Supporting small businesses and entrepreneurs
There have been numerous articles on the scope of the economic challenges Bermuda will be facing over the next few years. As we move forward in the next phases of cautious reopening, there are obvious sectors that will require more support — in particular, hospitality, restaurants and the retail industries.
The Government, the business community as well as the newly formed Economic Advisory Committee will need to ensure that there is specific focus on supporting entrepreneurs and small businesses as part of the broader economic recovery plan, given that small businesses are engines of employment, job creation and economic diversification.
Historically, the Bermuda economy was built on a thriving entrepreneurial community adopted to the needs of the global and local markets. The same is true today. More than ever, small businesses and entrepreneurs can play a role in what will be a challenging economic recovery.
To underline the present importance of the small business and entrepreneurship sector, according to the 2018 Government Employment Survey, of the almost 4,000 businesses in Bermuda, 3,500 of them had nine employees or fewer, representing 87 per cent of established businesses. Another way to look at this is that only 2 per cent of businesses in Bermuda have more than 50 employees.
The vast majority of businesses in Bermuda can be classified as entrepreneurial. These firms will have borne the brunt of our prolonged recession before Covid-19 and are obviously further impacted by the pandemic.
As we are likely to see a significant increase in unemployment and dislocation over the next several months, there is every possibility that Bermudians will increasingly turn to creating start-ups and small businesses.
Bermuda has the infrastructure to support small businesses and entrepreneurs
The good news is that Bermuda is fortunate to have two organisations specifically tailored to support small businesses and entrepreneurs — the Bermuda Economic Development Corporation and Ignite Bermuda. These organisations provide complementary and necessary services, and work in tandem.
The BEDC is funded primarily via government grant and provides a variety of education packages, toolboxes and events to small businesses. It also has an important role to play in enabling the financing of small businesses via loan guarantees, microloans and letters of credit. Importantly, the Government recently provided significant additional support to the BEDC through the expansion of the loan programmes.
Ignite, a registered charity, is funded privately and offers a full and comprehensive accelerator programme that provides in-depth education to entrepreneurs and companies as well a full mentor network and access to capital via private investors.
Ignite and the BEDC co-operate and complement each other both informally and formally — Erica Smith, the BEDC executive director, is on the Ignite board.
Both organisations have the ability to deliver support at scale. The BEDC over the years has assisted hundreds of entrepreneurs and small businesses. Ignite, operating only since March 2019 has supported about 170 entrepreneurs and small businesses to date. We have more than 80 entrepreneurs in our most recent cohort.
In spite of an increasingly polarised global and local community, there are many examples in Bermuda where diverse groups come together to create positive and sustainable outcomes. Ignite’s relationship with the BEDC is a good example of what we can create when private and public entities work together in a complementary manner with a common purpose.
Within Ignite, we have diverse stakeholder groups consisting of financial sponsors, numerous volunteers, investors and a very wonderful cohort of entrepreneurs working together to help Bermudians to create jobs, financial self-sufficiency and a more diversified economy.
Importantly, the BEDC and Ignite have as their core mission the desire to create equal opportunities in Bermuda for those who historically have not had equal access to business education, mentoring and capital. Until this is addressed, we are a poorer society in every way.
Supporting entrepreneurs is only one of many steps we need to take, but it is an important segment of the economy for us to support in the months and years ahead. Small businesses have been the economic bedrock of Bermuda in our history and will continue to be an important engine for Bermuda in the future.
Ignite is now open for applications for a new cohort to commence in August/September. We invite the entrepreneurial community to apply to “Cohort 3” and to do our part with the economic and opportunity recovery for Bermuda.
• Don Mackenzie, MBA, the chairman and owner of New Venture Holdings, is also chairman of Ignite. Applications for the new cohort should be made at www.ignitebermuda.com
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