Foreign Direct Investment [FDI] - How practical and accessible is it?

For most who have become frustrated with the available local funding options for one reason or another, there are some who have decided to explore other options. This comes against the backdrop of governments suggesting urging business owners to expand outside of our jurisdictions, export more and seek to expand. 

Foreign Direct Investment (FDI) is often discussed and seems to be seldom understood, even by those within the financial sector. It would appear that the various entities responsible for overseeing these types of transactions seem to be more than apprehensive about such transactions. What do I mean? 

The organizations:

• Don't seem to trust the source of funds and don't really seem to be able to assist in the provision of due diligence/even be able to advise on the process of due diligence that is available. There seems to be a fear of making a mistake permeating the various entities. 
• The entities that are in authority of such transactions don't seem to relate to each other. Why do I say that? Their information isn't synchronized and at times can seem to be conflicting. The organizations don't appear to even have a relationship with each other. This comment is made from the outside looking in. 
• There is no clear methodology to advise the public how to go about seeking and attracting FDI. So that even when entities successfully attract such interests, there's always a catch 22 that frustrates the process. 

Is FDI worth it? 

It seems to be more of a hassle than anything else. Why one has to go through a number of compliance steps in order to become compliant which usually is expensive, only to be told that there's an absurd aspect that prohibits the deal from being completed. This can even happen after getting authorisation from the Central Bank, meeting previous compliance standards, being legally compliant, then you get snagged on a technicality that could have been prohibited if you had the necessary guidance from the outset. It's a hard lesson to learn. 

In many cases, investors ask how come the banks are not jumping at these deals locally. They then decide to fund the transaction(s) completely [100% funding]. With seeming low-interest rates; until the payback is calculated in full. Then you see the hidden elements of the deal. Here's what I mean:

• Investors reserve the right to divest of the investment to other investors, which means you totally lose control of the ownership and who you can do business with. Often these contracts don't seem to have the first right to refusal. 
• You must have the insurance sums to prepay and secure your commitment to show that you're serious about doing business in the first place. This insurance acts as your security to participate in the transaction and can be quite expensive. 
• Defaults in repayment offer little recourse on the part of the investors who ensure that they clearly state what must and must not happen. 

There are other considerations and these examples are not exhausted by any means. If you're going to be in business, you need a strong team in order to build a business confidently and transparently that people can trust. 

Richard Blades functions in business development primarily in Barbados and regionally as we serve to help businesses do it right when planning their strategy. 

Techniques to grow your business

There's good news if you are seeking to grow your own business now. If you are serious about having a successful business, you must be well planned. Regardless of whether you intend to operate post-pandemic or if you were operating from before the pandemic; there are certain processes that would be rudimentary to your success. 

Let's address the big one that keeps people up at night continually. 

• Finances - It may be a bit more difficult to obtain finances in this current environment, at least on the surface. Before the pandemic, it was still "challenging" to obtain funds. It was like getting blood from stone in some cases. Who is on your financial planning team?
• Marketing - Needs to be well thought out and insightful. Your business needs to be going within a direction that will encourage your public to want to interact with you for the products/services you are offering. In the past, many of you tried to do this alone only to fail dismally. Who is on your marketing team? 
• Operations - We have witnessed entities putting programs together that just didn't gel. It seemed like the organization was unprepared for their own efforts. Information wasn't communicated internally and the result was poor execution all around of an effort that was to hopefully bring about positive results. Who is on your operations team?
• Management - There are too many solo operations which result in areas of importance falling through the cracks. Apart from the aforementioned, we must also consider legal, human capital, administration to mention a few others. It begs to question, who is on your management team?

Your teams must add value to your business. They do not need to be employed on a full-time basis, but what you need access to is their knowledge, skills, abilities, and hopefully contacts. You must be willing to pay for these resources. In the past, those who struggled most are those who thought the payment for information was too expensive, they quickly found out the alternative of not paying to access what the business needed was way more expensive. 

There are way too many businesses functioning by hunches rather than having well thought out and practical plans. Be different and don't fall into that category. Seek the help you need. Learn the techniques necessary to grow your business. 

Business Incubator Opportunities compliments BIDC

BIDC Accepting Applications For Incubator

Friday, February 20th, 2015

The Barbados Investment and Development Corporation is accepting new registrants for its Incubator facility.

Game-changing entrepreneurs who are desirous of accessing on-site business advice and support services for the purpose of getting their business ideas off and running in a cost-effective and nurturing environment are being urged to apply. Companies applying for placement in the Incubator must be three years old or less and must be registered or incorporated. Owners should have a business plan and be willing to accept mentorship and guidance.

The BIDC incubator facility is where start-up businesses are moulded into economically viable enterprises with the capacity to create employment and stimulate economic growth.  Facilities can accommodate businesses involved in services or light manufacturing. The incubator provides business counselling and a range of services to startup and growing companies to aid their development and sustainability.  In addition, Incubatees are offered:

• Affordable workspaces
• Access to business intelligence
• Local telephone, fax machine and photocopying services
• Computer and printer services with internet access
• Fully equipped conference room and training room
• Shared lunch rooms
• Mail box/ Business Address
• Building security
• Parking facilities

There are valuable benefits to be gained from being resident in the Incubator. There is the internal dynamics that are derived from businesses working together in a shared physical space with certain common services, the joint and cross-disciplinary learning that takes place, and the opportunity to form business networks and to make contacts which are vital to the launch of successful ventures.

Ryan Nurse
Business Development Officer

Barbados Investment & Development Corporation
P.O Box 1250, "Pelican House", Princess Alice Highway
Bridgetown, Barbados, BB11000 | www.bidc.com

T 246 426-2300 Ext. 8731 | C  246 836-3873

F  246 426-4635 | E rnurse@bidc.org

Some rough circumstances I've seen

It's been a while since I've last had the opportunity to post an article and not without reason. Some of the situations that I'm seeing in the business arena are giving me cause for concern. Without going into details here are a few:

• A business owes some money to the government which is less than what the government owes them. Having applied for funding, they need to get clearance certificates so that they can access the funding. It doesn't help that a new revenue authority has been formed by the government so that the difficulty in obtaining a clearance certificate is intensified. The delay's are costing the business daily both in terms of financial opportunity and credibility. 
• The youth are encouraged to get into entrepreneurship. The jump through all the required hoops and then when they now have a project that's ready for funding, it seems that the funding sources dry up or are unwilling to assist unless there is security in place. These young entrepreneurs are unable to navigate the systems despite the training to get the requirements met for the security. The result, frustrated entrepreneurs that can't find work nor generate employment with their projects; some of which had even won prizes in competitions. 
• Businessmen are always told by financial institutions that they need to have business plans to obtain funding. They then take ill-affordable funds to have these said plans prepared by professionals often securing the necessary talent to give their business structure. The local entities then want to under-fund them or decline them all together. In instances where FDI [foreign direct investment] is available, the business is frustrated with the process since the red tape of compliance seems formidable to them. Where can one truly get support for their business' development?

It is fortunate that for some who seek professional help they are able to get by the hurdles albeit with effort. However, what about those who don't have the access either by choice or who are just unaware; shouldn't they have an opportunity to eek out a livelihood as well? Let's hope for solutions within the coming weeks and months that would mean a better work environment that creates employment and generates economic activity is forthcoming. 

Greed to the Extreme = Chaos

Taxation has its place in any economy. It's what is needed in order for the nation to survive. However when taken to the extreme, it hinders rather than helps what the government of the day is trying to achieve. Politics has proven by way of the results, though packaged differently, that virtually are all parties seem to be the same - undeliverable promises made to capture votes.

There's something when the populous raises alarms that go unheeded. When the pain of a people is being heard and yet ignored. When people who are thought of as peaceful seem to be continually trampled by decisions that off ill effect. What is being put forward by the governments of the day seems to be win/lose rather than win/win. Macro economic policy seems to be decided upon by micro economic situations - hair extension brands, rims for vehicles, how much money small businesses make like hairdressers etc.

In short, government policies can help or hinder business development. There must be strategy to allowing businesses to develop and thrive so that collections can be made from profitable, sustainable businesses. Business owners must be allowed to have money so that they can make decisions that positively influence their businesses and the community within which it operates.

Caribbean businesses have not yet developed a profit mindset. The lack of strategies speak to this when one meets with the entity's decision makers and discuss the "methods" used to develop their business' model. Most businesses seem to adopt the "for me to succeed, you must fail" thinking. Yet others seem to have a need to spend when money is received to reset their accounts to pre revenue levels. Very few businesses have a plan as to what they need to do with any surplus cash - the result is then wastage.

When taxes can get to the level that they surpass the price of the service / product offered [see regional airline tickets] then we know we are really living in troubled times. Though it has not happened yet, the result over time can be chaos, when people are pushed to their limits and finally exceed their breaking points. We need to take heed and do so quickly.

[image was found on the internet] 

Some Serious Considerations for Getting into Business

Lately, entrepreneurship is a word that's being touted around. With the amount of business schools that are available, not to mention the online courses and articles, there are many who want to do business that are unprepared.

I hope that this would be a sort of guidance for some of them since as I interact with the various supporters of SMEs from investors and financiers, through professionals - accountants, attorneys, operations, marketing, statutory bodies, and general business advisory services; there's a growing intolerance that can be detrimental to those with sound businesses. There's a need for entrepreneurs to understand that business goes past the point of - A Great Idea.

• Governments are looking towards it for job creation
• Universities and tertiary level institutions are offering it as courses 
• Those who are upset with their jobs decide they will embark upon it so that they won't have to work for the man
• Young people leaving school have decided that they will embrace it so that they won't be treated like their parents 
• Agencies are set up to encourage it and to sometimes teach aspects of it
• Training programs are developed, Investors are predatory, yet with all these interest groups it is a sad day when the true realization is as follows

Entrepreneurs and Entrepreneurship are by and large unprepared for Entrepreneurship 

Beyond all the industry knowledge about your product / service idea some other real things are needed. Fortunately . Unfortunately, depending on where within the system you fit / have to function within you will find that you need some if not all of what will be listed below shortly. 

Business can be done internationally, regionally, and locally. However at the end of the day, it must be done well. 

Entrepreneurs why should any of the aforementioned groups wish to invest more in your business than you wish to invest yourselves. I may offend some of you with what's going to be suggested shortly, if you are thin skinned - STOP NOW and leave this article alone. If you're serious, you'll know what to do. 

• You need to know where to find information that will ensure the success of your business. You need to know your business inside-out. You need to surround yourselves with professionals. They are:
• accountants to calculate the feasibility of your idea in a numerical format - it's been my experience they don't do great business plans but can offer fantastic insights into the planning process 
• attorneys-at-law [yes a few of them - law is a vast area, you can't be all things to all people] 
• business advisory services [someone who knows a little bit about a lot of the different aspects of business, and who can find the specialist - those who know a lot about a little bit] 
• bankers, financiers, investors, friends and family - you will need money to begin a business is about as gentle as I can say it. the aforementioned support is not always free
• Marketing and Operations are key and vital functions for any business. Again these areas receive too little respect and are so critical to a business 
• Human resources will be offered separately since this area is evolving with the rise of so many small businesses, yet it is so vital with labour laws and employee rights being a major cause for concern in business 
• Your friends in government are a great source of information and are readily available to assist you. Do not believe the hype about civil servants. They are wonderful if you're respectful. 
• You need to bring the following to the table
• Commitment, Trust, Loyalty where necessary, Competence, Willingness to Work
• You need to show that you're organized
• You need skills in negotiation - however don't be ridiculous thinking that everything comes for free because you have a great idea that will be profitable. Expect that you will not get everyone willing to work and wait until the back end to receive their payment. Often they will not know you unless they are a part of your develop team. 
• Money - there's no gentle way of saying it so I won't try, but money needs to be present at the event of your business. 
• You'll need a working knowledge of how to utilize the skills and abilities of your professional "team". 

 There you have a place to start, and be assured that this information though is on the surface will help you to be a bit more prepared on embarking on your next business venture. 

Richie B. is responsible for Business Development with Blades & Blades Consultancy Services LP. He has experienced many successes for his clients over time and enables them to realize their business dreams. The above information will help you fast track your business to success; saving you time and earning you money. 

Here's my Money - Why should I give it to you?

Daily, I manage to have numerous business plans come across my desk with requests to review them. It's been years that this has been happening and this is a process that's paid for by the clients. Often though, my feedback may not be what they want to hear, but it definitely needs to be told if they are going to meet any measure of success in their attempt to get funding.

Here are some findings:

Based on many of the plans that have been presented, here are some common threads that go through most of them. The reason I'm putting them out here is so that they can be addressed before your next wave of funding is being sought. Hope this helps the entrepreneurs / small businesses.

Businesses are not well researched

• Too many feel good statements are made. One that sticks out in particular was one which under the title of Research and Development, the document said, "Research and Development will be ongoing". Tell me would you part with your hard earned dollars for a plan with this in it?
• Many of these business plans use assumptions that are filled with errors and overly simplistic with these kind of results - "Earnings should reach $1 million dollars within 12 months and then grow by x% per month for the next year". Many start ups span years of operating without seeing a million dollars pass through it. It depends on too many factors which are often not addressed within the confines of the document. 
• Benchmarks are used which originate in markets dissimilar to the one within which the business has to function. 

The request for capital are hugely unrealistic 

• "Did you really just ask me for that much money?"  How did you arrive a such a figure and; what will you do with that much money? These questions are often asked and seldom answered adequately when presentation time comes up. 
• Capital requirements are often not recorded or given in lump sum in the hopes of the reader glossing over them.
• If you were presenting to someone like you, would you part with that much money for so little benefits? That's a question that needs address. 
• How will you pay it back? Investors are not only looking for ROI (Return on Investment), they are also seeking Return of Investment.
• WAIT A MINUTE?!?! What are you putting into this business other than an idea?

The operations elements of the business are at best weak

• How does this business operate? Truly! The vague information that you put up here does not suggest that you've done your research. Matter of fact, it doesn't even seem like you know what you're doing in this business. Sure I understand that you want to say what you do, without saying how you do it; but clue me in - that you know what you're doing!
• This document does not show that you've even considered the elements of the business that you need to at planning stages. DO NOT WASTE THE TIME OF THE INVESTORS / FINANCIERS!
• Who is your team? What will they be doing? What examples do you have for success in other ventures with which you were involved?

The marketing addresses mostly all elements except sales 

• The demographics and psycho-graphics look great! So does the industry information that you pulled from the internet. But....how does it related to what's happening in this area where you want to set up business?
• You've sort of addressed advertising - newspaper, radio, television. Your budget looks more than a little low. Do you know how many times you must run the advertising before people even hear about you, let alone purchase what you're offering? Blank look / dead silence comes back.
• Then you say, but we're going to use Social Media - you know Twitter, Pinterest, Facebook, LinkedIn, and a host of others. Once we throw enough mud at the wall, something's got to stick, right? Do you have a network that we can have access to? 
• What are you going to say to them? Based on what you've presented, quite frankly - NO! 
• Learning to use Social Networks has a learning curve that is steep for some. Most don't manage to develop a following as quickly as some may presume. 
• But all this marketing is expensive. Putting together ads before they even get to go out costs - no kidding. Are you going into business to give things for free? Why then are you trying to get everything for free? 
• Where are you sales strategies? Is often met with, "I don't like selling". That's why I'm doing marketing. Well, you tell me what's wrong here. Yes sales is an element of marketing, and it is the only one that brings in the money. All the others are cost centers. 

Things that you should consider   

• Often, there is a need to get have sound business planning documentation prepared
• When you intend to go into business you need to have money for a variety of reason
• You will need
• Business start up funds - registration / incorporation, bank account
• Professional fees - legal, accounting, business advisory, real estate 
• Meeting costs, research for your business may be time consuming / costly
• Remember, excess greed will not make you money. As you wish to be paid when you are in business, those whom you contract their products / services will also want to be paid in a timely manner. 
• If you still decide to get into business, and do it well, chances are you will be successful. Here's wishing you every success. 

Richie B. is a Business Consultant & Trainer located in Barbados. He's well versed in business development for start ups, expansions, and turn-around projects. Richie's also capable of training to implement the plans that have been developed. For more information, see Blades & Blades Consultancy Services.

Sink, Swim, or Float...The Business Lessons

Entrepreneurship is an area of business unlike any other. Why do I say that?

No resume, CV or whatever you chose to call it is going to prepare you for what lies ahead when you decide to embark on business. No government support / lack of it is going to ensure / deny you success. When it comes down to it, it is how you take the "limes" life gives you and make it into something more palatable.

This economic environment is quite dynamic - forcing you to draw on creativity that you previous may not have known to even exist. Experience gained comes daily, since it is on these occasions that we are constantly faced with challenges which we've never really confronted before; and they are not going anywhere soon unless addressed by us.

So what do we do when faced with these challenges. Our approaches will determine if our business ventures survive or perish, whether we remain stagnant or gain traction. In short, what progress will we make?

Will we sink, swim, or float?

Guess what? Your attitude makes all the difference. It determines if you'll just "tread water" or succeed / fail. So how are you going to look at the situations you face? Will you seek solutions or dwell on the problems? Will you be negative / positive about the challenges you face?

You may believe that you have to face your challenges yourselves; while you are responsible, remember you are not alone.

Richie B. is a Business Consultant & Trainer with Blades & Blades Consultancy Services.