Defining exactly what a small business is has been a lengthy and complicated task for the DCI and that is the vital starting point from which small businesses may gain any possible financial breaks by government.
“It’s hard to draw the line as to what defines a small business,” Chief Officer in the Ministry of Finance Dax Basdeo states. “Should it be financial criteria, i.e. only businesses with a certain amount of capital? Or should the term be defined by the number of individuals working within the business, maybe 10 or less employees?” he ponders.
And then once a business has been defined as “small” Basdeo says the next hurdle is trying to identify the small business. “How do they prove that they are small?” he asks. “Changes in personnel may mean that the business then exceeds the requisite number of employees, which may in turn change the business’s status as a small business.”
If the definition is based on the financial bottom line of an organisation this also may cause difficulties, as Basdeo explains that some small businesses simply don’t produce financial statements and would therefore have no proof that they were indeed small.
The DCI is in discussion with organisations such as the Cayman Islands Small Business Association to gain their feedback and assistance with defining and recognising small businesses. Basdeo informs that one potential way to formally recognise small businesses is through the revisions that are being worked on to the Trade & Business Licensing Law.
The Trade and Business Licensing Law is, in itself, under scrutiny by the Ministry of Finance with revisions being drafted to allow for a much more user-friendly piece of legislation that will be far more transparent, particularly when it comes to the various categories of businesses. The regulations will classify each category of business under international standards, bringing it into line with the international standards already being implemented by the government’s Immigration Department.
“There will be far more clarity when it comes to classifying business,” Basdeo says. “We hope that the new regulations will speed up the processing of applications and cut out the requirement for filing a lot of paperwork each year.”
In particular, sign off for 100 per cent Caymanian-owned businesses will be a far speedier affair, with new applications hopefully turned around in about a week.
“It may take a little longer for businesses with a partial non-Caymanian ownership, but we are still hoping to turn these around in a month or less,” Basdeo explains.
Another feature likely to arise through the revisions to the TBL law is an online listing of businesses in each industry.
“One of the challenges that many small businesses face is poor market research, and particularly, knowledge of the level of competition that they face,” Basdeo explains. “We intend to have much better and more useful statistics when it comes to the business types that are operating locally, and this can better inform entrepreneurs looking to go into or expand their businesses.”
Due to the number and significance of the changes being contemplated, the Department is being very careful to consult with key stakeholder groups to ensure that these changes will increase the efficiency and effectiveness of the business licensing process. Nevertheless, it is expected that the proposed revisions to this legislation will be brought forward for public consultation by the end of the year.
Small Business Development Centre
Another new idea in the pipeline is the possibility of creating a centre for small businesses, with a link to the University College of the Cayman Islands. “The idea has been around for a while,” DCI Business Advisor Charmaine Moss says. “It’s a question of taking the best practices from countries which already have an established centre for small business, such as the UK, US and Canada, and making it work for Cayman. The model we are working from is closely aligned to that used in Florida.”
Programmes such as the Student Consulting Programme was design based on material provided by one of the small business centre in Florida. One of the attractions of this programme is that it allows UCCI to provide business students with practical examples of the concepts being taught. Small business clients of the DCI also benefit from having a team of student consultants who can work to develop business plans, marketing plans, or set up accounts for the business.
“It’s a really useful relationship for us because it helps us help our clients in terms of meeting their needs,” Basdeo confirms. “The success of this partnership is one of the reasons that we are partnering with UCCI to develop a more comprehensive small business centre.”
Key stakeholders that have been invited to form a steering committee to guide the centre and decide on programmes and initiatives include: CISBA, Chamber of Commerce, Cayman Angel Investors Network, Cayman Islands Development Bank, as well as representatives from the DCI and UCCI.