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The challenges of maintaining a small company
Despite the promising boom for the country's micro and small business sector, many entrepreneurs are still faced with the challenges of sustaining and maintaining their small enterprises, due to a lack of capital, technical and management assistance and business education and training.
In light of these challenges, the government has decided to establish small business incubators to minimise the risk of failure among micro enterprises, thereby providing an environment in which small businesses can flourish.
"The failure rate among start-up business is normally very high, and so when they are on their own without these kinds of integrated support services, they often experience implementation problems which many are unable to address successfully and fail in the first couple of years or sometimes even less than a year," Reginald Budhan, senior director of policy, planning, project and research at the Ministry of Industry, Technology, Energy and Commerce said in a JIS News release.
Support services
He further adds that, "the ides of a business incubator is to enable small start-up businesses to get the required support in their early stages...the incubators itself may provide certain common services to the occupants, like marketing, accounting, secretarial, security, and general support services, so that each business will not have to provide those for its needs".
While the concept of a small business incubator is nothing new in countries such as the United States of America, Canada, Uganda, India and Brazil, in Jamaica, the concept is still fairly new.
"A small business incubator is a physical facility generally, where start-up businesses would normally be located and there would be various support facilities, so there would be personnel who provide technical assistance and training to the businesses which are located within the incubator," Mr. Budhan explains.
He notes that the physical facilities for an incubator would be owned or leased by the Government and in turn leased to the operators. The operators will therefore own the business ventures, but not the physical infrastructure. Where there is a need for the use of heavy equipment, the Government may also own the equipment.
Project envisages
"The incubators are not intended to be government managed...what the project envisages is the Government would construct these facilities or rehabilitate existing facilities...and invite bidders to bid for renting the facility. If, for example, you work from home and lack certain facilities or equipment this incubator would have the necessary equipment that can be used," the senior director points out.
"One person would have overall responsibility, As they have a lease, we expect it to be a company. There are three categories or organisational forms that we are contemplating - it would be a limited liability company, owned by one or more individual, it would also be a cooperation or a provident society," notes.
Mr. Budhan said these incubators are not intended for those micro and small enterprises that can be initiated and implemented on their own without the support of an incubator. Instead, it is intended to benefit "small business operators who do not have collateral to be able to access loans to equip their businesses".
The incubators are also expected to benefit under-employed skilled individuals, unemployed persons who are unable to find paid employment, and whose last resort option is itself employment through micro business, unemployed semi-skilled poor individuals and unemployed, unskilled but trainable poor individuals.
"There is another category that we may be contemplating. There are persons who are in the Government's social safety net, the Government does not have the money to carry them indefinitely, so the incubator would be able to wean these people into employment," he says.
The senior director says that an incubator will be community based and will reflect the skills, resources, interests and aspirations of the community members. "It will be demand driven, rather than supply driven. If a community sees the need for an incubator and whose entrepreneurs come forward with convincing evidence that they need an incubator, it will be consider," Mr. Budhan points out
Despite the promising boom for the country's micro and small business sector, many entrepreneurs are still faced with the challenges of sustaining and maintaining their small enterprises, due to a lack of capital, technical and management assistance and business education and training.
In light of these challenges, the government has decided to establish small business incubators to minimise the risk of failure among micro enterprises, thereby providing an environment in which small businesses can flourish.
"The failure rate among start-up business is normally very high, and so when they are on their own without these kinds of integrated support services, they often experience implementation problems which many are unable to address successfully and fail in the first couple of years or sometimes even less than a year," Reginald Budhan, senior director of policy, planning, project and research at the Ministry of Industry, Technology, Energy and Commerce said in a JIS News release.
Support services
He further adds that, "the ides of a business incubator is to enable small start-up businesses to get the required support in their early stages...the incubators itself may provide certain common services to the occupants, like marketing, accounting, secretarial, security, and general support services, so that each business will not have to provide those for its needs".
While the concept of a small business incubator is nothing new in countries such as the United States of America, Canada, Uganda, India and Brazil, in Jamaica, the concept is still fairly new.
"A small business incubator is a physical facility generally, where start-up businesses would normally be located and there would be various support facilities, so there would be personnel who provide technical assistance and training to the businesses which are located within the incubator," Mr. Budhan explains.
He notes that the physical facilities for an incubator would be owned or leased by the Government and in turn leased to the operators. The operators will therefore own the business ventures, but not the physical infrastructure. Where there is a need for the use of heavy equipment, the Government may also own the equipment.
Project envisages
"The incubators are not intended to be government managed...what the project envisages is the Government would construct these facilities or rehabilitate existing facilities...and invite bidders to bid for renting the facility. If, for example, you work from home and lack certain facilities or equipment this incubator would have the necessary equipment that can be used," the senior director points out.
"One person would have overall responsibility, As they have a lease, we expect it to be a company. There are three categories or organisational forms that we are contemplating - it would be a limited liability company, owned by one or more individual, it would also be a cooperation or a provident society," notes.
Mr. Budhan said these incubators are not intended for those micro and small enterprises that can be initiated and implemented on their own without the support of an incubator. Instead, it is intended to benefit "small business operators who do not have collateral to be able to access loans to equip their businesses".
The incubators are also expected to benefit under-employed skilled individuals, unemployed persons who are unable to find paid employment, and whose last resort option is itself employment through micro business, unemployed semi-skilled poor individuals and unemployed, unskilled but trainable poor individuals.
"There is another category that we may be contemplating. There are persons who are in the Government's social safety net, the Government does not have the money to carry them indefinitely, so the incubator would be able to wean these people into employment," he says.
The senior director says that an incubator will be community based and will reflect the skills, resources, interests and aspirations of the community members. "It will be demand driven, rather than supply driven. If a community sees the need for an incubator and whose entrepreneurs come forward with convincing evidence that they need an incubator, it will be consider," Mr. Budhan points out
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