the sme sector in barbados presented by: lynette p holder may 6, 2010

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 milesPopulation: 275,000 Capital City: BridgetownPeople: 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):• $5.278 billion (2009 est.)• country comparison to the world: 157 • GDP (official exchange rate):• $3.637 billion (2009 est.) • GDP - per capita (PPP):• $18,500 (2009 est.)• country comparison to the world: 64 • 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 # Employees 25

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 DistributionSector Distribution (%)

Wholesale & Retail 26.3

Professional Services 24.3

Road Transport incl. garages 10.9

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 2.9Source: 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

www.sba.org.bb