The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Sky Bahamas’ chief executive yesterday warned budding entrepreneurs that they were likely to encounter a “pay to play” culture when establishing operations, and urged them to conduct a ‘P.E.S.T’ analysis of their business environment.

Captain Randy Butler told Tribune Business there appeared to be a persistent “level of corruption” in the Bahamas around small-scale, every day issues such as getting electricity and water connections.

Speaking to Tribune Business before he addressed yesterday’s International Labour Organisation (ILO) Entrepreneurial & Enterprise Workshop on the practical experienced of starting and expanding a business in the Bahamas, Captain Butler called on all aspiring businessmen and women to “look at me” and determine if they were truly ready.

And, apart from the normal SWOT analysis on Strengths, Weaknesses, Opportunities and Threats, the Sky Bahamas chief encouraged them to also conduct a ‘P.E.S.T’ assessment of the environment facing their specific business and industry.

Captain Butler explained that ‘P.E.S.T’ stood for the political, economic, social and technology factors facing any business as it strove to thrive in the Bahamas’ high cost operating environment.

“The purpose of this is to help Nassau and Family Island entrepreneurs build bulletproof business plans that are able to capture financing from commercial banks and elsewhere,” he told Tribune Business of the workshop.

While the SWOT analysis assessed internal and external threats, and the ‘who, what, why, when and how’, Captain Butler said his ‘P.E.S.T’ test was another useful tool for entrepreneurs to use.

When it came to the ‘P’, Captain Butler said: “I’ve got to look at Government stability, changes to the public policy environment, regulatory and deregulatory trends, and the ability to get Business Licences.

“There seems to be this level of corruption, that you have to pay to play, for things as simple as getting light and water turned on. It’s as simple, and as real, as that.”

Captain Butler said the Bahamian aviation industry was constantly being hit with sudden policy changes that impacted business models and decisions for both Sky Bahamas and its fellow private carriers.

He cited one such policy reversal as that involving Bahamasair, with the national flag carrier having gone from being branded a “non-essential service” by one Cabinet minister to getting a $100 million fleet upgrade.

With pilots, cabin attendants and maintenance personnel in relatively short supply, Captain Butler said he had to be mindful that Bahamasair might raid Sky Bahamas and others for extra personnel.

And there was also the extra competition that Bahamasair’s expanded fleet might bring, with no announcement yet on the fate of its existing Dash-8 planes.

The fleet expansion, the Sky Bahamas chief added, also raised questions over whether the national flag carrier - enjoying a $20 million-plus annual subsidy that its rivals can only dream of - would return to serving Family Island routes.

On economics, Captain Butler suggested that companies and entrepreneurs analyse the “stage of the business cycle”, and weigh how issues such as high labour and utility costs impact their operations.

Relations with the Department of Labour and Immigration Department were also key if it was necessary to obtain work permits for skilled or specialist labour not available in the Bahamas.

Again, applying this to Sky Bahamas’ business, Captain Butler said there was a shortage of qualified maintenance and technical persons, plus pilots and trainers attuned to the demands of its fleet, during the airline’s formative years.

Other economic factors in play also included the $3.5 billion Baha Mar project, both its fate and the competition it has - and will - present in the fight for scarce highly-skilled labour in the Bahamas.

The social ‘S’ in ‘P.E.S.T’ examines how lifestyle choices and social changes are affected by issues such as the National Insurance Board (NIB), taxation and illegal Immigration, Captain Butler said.

And technology issues were ever-present for a business such as Sky Bahamas, the latest being the new software system demanded by US transportation regulators to enable them to better screen passengers.