A new consideration to business planning

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. 

"Taxdiculous" Barbados....There has to be an alternative

By now, seventy cents of every dollar must be attributed to taxes. If it isn't it sure feels that way. Ever so often, it feels like we're either hearing of a new tax or having the tax rate increased. Yet the truth of the matter is that there is a smaller workforce to pay the taxes with all the retrenchment. The constant taxing of fewer people must have diminishing returns at some point.

We have the constant bantering of entrepreneurship which if you look through the fluff at the main target, it is only a ploy to say that the employment has increased or put differently unemployment has declined.

The use of micro economic approaches by taxing at the individual level rather than using macro economic strategies and initiatives to arrive at plausible solutions to address our economic situation seems non short of taxdiculous. Yes I coined the word.

Taxation, cannot be the only solution out of our economic situation. The seemingly selfish approach to take without any giving, not handouts, but a fair opportunity at making and being able to thrive from one's efforts at financial upkeep, the financial bullying of "we document and implement" without accountability is stressful.

Can we research and examine creative opportunities for economic empowerment? Surely those versed in economics can offer some solutions, or perhaps it is time to find alchemists to help us identify the plenty of which is said to be in abundance.

The systems of collection seem inefficient, punitive, and in no way user-friendly.  Why hasn't anyone sought to create a user-friendly way of collecting taxes where hospitality is exhibited? There are lots of people who were displaced from the workforce and the learning curve of running your own business is steep.

You no longer deal with just the requirements of your "job", but you are now faced with handling all elements associated with running a business. Elements that you were previously sheltered from within the organizational structure you functioned within. Many of you never even wanted to run a business, now you are here due to necessity of survival. Your comfort levels have shifted, leaving your equilibrium upset.

Government, create avenues where people can learn and earn . If taxes are reduced and the blanket widened, more taxes can be collected and everyone realizes their objectives without the overburdening of a few, dwindling, often middle classed people.

It is time for us to stop being taxdiculous and create a new model of economic thriving and dominance for small economies that are functional and not burdensome. With the level of human resources we have available at our disposal, I believe it is possible to realize the rebuilding of our economy through leveraging our talents, skills, and abilities.

What SMEs need...

There's a lot of talk about SMEs and entrepreneurship, and over the past 15 years it has intensified. Governments especially like to speak about it, since it's an avenue where they can speak about employment boosts. The thing is, they are so detached from the realities involved in setting up and running a business, they just don't get it!

What is needed is a thought process of what is needed to create an environment for SMEs. When entrepreneurs are undercapitalized and under resourced; how can they be facilitated to ensure that their business sees the light of day and has the opportunity to grow and thrive. It is not going to happen by the constant introduction of taxes, excessive regulations, and environments that are so expensive even foreign investors with their willingness to invest funds have to cringe at the costs of doing business.

There was some thought of introducing standards, but are they aiding or hampering creativity so necessary for business? Actually, when considering the various introduction of regulations, are they thought of by business people or technocrats who only have a theoretical understanding of business but are truly unfamiliar with the business environment? A pulse for the business environment is not going to happen by reading the newspaper or indeed many other articles since those in business seldom document as they are too busy trying to eke out a livelihood.

The bulk of businesses follow paradigms often touted but seldom tested. These cliches often result in the following:

• Businesses being undercapitalized and yet still expected to guarantee the results of their business plans 
• Miracles are expected with limited working capital
• Breakdowns in systems due to shortcuts being taken due to inadequate funds leads to the business hemorrhaging financially as the necessary controls are then often lacking
• Those responsible for directing the company then spend too much time putting out fires rather than directing the business to capitalize on opportunities within the markets
• Though they make the sacrifice of obtaining uniforms for the staff, they see the provision of business cards as an expense thereby missing out on marketing opportunities that can never be offered by "the executives"

When will the business climate change to include a fighting chance for homegrown businesses? Opportunities for growth need to include:

• Tax concessions for the generation of employment 
• A supportive environment that encourages expansion outside of the local boundaries of the country
• Incentives for bringing in foreign exchange and the ability to manage such in collaboration with your financial institutions 
• The establishment of mentorship programs that extend beyond the youth as those who are older displaced workers have been getting into businesses to support themselves financially
• The created environment needs to be such that businesses developed can succeed beyond the lifetime of their creators
• There needs to be a push in intellectual property usage so that businesses can move into the realm of residual income rather than be totally reliant on active income 
• Caribbean businesses need to not be ashamed of making profit rather than the subsistence levels that everyone seems to hover around

These are just a few, and there are more once you get your thought patterns mobilized. There are many good resource people who are more than willing to help the country realize these objectives. Of course, they will need to be adequate remunerated as well in a timely fashion. The taxes will come, but you have to create opportunities to make money so that they can in turn pay taxes without feeling sacrificial on all the occasions. 

Richard Blades is a business development specialist. He has helped businesses develop, grow, and thrive over the years. He lives in Barbados. 

Dun Wuk [Vagrant Life Rule]

This is going to be the lament of some people over the next couple of months. Charley was no exception. He ran a business and tried to do everything by the book and yet was feeling overwhelmed. No matter what he did, he just didn't seem to win. All the obstacles seemed to be stacked against him. What did Charley experience?

• Non paying clients. No matter how much the clients came with an emergency and begged him to do the work; offering at times to pay significantly more than necessary to get the work done. The unified problem was that once the work was done, so what the interest in paying. 
• Excessive taxation. Like PAYE [pay as you earn - based on what you earned], PFWYE [penalized for what you earn - an incremental tax], NYSI [Now you see it - for social security], VAST [ Value Added Still Taxing - computed on the value of the inputs], Property Taxes and Road Taxes; coupled with the recently Environmental tax - yes you pay to be living in a taxing environment. If a calculation was done, we - the working class, would probably get to keep 3 cents of every dollar. Then there's a CESS on gas so that you must cease driving and catch public transportation as you can't afford to drive in an already expensive environment. 
• Policy on how government can raise revenue to do its work is not only based on taxation, but the information used to set these taxes are based on the ridiculous things like what the populous spend their money on - rims, hair extensions, money spent on beautification. There are NO incentives to establish a business. It hardly makes sense to work as an employee since you are basically penalized for working. 

Charley has decided that he dun wuk. [No more working for Charley]; he's going to become a vagrant. Why? 

• There's no tax on begged revenues - standard nor incremental
• Risks are low and rent is free
• Food can be made available if you like what's on the free menus. 
• There's no burden on society since your society changes as you move around
• You don't have to maintain books, since no one thinks you are capable of doing so.
• Through all the changing scenes of life is more than a hymn. It's a way of life. 

So long Charley, and best of luck with your decision!

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] 

Changes in Customer Circumstances

Our trying economic environment is having a severe impact across the globe. The market place is so affected that once reliable customers are finding it increasingly difficult to meet their payment obligations where once before it would not have been a challenge.

As business owners, there needs to be a plan in plan in place as to how we will handle customer who fall upon misfortune. Challenges facing customers include, but are not limited to, burdens on financial security, health care, employment, inflation, increased taxation, and the list goes on.

More and more businesses are feeling the brunt of accounts receivable, NSF cheques, increasingly crafty customers, and those who tug at the emotional heartstrings.

As a business, will we resort to:

• compliance 
• using the legality of verbal agreements, documentation, and contracts
• embarrassment
• harrassment
• violence
• emotional abuse
• compassion and understanding
• a listening to understand the customer's perspective while being discerning

Your use or abuse of the above methods which have been stated in the broadest measure possible will determine the success or failure of your business in the long and short term. 

Examine your strategy if you have one. Is it working in today's environment? If you don't have one, what will you do to develop approaches so that you are not caught out in the cold reacting to knee-jerk emotional situations?

Why not tell us about yourselves? We may be able to assist you in developing your customer service approaches.