One thing that has been noticed by me is that entrepreneurs and SMEs are working hard at just trying to open and keep their doors open. They need help accessing funds and sometimes need more access to much-needed markets due to poor connections through gatekeepers.
There are some who make money while others, the majority, struggle. What is lacking across all those plains is enough guidance on how not only to make money but also how to keep more of what is made.
In many instances, some try to employ rules of governance as if they are dealing with employees rather than business developers; however small they may be. The end result is that many don't know or understand the rules within which they must/can operate so that they are more profitable and efficient in their daily dealings.
Apart from consultations and training, there is a growing need for business advisory services. Accountants may think that certain things fall into the realm of attorneys and vice-versa; and this is only when the prospect actually works with either of them. This is particularly common with issues pertaining to incorporations and related matters. There are too many poorly structured entities from the get-go. Unfortunately, this is only recognized when the entity is seeking funding.
Business planning needs to start before the business even gets up and going. There are a number of issues to be addressed with reference to the type of structure you are going to use and why. Too often the answer to questions asked is that they were told to do so, but they never understood why?
A good business advisory service will have a battery of other professionals with who they function so that the client benefits from the expertise for their required levels. This can range from rudimentary to those who have significant wealth.
E.g. I tend to work with a battery of legal professionals since the law is a vast area, and one cannot be everything to all people. Those I use for incorporations are different from those I would work with for real property deals, and would be different from those who deal with international trade law.
For a long time, the shoestring budget has been touted as a method of starting a business. However, it gained such a reputation that the ongoing trend is to underfund startups and expansions within this sector. Businesses need access to funding and to technical assistance to help them get structured correctly; this increases their chances of survival.
Not enough businesses have plans in place for what they should do with the funds that come in as revenue so that they can keep more of what they make and then move to be not only a business owner but enter the realm of investment if they so choose.
Given the contributions that SMEs through entrepreneurs make to economies, it's time for them to have a bit more respect given to them. They create substantial employment, make significant contributions to the GDPs of countries, yet they are marginalized by many in terms of access to finance, little to no incentives, and taxes at levels that make absolutely no sense.
Too many people, in government who plan for the SMEs don't have a full understanding of business. E,g, An entity moving from just a few thousand dollars to five figures within a short time doesn't mean that you extrapolate the information and say that they are making money and therefore pull the plug on them. They haven't even reached breakeven and are therefore unable to meet such onerous demands of the tariff structures imposed on them. In many instances, the owners haven't even been able to pay themselves yet since they are pouring back the revenues into the entity without personal remuneration. Yes, the struggle is real.
All the money that you make is not yours to keep. Plan to keep most of what you make legally of course, but it's a process that requires careful planning.
There are a number of moving parts to consider when you're getting into business that must be included in your planning. Look us up via our website: www.bladesandbladesconsultancy.com make contact and let's discuss how you can plan your future sensibly when we make an appointment.
Happy Independence Barbados, we wish you the best as you consider your planning for your entity going forward for the years to come.