash, but they have a good idea…and sometimes we have to give people a chance to succeed in the country.”

Panellist Roy Bodden raised the example of successful micro-business finance schemes and training elsewhere as examples to follow for small business success.

“What I would like to see and I know it's available, is the government to set up some funds that people can access but not only give them the funds, but also give them the discipline…I know it can work because it works for the Grameen Bank (a world-renowned micro-business finance scheme started in Asia). It can work for us here to adapt to deal with these economic times. Because there are some areas that Caymanian entrepreneurs will not be able to get in because the startup requirements are prohibitive,” the former president of the University College of the Cayman Islands (UCCI) said.

Another method of financing for small local enterprises recommended by guest Chris Goddard of Winners Circle is for financial institutions to allocate a portion of funds exclusively for this purpose.

“Each financial institution may be encouraged to ring-fence a certain portion of their balance sheet - 2 per cent or three per cent - for small business financing. I think that would encourage people to go in and apply… So we have to look at the regulatory framework around that and see what would make sense and make those accessible.”

 

(Listen to this edition of The Panel on Caymanian Times’ website, Facebook and YouTube pages)


Comments (0)

We appreciate your feedback. You can comment here with your pseudonym or real name. You can leave a comment with or without entering an email address. All comments will be reviewed before they are published.

* Denotes Required Inputs

Most Recent Newspaper

Wednesday, December 7, 2022

Monday, 05 2022
Download Newspaper

Online Poll

The Government has sought feedback on the Digital Identity bill which is to be debated in parliament. Do you support the introduction of this Bill?

Vote Now