Small business owners reflect on the issues they face
As many a politician the world over has said, small business is the lifeblood of any economy. While Bermuda is not immune from the effects of the global recession, being that the Island, is in fact, an island, it has its own set of very different circumstances that significantly affect the small business industry.
As the election looms just weeks away,
The Royal Gazette wanted to get a bird’s-eye view of what the economic issues are for small business owners.
What is on your ‘wish list’ for the elected government to help spur growth in the small business industry?
Jay Riihiluoma: Our market is mainly tourist-related, and if I had a wish it would be to see cruise ships come back into Hamilton and St George’s. It’s been a concern of mine ever since the two-pier concept was developed in Dockyard.
I was concerned in 2008 and here we are four-and-a-half years later and we’re seeing cruise ships drop some of their trips to Bermuda and the only reason I can see for that is that there isn’t the demand there. People aren’t having the experience of Bermuda that we would like them to have.
Whether we get smaller ships into Hamilton, get the cruise line’s tenders to help us move passengers across the Island, we need to make sure those people have a good time and say ‘this was a great place and I’d love to come back’.
Kevin Hill: My wish is to keep the payroll tax relief, which has helped us a lot. With that savings, it stopped us [Pembroke, Tile & Stone] from laying off people. That’s money we have used to reinvest in the employees.
Jay Riihiluoma: With our savings we replaced two large air conditioning units with the funds we had saved from payroll tax relief and now we’re able to save quite a bit on energy costs because the new systems are more efficient.
Lynn Hamilton: To the best of my knowledge, the construction industry received no assistance from the payroll tax relief programme. They tend to be one of the largest employers on the Island and they hire everyone from labourers to masons and everyone else, but no relief in sight for the industry. No work and no relief for them, which means no jobs.
Ashley Bean: My wish is for more cruise ships and to attract more international business people. A lot of our customers are leaving the Island. We lose that $10 that they come in and spend every day.
In the summertime it’s the tourists off the ship that sustain us but in the wintertime it’s the people that are more health-conscious and people that are used to this kind of shop in their own country who come down to get a nice coffee and protein shake.
We just had a couple of our regular customers yesterday tell us that they are leaving for good in January. We feel it on every level.
Lynn Hamilton: The same goes for the beauty industry. A lot of our regular clients are leaving and a lot of our clients were working for companies that have closed down.
Ashley Bean: Another wish is about the rules that the Corporation of Hamilton is enforcing, like the awning issue or having electronic advertising screens. I should be able to advertise the way I want to advertise.
Jay Riihiluoma: I’d like to get our vote back in the City of Hamilton. I pay more than $10,000 a year in taxes to the Corporation of Hamilton and I do not get one vote. I’m a property owner and a tenant but because I don’t live in the city, I don’t get to vote.
Lynn Hamilton: My wish is to get the Departments of Immigration and Labour and Training working the right way. Neither work and they haven’t worked for many years.
You hire someone in the beauty business, it takes a year to two years for a therapist to build a full clientele and by the time they build it all up, you have maybe two or three years to make money off of them before they are asked to leave the Island. Then you have to start all over again.
Our other business, fencing, there are very few qualified people to do fencing on the Island save the people we have hired and the Government views it as a non-qualified job.
I’ve seen some work out there by people who do fencing and it’s not pretty. When you train local people to do the way it should be done, they leave.
What are some of the major issues facing small business? I’m concerned with the decline of international business. Some of the policies Government has installed have hurt Bermuda, like term limits. Businesses that come are here to do a job and get it done, not be told what to do. If tourists and international business are here, the Bermudian gets the trickle-down effect of the income and then we’re able to spend.
Ashley Bean: We get a lot of cruise ship passengers because of our product, coffee is a big thing for visitors. Transportation is the number one issue.
There have been a couple of instances this year where we’ve had strikes and Government not doing what they can to end that strike so people can move around the Island. We pay the price for that.
Sydney Bean: I’ve heard that we do have more buses but half the fleet is in for repair. The ferry schedules are also a problem — cut the evening ferry schedules.
Town is lit up beautifully right now but if you’re in Dockyard, how are you going to get to see it? Can’t catch the ferry and the buses aren’t available.
Ashley Bean: We used to benefit a lot off of the late ferry with the tourists coming into Hamilton. We stayed open until 11pm, but when they stopped the ferry, we started closing at 9pm and now in the wintertime, we close at 7pm because there are less people around. Transportation has a big impact on getting people to your door.
Lynn Hamilton: Small businesses are hit with payroll tax, corporation and land tax if you are in Hamilton, social insurance, pensions, health insurance, duty and freight, rent and the Government expects the Bermuda business person to stay in business and hire people.
You can’t physically do it. You don’t make enough money. We’re all running at negatives and we’ll all end up closing.
Ashley Bean: We’ve only been open three years and it’s not getting any easier for us. That’s why we’re working 14 to 21 days without a day off.
What are some of your solutions to these issues? In regards to tourism, use cruise lines’ on-board tenders. Those cruise ships have the capacity to carry tenders and we could utilise them to move people around the Island without having to invest in large ferries and more buses. Let’s see if we can take advantage of that.
The other thought was chartered cruise ships. If the Island chartered a cruise ship, we could then benefit by distributing those passengers around the Island as we would like and we could also use them to sell the Island, which our current cruise lines don’t actually do — they sell themselves. You could use this trip to give it a Bermuda feel and sell other parts of the Island at the same time.
Kevin Hill: My concern is international business — this term limit issue from day one has been a disaster. Some of those policies that have been put into place should be reversed.
This would benefit the whole Island. With our tile company, you just don’t have locals buying, you have architects and designers who buy on behalf of the international business people who move into houses or condos that will be renovated.
And with that income, then you hire Bermudians and then the Bermudians, will, in turn, spend locally. That’s what we depend on.
Lynn Hamilton: There is a lot of work that needs to be done on this Island that could be helped by the construction industry. Schools that are falling apart, roads are in horrendous condition and there needs to be more transparency in how contracts are awarded.
I don’t understand how Government does its apportioning of what jobs need to be done and who they give it to. If they are going to spend money on things, spend it on fixing the Island.
Sydney Bean: Let the cruise ships gamble in port. We hear it all the time from customers: “Oh I can’t gamble. While Bermuda is beautiful, it’s the last time I come this Island”.
Bermudians can’t go on [visiting] cruise ships, we can’t go and lose our life savings, we’re unaffected by it. And, we need to work on transportation for tourists. Get that system working. If there are buses available, let’s fix them up and get them going.
Jay Riihiluoma: It’s economy of scale. The smaller ships have to charge more, and one of the things you could do to attract more people is to allow gambling and use it as a bargaining chip. Maybe the larger ships in Dockyard can’t gamble but the smaller in Hamilton, can.
Ashley Bean: We need to make it more attractive to come here. We need to invest not in just an advertisement but our infrastructure and that includes more things to do for tourists. Work to get the tourists to have a good time.
Lynn Hamilton: Another solution that a couple of other retailers and I have bandied about is a sales tax. Right now, we are paying tax on items whether it sells or not.
Before items have even hit your warehouse, you’ve paid government tax. If Government was to get rid of the customs duty as it is now and replace it with a sales tax on afterwards like other countries do, that would help small businesses.
Ashley Bean: If the government bodies would get feedback about policies from the people who are actually doing the work, I think we would have an easier time. If there is a conversation to be had, let’s do it and by working together, I think things could work more smoothly.
How to view local business in five years time — positive or negative? The way it’s going right now? Negative.
Lynn Hamilton: Negative.
Ashley Bean: Negative.
Sydney Bean: Negative.
Jay Riihiluoma: Negative.
Lynn Hamilton: I think you’ll find this year coming up a lot of companies going out of business.
Lynn Hamilton, owner of Face and Body and general manager of A1 Fencing, which is owned by her husband, Alan Whitecross
Kevin Hill, part-owner of Kita’s Hair Salon and Kita’s Wholesale with his wife Laquita Hill, and part-owner of Pembroke Tile & Stone
Jay Riihiluoma, manager of Riihiluoma’s Flying Colours
Ashley and Sydney Bean, co-owners of Juice & Beans