Small and medium sized businesses may be getting some added attention in coming months as a result of the last election.
A release from the Cayman Islands Investment Bureau states that in discussions with the bureau, Leader of Government Business and Minister of Development McKeeva Bush made it clear that as per his campaign promise, the growth and development of the small business sector was high on his list of priorities for his first year in office.
‘I fully recognise that small businesses are key drivers of the economic regeneration I envision for this country,’ he said.
‘I therefore plan to review the existing laws and regulations that govern this sector with a view to addressing any roadblocks that may limit growth and keep us competitive.’
Executive Director of the Cayman Islands Investment Bureau, Dr. Dax Basdeo reiterated the importance of a renewed focus on the small business sector.
‘Minister Bush’s vision for this vital economic sector is definitely in line with what we have been quietly trying to achieve for the past few years,’ he said.
‘Having realised the importance of small business development as a catalyst for continued economic prosperity, we had already started work on the establishment of clear small business definitions as we knew this would be an essential base to inform Government policy.’
Early definitions of small business were based on work conducted by the Department of Employee Relations in 2003 and though now somewhat dated, that data provided firm evidence of the important role that micro, small to medium-sized enterprises play in the Cayman Islands economy. This work showed that roughly 81% of businesses in Cayman have less than 25 employees.
The CI Development Bank has also been utilizing a similar definition with the addition of financial criteria to better differentiate businesses that are most vulnerable and thus in greater need of assistance.
‘The existence of a common definition for small businesses will contribute to our efforts in identifying our target market and in turn streamline our processes accordingly,’ said Ralph Lewis, general manager of the Development Bank.
Building public consensus and establishing clear definitions on this sector will prove critical for future planning. Any government policy that aims to support entrepreneurial development via technical or financial assistance must have clear criteria in place for selection. Additionally, any attempt to monitor the health of the sector will hinge on the ability to segment and identify businesses that fall within various categories.
Further to consultations with key stakeholder groups and solicitation of input from the public, the Investment Bureau has attempted to set out the parameters for future small business categorization. Once drafted, definitions were sent to public and private sector organizations for feedback.
Initial responses favoured micro businesses being defined as companies with less than 5 employees, not counting the owners. They would be independently owned and operated, with close control over operations. Net worth of the business should not exceed CI $75,000 in the preceding fiscal year and annual sales should not exceed CI$ 100, 000.
A small business would be defined as a company with up to 10 employees not counting the owner with a similar independent management structure. Net worth of the business should not exceed CI $300, 000 and annual sales should be less than or equal to $250,000. A medium sized business would have up to 25 employees, not counting the owner and annual sales would not exceed CI $750,000. The Bureau welcomes public comments and requests that any queries and or recommendations be made by end of July.
For more information, please email the CIIB at [email protected] or call 945-0943