Plummeting economic confidence among the world’s hirers caused by the fall in commodity prices has sparked a global employment freeze on the horizon. With this current state of affairs, becoming an entrepreneur has rapidly emerged as a more credible, if not a more necessary option for employment.
Access to finance is a determining factor for doing business and Barbados is in a prime position to support entrepreneurs. The Inter-American Development Bank has backed the Enhanced Access to Credit for Productivity program which gives small and medium-sized enterprises (SMEs) across the island more access to credit.
By opening up access to finance, Barbados is able to enhance its competitiveness on the global stage. Competitiveness by definition is “the ability and performance of a firm, sub-sector or country to sell and supply goods and services in a given market, in relation to the ability and performance of other firms, sub-sectors or countries in the same market.” In the Global Competitiveness Report 2014-2015 from World Economic Forum, Barbados ranks as second most competitive Caribbean country behind Puerto Rico.
Access to credit is an important link to productivity in Barbados. To continue to improve their performance, firms in Barbados can use the finance to preserve or increase their competitiveness, particularly in key economic sectors such as tourism. The guarantee mechanism of the Enhanced Access to Credit for Productivity program itself supports firms that are credit constrained as they do not meet conventional credit guarantees.
Financial literacy key to entrepreneurial success
Finance alone doesn’t determine the success of business. Becoming an entrepreneur does have other obstacles.
Research has already revealed that more than 50% of start-ups fail within the first five years. Financial literacy is a major skill most entrepreneurs fail to master that contributes to these disappointments. And it’s not something they can afford to ignore either as research has shown that inadequate financial management causes up to 36% of business failures.
Financial skills are at the heart of running a successful business but sadly many budding entrepreneurs are missing the vital knowledge needed to make informed and effective financial decisions.
Financial expertise helps to uncover a company’s financial strength, financing cost, financial flexibility, business control, financial risk, personal finances and business strategy. These areas are essential for highlighting business performance and the areas and capabilities able to innovate. After all, financial management is at its most powerful when used to drive improvements.
Expert financial advice crucial for all businesses
Crucially, financial knowledge is not an onus solely for entrepreneurs. There are plenty of good accountants that can give good financial advice, especially in the planning stages. They are experts in areas such as raising business finance, tax planning, business planning, and setting up financial management systems.
Across Barbados, there were 1,015 students (ACCA & Foundation) in May this year undergoing their training in professional accountancy, delivered by ACCA (the Association of Chartered Certified Accountants). They are learning a variety of technical and business-related components in their training. These bright and motivated individuals achieving the qualification will go on to provide finance and accounting services throughout the island. Through their commitment to this, and the rigorous grounding they have received in governance, good practice, ethics and transparency, the next generation of professional accountants will ensure that businesses in Barbados always strive to better themselves.
Having the right financial management is vital throughout the life of a business. Whether you are just starting out, have an established business or are looking towards a final exit from a firm, you need to have the right financial capabilities to ensure your organisation achieves its full potential.
Today’s businesses are changing and innovating more rapidly than ever before and their financial management needs must continue to evolve alongside their developments. Recognising the right financial management capabilities is imperative to their success.
Entrepreneurs are creative and capable people and Barbados has a particular talent for churning ones in the tech industry. They are the brains behind a growing number of programs across the sectors of Internet of Things, eLearning, Online Media, Mobile Gaming, Mobile Surveys, eAgriculture, eHealth, Social Shopping and more. Barbados is among the top three performing Caribbean countries in this space alongside Jamaica and Trinidad. With the expert support, guidance and financial investment available in Barbados, entrepreneurs will continue to flourish in the island.