It’s obvious that the entrepreneurial spirit is alive and well in the Cayman Islands, which boasts thousands of small businesses. Some are new ventures and some have become local traditions.
They may not be as visible on a day-to-day basis as the big name companies, like the branded Seven Mile Beach hotels or major accounting firms that individually have a larger footprint and have more resources devoted to marketing. However, small businesses as a whole are the major source of employment for people in the Islands, and that fact is reflected in various statistical sources.
Chamber Small Business Survey
One of the Cayman Islands Chamber of Commerce’s functions is regular surveys of members in order to gauge and publicise the positions of the business community.
In March 2012, the Chamber conducted a Small Business Survey, garnering 52 responses from businesses with 10 or fewer employees.
According to the results, the top three challenges facing small businesses are business overhead costs, work permit fees and import duties. Other challenges are energy bills, trade and business licensing fees, unlicensed business competition, debt collection, government support, slow government response time and unfair competition.
In addition to helping address the above challenges, respondents said they wanted the Chamber to advocate for more options for funding/financial assistance, more encouragement or incentives, helping small businesses reach target markets at an affordable price, professional training for young Caymanians and upholding the code of ethics of the better business council for all members.
“We have a lot of huge contracts that never pay us on time, it would be great to have a small business bank that can exchange job orders for actual cash,” said one respondent, apparently alluding to accounts receivable financing or factoring, where a financial institution provides capital to businesses that have creditworthy contracts.
Those options are generally only available to larger businesses with significant annual revenues.
Respondents said they wanted the Chamber to help teach other local businesses to ‘buy local’ – to purchase from Caymanian suppliers rather than entities in Miami or New York. Others wanted better regulations in place for health insurance.
One respondent said, “Work to stamp out corruption at all levels of government.”
According to the survey results, 45 per cent of respondents had fewer than five employees, and about 63 per cent leased office space. The top five small business sectors were retail, construction, services, financial services and real estate.
An equal percentage of respondents said their profits decreased in 2011 as said their profits increased in 2011; however, optimism prevails, as 63 per cent of respondents said they expect profits to increase in 2012. However, 65 per cent of respondents said they plan to maintain the scope of their operations this year.
Most businesses are small
According to information provided by the government’s Economic and Statistics Office, the majority of the workforce (56 per cent) is employed by businesses with fewer than 25 employees with 37 per cent of the workforce employed in businesses with one to 10 employees.
More than two-thirds of employees, 69 per cent, work for businesses with fewer than 50 employees. And 31 per cent of employees work for the largest businesses, with 50 or more employees.
During the Cayman Islands Chamber of Commerce’s Annual General meeting in late 2011, Chamber Chief Executive Officer Wil Pineau said the Chamber has 708 corporate members, two-thirds of which are small businesses, defined as having less than 10 employees.
The government doesn’t have a formal definition for what constitutes a small business, but in fall 2010, Department of Commerce and Investment head Dax Basdeo said 55 to 60 per cent of businesses in the Cayman Islands have 10 or fewer employees, and 80 to 85 per cent of businesses have 25 or fewer employees.
About 5,000 companies that do business locally are registered with the Trade and Business Licensing Board. According to the Economics and Statistics Office, Cayman has about 29,700 private sector workers, meaning that the average business in Cayman has about six employees.
From 2006 to 2009, the government’s Labour Force Surveys tracked the number of employees and people who are self-employed (with and without employees) in Cayman. The government did not perform a Labour Force Survey for 2010 because the information would also be gathered as part of the Cayman Islands Census 2010, the results of which were released in early April.
While the overall numbers fluctuate from year to year, the percentage of self-employed people remained fairly consistent, ranging from 7 to 8 per cent from 2007-2010 and composing 10 per cent of the total workforce in 2006 (when the survey’s data were categorised differently from the other years). The total number of people identified as self-employed, with employees or without, was 3,538 in 2006; 2,672 in 2007; 3,246 in 2008; 2,503 in 2009; and 2,569 in 2010.
According to the surveys, the overwhelming majority of self-employed people are Caymanian. From 2006 to 2010, Caymanians accounted for anywhere between 83 and 91 per cent of the self-employed population, either with employees or without.
In contrast, the majority of paid employees are non-Caymanian, with their share ranging from 54 to 60 per cent over the same time period. Looking at it a different way, self-employed Caymanian accounted for between 6 and 9 per cent of the total workforce from 2006 to 2010, whereas self-employed non-Caymanians accounted for only 1 to 2 per cent of the non-Caymanian workforce.
The same data also show that the vast majority of self-employed people are male. From 2006 to 2010, men accounted for between 70 and 74 per cent of the self-employed population, either with employees or without.
The number of men and women paid employees, meanwhile, has been roughly equal. Self-employed males accounted for between 6 and 9 per cent of the workforce. In contrast, self-employed females accounted for only 1 to 2 per cent of the workforce.
The 2010 census broke out self-employed numbers by status and gender. According to the results, the working population was 22 per cent Caymanian male, 23 per cent Caymanian female, 29 per cent non-Caymanian male and 26 per cent non-Caymanian female.
The paid employee population was 19 per cent Caymanian male, 23 per cent Caymanian female, 31 per cent non-Caymanian male and 27 per cent non-Caymanian female. The self-employed population was 61 per cent Caymanian male, 23 per cent Caymanian female, 12 per cent non-Caymanian male and 4 per cent non-Caymanian female.