A recent report illustrated a big earnings gap between whites and blacks. Bermuda's economic inequality is starkly illustrated in its capital where Front Street has long overshadowed the 'back of town'. However, help is on hand for businesses in North Hamilton, as Economic Empowerment Zone Agency director Erica Smith explains to Matthew Taylor in the last in the series examining reasons for the wealth gap.

Bermuda's lingering wealth gap between the races shows why it's important to help budding entrepreneurs get established, says Economic Empowerment Zone Agency director Erica Smith.

And she said the recession is forcing more people to start their own businesses.

She told The Royal Gazette: "Black Bermudians have always been entrepreneurs and continue to be so today.

"We are finding that, out of necessity, entrepreneurs are developing as a result of the current economic climate and its impact lay-offs, redundancies and downsizing.

"People are becoming entrepreneurs as a way to make ends meet."

She said the Economic Empowerment Zone (EEZ) was there to help relieve hardship and assist the disadvantaged, bringing them back into the economic mainstream.

The fact that whites earn on average 40 percent more than blacks reinforced the need for occasional interventions in the free market to close those gaps, said Ms Smith.

But crucially EEZs exist for set periods often ten years in order not to create a cycle of dependency. "EEZs are essentially a hand up and not a hand out."

The policies and products of the EEZ were all developed to reduce the wealth gap in North East Hamilton, said Ms Smith. Research is now being done on helping the West and East ends of the Island.

Businesses are being given access to expertise, resources and funding previously out of their reach.

So far the EEZ in North Hamilton has been a success. Since the EEZ office opened in December, around 25 business owners have been seen per month.

To date more than $90,000 in grants has been given to 14 clients and more than $62,000 in loans have been given to eight clients.

The grants have been the EEZ's most popular product. Businesses can receive up to $10,000 which they aren't required to be paid back.

Cash can be used towards accessing non-working capital items such as business plans, marketing plans, legal advice, company incorporation and architectural fees.

"We have also approved over $145,000 in customs duty payment to be deferred for five years for EEZ stakeholders," said Ms Smith.

"We believe we have been in contact with approximately 80 percent of North East Hamilton EEZ stakeholders."

She said the key problems facing entrepreneurs include a lack of adequate research and time spent developing a concrete business plan.

"Many people have dreams to own their own business only to find the service or items they are selling does not connect with Bermuda consumers.

"It's important to research whether the idea you have or the business you want to set up has a market."

Businesses often flounder because of a lack of capital.

"Many start-ups underestimate the amount of capital they will need to really solidify the business in the first two years.

"We can advise businesses and also our lending partners at HSBC and Butterfield Bank can give excellent advice."

High overheads are another drain for the unwary which is why the EEZ offers a Payroll Tax Concession programme and Customs Duty Deferral programme to help reduce overheads.

Businesses can also save on shipping by sharing containers to ship in items collectively.

A lack of affordable and available rental space can be another snag, said Ms Smith, who advised entrepreneurs to partner with compatible businesses to share spaces and reduce costs.

In addition, entrepreneurs should consider whether it's necessary to have a shop front or be in hot spots such as the City of Hamilton. Some businesses can operate through the Internet.

She added: "Other businesses can thrive from being located outside of the City or as a home-based business but of course this is dependent upon obtaining planning permission to operate from home."