THE SME SECTOR IN BARBADOS Presented by: Lynette P Holder May 6, 2010

OUTLINE Introduction Overview of Sector –SME Statistics Challenges Importance of the Sector Role of the BSBA Conclusion

BARBADOS – Country Profile Area: 430 sq km; 166 sq miles Population: 275,000 Capital City: Bridgetown People: About 80% African descent, 4% European descent, and 16% mixed. Annual Growth: 4.3% (Central Bank of Barbados) Unemployment: 9% (Q4 2009) Major Economic Sectors: tourism, offshore financial services, construction and utilities, sugar, light manufacturing, component assembly for export, agriculture, information technology services. Major export partners (2006): CARICOM 37.0%, US 10.6%, UK 12.3% Major import partners (2006): US 37.25%, CARICOM 26.0%, UK 5.9%

Profile Cont’d GDP (purchasing power parity):GDP (purchasing power parity) $5.278 billion (2009 est.) country comparison to the world: GDP (official exchange rate):GDP (official exchange rate) $3.637 billion (2009 est.) GDP - per capita (PPP):GDP - per capita (PPP) $18,500 (2009 est.) country comparison to the world: GDP - composition by sector:GDP - composition by sector agriculture: 6% industry: 16% services: 78%

OVERVIEW OF SME SECTOR Small Business Development Act Small Business –Annual Revenues $2,000,000 –Asset Base $1,000,000 –Maximum # Employees25 Micro – under 10 employees, sales of $500,000/yr Medium – under 50 employees, sales of $5M/yr

OVERVIEW OF SECTOR Statistics Approximately 11,500 SMEs existing Ownership –Sole Proprietorships 52% –Incorporated 43% –Partnerships 5% Gender Distribution –69% Male / 31% Female (Census 2000)

OVERVIEW OF SECTOR Sectoral Distribution SectorDistribution (%) Wholesale & Retail26.3 Professional Services24.3 Road Transport incl. garages10.9 Building & Construction 7.2 Other Manufacturing 7.0 Agriculture 4.9 Banking 4.3 Restaurants 4.1 Insurance (other) 3.1 Shipping, Port and Warehousing 2.9 Source: Inland Revenue Dept.

OVERVIEW OF SECTOR Employment Levels Variable ( source) Quantity Average no. of employees/business (BSBA) 04 Total number of Employees (BSS) – 24% of workforce 32,266 Labour Costs for small incorporated companies (IR) $143m Labour Costs as % of Sales/Revenue for small incorporated companies (IR) 58.61% Labour Costs as % of Sales/Revenue for all incorporated companies (IR) 43.32%

CHALLENGES TO SMEs Regulatory Framework – structures are often too restrictive, bureaucratic, duplicated Financing is sometimes insufficient, frugal, inadequate Lack of research data to inform policy and processes Poor management structures and systems Lack of hands-on technical support High financial and labour costs resulting in uncompetitive pricing

IMPORTANCE OF SMEs SMEs are in all of the major productive sectors, i.e. agricultural, industrial, manufacturing and services Key sources of employment generation: –women, youth, differently-abled: physically or academically Ability to enhance economic and social conditions Creation of backward and forward economic linkages Ability to reduce foreign currency expenditure SMEs are flexible and responsive

WHO WE ARE The Barbados Small Business Association (BSBA) is a non-profit organisation representing the interests of micro, small and medium enterprises in Barbados.

THE BSBA STRUCTURE BSBA SBAEISBVCI EASTERN OFFICE SECRETARIAT

BSBA’s PROGRAMMES NETWORK OPPORTUNITIES MARKETING ACTIVITIES TECHNICAL ASSISTANCE EDUCATION & TRAINING SECTORAL GROUP DEVELOPMENT RADIO & TELEVISION PROGRAMME DECENTRALISATION OF PRODUCTS & SERVICES – Satellite Office

SPECIFIC BENEFITS Website & internet facilities Advertising discounts with industry partners e.g. radio & newspaper, telephone, computers Marketing opportunities at exhibitions and showcases Promotion via BSBA’s television and radio series Discounts on members’ products & services A wider customer base by accessing the BSBA membership – mail outs, bulletin, meetings Business support services Office/meeting facilities

Membership Sectoral Distribution

CONCLUSION Self-employment is a solution to improving social & economic conditions Business start-ups can be found in all areas of economic activity BSBA offers handholding, education, training and business development programmes Innovation and creativity are needed to transform the current business climate

QUESTION & ANSWER