Methodology and Reasons for Raising Capital for Small Businesses

 

Raising capital is crucial for many small businesses to expand, invest in new equipment, or hire additional staff. However, the process can be daunting, especially for entrepreneurs who may need a solid financial background. This blog post will explore the methodology and reasons for raising capital for small businesses and the different types of share capital that can be used.

Why Raise Capital?

There are several compelling reasons why a small business might need to raise capital:

• Expansion: Investing in new locations, products, or services requires significant financial resources.
• Equipment Upgrades: Modernizing equipment can improve efficiency and productivity.
• Hiring: Expanding the team can help a business meet increased demand and achieve its goals.
• Debt Reduction: Raising capital can be used to pay off existing debt, reduce interest payments, and improve financial health.

Methodology for Raising Capital

The process of raising capital for a small business typically involves the following steps:

1. Assess Your Needs: Determine the specific amount of capital you need and how you plan to use it.
2. Develop a Business Plan: A well-crafted business plan outlines your company's goals, strategies, and financial projections.
3. Choose a Funding Method: Decide whether you want to use debt financing (loans) or equity financing (selling ownership).
4. Pitch to Investors: Prepare a compelling presentation to attract potential investors, such as venture capitalists, angel investors, or crowdfunding platforms.
5. Negotiate Terms: If you secure funding, carefully negotiate the terms of the investment, including interest rates, repayment schedules, and ownership stakes.

Types of Share Capital

If you decide to raise capital through equity financing, there are several types of share capital you can consider:

• Common Stock: This is the most common type of stock, giving shareholders voting rights and the potential for dividends.
• Preferred Stock: Preferred stockholders have priority over common stockholders regarding dividends and asset distribution in the event of a liquidation. However, they typically do not have voting rights.
• Convertible Bonds: These are debt securities that can be converted into common stock under certain conditions.

Conclusion

Raising capital can be a significant step for a small business, but it requires careful planning and execution. By understanding the reasons for raising capital, the methodology involved, and the different types of share capital available, entrepreneurs can make informed decisions and increase their chances of success.

Businesses making it work in this decade

Taking this opportunity to wish all readers all the very best for 2020, makes me stop to think about what would it take for those who are in business to really experience the best of 2020. For many in business, there appear to be more questions than answers. which is coupled with an air of uncertainty.

Often, it can feel as if our environment is spinning out of control with events and experiences taking place at a rapid pace. Influential factors appear at a rate that is faster than the solutions required and often before the knowledge we need as business owners even seems to be available.

Many have embarked upon the path of business ownership, being disenchanted for a variety of reasons of what traditional employment was offering. There are lots of claims of violated rights and privileges. However, when you look at those within a business, they treat themselves far worse than the environment out of which they emerged.

Quickly they realized that there is no increased pay when they want it. there is a reluctance to take the vacations they previously believed they were entitled to, and in many instances, they don't even pay themselves at the most basic levels of remuneration. They place this misguided approach on a word they call commitment, which they wrongly define as taking the worst treatment possible to satisfy their current situation for a better future.

Feel good terms like delayed gratification emerge without a real plan of when the delays can be finally realized. Misery also loves company, since these business owners feel that others must also be sacrificial like them and committed to a cause that is not readily defined.

Rather than go on as to why businesses don't work and the challenges they face; let's turn our attention to what is required to really make them work.

• Money follows management. Your management is not required if you are going to be a boss. Rather if you will humble yourselves to become servant leaders you will stand a better chance of success. How are you adding value to the lives of others that your business interacts with both internally and externally?  Are you selecting your team members well? Are you helping them to develop the competence to cope with the rigours of the job at hand? Are you getting their feedback from the trenches and are you well equipped mentally and physically to provide the resources to capitalize on available opportunities?
• Finance raises questions of having enough money to execute your plans, to develop opportunities so that they more from potential to reality. Can you manage your cash flow well? Do you have enough working capital, and do you know what working capital even is? Have you identified where you can get the funding you require and what the requirements would be that need to be in place? 
• Marketing when examined often reveals that many entities are functioning on being top secret. No one knows about them and what is required to interact with these entities. There is no real marketing plan nor approach with many entities just hoping to throw enough mud against the wall and hopes that something sticks. Markets are not well defined, making it all the more difficult to target effectively. 
• Operations are generally undercapitalized making execution all the more difficult. Often business owners run around trying to do everything themselves, even though this does not really help them capitalize on economies of scale. As you enter into or seek to expand your business, there are many things that you will not know. So who do you have on your team? At the very least you will need the following:
• A good attorney - remember the law is vast and all attorneys cannot adequately cover all aspects of the law. You will have needs for attorney's based on a number of criteria - contracts, intellectual property for example
• A good accountant - it is necessary that your financial and managerial accounting information and systems be kept current. If you do not understand the different approaches in accounting then you need to get that advice. Contact us for a more in-depth discussion and possible recommendations based on your area. 
• Human capital - with the changes and demands of dealing with people internally and externally; you will need someone to assist you in navigating this landscape often governed by the Employees Rights Act. It is just as it sounds and you can find the employees have all the rights if you are not compliant. 
• Sound business advisory services are going to help you pull all the moving parts of the business together in a manner that is cohesive and that works together so that there are traction and progress.  
• Statutory compliance is key and knowing your obligations helps with your planning. It also makes it easier for other entities to interact with you. If your business is incorporated then you must practice good governance. 

This short article only provides an overview, and serves as a quick guide to help you keep on target with the growth and development of your business. 

Feel free to ask questions and start a discussion with other readers. It is important to get the best benefits and experiences of others.  Happy New Year to you. Here's wishing you a successful decade in your businesses. 

SMEs, in particular, are vulnerable

If we are going to be a country that looks at SMEs as a way of growing our economy, there is a serious need to not only put protection in place for SMEs but help them to understand that there are predators.

These predators will think nothing, when they are pouncing on your business, of the sacrifices and commitments that you made to grow your business from an idea to operation. They will look at your vulnerabilities and seek to exploit them. Even in instances when those opportunities are not clear for them to take advantage of you, they will still try to see how far they will get.

If you are seeking to get into business or grow an existing one. There are some elements that you mut appreciate when functioning within any given market place. Understanding why our business environment is the way it is:

Rules and Regulations

They are instituted for a reason. Many times, though we may not appreciate it at the time, they protect the SME from acts of ignorance. When you are in business, even with the presence of a team, there are many elements pertaining to business that you will not now. If you are a startup then this is even worse e.g. being a good plumber doesn't mean you'll run a good plumbing business.

• There are many elements that you'll be shielded from when you were an employee within a larger organisation. Other departments comprising of various team member performed certain roles enabling you to do what you do best. You were able to focus on your specialised tasks with little concern for how other elements of the business ran to create an atmosphere of stability. You worked without having to collect the money done for the work, performing the accounting functions, which then ultimately resulted in you being paid. You never had to consider marketing the entity, handling staffing situations, coping with financial issues, manoeuvring the legalities; all of these functions were covered by others in various departments. As an SME, its just you that has to deal with all these and more issues.

Communication

There are many people working in organisations that are poor at sharing information with the team internally. Too many people working within organisations are hearing about internally planned events, promotions, and other bits of information via the public media first. How can those in positions of responsibility then expect adequate representation? Your team members should be ambassadors for your organisation, not refugees from the public scrutiny that they will experience. 

Operations 

There is a need to marry responsibility with authority, currently, they are unequally yoked. In too many organisations, many are required to undertake responsibility without the authority to implement and stand by the decisions made without fear of penalty from others within the organisation. This is not a reality for any one sector but is quite widespread throughout many sectors and organisations. The lack of connection between responsibility and authority may have hindered the growth of many entities. Some of the areas impacted within the organisation include marketing, sales, decision making by line staff, supervisors and even some managers. There is a tendency to pass the buck, or as is said in some circles; the can is kicked down the road for someone else to handle.

Conclusion

Beyond the hosting of programs for SMEs there is a need to provide tangible guidance by way of mentorship programs and consultation programs that enable these entities to have teams of experts to guida them properly through all the challenges that the leadership of SMEs would face. By definition, there are no real large businesses within Barbados nor the wider Caribbean. Hence, we need to pull the business education out of the classroom and exam centres and into the mainstream of business.

SMEs need to understand how to adequately use shares - ordinary and preferred to promote growth. They neey to understand that insurance can be used to support their investments. Borrowing mechanisms need to move beyond commercial loans to include bonds, and empower our societies to truly understand the functions and benefits of crowdfunding. We need to do better since SMEs are still particularly vulnerable to so many threats within the global arena. 

Money...it's not always the problem

Often, when I engage with entrepreneurs they invariably think that inadequate funding is the source of their problem. On the surface, it may appear true; but when we take a real look examining the various aspects of the business, we find that there are some aspects of the business that if money was engaged the business would be far worse than it is without the funding.

The most cliched statement, "money follows management" is not just a cute sound bite. It's actually true. With good management, a business operation can address the issues that can cause it to flounder.

Surefire ways showing how the finances will be utilized are presented, often along with the marketing paint brush that includes the following:

• We are operating in a $x million/billion industry. Just 1%.....
• The SWOT does not allow for addressing real situations that were previously thought would never happen (Do we really need to say what kind of streets the business can end up on?)
• Big titles/bunches of keys, and no real resources to back up the rhetoric
• Inexperienced individuals who don't have the support of a more experienced team (see the previous point, since it is easy to deconstruct that there is no difference between the owner and the management. If incorporated, you'd find you can prepare job letters for employees to get loans, but you cannot get any for yourselves. 
• NO DISCIPLINE, sometimes you get funding for entities who then misappropriate the funds like it was a huge payday and not something to be used as the plan prescribes. They party spending the money more on entertainment than business. 
• No governance, who is going to ensure compliance with the plan within the entity? 
• We are going to use Social Media in our marketing. When probed, there's no real plan. It does not work by throwing enough mud against the wall hoping for some to stick. 
• Many are unable to answer operational questions of all types. 

I think you're getting the picture. Business is a team activity. Lone Rangers would be seen as owning a job and not having a business, they must work to generate income. Again no systems are in place. 

Many are operating in a red ocean of activity, often competing on price rather than looking at their unique positions to identify what their real model of operation is going to be. 

Take a serious look at your business, get help as needed to assist you in realizing the true potential of your entity. Should you require assistance, visit us at www.bladesandbladesconsultancy.com and we'll at the very least point you in the right direction if we are unable to help you ourselves. 

Have a wonderful remainder of the week. 

Thoughts on Caribbean Businesses

Whenever things in the economy get tight one of the first things politicians in developing countries do is turn their direction towards entrepreneurship. In many cases, it's hard to tell if this is genuine and the interests are for real.

Job gimmickry often comes to mind for a number of reasons. The key one being that this is a way of justifying job creation through lip service. My thinking goes this way for some of the various reasons I'll now highlight below.

• The processes entrepreneurs face is becoming increasingly bureaucratic since the government wants tax clearance certificates issued at every turn. The attempts at collecting taxes are becoming a nickel and dime process without a holistic approach that can make the entire process more simple. 
• Too many companies in Barbados and perhaps the Caribbean are not structured for growth. The general approach is to incorporate without the incorporation documents supporting the raising of capital via shares instead of debt financing. Consequently, too many businesses are limited by the opinions of the lending officers within banking institutions who may have never run a business and have no appreciation for what is required in the running of one. Most banks then represent their interests with a cookie cutter approach rather than truly examining the business on its own merit. 
• The accountants along with business advisory services and attorneys need to interact more in the advice that they provide companies so that their advice is more inclusive to the strategy that the business wishes to employ that would best serve its sustainability and survival. 
• The leaders of the business are ignorant of areas outside of their immediate scope of work since they do not read enough developmentally. Sure they know the technical information yet that often is not enough to grow to the levels of success that such an educated grouping of leaders should be meeting and exceeding. Hence the performance of Caribbean businesses remains constant for the most part with very little mobility in either direction. Once they are profitable, the incentive to stretch further seems to be non-existent as leaders setting into contentment with their levels of performance. They function completely oblivious to the competition from other world markets. 

This is by no means finished but serves the basis of getting the reader to think that perhaps more needs to be done. We need to get on purpose with business development, not only within our existing markets but seeking to expand into other markets and create opportunities future development. 

We need to develop our own unique model for conducting business and take it global thereby helping them to understand what it means to be doing business within our standards. Perhaps we should redefine what it means to be doing business@islandtime, and help them understand that we do business as a people the world over. 

UNDER RESEARCHED...

There are lots of people seeking to get into a business. Conversations with many of them will reveal that these people have some pretty good business ideas.

Further discussion can be quite the insight into the fact that there are more ideas available than the research that goes into them. In short, many of the businesses are not where they should be in terms of the research that's necessary. Therefore they are totally unprepared for the hiccups.

In business, you cannot be myopic only planning for the perfect picture that you have visualized that business will happen exactly like that daily. Once you are alive, storms will come through ever so often; sometimes earlier / later. There's just no sure-fire formula.

How do you ensure that your business is shovel ready? In other words, if you were being processed right now to access funding for your business, have you eliminated all of the setbacks that can halt the process? Should you get the funding right now, how fast can you mobilize to implement what you requested the funding for doing?

When business owners are asked to present about their business, and they are cross-examined, it is when many realize that they are not as prepared as they thought. Sole proprietors suffer most with this as they have not built a team which would enable them to benefit from another perspective.

Do you know the following for your business? Here are some questions that will need to be answered regardless of what business you are in:

• How much money do you need to begin your business on the right scale that would enable you to meet your objectives head on? 
• If you have to get investors, what are you willing to offer them / receive from them as a part of the total investment package? 
• Do you know how investment/financing works and recognize the differences among them? 
• Who forms a part of your team and what experiences/influences are they bringing to the table that can enhance your business and enable it to gain traction in the market? 
• Do you have a full complement of professionals that you can access? [accounting, financial, legal, marketing, business advisory services, operations] 
• How will you handle shocking changes in your business' environment? Especially those that weren't considered in your SWOT analysis. 
• Do I, as an entrepreneur, have what it takes to orchestrate this and where can I quickly find help? 

These seven are not the only questions, however, they are key considerations for your business' development. 

Well....do you still think that you have the best business concept, or do you still need to put in some more work? How well do you know your business and the industry within which it will function? Do you know that you will not have all the solutions, and who are you willing to partner with to arrive at the necessary solutions? 

Always keep in mind that not all money is good money. Don't get overconfident in your dealings with the members of the public you serve.

Remember that the research you put in is not a one-time effort as your environment is always changing. Your research needs to keep up to date lest you become extinct. 

Think in terms of possibilities. You were given that idea download for a reason; how best will you exploit it? Looking forward to reading about your lessons learned down the road. Plan to be the winner you set out to be. 

There's no room for Lazy...

Entrepreneurship, is NOT for the faint of heart. It's where you put everything on the line. The success or failure that you experience puts you in contact with your real self. Among the questions that flit through your mind, this one stands out; "Do I have what it takes to be a winner?"

Some people embarking on the journey say in an off handed manner that they want to be their own boss. Making their decisions and so on. The reality is that you are accountable and to more people than you initially realize. To mention a few:

• Yourself
• Your family
• Your customers 
• Your investors 
• Your supporters
• Your suppliers 
• Your various members of your public who are waiting to see if you are for real.

Often when you start up, you will be placed in the unfamiliar zone of loneliness. There's no longer a superior offering you instruction by way of orders or suggestions. The directions and instructions now originate with you. Have you thought them out well enough to recognize that they have far reaching impact on various aspects of your business? The decisions that you make wil; contribute to your success or failure. 

You're no longer entitled,,,,

• Paid vacation leave
• Getting paid for showing up for work 
• Vacations, if not carefully planned are never experienced
• The freedom of speech must now be tempered with the impact that it will cause
• Sick benefits, are you kidding me? Get into the work environment and forget about going to bed because you feel ill

The buck stops with you. It's no longer turn up, collect your paycheque, ensure the money's correct and then leave. You have to create the safe environment. In other words, the following is your responsibility:

• Creation of a safe, functional work environment
• Planning customer interactions so there's always steady revenue streams 
• Taking responsibility for minimizing expenses that are unnecessary
• Cash management and all that it entails - working capital, management of accounts payable / receivable, ensuring there's adequate stock / inventory 
• Meetings with investors, staff, prospects, clients, banks, accountants, and the list goes on. 

Everything that happens in your business will be a result  of the effort that you put in. To get to the stage of residual income, you have to work hard initially at the systems required to develop the active income. In instances where you don't know what you need to know, you will have to take classes / hire consultants / develop competent teams / research information. All of these areas require the investment of both time and money. 

Do you still want to be your own boss? Does this skeletal outline look like the part of the sacrifice you are willing to make? Understand this, when you are getting into business; read what I'm about to say at least ten (10) times so that it will sink in. THERE IS NO ROOM FOR LAZY! 

Business Start Up - Observing the Nitty Gritty

Business Start Up, Entrepreneurship, Business Development Programs, and other such combinations of words are touted about in the media a lot nowadays. Especially in times of economic hardship and uncertainty of the economy, stifling taxation policies and limited access to actual funds make the entrepreneurs become overwhelmed.

Finding sound, proper, practical technical assistance is becoming a myth. Not making negative references to those qualified theoretically, and having little experience to truly guide an emerging / expanding business. But T/A programs are often underfunded, seeking to pay such reduced rates to those providers that they would rather do without the payments from these programs; which are often excessively late. The reasons for the late payments is another story.

In short, entrepreneurs and businesses seeking funding to expand their operations are between a rock and a hard place. The expanding trend is to take classes and enter competitions in hopes of winning the prize money to springboard your business. It seldom materialises.

So let's get real. What's going to get you to the money. Here's what is NOT working:

• A brilliant idea 
• You management team comprising of your family members 
• The fact that you're under funded with no access to collateral (There are no sympathies for the death of your business before it gets started.) 
• Your presentation of the business plan and countless slides 
• Your talking past the close when you don't realize what you're selling has already been sold. 
• Not realizing that your novel idea / concept is not really that unique. (Someone else pitched it just two candidates ahead of you) 
• Saying that you can sing better than Rihanna (Yes I've heard that countless time) Same as making better burgers than Chefette. (It's kind of in that category)
• Not knowing how you actually will make the money and from what channels; not to mention how much and within what time frames. 
• How will you present your service / product that people (your customers) would love and welcome. (I fired someone today that just didn't cut it.)

Here's what you need:

1. A clearly thought out and documented concept that conveys exactly what you'll be doing in as few words as possible without diluting the meaning of what is intended. It should be backed up numerically and be able to withstand cross examination confidently. Your operation should be immaculate and functional. [How will you make money sustainably and by doing what?]

Some resources that you need:

• Get professional help it's necessary
• Accounting
• Legal
• Business Advisory Services - Operations
• Access to highly liquid collateral - Funding 

Money's not everything, but it's right there with oxygen, if you don't have it you're going to miss it. (Zig Ziglar) 

If you don't have these things covered, don't get into business. Even when going to professional help, they won't take you seriously if they have to commit to your business more than you're willing to. 

Here's hoping that I'm not too controversial, but too many people are seeking to get into business totally unprepared. Have some great weeks ahead. 

The personal side of the entrepreneurship lifestyle

As an entrepreneur, everyone expects that you'll always be the strong one - striving for success, achieving set budgets, having a surplus of profits that contribute to a really great lifestyle.

You get letters from various people who want you to contribute to their causes, customers / clients who believe that you have enough money so they will pay you in the next batch. The governments of the day who burden you with staggering taxes, prohibiting you from properly paying themselves, but contributing to their planned schemes and projects where the money's wasted and nothing seems to be accomplished. They don't see the hustle, the sleepless nights, the inability to afford the basics; the fact that your personal quality of life is nowhere near where they or yourself expected.

When I get to see the inner information pertaining to entrepreneurs, the pictures are not pretty. In many cases, they try to conceal the true situation even from their families and loved ones. So who knows the entrepreneur?  It often comprises of themselves and their banker.

Entrepreneurs often face these situations:

• No salary / wage
• No benefits 
• No vacations 
• No specialty team of advisors 
• No group huddle of others in similar relationships to discuss how to deal with the challenges
• No reserve funds 
• No proper organizational structure 

Additionally, technical assistance that's available often has a lot of requirements to be fulfilled to qualify for the assistance. Another area requiring lots of information before assistance is grants. 

Will they ever be a system that allows the entrepreneurs to do what they do best - work, while the other activities get completed by professionals in the requisite fields? 

The next time someone offers you the opportunity to be an entrepreneur, think long and hard. The investment of time and resources can be enormous, and not obvious at first neither. 

Despite the drawbacks, there can be benefits such as:

• Control of your time if you're organized. 
• Networking opportunities, where you can work with the more desirous of your contacts. 
• Projects developed can be better controlled by you using the timeframes as you allocate based on your scheduling. 
• Serving multiple markets reduces and removes the element of boredom as there's always something to learn.
• On going education, where you learn elements of the business that you would be never exposed to if you worked in a job. 
• If you get to make money, you get first pick at spending, then the government gets theirs. Way different than when you're an employee. [NB. Employees are taxed heavier than corporations in some jurisdictions] 

Entrepreneurship is not all that it's cracked up to be, unless it is done well. You have to be prepared to make some investment of time / money / other resources along the way. If you're good at it, the personal side of the entrepreneurship lifestyle may be worth it for you. 

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. 

Organizations with notable contributions to Small Business

In my years of business development, I have come across a number of entities that have given assistance to the development of SMEs over the years. However, I have found that they are some that stand out more than others not only for their assistance, but for their consistency of effort.

In this instance, I will focus on those that are located within the island of Barbados. I would hope that they will take note of this post and endeavor to continue to great work that they have done over the years. To explain the services of each one would result in a post that would probably bore the reader. Therefore, if you have any knowledge of their services or industries that they operate within you will know that they are exemplary in their offerings:

Telecommunications

• LIME - for all their services and packages

 Banking and Finance

• Scotiabank
• First Citizens Bank
• City of Bridgetown Cooperative Credit Union

Technical Assistance and Mentoring

•  The Barbados Investment and Development Corporation [BIDC]
• Caribbean Export
• The Barbados Youth Business Trust 
• The Youth Entrepreneurship Scheme
• Science and Technology

There was a time that a lot of support came from

• The Barbados Coalition of Service Industries [BCSI] 
• Republic Bank 
• CIBC First Caribbean International Bank

Conference and meeting facilities

• The Hilton Barbados
• The Barbados Yacht Club
• The Courtyard by Marriott
• The Accra Beach Hotel 
• The Coffee Bean [more for meetings] 

 Power

• The Barbados Light and Power 

Water

• The Barbados Water Authority 

Permissions

• The Town and Country Planning Office 

Ongoing Education

• The Samuel Jackman Prescod Polytechnic [SJPP]
• The Barbados Community College [BCC] 
• Barbados Institute of Management and Productivity [BIMAP] 
• The University of the West Indies [UWI] 

Incentive creation and positive functional taxation policies that facilitate economic growth

• The Government of Barbados with their Bright, Lucrative, Policies 

We want to take this opportunity to say thank you for your various contributions to SME development within Barbados.You will note that mentioning SMEs does not mean entrepreneurs, but small businesses that drive the tangible sustainability of the economy. Thank you for your outstanding efforts.

Entrepreneurship - Too Simplified?!?! Not for everyone.

Sure...anyone can register a business! Great...now what?

The media is touting entrepreneurship as the remedy for just about everything - wealth creation, the solution to this recession and the list goes on.

Recently I read a series of articles, and what came across to me is that this seems too simple. Take for instance this extract:

"What if we were to understand that people are a nation's greatest asset and were to go out in joy not only developing our people to the fullest but instilling in them the confidence to quit their current employer and develop their own start-up, spin-out, and scale-up enterprise and become their own boss hence gaining control of their own destiny?"

Which appeared in [WEALTH DISTRIBUTION - BASIL SPRINGER COLUMN WHICH APPEARED IN THE BARBADOS ADVOCATE'S BUSINESS MONDAY ON AUGUST 5, 2013]

Is it really this simple?

My mind went on to extrapolate this base information, and the result was chaos. All Chiefs no Indians. Is this really what is required when building a productive society in which entrepreneurship is expected to thrive? Somehow, I do not think so.

Yes the human resources are important, but we must be mindful of what they want. Not everyone is geared or have the desire to be an entrepreneur. I have met many people who desired to have their own business. Upon a more in-depth series of meetings, it was found that they really should not embark on the enterprise as they were ill prepared for the challenges of running a business.

Here's why:

• They lacked capital / access to capital
• They lacked knowledge of the elements of operations required to run their type of entity
• They did not know who their competition was in the market they wanted to operate within 
• They lacked the dexterity, discipline, and tenacity to find out / to do certain things
• They quickly found out that more than a big dream was required
• Business needs people in order to function, it is not what you know, but also who you know and how useful they can be in helping you realize your potential achievements 
• Planning is a skill. It requires being able to develop and systematically layout steps necessary to reaching your objective. It is not a collection of wishes
• It may mean sharing ownership of your business to truly advance it to realize its potential 

Here's another article that you can read about entrepreneurs who turned their passions into the livelihood. They short stories of what they did to become successful does not mean they did so without challenge. It meant that they considered and worked on the aforementioned why's as well as others that are not on this incomplete list. 

That being said, are we in the right environment for entrepreneurship? Our governments have to be careful about the climate they create that would support entrepreneurship. One that's too heavy on taxes and too light on incentives can create a sluggish environment for business start ups and expansions. There needs to be the right mix that enables business development while government realizes their revenue needs. 

In closing, let's stop making entrepreneurship seem more simple than it really is. It does not mean that we don't simplify the processes, but we must be realistic in our observations about the area of business development. 

Richie B. works as a business consultant & trainer, since 1995 operating from Barbados, West Indies. He's practical in his applications and offers sound information which can be quickly acted upon. Richie operates in the Caribbean region predominantly and via the internet offers solutions to some North American entities.