Small Business

Act's September

drafting target

Sub-Deck:

* ILO and IDB assistance to be sought

* Barbados government-guaranteed model suggested for venture capital fund

By NEIL HARTNELL

Tribune Business Editor

The first draft of a Bahamian Small Business Act should be ready for government review by September "next year", the chair of the committee responsible for developing it said yesterday, adding that the International Development Bank's (IDB) and International Labour Organisation (ILO) expertise would be employed to assist the effort.

Mark Turnquest, of Mark Turnquest Consulting, said the proposed Act would be "Bahamas focused, but internationally recognised", adding that while the Government's plan to create more than 2,500 jobs was laudable, none of its initiatives were "feeding the population that creates 40-60 per cent of employment in the Bahamas" - small businesses and entrepreneurs.

Mr Turnquest told Tribune Business that the Small Business Act aimed to change this, and after the first meeting of private sector association heads to discuss the proposed legislation, it was agreed they would consult the IDB and ILO on "how we want to shape the initial draft".

The Small Business Act Committee, he added, would meet with Zhivargo Laing, minister of state for finance, and all business and private industry heads throughout the Bahamas "so we can finalise and put their input into it".

"We want to make it Bahamian focused but internationally recognised," Mr Turnquest told Tribune Business. "We hope by September next year to have the first draft that can be looked at by the House and the Senate. Everything is on the way."

The effort will also ensure that all other business-related legislation, such as the Business Licence Act, the Industries Encouragement Act and others, "come into line with the Small Business Act", thereby creating an omnibus piece of statute covering the sector.

Mr Turnquest suggested that the everlasting difficulties that Bahamian entrepreneurs and small businesses faced in accessing financing could be solved, at least partly, by adopting the model Barbados had just implemented for its newly-launched venture capital fund.

The Barbadian government has agreed to provide a guarantee for the principal invested by private investors in the fund, a moved designed to attract outside backers to support an initiative that has been started with $750,000 of government seed capital.

Mr Turnquest suggested that such a model could also be employed by the Bahamas' own government sponsored venture capital fund, and said he had put its administrator, Jerome Gomez, in contact with Basil Springer, the consultant who had masterminded the Barbadian fund's structure. To date, the Bahamas Entrepreneurial Venture Fund has drawn 100 per cent of its $5 million capital from annual $1 million taxpayer subsidies.

A more complete business support package was also urged by Mr Turnquest, citing his "business survival model" that combined financing with networking, consulting and trading functions in one support system.

This, he explained, would ensure Bahamian entrepreneurs were equipped with the marketing, management and accounting skills to ensure their ventures survived and prospered, giving lenders confidence that their credit would be repaid.

" This is the only way to move forward past this recession and make it in the Bahamas. We have to lend money to start small and medium-sized businesses, but there have to be shepherding, mentoring and business support programmes," Mr Turnquest told Tribune Business.

"Both government and the private commercial banks, the credit unions, whoever is in the business of lending money, needs to look at this model.

"Tourism cannot sustain us. We need to be more entrepreneurial when it comes to agriculture, handicrafts and industrial products, plus products to export. We have to try to encourage entrepreneurs to take on that responsibility with the support of the Government. Once we increase exports, we increase GDP."

Mr Turnquest added: "The problem has been our model over the years. We rely too much on foreign direct investment, and have not seriously encouraged our entrepreneurs in Nassau and the Family Islands to produce products and services with natural benefits.

"We need to have the Family Islands planned for business, where the private sector, government, the banks and investors look at each island and identify how they could encourage business development on each island.

"Every island needs a clothing store, a laundromat. At the end of the day, everyone buys from each other, makes money and reduces the population drift to Nassau."

Despite the recession and gloomy Christmas economic outlook, Mr Turnquest said the future was still "bright" for Bahamian entrepreneurs and small businesses.

"Nothing great is going to happen this Christmas, so people are shaping their businesses," he said. "Christmas decorations are going up earlier this year to entice some type of using consumer spending, but everyone understands this is not going to be a very wonderful Christmas.

"We know there's been a lot of pain, a lot of casualties in business, people going broke. That's life. We are now cleansing the business environment, and a new business world is being created next year. We have to forward and not worry about the past."

Published On:Wednesday, November 25, 2009