SMEDA Draft Final Report_Draft_v3 (1)

Enterprises Needs Assessment Survey and
Analysis Report
Sponsored By: The Inter-American Development Bank under the Compete
Caribbean (CC) Program, the Technical Cooperation “ Policy and Insti tut ional Framework for SME Development in
The Bahamas”
PH: (242) 362-1044 Email: [email protected]
Or
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1.2. Overview of the Small & Medium Enterprise Sector ......................................................... 8
1.3. Project Background ......................................................................................................... 9
3.1. Participant Demographics .............................................................................................. 14
3.2. Company Information .................................................................................................... 16
3.3. Small & Medium Enterprises’ Needs.............................................................................. 17
3.4. Assessment of the Effectiveness of the Current SME Support Structure ....................... 18
3.5. Challenges facing the SME Sector ................................................................................ 19
3.6. SME Recommendations to Improve the Current Support Structure ............................... 20
4. RESULTS: FOCUS GROUP SESSIONS’ DISCUSSIONS .................................................... 23
4.1. Focus Group Demographics .......................................................................................... 23
4.2. Highlights of Focus Group Sessions .............................................................................. 23
4.3. Agency Considerations/ Recommendations .................................................................. 24
5. CONCLUSIONS AND RECOMMENDATIONS ...................................................................... 26
5.1. Development Strategy ................................................................................................... 26
5.3. SME Training Design ................................................................................................... 27
5.4. Experiential Learning ..................................................................................................... 28
5.6. Sustainability ............................................................................................................... 29
ACKNOWLEDGEMENTS
• Compete Caribbean: o Ms. Jaiwattie Anganu, IADB, Senior Specialist, Financial Markets o Mr. Diego Morris, Projects Coordinator o Mr. Gerard Johnson, IADB Representative – Country Office Jamaica
• Mr. Simon Wilson, Deputy Financial Secretary, Ministry of Finance
• Ms. Tonya Adderley, SMEDA Coordinator
• Mr. Don Gray, SMEDA Co-Coordinator
• The Ministry of Finance SMEDA Advisory Committee: o Mr. Mark Turnquest, CEO, Mark Turnquest & Associates o Mr. Andrew Edwards, Independent Consultant o Mr. Kareem Hanchell, Independent Consultant o Ms. Janica Deveaux, Independent Consultant o Mr. Tamico Brice, Independent Consultant
• The Department of Statistics
• Yvette Bethel, CEO, Organizational Soul (Focus Group Sessions Facilitator)
• Terrance Fountain, Organizational Soul (Research Specialist)
• Edison Sumner, CEO, Bahamas Chamber of Commerce and Employers’ Confederation
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Table 5: General Suggestions for Operations Structure ................................................................
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Figure 2: Perceived role of SMEDA for supporting SME operations ..............................................
Figure 3: Importance of Selected Criteria ......................................................................................
Figure 4: Level of Interest In Technical Assistance ......................................................................
Figure 5: Level of Interest In Financing .........................................................................................
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1.1. The Bahamas Demographics
The Commonwealth of the Bahamas is a cluster of some 700 islands with a total land mass of 5,382 square miles scattered over 80,000 square miles of the Atlantic Ocean. The majority of its population (over 95%) resides on only seven islands. Inhabitants mainly populate two major centres, Nassau, which is the capital of Bahamas, located on New Providence, and Freeport, located on Grand Bahama. The other populated islands and cays are called Family Islands. More than half of the Bahamian population lives on New Providence Island which, based on the 2010 census population data, can be categorized as very densely populated with the population per sq. Km estimated at 1,181. Only three other islands/island groups have population densities greater than 100 per square mile(1). The total population of the Bahamas based on the 2010 census was 351,461 persons.
The Bahamas has been an independent unitary state within the British Commonwealth of Nations since July 1973, and is governed as a parliamentary democracy based on the Westminster/Whitehall model. There is a Governor General who represents Her Majesty the Queen, a bicameral legislature including an elected House of Representatives, an appointed Senate, and an independent judiciary. The Cabinet of Ministers is headed by a Prime Minister who is also a member of the legislature. Government business is carried out by ministries, headed by a minister (political) and permanent secretary (administrative), and by quasi-governmental institutions. There is some level of local government in the less developed islands but this is designed more to facilitate the work and policies of the central government.
The Bahamian Government allocates approximately 30% of the national recurrent budget to social sectors, with special emphasis on education, health, and housing. (2)
The Gross Domestic Product (GDP) total for the Bahamas in 2012 was US$8.149 billion. The Gross Domestic Product per capita in Bahamas was last recorded at US$21,083.65 (4)
in 2012. The GDP per Capita in Bahamas is equivalent to 170 percent of the world's average.
GDP per capita in Bahamas is reported by the World Bank. From 1960 until 2012, Bahamas GDP per capita averaged US$19,752.1, reaching an all-time high of US$24,212.4 (December 2002) and a record low of US$12,753.9 (December 1975).
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1.2. Overview of the Small & Medium Enterpr ise Sector
An “official SME definition does not exist in The Bahamas, but using the BLU (Bahamas Business Licensing and Real Property Tax Unit) data, 91% of businesses actually reported sales below $250,000 in 2006”. (Philippe Schneuwly: A Road Map for Improving The Business Climate For SMEs, August 2007).
The Bahamian economy is renowned for having being built

on two (2) pillars – Tourism and Finance. This traditionally skewed weightings towards Tourism and Finance, whilst boding well for short term growth, economic viability and stability, doesn’t provide the country with any built-in protection against problems in those sectors.
Consequently, most of the country resources, including the more attractive skilled labour, are found in these sectors – generally operating as employees. As a result, the expected Small & Medium Enterprise (SME) sector-led growth, in complementary and lagging sectors, such as agriculture, fishing and handi-craft, has been retarded and dampened over the years.
Consistent with this trend, Bahamian SMEs have been perennially viewed as underdeveloped and underperforming.
Over the years, however, efforts have been made to formally structure the sector and provide requisite institutionalized support via various governmental and quasi- governmental agencies, i.e., Bahamas Development Bank, Bahamas Agricultural and Industrial Corporation and the Bahamas Venture Capital Fund. Other than the presence of Chamber of Commerce offices on several islands, there is a noticeable absence of viable non-profit/ non-governmental Business Support Organizations (BSOs), to complement, support and balance the government led initiatives.
Most recently, during the governmental administrative years of 2007-12, the government undertook an initiative to galvanize its efforts to crystallize a Small & Medium Enterprises
Act. This Act was to be the forerunner of a Small & Medium Enterprise Development Agency (SMEDA), to advance and champion the cause of SMEs throughout the country. SMEDA, from its inception, will be initially funded by the government but will operate as an independent agency.
This strategy was also espoused by an earlier administration, who sought to create a similar agency in 2006, albeit under a different name - The Domestic Investment Board.
The current administration, in an endorsement and continuance of the efforts of previous administrations, commissioned the crystallization of the strategy and initiatives it met in place, paving the way for the completion of the ‘Policy and Institutional Framework for SME Development in The Bahamas’ Project.
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With tourism as the primary economic pillar, SMEs in the Bahamas are consequently and predominantly linked to the tourism industry, followed by the financial services sector and construction. Notably the handicraft sector has always been the traditional bedrock for micro businesses and this area is now trending up. The IDB sponsored “Bahamas Virtual Platform” project, a collaborative effort by the Bahamas Chamber of Commerce (BCCEC) and the Bahamas Agricultural & Industrial Corporation (BAIC), will be instrumental in strengthening the SME handicraft sector, as the initiative has recently developed a platform for the global sales and marketing of local Bahamian handicraft items. This platform (website) goes live Q1 2014.
Notwithstanding the lack of infrastructural support and private sector led growth, the development and sustainability of a vibrant SME culture is commonly accepted as the lynchpin for the country’s long term economic success.
1.3. Project Background
The Government of The Bahamas (GOBH) requested support from the Inter-American Development Bank (IDB) to develop a comprehensive and coherent institutional framework to support Bahamian SMEs, including those in the Family Islands.
For this purpose, under the Compete Caribbean (CC) Program, the Technical Cooperation “Policy and Institutional Framework for SME Development in The Bahamas” (the Program or Project) was approved and signed with the GOBH, through the Ministry of Finance (MOF).
The project’s goal is to develop a comprehensive and coherent institutional framework to support SMEs, including those in the Family Islands. Its purpose, through the new institutional framework for SME development and a particular strategy for the productive sector in the Family Islands, is to increase SME productivity in the country, particularly those in the more productive and high-growth potential sectors.
The Program, with the introduction of the Small & Medium Enterprises Development Agency, will deliver important products that are stand-alone and do not depend on external factors for success. This will include mechanisms to provide in-depth information on SMEs and a basis for the continuous review of the sector. It also speaks to developing useful tools for each Family Island to utilize - for overall SME stimuli and development linkages on their respective islands.
With the anticipated implementation of the SMEDA legislation, a positive impact on economic growth and income distribution, particularly sectoral, will be critical, as local businesses have to be positioned to increase national contributions and improve overall productivity – via improved market intelligence and a robust SME support infrastructure.
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By extension, this should improve the country’s ability to exploit its touristic sector successes, by lessening the need for imported goods and services (import substitution), via the improved competitiveness and contributions of empowered SMEs.
This speaks to a potential mit igation and rationalization of t rade imbalances.

ness, which impair their competitiveness and productivity. It will also track and provide key performance indicator (KPI) information, on the impact of specifically targeted business development services and programs on SME performance.
1.4. Project Objectives
The general objective of the project is to improve the business climate and competitiveness and coherent institutional framework to support SME’s, including those in the Family Islands.
The specific objectives of the needs assessment survey were: • To identify the needs based on the perception of the SMEs themselves; • To give SMEs an opportunity to communicate their perspectives about the
development of the SME Development Agency; • To evaluate the effectiveness of existing SME policies, administration and support
services; and • To establish a baseline in order to assess the impact of policy and organizational
change (through periodic repetitions of the survey).
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2.1. Study Design
The project incorporated a basic mapping exercise, needs assessment surveys and focus group discussions (2), which utilized a Cross-Sectional design. This design could be equated to a snapshot of the current situation both with respect to the primary indicators of interest and associated factors.
At the onset of the project, the consultants met with executives of the Ministry of Finance (MOF) and the Department of Statistics (DOS), to discuss the process, review the issues to be surveyed, agree parameters and to gauge the level of support and buy-in for the process of conducting the survey.
2.2. Study Population
The target population for this project was a representative sample of Small and Medium Enterprises (SMEs) that were registered as official Government of The Bahamas’ business license holders (formal sector). Based on discussions with DOS and additional stakeholders, the islands of interest identified for inclusion in the need analysis review were New Providence, Abaco, Andros, Bimini, Cat Island, Crooked Island, Eleuthera, Exuma, Grand Bahama and Long Island.
Survey respondents were then randomly selected, by the DOS, from the 2012 Business License Register. It was then agreed that secondary or replacement respondents, in the event of a non-response, would be chosen from SMEs with similar characteristics to ‘non respondents’.
Focus groups participants were drawn from a smaller but representative population of accomplished SMEs. The sessions were further stratified, with representatives from small businesses participating in one session and representatives from medium-sized businesses in another.
After the completion of the mapping exercise, a strategic decision was taken to adapt a two-pronged approach for the collection of SME survey information. This was deemed as logical, due to the relative insignificance of a number of sectoral activities in a majority of islands. With the population’s disproportionate skew to New Providence, it was agreed that any additional required survey information, outside of the initial sample selection, would primarily be filled from New Providence.
It was also agreed that the data collection activities would begin in New Providence, which would be the early catalyst for lessons learned, prior to moving to the other islands.
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2.3. Data Collection
An initial survey instrument, which anecdotally addressed the issues identified by the Ministry of Finance and the Small & Medium Enterprise Development Agency (SMEDA)
Advisory Team, was drafted and referred to the Department of Statistics for review, commentary and subsequent approval. Predictably (and of note) there was a consensual concern, expressed by all parties, with the identification of a specific ‘local’ metric for Small & Medium Businesses.
The approved survey instrument was subsequently pre-tested online by members of the MOF’s Advisory Team and Compete Caribbean to validate its specificity and relevance.
The data was collected using multiple methods, i.e., personal (face to face) interviews, telephone interviews, self-completed internet forms, as a last resort. The primary collection method, however, was the personal interviewing method.
2.3.1 Need Assessments Survey
Data collection, utilizing the approved Survey Instrument (ANNEX 1), commenced July 2013 and was substantially concluded December 2013. The project recognizes the constant disruptions to associated activities, with the escalation of the local debate on the pros and cons of the new Value Added Tax (VAT) regime. VAT is to be introduced to The Bahamas July 2014.
Interviews conducted in New Providence were done face to face. Due to the costs associated with travel to the other islands (Family Islands), notices, wherever possible, were sent to the randomly selected SMEs in the Family Islands. SMEs were invited to meet with interviewers, at scheduled times, in the Island Administrator’s Offices on respective islands. Telephonic and online interviews were used to accommodate interviewees who were unable to make the scheduled engagements.
The survey instrument included the following categories:
• General Company Information
2.3.2 Focus Group Sessions
The data was collected primarily through the use of a combination of semi-structured and open-ended questions. The sessions were designed to ensure that unanticipated but key commentary and questions were fully explored.
The Focus Group sessions were designed and hosted by Organizational Soul. The questionnaire utilized during the sessions was collaboratively finalized by Organizational Soul and the project team. Questions were formalized to explore and understand attitudes, beliefs and motives emanating from the quantitative survey; as well as to provide feedback on any strategies and recommendations.
The host interviews were conducted by Ms. Yvette Bethel (Organizational Soul).
2.4. Data Handling
For the purpose of the analysis, all participants who completed questions up to and inclusive of the business development questions (questions 45-60), were included in the review. Those businesses who began the survey but who did not complete the survey up to this point were excluded from the results. While some basic data were obtained directly from SurveyMonkey®, the majority of the analysis was performed using the IBM statistical package ‘SPSS’. The data was initially downloaded into Excel prior to its being uploaded into SPSS.
2.5. Report Writing
This report is the only written report produced and incorporates the results from the need analysis surveys and the two (2) focus group sessions. To assist in the communication of the results of the survey, a PowerPoint presentation has been prepared and included as a deliverable.
The data collected has been included as an addendum to this report, which will be made available in an electronic format for dissemination to approved bodies or in the event any authorized stakeholder seeks future referencing.
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3.1. Participant Demographics
A total of 556 SMEs were interviewed. Interviews were primarily one-on-one but were supplemented with online and telephonic, utilizing contact information obtained during the mapping exercise.
Table 1 SME Demographic Indicators

Number Percent
Gender Males 321 57.7 Females 228 41.0 No Responses 7 1.3
Residence New Providence 380 68.3
Abaco 12 2.2 Andros 59 10.6 Bimini 6 1.1 Cat Island 18 3.2 Crooked Island 1 0.2 Eleuthera 25 4.5 Exuma 1 0.2 Grand Bahama 25 4.5 Long Island 29 5.2
Business Type Home Based 189 34.6 Other 357 65.4
Owners and representatives from a total of 556 SMEs were interviewed, 7 of whom declined or omitted to indicate the identity or gender of the business owner. New Providence businesses (380) accounted for 68% of the interviews, with 176 (32%) of respondents representing Family Island businesses.
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Almost 4 in 10 (38%) of the respondents reported being in businesses for 1-5 years, with an additional 3 in 10 (29%) operating their businesses for more than 10 years. Only 10% of the SMEs were new market entrants, i.e., less than 1 year in business. (Table 2).
Table 2: SME Operations Indicators

Number Percent
Years in Business Less than 1 Year 56 10.2 1 – 5 Years 208 38.0 6 – 10 Years 124 22.6 10 Years or More 160 29.2
Class of Business Manufacturer 29 6.6 Wholesaler 11 2.5 Retailer 349 79.1 Exporter 10 2.3
* 115 respondents did not define their business class and 42 supplied multiple answers
Figure 1
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In which Sector does your business operate
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3.2. Company Information
Approximately 4 of every 5 respondents (78.6%) operate businesses with less than 5 persons, including the owner. A total of 105 respondents (19.8) employed 5-19 persons. Only 1.6%, or 8 SMEs reported having staff complements of 20+ employees. (Table 3).
Table 3: Employment Indicators
Number Percent
Number of Regular Staff 1 – 4 Persons (including Owner) 416 78.6 5 – 9 89 16.8 10 – 19 16 3.0 20 – 49 4 0.8 50+ 4 0.8
On the question of employee compensation, the overwhelming majority of businesses (80%) indicated a salary/ wages compensation arrangement. As opposed to a commission arrangement (8%) or a combination of salaries and commissions (10%).
This is indicative of a possible root cause for business failures or the onset of cash-flow difficulties, as the majority of respondents indicate lack of funding as an ongoing business concern. An SME operating with cyclical revenue streams, while paying fixed regular salaries, will have cash flow (timing) challenges.
9 in 10 SMEs (92%), who responded to the question on gross revenue earnings, reported earnings o f less than $100,000, with only 15 respondents or 3% reporting earnings over $250,000. (Table 4).
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Number Percent
Gross Revenue Less than $50,000 376 77.5 $50,000 - $100,000 70 14.4 $100,001 - $250,000 24 5.0 $250,001 - $500,000 8 1.7 $500,001 - $750,000 5 1.0 $750,001 - $1,000,000 1 0.2 $1,000,001 + 1 0.2
It’s against this background that 6 in 10 of SMEs confirmed that they do not invest in staff training and development. Correspondingly, 58% admitted that their businesses cannot afford to provide the level of training required to sustain themselves.
In somewhat of a contrast, but underscoring the expressed importance of training, 54% of respondents reported some form of formal training in their respective businesses.
3.3. Small & Medium Enterprises’ Needs
To identify the specific training needs of SMEs, the respondents were asked to indicate which of the specified generic, technical and management competency training assistance their business required. Results revealed that more than half of the SMEs responding were interested in receiving Customer Care training assistance (66.2%); Technical (37.2%); Account ing/ Finance (22.7%); Administrative (13.8%); and Human Resources (12.6%).
When asked to prioritize specific training requirements, survey respondents consistently identified Customer Care (1), Technical (2) and Accounting/ Finance (3) training as most important for their business success.
With regards to the question “Do You Require Financing to Grow Your Business?”, only 55% of respondents indicated that they did. This is perhaps a clear indication that while financing is considered important, SMEs recognize technical assistance and specified training as critical components to growth.
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Eight (8) out of ten (10) SMEs, or 68.8%, indicated a wi llingness to “ accept financial assistance if linked to technical support” .
In terms of marketing, the overwhelming majority of respondents (88%) deemed marketing their business as very important or important.
Figure 2
70% of the SMEs who indicated that Marketing was very important or important to their business success, reported that their business require marketing assistance.
3.4. Assessment of the Effectiveness of the Current SME Support Structure
Nine (9) of ten (10) respondents speaking to the effectiveness of the country’s ‘formal business support structure for SMEs’ , regard it as ineffective.
In this vein, only 6% of respondents reported being Chamber of Commerce members. Conversely 97% reported never having sought any assistance either.
Only 5% and 6% respectively, reported having received funding from either the Government Guarantee Program or the Bahamas Development Bank. Strikingly almost 5 in 10 respondents (48%) confirmed that the funding received from the government programs was inadequate, or insufficient for business requirements.
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Similarly, 432 of the 459 interviewees (94%) answering the question on Trade Association or Cooperative membership, answered in the negative. 99% of respondents reported never having sought any assistance from either institution.
Al l of the above appear to speak to a decided indifference (apathy) towards the current support structure or ignorance regarding any support or assistance the system may offer SMEs. This poses a possible credibility issue.

ucture would be able to better serve the needs of its constituents, respondents were asked what features they would recommend as ‘necessary’ for an “effective and independent Small & Medium Business support agency?”
Notable and consistent responses were: Equality; Open Consistent Communication; Guided by a Board of owners; Committed; Credible; Independently operated or minimal government interference .
3.5. Challenges facing the SME Sector
Respondents and Focus Group participants identified a number of issues that presented a real challenge to the sustainability of their businesses.
The questioned posed was “What are the most significant challenges your business currently face?” Comments included ‘commercial banking policies and practices (access to funding); lack of support/ trust for selected types of business or sectors, i.e., restaurants, agribusinesses and new market entrants; branding of small businesses (due to high failure rates); bad business plans (strategy); local customer base/ support; and “lack of proper accounting systems”.
Other “significant challenges” include, the economic downturn (depressed economy); high costs of materials and supplies (custom duties/ shipping costs); and high utility costs.
In addit ion, SMEs cited availabili ty of reliable and trained staff, unfair competition (price undercutting by illegal immigrants and unlicensed businesses), high marketing costs, poor infrastructure, excessive regulations, lack of reliable inter- island shipping transportation and threat of VAT (value added tax).
Regarding the advocacy for a level playing field in doing business, concerns were expressed about the ability of foreign companies and individuals (informal sector) to operate unchecked in The Bahamas and the need for industry regularization.
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3.6. SME Recommendations to Improve the Current Support Structure
Seventy-nine percent (79%) of SMEs support the creation of a Small & Medium Enterprises Development Agency (SMEDA) and believe it will play a vital role in supporting their businesses.
Figure 3
However, only 44% of interviewees choose to or were able to recommend the necessary features of the agency.
The following were cited as desirable features for SMEDA:
Equality (of treatment to all SMEs)
Open Consistent Communication (opportunities & developments)
Board of owners (composition of the Board of Directors, i.e., Board of Peers)
Committed
Credible
The following service categories (functional support structure) were also cited as necessary Agency features:
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• Research and Development Unit o Market Research Assistance; o Standards;
• Training Unit o QuickBooks; o Cost Control;
• Business Planning Development Unit o Mentorship;
o Strategic Planning;
o Assistance with document preparation for all documents (i.e. Town
Planning, Hotel Licensing, National Insurance, Professional Indemnity
Insurance, etc. - ensuring the SME has everything required);
o Assistance with Copyright, Patent and intellectual Property Protection;
• Financial Guidance and assistance Unit
o Access to loans;
o Accounting Support;
• Marketing and Advertising Unit o Promote Exports; o Help with plans;
• Advocacy o Favourable banking policies; o Worker (SME) protection from bankruptcy; o Better Concessions; o Greater support of businesses through purchases etc.; o Greater market share for local products, goods and services; o More regulation of roadside and other unlicensed businesses;
• Resource Centre

Financial Guidance and
• Accounting support
• Better (improved) concessions
(clustering)
services
other unlicensed operations
Establishment
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4.1. Focus Group Demographics
This phase of the project incorporated qualitative research that utilized a focus group design. As such, the results could not be extrapolated to the population under study, could be considered highly subjective and thus only offered insights rather than conclusions.
The discussions were primarily for explanatory purposes; to explain unclear results or to get more in-depth information obtained through the earlier quantitative situational analysis/needs assessment
A total of 14 small and medium business owners from cross-sectors were invited to participate in two (2) focus group sectors. The initial intention was for one of the groups to consist of representatives of small businesses and the other with representatives from medium-sized businesses. Unfortunately, this was not possible and each group included a mix of owners from both small and medium-sized businesses.
Care was also taken to ensure that SMEs selected had been in business for some time and were able to contribute to in-depth discussions regarding sector trends, industry barriers and the general economic climate.
4.2. Highlights of Focus Group Sessions
“ Let’s not fool ourselves, the banks in th is town – the small and medium businesses are not on their target lists. They make their monies from loans, vacation, etc.” (Focus groups consensus).
“ My experience as a business owner is that persons th ink they are doing you a favor by just coming to work” . (Reference to the ethos of young workers).
Notable (qualitative) findings and recommendations from the focus group participants and report (Appendix 5), included the following:
o Less than 8% of focus group SMEs reported ever utilizing the services of the Chamber of Commerce, BAIC or any Cooperative; with 14.3% of participants confirming ever having had a relationship with the Development Bank.
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o Training was regarded as essential and, with the participants, similarly to the Need Analysis respondents, voicing the need for ‘SME training support’, to supplement challenged resources, during “these economic trying times”.
o The following specific training needs were emphasized: o Resource Management o Financial Management o Policy & Process Documentation o Marketing/ Strategy o HR Management
o While one of the owners felt that mentoring on general business operations and
development would be helpful, others held the opinion that this (mentorship)
should be business and/or industry specific. It was generally felt that mentors
should have a proven track record or experience in the field of the mentee. A
number of the participants did not feel that this type of mentoring was
available from the current agencies designed to assist SMEs and it was
suggested that the proposed SMEDA create a sustainable learning environment
and infrastructure, which will provide the core competency platform that is
necessary for SMEs to effectively compete on the national and global levels .
4.3. Agency Considerations/ Recommendations
Focus group participants saw the need for a ‘cluster’ approach to industry wide or
sector-wide training, with SMEs sharing the cost, or some sort of subsidized
support f rom an agency such as SMEDA
The following views (recommendations) were expressed by focus group SME owners and discussed during the sessions:
o SMEDA should feature a ‘business or service exchange between SMEs’,
which would benefit businesses tremendously. (This could possibly be
achieved by tying SMEDA’s SME support to participation in this program).
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o A comprehens ive (up to-date) SME reg is try is required. It must be properly maintained and made accessible to stakeholders and the public. SMEDA has to be accountable for the integrity of the information.
o ‘Research’ Services has to be an integral part of SMEDA’s support offering, as
there is a clear cut need for this service. The different levels of research services should include:
Product Demand Consumption Industry/ Sector (key performance indicators)
Geographical Marketing Information (general) Local/ Regional/ International Funding sources Global/ Regional Trends Material Sourcing
o Strong Advocacy Program: particularly for funding and commercial banking support. Prohibitive collateral demands and non-favourable banking policies restrict SME growth. Other important advocacy areas include:
Specific industry/ sectoral concessions via Bahamas Customs, business license fees, etc. (benchmarking)
Market protection for select locally manufactured goods, i.e., via minimum local content policies in hotels and stores
Transparency in governmental contract awards, to promote accountability and equality
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5. CONCLUSIONS AND RECOMMENDATIONS
With the ever increasing need to diversify the Bahamian economy and to equip SMEs to compete globally, in response to globalization challenges, both government and private sectors understand and agree the urgent need to establish a credible and autonomous business support organization, to act as catalyst for this national response.
The needs assessment served as the initial step in this process and provides quantitative baseline data, for the formation of the Small & Medium Enterprise Development Agency (SMEDA). It highlights capacity requirements, training needs, challenges, experiences faced and intercession requirements. It validates several previously anecdotal problems and a number of developmental strategies and action plans, previously espoused by stakeholders and governments. The focus group discussion points provide qualitative confirmation along the same lines.
Consequently, the objectives of the recommendations are: • To improve upgrade local sector support • To improve the operating and strategic capacity • To position the sector as a viable alternative or channel for accomplished
professionals and/or new market entrants
5.1. Development Strategy
As a matter of priority, a training and development strategy should be created that is designed to build capacity throughout the sector. In a nutshell, the contextual reference to strategy is what SMEs can do to equip owners and executives with the necessary business acumen to grow vibrant competitive businesses. Once the strategy is approved, it should be broadly communicated to SMEs but specifically to key ‘growth’ and ‘target’ industries to obtain buy-in. Distribution of information can be via email and direct mail.
The training strategy should include the following baseline components: • Stakeholder Analysis • SWOT and PESTLE • Best Practice Benchmarking • Vision • Mission • Objectives • Action Plan
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5.1.1. Considerations
SME Training & Development (STAD) Committee - To facilitate the operations and management of the training program. The primary objective is to create a sustainable learning environment and infrastructure, which will provide the core competency platform that is necessary for SMEs to effectively compete on the national and global levels.
5.2. Technical Assistance and Delivery Process
The results of the survey and focus groups sessions indicated significant interest levels in a variety of competencies and a structured mentorship program. The training that addresses these competencies can be offered as singular learning interventions (workshops) or bundled as a ‘core competency platform’ . Prioritization of modular courses can be based on the convergence of sectoral best practices and the somewhat divergent views of SMEs. It is noteworthy that female SME owners show a preference for strategic and administrative training as opposed to their male counterparts, who predominantly show a preference for ‘hands on’ t raining. As an example, there is a need for SMEs to be more ‘market-responsive’, as opposed to instinctual. Moving forward, such competencies will take on increasing importance; particularly if there are changes to the government’s tax collection system. As a result, legislation that mandates such training may be required or incentives may have to be introduced to make the courses attractive or a priority.
The approach to mentorship, as espoused by the more seasoned focus groups participants, speak to a more structured and deliberate approach, as a “number of the participants did not feel that this type of mentoring was available from the current agencies designed to assist SMEs” .
5.3. SME Training Design
Targeting the Material - A number of subject areas were identified as possible high priorities – specifically by way of workshops. For instance, customer service skills was identified as being of high importance to SMEs, as well as technical assistance and accounting/ financial training. As a result, SMEDA should seek to offer SME developed programs, which have been tried and tested throughout the region or globally, as opposed to offering generic skills courses for employees and not owners.
Learning Paths - The learning paths can be established as either a certification or a menu of courses that can be selected as needed. Each path can be sequenced to ensure foundational information is built upon over time in order to facilitate capacity building and sectoral strengthening. Possible learning paths include but are not limited to:
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5.4. Experiential Learning
While learning design should include consideration for all learning types, given the nature of the sector, learning interventions with a strong kinesthetic component should be preferred; i.e., a style where participants learn more by doing or carrying out a physical activity, rather than listening to a lecture or watching a demonstration. Possible interventions include:
• Workshops • Group discussions • Case studies • Mentors (Smaller companies with larger companies/ trained mentors with
mentees) • Webinars
The Experiential Learning Methodology is built on the premise SMEs share their current experience by means of exercises, initially in small groups, thereafter with the entire group with guidance by trained experienced facilitators.
This approach is adjudged best for adult learners and is typically case study based and driven by (relevant) practical examples and assignments. It is action-oriented by using techniques such as plenary group work and structured learning exercises, discussion, brainstorming sessions and fieldwork.
5.5. Mentorship Suppor t Program
SMEs continue to face considerable challenges in today’s social and economic climate,
as they seek to grow their businesses. These challenges include:
• Insufficient experience in business and management skills leading to poor budgeting, pricing and cash flow management;
• moderate levels of technical competency not supported by business experience;
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• limited knowledge of market research and the evaluation of the viability or
feasibility of business decisions and choices leading often to the temptation to
assume or copy what appears to be a potential income opportunity;
• limited exposure to markets and global business environments and practices;
• lack of business diversity;
• lack of access to information about where to find information or support; and
• inadequate/ inappropriate levels of funding and very limited access to start-up
capital.
• poor business choices;
on (inexperienced) consultants and ill-equipped BSOs to create business plans
and support business decisions;
• poor access to capital due to the quality of business proposals and perceptions of
risk from financial institutions; and
• poorly formulated and executed business and financial management strategies.
Mentorship is a one-on-one ‘experiential’ intervention between mentor and business owner. Mentorship is a focused business specific relationship based on trust and relies entirely on cooperation and fit between mentor and mentee.
Mentorship should be managed on a practical basis. It should be aimed at taking the mentee from a position of high dependence to low dependence and should be managed on a decreasing basis. It is important that mentee do not become dependent on the mentor.
In addition to traditional training protocols and programs, as articulated in the focus group sessions, SMEs can benefit tremendously from business and/or industry specific mentoring, linked to SMEDA funding or support.
5.6. Sustainability
Many of the challenges to the SME sector are those brought on by ever increasing competition and the need for specialized support, i.e., specific market research, research and development, etc.
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SMEDA should establish a business model that allows the organization to continually provide high quality programs, inclusive of market intelligence services. At the same time, it should ensure workshops are offered at optimal prices, to protect against the ‘free equates to low or no value’ syndrome . Possible funding options may include:
• A Governmental linked (appropriate) training budget;
• Subsidized funding (key industry stakeholders, donor agencies, etc.).
The opportunity for relevant training was identified as an important SMEDA benefit. In order to build a robust training protocol and sustain the activity, the following considerations must be contemplated by the SMEDA.
5.6.1. Formation of a SME Training Committee
The objectives of an institutionalized SME training committee are to ensure:
• There is an ongoing review of developmental training needs and results; • The development and execution of a training strategy; • The development and maintenance of a fully functioning ‘mentorship’ or
business support program; • The development and execution of a communication plan which includes
collateral material that will be used to communicate the training programs and related schedules to SMEs, e.g., brochures, web pages, etc.);
• Establishment of a certification regimen or program; • Annual scheduling of workshops/ courses; • The annual training schedule is fully executed (either by independent
training owners, employees or combination of both); • To ensure the selection of quality subject matter experts/trainers; • The workshops are held to established standards of content and delivery,
i.e., industry and regional; • The development of selection criteria for facilitators; • The maintenance of a database of approved workshop facilitators/trainers; • The establishment of a train-the-trainer program for subject matter experts
with limited training experience; • An accreditation process is investigated and implemented if a local
certification will be established.
5.6.2. Accountability
While some SMEs provided formal training to employees, they overwhelmingly admitted that they did not have the resources to provide training for themselves or
30

their employees. To date, there is no mandatory requirement that compel banks, government agencies and government funding programs to link SME funding with suitable training. This needs to be looked at, with a view of linking disbursements to mandatory training in core business competencies, which could be charged to the SMEs, as part of the loan principal, or deducted from the grant.
This approach is one that is proving successful in many parts of the industrialized and developing world. South African commercial banks also utilize a re-certification program, with annual reviews conducted by approved independent consultants.
Based on these findings, it is suggested that to assure a degree of accountability, SMEDA, in conjunction with relevant sectoral bodies, should:
• Establish local certification and recertification standards to be adhered to by registered SME members. International & Regional accreditation of the certification is strongly suggested. The SMEDA Board may also consider tying assistance from SMEDA to levels of certification;
• Advocate laws that require practices that will improve integrity within the sector;
• Investigate how SMEs can be rewarded if they develop their skills to a prescribed standard. For example, establish a process that provides smaller entrepreneurs with quality value-chain opportunities to collaborate with clusters & larger local and international enterprises.
5.6.3. Succession
It is important to note that succession planning within a society that has a high prevalence of ‘family-owned’ business, is not an easy deliverable but a highly desirable one, as it speaks to sustainability.
Small businesses that have strong brands may eventually become medium businesses, and by extension, medium businesses become large ones, with appropriate additional training, thus a ‘family governance’ support program would be ideal for this climate.
Mentoring and training tend to be limited, especially for SMEs but given the importance of capacity building in this sector, to the overall strength of the economy, a strong national program needs to be implemented. A formalized link with the Bahamas National Training Agency should be considered.
In building a strong national training programme, there are several important realities to consider:
• It is important to build and sustain standards among SMEs;
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• Establishing a strong industry training programme through SMEDA can help entrepreneurs who wish to grow their businesses over time.
5.6.4. Relevancy (Ensuring the SMEDA workshop offerings are relevant across sectors and industries.)
The impact of technological change is beginning to have an effect on the way businesses organize themselves to compete locally and globally. The continuous advancement of the social media and other communication channels, makes it mandatory for business and employees to continually retool and improve skill sets.
Unfortunately, many of the cores competencies that may be useful to potential international & regional partners, i.e., cutting edge skills for jobs and the management of collaborative contracts, are those considered to be of least importance by local SMEs, who are faced with l imited resources.
5.6.5. Staffing Needs
Should a training professional or employee be delegated the responsibility for developing and managing the training program, a job description should be established to ensure role clarity/key deliverables.
5.6.6. Public Relations and Marketing
Based on the comments received, the opinions of many of the SMEs reflected low awareness of opportunities. As a result, the suggestion was put forth to undertake a marketing campaign to promote SME development and to change the perception that the public have of the sector.
To facilitate this, a communications strategy would have to be developed. This strategy will have to look at reaching out to SMEs via multiple communication channels, including internet, cell broadcasts, periodicals, television and radio.
5.7. Future Analyses
The following additional analyses should be considered:
To assist with the sustainability of the training program, a beneficiary assessment of the program should be undertaken. This would include the profile of beneficiaries to determine whether and the extent to which they could share in the direct costs for improved SME support. These beneficiaries may be agencies, organizations, groups or
32

individuals who have a direct or indirect interest in ‘specific’ development interventions (value added processes) and can include:
Segments of the population (producers, consumers); An organization (ministry, public or private entity, union, non-governmental
organizations); or Social groups
To complement the needs assessment and focus group exercises, the Ministry of Finance may wish to conduct a survey of international/ regional donor and developmental support agencies, to determine desired profiles, industry and sectors eligible for financial support and technical assistance. In addition, efforts should be made to benchmark or identify a suitable ‘mentorship’ program, i.e., GIZ’s “PROCESS Skills Development Program” for business mentors.
33
6. BIBLIOGRAPHY
1. Department of Statistics, Ministry of Finance. Commonwealth of The Bahamas: Report of the 2010 Census of Population (Preliminary); May, 2011; statistics.bahamas.gov.bs/

onnect/ca15826e-824d-4109- bbf4dc68436a3c5b/FY2012+Recurrent+Expenditure+Estimates+Details+20120529.pdf?MOD=AJ PERES
3. Department of Statistics, Ministry of Finance. Commonwealth of The Bahamas: 2011 Labour Force Report; Oct., 2013.
4. The Central Bank of The Bahamas, Ministry of Finance. Commonwealth of The Bahamas: The Quarterly Statistical Digest; Volume 21, No. 2; May, 2012.
5. The Central Bank of The Bahamas: Quarterly Economic Review, September 2013
6. Inter-American Development Agency Report: A Road Map for Improving The Business Climate For SMEs; Philippe Schneuwly, (August 2007).
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SMEDA NEEDS ASSESSMENT SURVEY
Small and Medium Enterprise Development Agency Business Survey The Government of The Bahamas (GOBH) has requested support from the Inter-American Development Bank (IDB) to develop a comprehensive and coherent institutional framework to support Bahamian Small and Medium Sized Enterprises (SMEs), including those in the Family Islands.
For this purpose, under the Compete Caribbean (CC) Program, the Technical Cooperation “Policy and Institutional Framework for SME Development in The Bahamas” (the Program or Project) was approved and signed with the GOBH, through the Ministry of Finance (MOF). The general objective of the project is to improve the business climate and competitiveness and coherent institutional framework to support SME’s, including those in the Family Islands.
Policy and Institutional Framework for SME Development in the Bahamas This project is to develop a comprehensive and coherent institutional framework to support Bahamian Small and Medium sized Enterprises, including those in the Family Islands. Through the new institutional framework for SME development and a particular strategy for the productive sector in the Family Islands, the Program seeks to increase productivity in the sectors that represent the majority of firms in the Country.
The Program will deliver important products that are stand-alone and do not depend on external factors for success, particularly in-depth information on SMEs and a basis for its permanent review, as well as a program for the Family Island to act as a driver for overall SME development and sectoral linkages. If the new institutional framework is subsequently implemented, the impact to economic growth and income distribution, particularly regional, would be important as local businesses would increase their contribution to growth and improve overall productivity. This would also help improve the competitiveness of the tourism sector and potentially decrease the need of imported goods and services that could be provided by local firms, which would help in preventing long term external imbalances. The Program is also expected to generate much needed knowledge about barriers that impede women from developing more competitive and productive businesses, as well as the impact that specifically targeted business development services and programs have on the performance of these businesses.
Please spare a few minutes to complete this questionnaire. Your participation in the Small Business Survey will help us to understand your business - and give you a chance to make an input to The Government of The Bahamas’ campaign strategies for Small and Medium Enterprise Development.
None of the questions below are 'mandatory' - feel free to skip those that are not applicable. Please be assured that your responses will be treated with the strictest confidence.
GENERAL COMPANY INFORMATION 1. What is the name of your company?
2. What is your street address?
3. Name of Proprietor or Business Owner?
4. Gender of Proprietor or Business Owner?
36
6. What is your telephone contact?
7. On what Island is your business located?
8. Where is your business based?
District
Settlement
Yes
No
Less than 1 year
Products
Services
Other (please specify) 12. Which class of business best describes your company?
Manufacturer
Wholesaler
Retailer
Exporter
Other (please specify) 13. In which Sector does your business operate?
Accounting/Finance/Legal Services
Building and Construction
Building Maintenance/Electrical/HVAC & Mechanical
Office Supplies
Other (please specify)
HUMAN RESOURCES & TRAINING 14. How many people does your business employ on a regular basis (including the proprietor)?
1 - 4 people
5 - 9 people
10 - 19 people
20 - 49 people
50 or more
Other (please specify) 15. Which of the following best describe how your employees are compensated?
Salary/Wages
Salary & Commission
Commission Only
Other (please specify) 16. Are you able to find suitable employees for your business?
Yes
No
Other (please specify) 17. Do you have a recruitment strategy and retention plan?
Yes
No
Other (please specify) 18. Would your ability to find suitable employees impact your ability to take advantage of a viable opportunity?
Yes
No
19. Do you have to import labour for your business?
Yes
No
Other (please specify) 20. Do you invest in staff training and development?
Yes
No
Other (please specify) 21. Do you offer or provide any formal training for your employees?
Yes
No
Other (please specify) 22. Can your business afford to provide the level of training required to properly sustain the business?
Yes
No
Other (please specify) 23. What type of training assistance do your require for your business?
Technical
Accounting/Finance
Customer Care
Other (please specify) 24. In order of priority which type of training is needed in your organization?
1.
2.
3.
4.
5.
FINANCIAL
25. What was the business' gross income for the last financial year?
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$50,000 - $100,000
$100,000 - $250,000
$250,000 - $500,000
$500,000 - $750,000
$750,000 - $1,000,000
More than $1,000,000 26. Is there a Bank located in your Island/District/Settlement?
Yes
No 27. What changes would you suggest to the existing banking requirements?
28. Have you obtained financing to start your business?
Yes
No 29. What was the source of financing?
30. Have you tried to raise capital or finance a new project/business within the past 5 years?
Yes - and was successful
No
Other (please specify) 31. Do you require financing to expand your operations?
Yes
No
Other (please specify) 32. What financing options would you recommend to businesses in your sector?
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33. What type of financial assistance should the government provide to help small & medium businesses in your sector?
34. What level of financing would you require ($ value)?
35. Have you ever received funding from the Government Guarantee Loan Program?
Yes
No 36. What was the ($) value of this funding?
37. Was the level of funding sufficient for your business requirements?
Yes
No
Other (please specify) 38. What would you suggest as an appropriate ($) amount?
39. Have you ever received funding from the Bahamas Development Bank (BDB)?
Yes
No (go to question 43) 40. If Yes, what was the ($) amount?
41. Was this amount sufficient for your business requirements?
Yes
No
Other (please specify) 42. What suggestions would you make to administration of the BDB with regard to its policy and procedures?
43. Would you be willing to accept financial assistance if linked to technical support?
Yes
No
Other (please specify) 44. What has been the major stumbling blocks to accessing financing?
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BUSINESS DEVELOPMENT 45. What are the most significant challenges your business currently face?
46. What are the requirements to grow your business?
47. Does your business have the ability to fulfill products and/or sales requests for your market at whatever quantity/ quality demanded?
Yes
No
Other (please specify) 48. Is there sufficient demand locally for Bahamian made products and services?
Yes
No
Other (please specify) 49. What type of product or service produced in The Bahamas would excite the market and/or increase sales?
50. What would your sector need to be able to exploit any viable opportunity?
51. What do you feel can be done to increase traffic to businesses in your sector?
52. How important is marketing to your business?
Very Important
Other (please specify) 53. Does your business need marketing assistance?
Yes
No
Other (please specify) 54. Are you a member of the Chamber of Commerce?
Yes
No 55. Have you ever sought assistance from The Chamber of Commerce?
Yes
No
56. What type of assistance has the Chamber provided?
57. What type of assistance has the Chamber provided?
58. Are you a member of a Trade Association or Cooperative?
Yes
No
If Yes (please specify) 59. Have you ever sought assistance from The Trade Association/Cooperative?
Yes
No
If Yes (please specify) 60. What type of assistance has the Association provided?
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SME Development 61. Do you think creating a Small & Medium Development Agency in the Bahamas will play a vital role in supporting small and medium businesses?
Yes
No
Other (please specify) 62. What would you recommend as necessary features for the effective and independent Small & Medium Business support agency?
63. Is the existing formal business support structure for SMEs in the Bahamas effective?
Yes
No
Other (please specify) 64. What changes would you recommend to improve the impact on SMEs?
65. Are there any comments you would l ike to make on financial support for small businesses?
Author izat ion for release of in formation
66. Are you willing to have your response to the these questions used publicly to present the case for small business development in your sector?
Yes
No 67. If you answered "Yes" to the question above, do you want to be identified?
Yes
No
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INTERVIEWERS MUST ANSWER AT END OF THE INTERVIEW: 68. It is my perception that the responses to the questions regarding opinions and perceptions:
Truthful
Are taken directly from establishment records
Are estimates computed with some precision
Are arbitrary and unreliable numbers
Other (please specify)
70. Interviewer Name:
Gender of Proprietor or Business Owner?
Answer Options Male Female Response Percent
Response Count
Agriculture/Agribusiness 14 7 4.3% 21
Art and Craft/ Creative Industry 16 31 9.6% 47
Automobile Sales, Parts, Service & Repair 42 6 9.8% 48
Building and Construction 22 2 4.9% 24
Building Maintenance/Electrical/HVAC & Mechanical 13 1 2.9% 14
Childcare 1 2 0.6% 3
Consulting 8 5 2.7% 13
Electrical/Electronics 13 1 2.9% 14
Engineering and Metal Trades 3 0 0.6% 3
Entertainment 12 5 3.5% 17
Environmental Technology and Services 5 1 1.2% 6
Fisheries 7 4 2.2% 11
Food and Beverage 51 46 19.8% 97
Gifts and Homeware 4 7 2.2% 11
Health/Fitness/Beauty 13 20 6.7% 33
Horticulture/Gardening/Landscaping 6 3 1.8% 9
Hospitality 16 8 4.9% 24
Human Resources 0 3 0.6% 3
Janitorial 7 3 2.0% 10
Manufacturing 14 7 4.3% 21
Marketing 3 0 0.6% 3
Media/News Agency 3 2 1.0% 5
Medical/Dental 1 4 1.0% 5
Mixed Business (general store, small goods, etc.) 30 38 13.9% 68
Office Supplies 2 3 1.0% 5
Pharmacy 1 2 0.6% 3
Postal Services/Shipping & Logistics 2 0 0.4% 2
Printing/Publication/Bookshop 5 5 2.0% 10
Real Estate 3 0 0.6% 3
Retail 39 46 17.3% 85
Telecommunications/ICT 3 0 0.6% 3
Transport & Travel 8 4 2.4% 12
Other (please specify) 92
Answer Options Male Female Response
Percent Response
Products & Services 0 1 0.2% 1
Services 201 96 55.7% 297
Answer Options Male Female Response
Percent Response
Self /Out of Pocket
Efficacy of the Cur
SMEDA FOCUS GROUP QUESTIONS
1. Training a. While the recently conducted survey indicated there are business owners
interested in training, what types of skill development should SMEDA prioritize for training offerings?
b. As a business owner, what type of training do you need to position your business to compete globally?
2. Research & Information Dissemination • What types of research should SMEDA conduct to help you to develop your
business: • In the current environment? • In future, in an open market?
3. Advocacy • Which types of issues should SMEDA advocate as a priority?
4. Mentoring and advisory services are other types of support suggested. • What are your thoughts on mentoring and why? • How open are you to advisory services? (Financial, marketing, planning, business
growth, financial, document preparation, legal etc)
5. The recent survey revealed that the vast majority of small and medium businesses are either not familiar with or do not utilize the services of business support organizations like the Chamber of Commerce. Is there something that these organizations can do to become more attractive to businesses?
6. Of the types of support that can be made available to your business, what would you elect to participate in?
7. Based on your knowledge, what are those areas of your business that requires strengthening?
8. Is there something we have not yet considered that is essential to the strengthening and growth of the agency?
9. How can SMEDA help you to prepare your business for global competition? a. Free Trade b. b. Export
51
52
76

Policy and Insti tutional Framework for Small and Medium- Sized Enterprises Development in The Bahamas:
Report of The Focus Group Surveys
Sponsored In Part By: The Compete Caribbean Project of The Inter-American Development
Bank
Or
Email: [email protected] www.orgsoul.com
1. Introduction ............................................................................................................................. 1
1.1 Background to the SMEDA Focus Group Survey ............................................................ 1 1.2 The SMEDA Focus Group Survey .................................................................................. 2
2. Methodology ........................................................................................................................... 4
2.1 Survey Design ................................................................................................................ 4
2.2 Participant Selection ........................................................................................... 4 2.3 Data Collection .................................................................................................... 4 2.4 Data Analysis and Report Writing ....................................................................... 5
3. Results: Focus Groups ............................................................................................................ 6
3.1 Profile of Focus Group Participants ................................................................................ 6 3.2 Company Information ..................................................................................................... 6 3.3 Training .......................................................................................................................... 8 3.4 Research ...................................................................................................................... 10 3.5 Advocacy ...................................................................................................................... 11 3.6 Mentoring and Advisory Services ................................................................................. 12 3.7 Improving Existing Support Services ............................................................................ 13 3.8 Suggestions to Improve the Structure and Operations of SMEDA ................................ 14
4. Discussion ............................................................................................................................ 16
5. Annexes ................................................................................................................................ 20
Annex 1: Focus Group Confirmation Letter ........................................................................... 20 Annex 2: Focus Group Consent Form .................................................................................. 21 Annex 3: Participant Form .................................................................................................... 22 Annex 4: Focus Group Discussion Guide ............................................................................. 23 Annex 5: Focus Group Questions ......................................................................................... 26 Annex 6: Case By Case Results of Participant Form ............................................................ 27
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• The Inter-American Development Bank
• Ministry of Finance: • Mr. Simon Wilson, Deputy Financial Secretary • Mrs. Tonya Adderley, SMEDA Project Manager
• EPS Consultants: • Mr. Donald Demeritte BCA Chairman • Mr. Andree Weech
• Bahamas Chamber of Commerce
lxx
BCOC Chamber of Commerce
BDB Bahamas Development Bank
GOBH The Government of The Bahamas
IDB Inter-American Development Bank
MOF Ministry of Finance
Business Survey Small and Medium Enterprises Business Survey
SMEDA Small and Medium Enterprises Development Agency
lxx
1.1. Background to the SMEDA Focus Group Survey
The Government of The Bahamas (GOBH) requested support from the Inter-American Development Bank (IDB) for the development of a comprehensive and coherent institutional framework to support Bahamian Small and Medium-Sized Enterprises (SMEs).
In response, the IDB, under the Compete Caribbean (CC) Program, approved and signed a technical cooperation agreement with the Ministry of Finance (MOF) entitled “Policy and Institutional Framework for SME Development in The Bahamas”. It is anticipated that the Program, through the introduction of a new institutional framework that will be accentuated by a Small and Medium Enterprises Development Agency (SMEDA), will increase SME productivity in the country; particularly those in the more productive and high-growth potential sectors.
In order to develop effective interventions for the small and medium-sized business sector, it is important to have a comprehensive understanding of the sector; the specific challenges faced by these business owners, the capacity they have to deal with these challenges and the efficiency and effectiveness of the services available to them.
Any development strategy should, however, take into account that a universal approach will not be effective and that interventions should be targeted and evidence-based. Consequently, the availability of reliable and accurate information with regards to the specific needs of specific segments of the small and medium-sized business sector is paramount to the development of an intervention or development strategy.
In most developing countries, The Bahamas being no different, this kind of information is not readily available. While many government departments, other public sector agencies and financial sector providers are engaged in the delivery of services to support small business development, the reach of many of these well-intentioned support interventions is often perceived to be low and the impact minimal. The lack of quality information to guide intervention strategies significantly contributes to this situation.
In recognizing this, as a part of the SME development project, the MOF then contracted EPS Consultants to develop and conduct a comprehensive Small and Medium Enterprises Business Survey (SMEDA Business Survey).
The survey was designed to: • Describe the size and scope of the small business sector; and • Segment the small business sector into homogeneous market segments, with the
intention of identifying the development and financial needs of the different market segments in order to stimulate segment-related development and financial product innovation.
1

In addition to these objectives, and in pursuit of the purpose of making financial markets work for this sector, the Survey also sought to:
• Determine levels of financial access for the small business sector; • Describe the landscape of financial access for the small business sector (i.e. the
type and extent of financial product utilization); and • Identify and describe the drivers of, and the barriers to, usage of financial services
and products for the small business sector.
1.2. The SMEDA Focus Group Survey 2014
To supplement the information obtained from the SMEDA Business Survey, Organizational Soul Ltd. was contracted to support the SMEDA project through the design and conduct of two focus group surveys targeting small and medium-sized businesses in The Bahamas. The specific objectives of the focus groups were:
• To inform the project team as to the underlying issues contributing to the current situation with respect to local businesses;
• To assist in interpretation of the Business Survey results and the identification of the focal areas for strengthening; and
• To assist with guiding the preparation of a development plan for the sector.
As the implementing agency, Organizational Soul Ltd. was responsible for overseeing the technical implementation of the survey; developing dissemination material; and making the information available to stakeholders. This was accomplished in four phases.
Figure 1: Project Flow-Chart
In implementing the Small Business Focus Group, Organizational Soul Ltd. collaborated with a number of stakeholders to ensure that the information gathered addressed relevant issues and added value to that available from the Business Survey. These individuals and/or agencies provided input into the formulation of the questions, as well as into the contextual interpretation of the findings. Organizational Soul regards stakeholder buy-in and support for the survey as essential in ensuring that the information provided is used to guide intervention strategies.
Phase 1: Scoping

Preparation of survey instruments, selection of group participants, etc.

Phase 4: Data Analysis and Report Writing
Recorded information transcribed, data analyzed and draft report completed

2. Survey Methodology
2.1. Survey Design
This phase of the project incorporated qualitative research that utilized a focus group design. As such, the results could not be extrapolated to the population under study, could be considered highly subjective and thus only offered insights rather than conclusions. The discussions were primarily for explanatory purposes; to explain unclear results or to get more in-depth information obtained through the earlier quantitative situational analysis/needs assessment.
2.2. Participant Selection
Based on discussions held with representatives of the project committee, participants were conveniently selected from those small and medium businesses that operated in New Providence, the capital city of the Commonwealth of The Bahamas.
To be eligible for inclusion in the focus group sessions, potential candidates had to have been a self-perceived business owner of a company that employed less than 100 persons.
There were a total of two (2) focus groups held. The initial intention was for one of the groups to consist of representatives of small businesses and the other with representatives from medium-sized businesses. Unfortunately, this was not possible and each group included a mix of owners from both small and medium-sized businesses.
Due to its familiarization with the SME community, EPS Consultants was directly responsible for the identification and recruitment of potential respondents and the facility that was used for the administration of the focus group. A confirmation letter giving directions to the facility and outlining the role of participants was emailed to each owner upon agreeing to participate (Annex 1).
2.3. Data Collection
The focus groups were held at the offices of The Bahamas Chamber of Commerce (BCOC) on Wednesday 29th and Thursday 30th January, 2014. Each of the sessions lasted approximately 2 hours. All participants were required to sign a consent form prior to their participation (Annex 2). The consent form briefly described the overall project, the objective of the focus group and gave some of the discussion ground rules. Additionally, the participants were asked to complete an 11-item participant information form designed to capture demographic information about themselves and some basic information about their respective businesses (Annex 3). This was also administered before commencing the focus group sessions.
3

The focus groups followed a format of a short introduction, explanation of the project, the ground rules to be followed and then the questions and discussion (Annex 4). Of note, to maintain the anonymity of the participants, once the discussions commenced, the tape recorder was turned on and participants were referred to by a number. For those participants who arrived late, all instructions and procedural rules were conveyed before they joined the group.
The focus group discussion guide consisted of a combination of semi-structured and open-ended questions that were aligned with the survey objectives; i.e., to explore and understand attitudes, beliefs, motives and behaviors as well as to provide feedback on any strategies and recommendations emanating from the quantitative survey (Annex 5). The same core discussion questions were used with both focus groups. However, due to the nature of the questioning method, unanticipated questions were included to fully explore issues that arose. The general themes explored by the questions included:
• Training; • Research; • Advocacy; • Mentoring and Advisory Services; • Areas in need of Strengthening; • Effectiveness of Support Services; and • Preparation for Competition;
The questionnaire was designed by Organizational Soul, in collaboration with EPS Consultants, and took into account information obtained from the SMEDA Business Survey. Both sessions were facilitated by Yvette Bethel of Organizational Soul, a Human Resource and Organizational Development Consultant and a business owner with considerable knowledge and experience in the sector.
2.4. Data Analysis and Report Writing
This report incorporates the information from both focus groups. The results presented include a synopsis of the issues and suggestions from the focus groups and a contextual discussion. Comprehensive transcripts of each of the sessions are included as an addendum to this report and should be used as a referral source for more in-depth information. The data was analyzed by Organizational Soul Ltd.
4
3.1. Profile of Focus Group Participants
There were a total of 14 participants in all; 7 in each focus group. All of the participants normally resided in New Providence. A complete case-by-case listing of the results from the Participant Information Form is included as Annex 6.
Of the 14 owners who agreed to participate in the sessions, 9 (64.3%) were males and 5 (35.7%) females. The participants were relatively older with 6 (42.9%) of the business owners between the ages of 40-49 years and another 6 in the 50-59 years age group. The remaining 2 (14.3%) were age 60 years or older.
Table 1: Participant Demographic Indicators
Demographic Indicator
Distribution of
60 Years or Older 2 14.3
Island of Residence
3.2. Company Information
The results relative to the participants’ business are presented in Table 2. As an indicator of the level of business experience of the participants, they were asked how long had they been the owner of their business. The results revealed that all of the participants operated what could be considered as established businesses; having operated for more than 5 years. Four (30.8%) had been owners for 5-9 years, 3 (23.1%) for 10-14 years and 6 (46.2%) for 15 years or more. One person did not answer the question.
A total of 5 (35.7%) participants operated businesses that can be described as micro- businesses, with less than 5 employees, 3 owners operated businesses with 5-9 employees and another 3 with between 10-19 permanent employees. A further 2 had businesses with 20-49 employees while 1 participant operated a business with 50 or more permanent staff members.
5
15 Years or More 6 46.2
Type of Business Supplied
<5 persons 5 35.7
5-9 persons 3 21.4
50-99 1 7.1
With regards to the type of business that the participants operated, 4 (28.6%) owned businesses that dealt with products, exclusively; irrespective of whether they were manufacturers, wholesalers, retailers or exporters. One half (7) was in the business of providing a service, exclusively, while 3 participants (21.4%) reportedly owned businesses that provided both goods/products and services.
A number of participants owned businesses that operated beyond the island where they were based (New Providence). In fact, 7 (50.0%) of owners present indicated that they conducted businesses on more than two additional islands and 1 on another 1-2 islands. Six of the businesses represented in the focus groups operated on New Providence, exclusively.
Results revealed that the use of services offered by local agencies that are assumed to assist in the creation and development of SMEs was minimal (Figure 2). Of the 14 participants in the 2 focus groups, 2 (14.3%), 1 (7.1%) and 1 (7.1%) had ever utilized the services of the Bahamas Development Bank (BDB), the Bahamas Agriculture and Industrial Corporation (BAIC) or the Chamber of Commerce, respectively. One participant reported that they had accessed the services of a cooperative specifically for his/her business.
Figure 2.
Percentage of Participants that have Utilized the Serv ices of
Selected Agencies
Development Bank
3.3. Training
Based on the results of the SMEDA Business Survey, it was clear that local owners of SMEs
were aware of the need for training. As to the specifics, training required by the owners
themselves, training required by the staff, etc., additional information was required and
hence a considerable amount of time was devoted to this topic during the focus group
sessions.
Participants of the focus groups identified a variety of training needs for both business
owners and staff. What they wished to make clear was that while the need for training was
great, many were not in a position to divert funds fro

Documents

SMEDA Draft Final Report_Draft_v3 (1)