THE UNIVERSITY OF THE WEST INDIES

ST. AUGUSTINE

ASSIGNMENT: CHALLENGES FACING SMALL & MEDIUM

SIZED BUSINESS ORGANIZATIONS AND
RECCOMENDATIONS TO VAULT THESE CHALLENGES

COURSE CODE & NAME:

PRMG 6017 – PROJECT MANAGEMENT FOR SMALL &

MEDIUM SIZED ORGANIZATIONS

COURSE LECTURER:
DR. WINSTON H.E. SUITE

STUDENT NAME AND ID:

FACULTY OF ANEAL A. GIDDINGS 813005915

ENGINEERING
April 28, 2015
CONTENTS

1. INTRODUCTION ................................................................................................................... 3

2. CHALLENGES ....................................................................................................................... 4

2.1 LIFECYCLE OF THE SMALL AND MEDIUM-SIZED BUSINESS ........................... 4

2.2 PRINCIPAL CHALLENGES, THEIR IMPACT AND MECHANISMS TO VAULT

THESE CHALLANGES ............................................................................................................ 5

2.2.1 ACCESS TO AFFORDABLE FINANCING ........................................................... 5

2.2.2 UNFAIR TRADE PRACTICES ............................................................................... 8

2.2.3 POOR BUSINESS SKILLS ................................................................................... 12

2.2.4 CLIENT & FOUNDER DEPENDENCE ............................................................... 13

2.2.5 POLITICAL HURDLES ........................................................................................ 15

3. CONCLUSIONS & RECCOMENDATIONS ...................................................................... 18

4. BIBLIOGRAPHY ................................................................................................................. 20

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1. INTRODUCTION

Small and medium-sized organizations (also known as small and medium-sized enterprises or
businesses) can be principally defined as a juxtaposition of the numbers recorded through
various factors – primarily the number of employees and the volume of sales that are generated.
Other factors should also be taken into account when defining Small and medium-sized business
organisations (SMBs) such as their geographical location. The factors and characteristics that
classify a business as a SMB are dependent on the economic climate in which they operate. In
larger economies such as the European Union and the United States of America, income
generated and employee numbers might significantly outweigh that of their counterparts in the
Caribbean, however, they are still categorised as small.

In the EU, the criterion of staff members is one of the principal factors in determining whether
and organisation can fall within the class of SMBs. However, “a financial criterion is a necessary
adjunct in order to grasp the real scale and performance of an enterprise and its position
compared to its competitors” (Commission of the European Communities 2003). The financial
criterion can be a grouping of volume of sales or turnover and a balance sheet total since the
turnover-rate for various sectors in which small businesses operate can vary and is therefore not
sufficient to use as a basis for definition.

In order to be successful when running a small or medium-sized business, owners and

entrepreneurs must strive to overcome each and every major challenge with which they will be
constantly faced in the context of operating in a developing economy. Based on the above
definition, it is obvious that challenges facing SMBs in the Caribbean can and will differ from
that of larger economies. The following chapters seek to identify some of the principal
challenges facing SMBs in the Caribbean and further outline possible mechanisms that could be
employed, by either the small-business owners, governments or other empowered entities, to
vault these challenges.

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2. CHALLENGES

2.1 LIFECYCLE OF THE SMALL AND MEDIUM-SIZED BUSINESS

In order to fully grasp the major challenges facing micro, small and medium-sized organisations
in our region, the lifecycle or evolution of the same must be understood.
GROWTH

STEADY STATE

COLLAPSE

STARTUP
TIME

Figure 2-1 - The waves of change in the evolution of a small business enterprise (Suite 2015)
Figure 2-1 gives a representation of the lifecycle from its inception. The first period represents
the growth of the business as it attracts customers and creates a name for itself that will place it
in the competitive arena. During this progression, some organisations find themselves facing
many unforeseen circumstances and in its worst case, they will totally collapse.

The next period represents a “steady state” where the organisation more or less maintains its
current operations in its current state without actively seeking expansion. In this period,
production or sales may increase or decrease (depending on the market) as is similar with its
turnover. The same products or services offered are not altered as they have already proven to
provide an adequate enough profit. It is considered a steady state because the organisation has

4
attained a level where it can self-sustain its operations and maintain its current workforce on the
profits derived from selling their products or services. Sometime during the course of a steady
state, the company may see the opportunity to better its operations by diversifying its products,
expanding to different markets, offering additional services and the likes, thus entering a second
growth phase. There is always risk when expanding a business organisation and the ability to
manage these risks are crucial in determining whether the organisation succeeds or not.

The lifecycle so progresses that a small-business can constantly grow and develop its human
resource base and diversify into superior products and services at which some point, it might no
longer be classified as micro, small or medium-sized. These categories of organisations are
usually private companies, sole traders or partnerships and also include business that fall under
the category of non-governmental (NGOs), community-based (CBOs), faith-based (FBOs) and
Not-For-Profit organisations (Suite 2015).

2.2 PRINCIPAL CHALLENGES, THEIR IMPACT AND MECHANISMS TO VAULT

THESE CHALLANGES

Small businesses in the region are very important to the fostering of a better economic climate of
a developing country. They make a huge contribution to employment, while providing very
important services to their communities. Small business are, by virtue of their size, much more
flexible and make decisions much quicker, in addition to having smaller overhead costs which
allows them to provide cheaper goods and services to their customers (Guyana REDD+
Investment Fund 2015).

The following subsections seek to outline the major challenges faced by small businesses in the
region, with particular emphasis on Guyana, the impact these challenges have on varying factors,
among them: the success of the small business as well as the economic effects to the country, and
finally, the measures that are taken to overcome these challenges.

2.2.1 ACCESS TO AFFORDABLE FINANCING

Financing has always been a major issue for small and medium sized business organisations. In
Guyana, while no definitive studies have been undertaken, experts use Latin America as a
performance indicator where SMBs account for 99% of businesses and 67% of total employment

5
(Williams 2013). Many SMBs are forced to obtain loans from banking institutions that imply a
high interest rate. These interest rates are usually too high for a SMB to sustain profitability
mainly due to the fact that the banks have little to no information as to the creditworthiness of the
borrowers (Knowledge @ Wharton 2008). In order to obtain a business name in Guyana, you
need only apply to the Deeds Registry and pay a small annual fee. It should be noted that the
process for registering a company (which is different from that of a business name), is more
complex and is outlined and guided by the Companies Act. On the other hand, while the banks
might not be the only source of financing for SMBs, the general lack of information of other
available financial instruments or options can result in poor business decisions being made or
total exclusion from the market.

Further, the inability to access affordable financing can be attributed to many additional factors.
These include, but are not limited to: the inability to formulate credible business plans, financial
illiteracy, poor financial practices, lack of knowledge of the markets, amongst others (Tracey
2013).

The Impact

Even though the statistics show that 99% of businesses account for the micro, small and medium
sized subset, the lack of access to affordable financing would imply that many of these SMBs,
while existing and surviving, may never be afforded the opportunity to expand. Expansion is
more so difficult for the micro and small business owners in that high capital investment is
required which might prove difficult to obtain. The inability to operate not only impacts the SMB
but can have a negative influence on a country’s economy because growth in small business is
key to job creation and the availability of better products and services.

As was stated, SMBs account for some 67% of jobs in the Latin-American region. If SMBs are
unable to create jobs then developing nations such as Guyana will encounter socio-economic
setbacks such as brain-drain.

Mechanisms to vault this challenge

The Guyana Government, over the years has recognised this challenge which has a negative
impact on the economy. It is for this reason that several projects have been launched:

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  In 2013, the Government with support from the Inter-American Development Bank
launched the Micro and Small Enterprise Development (MSED) project which seeks to
provide loans to SMBs for start-ups and expansion. This project saw the availability of
some $10M USD ($2B GYD) (Tracey 2013).
 Also in 2013, Guyana’s Low Carbon Development Strategy (LCDS) Micro and Small
Enterprise and Building Alternative Livelihoods for Vulnerable Groups (MSE) project
which seeks to provide a further $5M USD through the Guyana REDD+ Investment Fund
(GRIF). This project particularly catered to small and medium sized enterprises in
vulnerable communities through the access to financing and business training (Guyana
REDD+ Investment Fund 2015).

Aside from the projects, there also exists the Institute of Private Enterprise and Development
(IPED) which has been in existence for over 25 years. IPED provides supervised loans and
business development services to Micro, Small and Medium sized enterprises countrywide. Their
slogan is “Helping People to Help Themselves” (IPED n.d.). The slogan, very appropriately
coined, provides the services of a one-stop shop for anyone seeking to start up a new business or
to expand their current operations by providing services and crucial information that can help
them to make the most of the finances provided by the organisation.

Through Guyana’s Low Carbon Development Strategy, a bill was tabled in parliament which
saw the enactment of the Small Business Act of 2004 which provides for the establishment of a
Small Business Bureau, Small Business Council and the creation of a Small Business
Development Fund. (Government of Guyana 2004). The main purpose of the Council and the
Bureau is to “provide incentive regimes and support programmes for small business” through the
achievement of long-term strategic objective set forth in the Act. Similar to the functions of
IPED, the Small Business Bureau (SBB) offers one-stop assistance to SMBs by providing a wide
variety of information and guidance from a centrally and easily accessible location (Ministry of
Tourism, Industry and Commerce n.d.).

Recommendations

While the Government, through its partnerships have sought to bring to the table various
initiatives with the aim of assisting small businesses, it is my opinion that more needs to be done.

7
IPED is the only private institution that caters to small businesses and as a result, their available
funding might be burdened a great deal due to the emergence of new small businesses.

For example, the Government, through its SBB should strive to work with the banking sector to
overcome the issue of the availability of low-interest loan schemes. It is recommended that, with
the recent establishment of Guyana’s first credit bureau1, a mechanism be put in place to allow
for vetting of credit ratings for new and existing business registrants who have indicated that
they would require loans in order to establish or expand on their venture. With this information,
the banks would be able to mitigate the risk of providing loans to non-creditworthy borrowers.
This would, in effect, create more assurance on the part of the bank.

While credit information might not be sufficient enough to make an assured decision (by the
bank), especially because the credit bureau needs some time to mature, the SBB needs to be
more proactive in lobbying the banking sector to ensure loan policies are reformed. This (policy
reform) can be incentivised by requiring collateral guarantees and providing interest rate
subsidies to small business ventures.

2.2.2 UNFAIR TRADE PRACTICES

According to the Small Business Bureau (SBB), one of the most common complaints from small
businesses (or Micro and Small Enterprises [MSE]), is that of unfair trade practices of some
Caribbean countries in implementing non-tariff barriers2 (Guyana Times 2014).

Many CARICOM small businesses operate on import/export of produce or services and as a

result, non-tariff barriers hinder significantly their means of survival. Even though there exists
the policies outlined by the CARICOM Single Market and Economy (CSME) mechanism, many
countries do not exhibit fair practices or conform to policies outlined by the CSME.

In May 2014, the Caribbean Court of Justice ruled in favour of RUDISA Beverages N.V., a
Surinamese beverage exporter, to the tune of some $6M USD in environmental taxes that were

1
CreditInfo Guyana entered into existence in 2012 as part of the CreditInfo Group which, apart from
collecting credit-based information, is working to address the needs of the financial community and SME
sector (CreditInfo Guyana n.d.)
2
Non-Tariff Barriers refer to restrictions that result from prohibitions, conditions or specific market
requirements that make importation or exportation difficult or costly (Non-Tariff Barriers n.d.)
8
collected over a period of time by the Government of Guyana’s tax-enforcement agency, the
Guyana Revenue Authority (GRA) (Stabroek News 2014) citing that it was in contravention of
the Revised Treaty of Chaguaramas3 which is the establishing document for CARICOM and the
CSME.

While RUDISA Beverages do not fall in the category of a SMB as they are a very large
company, the similar taxation has been applicable to other CARICOM countries. The rate that is
charged by the GRA as outlined in the Customs Act: $10.00 GYD on every unit imported
(Guyana Revenue Authority n.d.).

Unfair trade practices do not only affect import and export markets. This is evident in many
forms namely (but not limited to):

 Unfairly limiting competition

 Unfairly refusing transactions
 Unfair exclusion of competitors
 Unfairly soliciting customers
 Disrupting business activities of another enterprise
 Non-regulation of giveaways
(Korea Fair Trade Commission 2010)

The Impact

Unfair trading practices such as non-tariff barriers lead to higher pricing of commodities on the
local markets due to the high overheads that need to be cleared before a modest profit could be
made and might force importers to seek other sources which, in most cases lie outside of the
region. The effect of this on the economy varies from the inability to retain foreign exchange in
the region to stifling of the local market with products that might be mass produced and of lower
quality.

Many large businesses rely on the satellite supply of feedstock from micro, small and medium
enterprises and if the profit margins of the final product are affected by non-tariff barriers, the

3
Text for the Revised Treaty can be found at http://www.caricom.org/jsp/community/revised_treaty-text.pdf
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large companies may choose to source their feedstock from the more established entities thus
stifling the SMBs.

Smaller, more predominant issues of unfair practices might have a more significantly impact
than the effects of non-tariff barriers. Cases of unfairly refusing transactions where, for example,
a supermarket is unable to stock and sell a certain product from a supplier because they are
unable to sell another brand that is distributed by the same supplier, even though the market
exists in the realm in which the supermarket operates, create an environment where competition
is monopolised. Inclusive, employing tactics that seek to solicit customers and disrupting the
business of competitors can cause severe harm to a small business.

Mechanisms to vault this challenge

In 2006, H.E. President Bharrat Jagdeo assented to the Competition and Fair Trading Act which
sought to create a framework for Anti-Competitive Agreements or Trade Practices and Abuse of
Dominant Position. The Act further created provision for the creation of a Competition
Commission. This Commission, by law, has the power to:

a) declare certain business practices to be abuses of dominant position;

b) prohibit the withholding of supplies or any threat thereof;
c) order the termination of an agreement;
d) prohibit the making or carrying out of an agreement;
e) prohibit the attachment of extraneous conditions to any transactions;
f) prohibit discrimination or preferences in prices or other related matters;
g) require the publication of transparent price lists;
h) order enterprises to cease and desist from any form or conduct that has or is likely to have
as its object or effect the lessening of competition.
(Laws of Guyana 2006)

The Competition Commission is mandated to receive and treat with complains by both local and
foreign entities, perform investigations on possible breaches to the fair trading and competition
and has the power to levy restrictions or sanctions on the authors of any breach within the
jurisdiction of Guyana. The Commission however, does not have the power to rule on any
infringement on the part of the Government, as was evident in the case of RUDISA Beverages.
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The Private Sector Commission (PSC) of Guyana also actively ensures the enforcement of fair
trade and competition policies in an effort to “promote socio-economic growth and development
through the creation of strategic partnerships with the Government and other stakeholders”
(Private Sector Commission 1992).

CARICOM, through its CARICOM Single Market and Economy (CSME) mechanism, also
promotes and formulates policies relating to fair trade and competition within the Caribbean
region and through partnerships with entities such as the Economic Commission for Latin
America and the Caribbean (ECLAC), seeks to treat with the pending issues of non-tariff barriers
that can hinder economic growth in both regions.

Recommendations

The Caribbean Community needs to take a more proactive stance as it relates to trade policies
outlined in the region. There is need for change driving mechanisms to be established which seek
to analyse the trade policies in place in member states and their supporting mechanisms which
ensure enforcement of these policies. There is also a need for lobbying governments to ensure
that legislation is in place to deter any attempt to circumvent the policies. Without these
initiatives, the CSME mechanism can be subject of criticisms and the impacts can be far
reaching.

While existing laws in any member state cannot be changed overnight, assurances must be made
by governments that circumstances would be taken into consideration particularly as it relates to
goods and services whose origin is within CARICOM and policies enacted and revised
frequently.

While there have been many complaints to competent bodies (The Competition Commission, the
PSC) relating to unfair trade practices, there must also be sectorial involvement. Guyana, apart
being a middle income developing nation can be regarded as politically unstable, therefore,
resources to perform mandated activities by these bodies might be hindered and justice delayed.
As a result, it is recommended that unfair trade practices be handled by the bodies that represent
the specific sectors of the economy before being escalated to the level of the Competition
Commission. These bodies might need to be empowered through legislation or by frameworks
authorized by the Competition Commission.
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 2.2.3 POOR BUSINESS SKILLS
“A stance can be made against the invasion by an army, none can be made against the invasion
by an idea” – Victor Hugo (1802 -1885)

An entrepreneur might have a great idea and sufficient technical knowledge in a certain area for
which he/she might envisage a healthy profitable venture. This is the birth of a small business.
However, without the necessary management and business skills which range from the
formulation of a business plan, proper money management, making critical business decisions to
marketing and research and development, the small business can surely be negatively impacted.
Small businesses usually do not have the capital or the resources to acquire such specialised
services and as a result, the owners usually adopt this critical role, for which they are not trained.

Another important aspect of management is the administration of their cash flows. It must be
noted that cash flows are different from the acquisition of start-up financing or financing for
expansion or major implementations. In order to survive, the small business must learn to
properly manage their budgeting techniques. How money is allocated to various tasks such as
overheads, payments to employees and investing must be managed in a way consistent with the
requirements of the business.

The Impact

The impact might not be evident at the time but becomes clearer after the SMB is born and enters
into the turbulent business environment. Without the necessary skills – to formulate a clear
vision/mission and the ability to project the future – the small business owner will find
him/herself constantly fighting fires, trying to solve problems rather than creating opportunities.

In the long term, the SMB is usually more prone to failure than just after creation because there
is usually a drop in morale in these later stages. The employees and founders find themselves
losing interest and becoming frustrated and this can have devastating effects which might even
lead to complete failure.

Mechanisms to vault this challenge

As was outlined in 2.2.1 ACCESS TO AFFORDABLE FINANCING, there are several entities
that provide guidance and financing to small business owners or prospective owners. IPED offers

12
business guidance and counselling with particular advice on “the appropriate approach and risks
to financing your business idea” (IPED n.d.). If financing is provided through their mechanisms,
they will continue to provide such guidance to ensure that not only the start-up is successful but
that the SMB moves forward in a productive and profitable way.

Another way to ensure that a small business idea might become a successful venture, is through
partnerships. It is sometimes a hard but important decision to make. The circumstance may exist
that while you may possess the necessary technical and interpersonal skills that are required by
the type of business you wish to enter, you may not have the related business skills required to
make it a success. It is at this point that the decision must be made to enter into a partnership
with an entity or a person who is more affiliated with such skills. It is important however, that
contractual agreements be signed to ensure that no single partner “hijacks the business” in the
event of success.

Delegation of tasks may be a very good decision to ensure balance in an organisation. Especially
for financial tasks, it may be wise to distribute the heavy lifting to more than one person. This
should be done in a way consistent with the information that would have been gathered about
your employees, particularly their strengths and weaknesses.

It should be noted also that lack of financial and other business related skills should not be a
deterrent to following your dreams of owning a small business. With the advent of a globalised
environment, an environment made possible through the advent of the internet and the
possibilities that exist. The small business entrepreneur must constantly seek to learn using this
platform. There is a myriad of great resources existent online which can aid a small business in
achieving their goals. One such example is that of Business-in-a-Box ™ software. This
framework offers businesses whether micro, small, medium, large or very large, useful tools to
assist in getting business related tasks done in a timely manner. It offers many documents and
templates which can assist at various stages of business development lifecycle.

2.2.4 CLIENT & FOUNDER DEPENDENCE

“Starting a business is a big achievement for many entrepreneurs, but maintaining one is the
larger challenge” (Beattie 2011). Client and founder dependence are two separate concepts

13
which share a similar impact on a small business. These two concepts are discussed in the
subsections that follow.

Client Dependence & the Impact

The small business must ensure that it acts in the way a small business does. If the business is,
for the most part, dependent on a single client / customer for income, then the SMB is no more
than an independent contractor. The diversification of a client base is very important to the long
term success of a business. It should be noted however, that many independent contracts evolve
their expertise into a small business.

The major problem with client dependence is that survival of the “business” and its employees
are solely dependent on a single or few clients. If these clients cease to exist then the business
owner is faced with the challenge of not being able to sustain its operations, pay its employees or
clear overheads. It can even face lawsuits from suppliers which it may have a line of credit with
and now unable to pay and be forced to ultimately file for bankruptcy and face failure.

Founder Dependence & the Impact

As a small business grows, it should become less reliant on its owner and more dependent on the
structure in which it operates. Founder dependence is an issue that arises when the
founder/owner is not open to taking risks and is too dependent on micro-managing the
operations. This form of reliance leads to a business being slowed and also not open to various
(possibly better) ways of overcoming challenges or implementing new features.

Mechanisms to vault this challenge

Client Dependence

While it might be necessary to operate an independent contractor (which is better because it

facilitates risk transfer away from the contractor and places it on the client), if the contractor
decides it is time for him/her to take the next step forward and establish a small business that
provides the same services, it must ensure that more than half its income from the operations do
not come from a single or a few clients. Before taking this bold step, market research must be
done and the formulation of a concise business plan should be evaluated. Only after revealing
that it is feasible to evolve into a small business, should the step be taken.
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At this point in time, the small business owner must be cognizant of the fact that there are greater
risks involved and the possibility of failure may be higher in such an arrangement.

Founder Dependence

If a business wishes to grow, the founding members must be able to delegate. A small business
must strive to create an environment where a hierarchy or structure is the bedrock of its
existence. Whether through departmental structuring or simply delegating and empowering
employees, this form must be embraced.

Good leadership does not imply being the only leader. Good leadership involves recognizing and
analysis the strengths and weaknesses of the business and of course, its employees. At some
point in time, the owners must recognize that they cannot be the account, the financier, the
research and development officer, the marketing lead and at the same time, the owner. The
success of a venture must never be solely dependent on a single person or a small group but
rather must be able to be self-sustainable through the expertise of its human resource base.

2.2.5 POLITICAL HURDLES

Particularly in Guyana, and more so it is imagined, prevalent in the region is the issue of politics
as an impacting factor on small businesses. It is without a doubt, that governments strive to
create an environment that embraces small businesses and promotes fair competition. However,
sometimes, due to circumstances beyond any measurable control, the political landscape can also
promote the negative impacts on micro, small and medium-sized business organisations.

In 2011, Guyana held its last General Elections which was contested by many parties of which
the ones obtaining seats were: the Peoples Progressive Party / Civic (PPP/C), A Partnership of
National Unit (APNU) – which is an alliance of several parties and the Alliance for Change
(AFC). The results revealed that APNU obtained 139,678 votes while the AFC obtained 35,333
and the PPP/C: 166,340 (Guyana Elections Commission 2011).

These results meant that the PPP/C won the presidency but did not gain a majority in the
Parliament because the combined opposition (APNU + AFC) had cumulatively more votes than
the PPP/C, a total of 175,011. As a result, the combined opposition had in its arsenal, a single
extra seat in Parliament.

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The aforementioned paves the way to explaining the following issues:

The Anti-Money Laundering & Countering the Financing of Terrorism Act

In recent times, the Government of Guyana has had a hard time in getting approvals for many
projects and bills that were sent to the Parliament. Amongst these was the amendments proposed
to the Anti-Money Laundering and the Countering the Financing of Terrorism (AML/CFT) Act
of 2009. The combined opposition in Parliament chose to use its one seat majority to disapprove
of the changes submitted by the Minister of Finance in what is viewed by the Government as an
attempt to blackmail them into bartering for its approval.

Whilst this is being debated time and time again, in the meanwhile, international banks have
been imposing sanctions and cutting ties with Guyanese banks because they have not passed the
bill. Amongst the many impacts of this is the inability for local businesses to do business with
foreign entities. Small businesses in particular are affected because they are either unable to be
paid for exports or payments are delayed and subject to high fines.

Energy Costs

Demand for new and improved products and services that are supported by technology has
already taken a permanent seat in the world. Industrialisation has already become the key feature
of many small businesses today. The use of specialized equipment has paved the way for a
competitive market on various fronts. Small businesses have also learned to adapt themselves to
the use of specialized equipment for production and service provision as well as its use in the
office for administration purposes.

The common denominator in all sectors regardless of specialization, is that of energy. The final
price of a product or service can be heavily dependent on the cost of energy. Therefore, it is
important to acquire energy at the lowest cost possible to ensure market price remains
competitive. In Guyana, energy costs have been a thorn in the side of small businesses. Coupled
with the fluctuating oil prices in the region, many SMBs are forced to incur another capital
expenditure: that of equipment that will allow them to self-generate electricity because of the
high prices per kilowatt-hour demanded by the power company.

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In recent times, efforts by the Government of Guyana to seek funding for more renewable energy
efforts such as hydro-electricity projects, for example: the Amaila Falls Hydro-electric dam, have
also suffered the same fate as the AML/CFT amendments.

Mechanisms to vault these challenge

This is a very volatile issue. The small business community is almost powerless in this regard.
They operate in an environment where restrictions and sanctions by higher powers can adversely
affect their business and their plans to grow and diversify. For new entrepreneurs, it might be
less of a burden as they could be able to do research and propose plans that may allow for
circumventing the major hurdles. For example, when a SMB owner is faced with a critical
decision between expanding their business by seeking external markets or promote their product
or service on a larger scale locally, the results of their research will conclude that it may be more
profitable to explore the latter option.

The minority Government seems to be powerless as well. The discourses and speeches heard
through the media only seem to indicate complaints and pleading with the majority opposition
parties. The Government needs to be a bit more proactive in calling for support from the
international community, organizing campaigns geared to educating the public on crucial matters
such as the AML/CFT amendments and the hydro-electric project.

However, there is hope still. In Guyana, General and Regional Elections are scheduled to be held
on May 11, 2015 (a mere two weeks from today), more than a year ahead of schedule. The
reason for this is that the opposition, chose to use their one-seat majority to invoke a no
confidence motion in the current administration resulting in the dissolution of Parliament and the
calling of elections. This is a chance to regain balance in Parliament. Whether the opposition
takes power or the incumbent PPP/C regains power, the political parties must strive to work
together for the betterment of the country and its people.

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3. CONCLUSIONS & RECCOMENDATIONS

Major challenges facing small businesses in the region today warrant more attention due to the
fact that these businesses account for over two thirds of total job creation in the region. Through
the provision of high-quality products and services assisted by technological advancements,
small businesses are able to provide and contribute to an overall better lifestyle for their
communities and the region as a whole. Therefore, governments and economic entities need to
ensure that a healthy environment is sustained through legislative frameworks and policies to
ensure that small businesses can be provided the necessary assistance in order to overcome the
myriad of challenges they may face throughout their lifecycle.

Of the challenges identified, this research sought to identify the major issues that plague micro,
small and medium sized businesses in the context of the Caribbean with particular emphasis on
Guyana. These include:

 The ability to access affordable financing for start-up ventures and expanding operations
 The issue of unfair trade practices such as non-tariff barriers and abuse of dominant
positions
 A general lack of business skills which are crucial to the success of any small business
 Client and founder dependence and
 Political hurdles which may influence the performance or ability to expand of a small
business.

The major impacts of these challenges were discussed citing, where relevant, examples that
demonstrate these as well as existing mechanisms that seek to assist SMBs in reducing the
impact of these challenges. Where relevant, recommendations were made for possible
mechanisms that might work to overcome said challenges.

It is recommended that further research be done in specific economies such as Guyana and in-
depth analyses be performed as to other challenges that might not be as significant in frequency
but once it occurs, can lead to the detriment of a small business. One such example that should
be explored is that of the effect of balancing quality with growth in an organisation. This could
become an issue where a company finds itself in a position to expand but if this expansion is not

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managed and executed in a strategic way, in keeping with the overall strategic goals, the overall
quality of current products or services could be harmed. Many small business owners have a
proclivity for micro-management, for which the culture of the employees may grow accustomed
to, but in the end, such habits need to be dissuaded if the business is to scale and grow.

It will be further recommended that frequent and comprehensive analyses be performed by either
governments, private-sector organisations or through the aid of the international communities as
to the challenges facing SMBs in particular periods of time. We all can appreciate the turbulent
and ever-evolving nature that is globalisation and the effect that technological advancements
have impacted the way in which we perform tasks and market our products and services.
Therefore, periodic research will ensure that sufficient information is made available to the wider
community and small business assistance initiatives taking into account these advancements.

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4. BIBLIOGRAPHY

Beattie, Andrew. 2011. "5 Biggest Challenges Facing Your Small Business." Investopedia.
December 8. http://www.investopedia.com/articles/pf/12/small-business-challenges.asp.

Commission of the European Communities. 2003. "Commission Recommendation concerning

the definition of micro, small and medium-sized enterprises." Official Journal of the
European Union (European Commission) 36 (124). http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:124:0036:0041:EN:PDF.

CreditInfo Guyana. n.d. About Us. http://www.creditinfo.gy/frontpage/about-us/.

Government of Guyana. 2004. "Small Business Act 2004." Laws of Guyana. Geogetown:
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Guyana Elections Commission. 2011. General Elections Results 2011. Georgetown, December
1. http://www.guyana.org/Elections/elections_2011.html.

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http://www.guyanareddfund.org/index.php?option=com_content&view=article&id=112:
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Guyana Revenue Authority. n.d. Environmental Tax - Frequently Asked Questions. Accessed
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Guyana Times. 2014. "Unfair trading a challenge for small business." Guyana Times
International, December 12. http://www.guyanatimesgy.com/2014/12/12/unfair-trading-
a-challenge-for-small-business/.

IPED. n.d. About Us . Georgetown. http://www.ipedgy.com/.

Knowledge @ Wharton. 2008. Falling Behind: The Many Challenges Faced by Small
Companies in Latin America. Pennsylvania, May 28.

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 http://knowledge.wharton.upenn.edu/article/falling-behind-the-many-challenges-faced-
by-small-companies-in-latin-america/.

Korea Fair Trade Commission. 2010. Unfair Trade Practices.

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Ministry of Tourism, Industry and Commerce. n.d. The Small Business Bureau (SBB).
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Private Sector Commission. 1992. About Us - Mission Statement. http://psc.org.gy/about/#intro.

Stabroek News. 2014. Guyana ordered by CCJ to repay $1.2B in environment tax to Suriname
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Suite, Winston H.E. 2015. "Lectures from PRMG 6017 - Project Management for Small and
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Tracey, John. 2013. "High risks limit bank loans to small businesses – Tracey." Guyana Times
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Williams, Nigel. 2013. "Financing for Small Business." Guyana Times International, January 31.
http://www.guyanatimesinternational.com/?p=23999.

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