Micro businesses and the 2017 Budget

From time to time, we publish stories of Vincentians of all ages, who by choice or necessity have decided to launch out and establish their own businesses.{{more}}

Some of these entrepreneurs are mature men and women seeking to supplement their income, young college or unversity graduates who have given up on the idea that someone else will employ them, or those who have chosen to be self-employed and have a business idea geared at meeting some unmet need in the society.

The imminent opening of the Argyle International Airport also provides business opportunities that may have been previously difficult to implement and should spur increased business activity.

The micro ventures vary widely, spanning the range of personal care items, tourism, auto, information technology and event planning services, light manufacturing, food preparation and agro processing, among others. These businesses generally start off as tiny home based ventures, and while some, over time, prosper and grow, many fail.

What is the Government’s role in helping these micro enterprises to succeed?

Towards the end of this month, Prime Minister and Minister of Finance Dr Ralph Gonsalves will lay the Estimates of Revenue of Expenditure for 2017 in the Parliament, following which he will present the 2017 Budget.

Successive governments have provided incentives for the private sector in their annual budgets as the success of a government is inextricably linked with the success of businesses, whether small or large. It is in the Government’s best interest to create an encouraging environment for small and large businesses.

However, the traditional incentives such as tax breaks and trade policies are usually of little help to budding micro businesses, as many of them operate under the radar and fall outside any mechanism that may be set up to help them grow.

Being aware of this, the Government, non-governmental agencies and the private sector have for decades set up mechanisms to provide support to micro enterprises in clusters, especially in the areas of institutional strengthening, provision of start up funding, packaging, marketing and training.

The problem is that most of these support/umbrella organizations are themselves under-funded and have very little means of sustaining themselves. Some were set up using grants from funding agencies, but when the initial project ended, many of the programmes designed to support fledgling businesses, such as incubators, also died a natural death.

So, what is the way forward? There is no simple answer to that question. What is clear, however, is that the micro business sector needs help. Many of the ideas are good, but fall short in execution. With help though, the businesses could one day significantly contribute to the economy. Though individually small in size, the micro businesses are many in number and they and their support organizations should not be overlooked when incentives and support mechanisms are being designed for inclusion in the 2017 Budget.