While the Stabroek Business has been unable to secure a reliable estimate of the extent of the increase in urban trading over the past five years we have noticed the pronounced upsurge in small business investments in sectors such as grooming and beauty treatment (barbering, hairdressing, cosmetology), fashion, food vending and IT goods and services. There is, too, the constant ebb and flow of high street vending which, these days, appears increasingly to have taken on seasonal overtones.
On the basis of the available evidence, the informal lending sector appears to be a considerable driving force behind a borrowing culture associated with the acceleration of small to medium-scale investments in some of the aforementioned ventures. There is also the persistence of interest in modest investments in the agricultural, agro-processing sectors though the challenges associated with manufacturing would appear to have put a brake on what, in recent years, had been increased small investor interest in agro processing. Small-scale farming, including poultry farming, has remained hostage to a number of considerations including the weather, pests and diseases.
What we have found, however – and admittedly our search has not gone much beyond the capital and its environs – is that there appears to be an increasing appetite for excursions into small business ventures, both as means of substantive employment (in an environment of job scarcity) and as income-subsidy options in an environment of low wages and salaries.
We discovered too, based on a period of interaction with twelve University of Guyana undergraduates – and probably to no one’s surprise – that even young people with professional ambitions continue to look, increasingly, at some form of business as an option. Their lack of enthusiasm for the formal employment sector, whether it be in the public or private sector, driven by what they consider to be unattractive pay and limited opportunities for the realization of ambitions. What we found was that it was not that they had abandoned their lofty professional ambitions associated with seeking the requisite certification at the University of Guyana but that they had come to an understanding that we live in an economic climate in which it makes sense to hedge one’s bets as far as making a living is concerned.
Investment funding is, of course, a major issue. These days, commercial banks have caught on to the image-enhancing benefits of trotting out schemes that offer lending support to small businesses though their overriding disposition remains one of the strictest risk-aversion. As far as loans and grants through state-run mechanisms are concerned, (and here we speak of those services that are available through institutions like the Small Business Bureau) what we have found is that these appear to have metamorphosed into bureaucratic labyrinths insofar as accessing loans and grants pose considerable challenges. That, at least, is what we have learnt from persons who have sought to access those facilities.
Another of our concerns, too, is with what would appear to be a profusion of untutored investors, persons who risk loans or painstakingly accumulated savings in small business ventures without first understanding the basic rules of thumb associated with business.
In the case of the agro-processing sector, for example, what we have found is that there is a scarcity of even some of the most basic manufacturing tools necessary for the growth of the industry and perhaps more significantly, that, these days, a bewildering array of brands of the same product compete for the same market. One of the problems here is that limitations associated with product presentation (packaging and labelling) as well as verification issues that have to do with food safety regulations serve to limit access to overseas markets. Unless that changes we will continue to be confronted with the challenge of our manufactured food products being ‘condemned’ to a far too modest local market.
The beauty and fashion industry drives a considerable portion of the urban small business sector. Though, while the demand continues to be considerable, the competition is daunting. Young women attending hair-dressing and cosmetology courses continue to have ambitions of either eventually opening up small businesses of their own, or else, securing employment in pre-existing outfits. Inevitably, some ambitions are dashed in the face of competition and failed business ventures.
On the whole, what we have found is that, to a considerable extent, the attractions associated with entering into small business ventures are not matched with a sufficient understanding of the rules of the game, so to speak. So that, for example, there appears to be a sizeable number of small business ventures that have been undertaken without the benefit of market studies. What we have found, too, is that some businesses emerge on the basis of templates that are underpinned by questionable assumptions articulated in business plans put together by persons who might have benefited from a ‘crash course’ in what is, frequently, a complex undertaking.
There is need, we believe, for a particular type of business schooling, not so much the kind of formal institutions that offer various forms of certification but institutions that tutor actual risk-takers in what one might term the nuts and bolts of business. You undertake this kind of course as a precursor to entering into a venture of your own so that your questions can be answered and your concerns addressed long before your own day one.
Here, we believe that there is a role for the local business support organizations, the Private Sector Commission and the various Chambers of Commerce across the country. We believe that such as service stands a much better chance of catching on, so to speak, if the business support organizations were to market these services earnestly and in ways that are likely to attract public interest. There is a school of thought which suggests that our BSOs have not done nearly enough to support emerging small businesses; that they have adhered pretty much to their traditional roles. Given the extent to which livelihoods depend on those small emerging businesses that has to change.
