Owning a small business: Aspiration and Accomplishment

Another side to business

The Institute of Private Enterprise Development

One of the visible indicators of our urban poverty is the number of children who continue to be pressed into service as vendors on the streets, outside the markets and frequently in the vicinity of restaurants and bars. It is a serious social issue as much as it is a reflection of a reality that cannot be wished away by moralising about it. Children become vendors in order to subsidise households that cannot afford to keep them; so they must earn their own keep.

Some children vend from just past sunup until late at night. Others sandwich school between shifts. Either way, it robs them of much of their childhood and in some cases – perhaps far more cases than we might imagine – exposes them to the possibility of abuse.

There is another way of looking at it. Child vendors have no choice, though what they lose by doing what they do may probably never be regained.

The Institute of Private Enterprise Development
The Institute of Private Enterprise Development

There is, of course, the option of them trying to catch up later. There are, today, a number of successful businessmen and women who delayed at least some of their education because they had to earn a living at an early age. There is evidence that it worked for them. Playing catchup is harder these days. There is a great deal of formal training involved in being a conventional businessman and you stand a considerably greater chance of success in business if you understand the basics.

It is entirely unsurprising that there is considerable demand for training in various facets of business studies including preparing business plans, budgeting, marketing and a host of other disciplines without which you cannot hope to run a successful business. It is not by accident that our various business support organisations offer greater numbers of training courses in business-related disciplines. The reason has to do with the fact that having initially ventured into business some of our erstwhile businessmen and women are discovering belatedly that you need to learn how to run a business after all. The problem becomes worse when account is taken of the fact that preferences would appear to be shifting from the conventional job market to various forms of self-employment. Internet cafes, barber shops and beauty parlours would appear to be some of the popular business undertakings among young men and women whose choices are influenced solely by the fact that they had done a course in male or female hairdressing or might have developed a fair grasp of the rudiments of Information Technology. Here, the problem is that these would-be entrepreneurs failed to take account of the fact that simply cutting or styling hair or possessing the ability to transmit an e-mail is not running a business.

The problem of late development amongst small business owners is reflected in the current challenge facing the Small Business Bureau of providing training for (probably) upwards of 1,000 people some of whom do not, even at this stage, qualify for a loan from a commercial bank. There has been lots of talk about the disposition of commercial banks towards lending to business aspirants. Setting aside their concern with properly managing clients’ deposits, commercial banks need repayment assurances, part of which is often derived from their assessment of the borrower’s ability to repay. Sometimes, frequently, competence and credentials can help serve as collateral and that is one of the issues that small business owners must face. As an aside the Stabroek Business continues to publish various articles about the Medium and Small Business project currently in the works though not a great deal is being said about when the grants and bank loans are going to commence. One suspects that the altruism associated with this project is entirely de-linked from the posture of the commercial banks that continue to demand their own criteria for loan eligibility.

A small craft booth outside the Guyana Post Office Corporation building
A small craft booth outside the Guyana Post Office Corporation building

If entrepreneurship trends are towards the startup of small businesses, then there is clearly a need to create various forms of institutionalized training rather than simply ask well-intentioned but inadequate small business aspirants to try to prepare their own business plans for submission to lending institutions after a crash course. Such a course of action can be counterproductive, even disastrous. The desired approach is for small business aspirants to work with professional guidance and support.

If there are really no reliable statistics with which to make a case, there is evidence that many urban small businesses come and go quickly. Many of these are in the snackette, barber shop, beauty parlour and vending sectors. Some of the would-be entrepreneurs assume a posture which says that if one form of business doesn’t work, let’s try another. Here, they fail to understand that the problem may not be with their choice of business but with the fact that they are simply not equipped to run any business of any kind. Basic business training is essential if the small business sector is to make a mark.

The Institute of Private Enterprise Development (IPED) which has sustained itself over a number of years as a lender to small and micro business initiatives, has done so largely because it chose to extend its services beyond providing loans. It recognised that the businesses that it supported financially had a much better chance of growing and that, by extension, they had a much greater chance of having their loans repaid, if their borrowers were equipped to run a business.

The Small Business Bureau will face a similar kind of challenge. One component of the project challenges beneficiaries to produce a certain number of jobs within a particular time frame. It stands to reason that they will only accomplish that goal if their respective enterprises are run efficiently and that will depend on how much they put into training.

To return, briefly, to the issue of child vendors it has to be said that it is a complex problem. Where need exists in the home, parents will continue to risk prosecution by sending their children on the streets. Of course the laws that forbid it can be enforced, though the greater goal ought to be to seek to address the causes. What has to be said, however, is that there is no virtue in creating an army of child vendors in the hope that they will metamorphose into successful entrepreneurs. Staying in school and experiencing a formal education is by far the better option.

The surfeit of interest in private enterprise as reflected in the steady growth of a small business culture is a good sign though there are clear indications of a lack of structure to the process. In the particular context of this article it is a matter of laying the groundwork, creating the foundation for a sturdy small business infrastructure by seeking to ensure that small business aspirants are adequately equipped to realise their ambitions.

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