Tag Archives: Small Business

Government Needs to Protect Small Businesses

Adrian Loveridge - Owner of Peach & Quiet Hotel

Adrian Loveridge – Owner of Peach & Quiet Hotel

Perhaps more than many, I can empathise with individuals who have recently seen their business either fail or brought dangerously close to insolvency. In 47 years it has happened to me twice and in both cases, they were largely external forces which caused near personal financial catastrophe.

Of course, it is easy to attribute the blame to others but in my case, I can unequivocally state that both near failures, which occurred years apart, were largely caused by strike action in the United Kingdom. Both involving the National Union of Seaman. Personally witnessing bus loads, of what can only be described as pickaxe wielding thugs, destroying property and intimidating ordinary people simply wanting to go about everyday work and operating their businesses.

More than a decade later, it was the same union, blockading the English channel ports, which prevented literally thousands of our booked holidaymakers taking their hard earned trips.

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Peach and Quiet:Small Businesses Should Have the Right to Offset

The following is a communication which was sent to the VAT Office by Hotelier and social commentator Adrian Loveridge.

Adrian Loveridge - Owner of Peach & Quiet Hotel

Adrian Loveridge – Owner of Peach & Quiet Hotel

On or before the 15 March 2013, we will be expected to pay over to Government the amount of $37,526.60 in Corporation taxes due for the last financial year [2012]. If we do not pay on time, then there will be an immediate fine of 5% of the amount due, which equates to $1,876.33 plus interest accrued of 1% per month or 18% annually, which is 3 times the latest rate of Government borrowings to sustain a bloated public service and pay for dismally failed projects like GEMS (Hotels and Resorts Limited) and the chartering of Carnival Destiny for CWC2007.

As a small business that has operated on Barbados for twenty five years and has honoured all statutory obligations, it is a significant amount of money. Yet the same Government has owed us outstanding VAT refunds of nearly $30,000 for up to two years. Of course they have not paid us any late penalty charges or interest.

Before going public, I have written personally to the Ministers of the various Government bodies involved, but up until today not received any form of response.  It appears they feel they have no obligation to businesses that are successful, sustainable (through there own efforts) and those who have demonstrated viability over decades of operation. Yet week after week, it is almost impossible not to read or listen to endless rhetoric about the importance that small businesses will play in the recovery of our economy.

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Entrepreneurship Key to ‘Rebirthing’ This Fair Land

An entrepreneur searches for change, responds to it and exploits opportunities

Richard Branson believes an entrepreneur searches for change, responds to it and exploits opportunities

“In plenty and in time of need. When this fair land was young, Our brave forefathers sowed the seed. From which our pride was sprung…”

From time to time in Barbados the debate centres on how Barbadians can enable the landscape for entrepreneurship to flourish. A casual observation confirms that a large and growing Barbados middleclass is of the collin-tie variety. Entrepreneurs who are wired to deliver goods and  service of a world class standard continue to struggle and earn respect in Barbados; in stark contrast to Jamaica, Trinidad and Guyana. In fact we may have a problem defining who is an entrepreneur versus a businessman.

BU suspects for an entrepreneurship culture to take root in Barbados  an old mindset has to be dismantled and be transformed, to become a Barbados where the school, heights and terrace, media etc are respectful of this segment. BU has a view that the socialist model which has served Barbados well in a post Independence period has lost its relevance. A consequence is that a mendicant culture is flourishing. Social benefits have morphed to be entitlements in the perception of many. The end result is that we have reached a point where public expenditure has outpaced our ability to generate matching revenue. Ignore the politicians who disagree!

What will it require to energize a comfortable ‘collin-tie’ class that a different approach is needed if we are to protect the standard living we have become addicted?

Here is one of the world’s best known entrepreneurs extolling on – what is an entrepreneur:

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Usury Interest Rates?

Adrian Loveridge – Hotel Owner

A couple of days ago we approached our bank about rates for a commercial mortgage and were quoted rates of between 11.5 and 14.5 percent interest. Yet only recently I saw an article where the banks were attempting to pressurize the Central Bank to lower the interest rate paid to depositors from the current minimum of 2.5 per cent.

How can we in the private sector and Government, at least giving lip service to encouraging small businesses and entrepreneurship, tolerate ludicrous spreads like this of 9 to 12 per cent?

We are already forced to accept a level of poor service that would simply not be put up with in the countries where many of these banks have their origins. Unanswered voicemail messages, because its almost impossible to speak to a human being, lengthy and time wasting queues, endless delays in trying to procure critical documentation and managers who feel they have no obligation to respond to the written requests of their customers.

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Government Must Not Kill The Golden Goose – Small Hotel Suffers 50 Percent Hike In Land Tax Valuation

Adrian Loveridge - Hotel Owner

Just when you were beginning to think that it was almost impossible to absorb anymore increased operational costs and stay in business, out of the blue comes yet another surprise. This time for us, its a 50 per cent hike in our Land Tax Valuation.

The number of hotels that have closed over the last 16 years now exceeds thirty and that fact surely cannot have escaped the authorities. Their closure doesn’t seem to indicate improved viability in the sector or that the value of the accommodation property has dramatically increased. So where on earth can there be any logic in re-assessing our small hotel upwards by over 16.6 per cent per annum for the next three years?

Of course, we can object, providing we do it within 30 days of receiving the notification, but a week has been lost already, as the assessment apparently took a week in the post to reach us from Bridgetown, judging by its issuance date. To give that objection any real credibility, we would have to have a professional valuation undertaken, which again takes time and at speculative additional cost. In our case, valuers have indicated at least $7,000 and at a time when we are probably experiencing one of most difficult trading periods for decades.

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ENTREPRENEURSHIP – Latest Buzz Word For Government

Sandra Husbands, Barbados Labour Party Candidate for St. James South

The revival of the demand for a relatively unknown entertainment licence has frustrated the efforts of many promoters to host Crop Over fetes resulting in losses for this sector. It is a reflection of the regard with which small businesses are held by government. This economic crisis has taken a toll on the small business sector that now reels from diminished spending power of its customers, and rising costs to do business, compliments of the international environment and government taxation policy. Hundreds of small shops, professional services, contractors, fisherfolk, retail shops, cosmetologists, IT service providers, general services providers are now operating on a third of the income they commanded in better years or in some cases closing. Loss of private sector jobs have come primarily in this sector as small business employers have been forced to cut hours, lay off, reduce purchases of goods and services. Many are unable to meet payments and statutory obligations such as rent, wages, loans, utilities, suppliers, increased licensing fees, NIS, PAYE, and VAT. The international environment and questionable government policy squeeze from both sides robbing these businesses of necessary oxygen to survive. Their demise affects significant investment capital, and the employment opportunities for the young graduates and school leavers, now some 12,000 strong. The growing number of empty commercial spaces is testimony to closures in this sector.

Taking government at its word that it is committed to the small business sector, in 2008, the request to government was as a strategy to aid the small business sector to survive the unfolding crisis was to ensure that 40% of government contracts worth 200m be distributed to this sector which would support close to 1000 small businesses. This would have protected more than 4000 jobs thus stabilising the unemployment figures without gov’t swelling the civil service. This money would flow through the economic system benefitting a wider network of persons into the retail and services sectors, banking system, large businesses etc, thus sustaining government revenues through VAT receipts, duties, income tax and corporation tax. Instead we witnessed a contraction in the use of small businesses in the tenders for government contracts, which have become concentrated into fewer hands.

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