The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A small business consultant says it is “a 50/50 toss up” as to whether many of his more “mature” small business clients can survive the Bahamian economy’s slow bounce back from COVID-19.

Mark A Turnquest, president of the proposed 242 Small Business Association and Resource Centre, and head of his own consulting firm, said the struggles of his long-standing clients contrasted with a wave of new entrepreneurs he is mentoring who have accessed the $5,000 grant offered by the Small Business Development Centre (SBDC).

However, he revealed that his larger small and medium-sized clients are now “struggling” in many instances to repay the up to $20,000 Business Continuity Loans they received via the SBDC at the height of the COVID-19 pandemic last year.

“They got $15,000 to $20,000, and a $4,000 to $5,000 grant,” Mr Turnquest explained, “as government gave out funds to existing businesses through to February. Some of those that got the money spent it all up early to maintain existing staff and product levels.

“Unfortunately, it did not meet expectations. They spent a lot of money upfront keeping staff levels up high, and certain inventory and products high, but customer demand did not meet their expectations in terms of coming back and buying.

“They’re feeling the pinch right now. A lot of them knew they had a good location, and were able to negotiate on the rent with the landlord, and some had to pay the full amount, so they had that burden on them. No one wanted to move. I advised them that to survive they have to make an adjustment again and face the reality.”

Mr Turnquest said many of his entrepreneurial clients in this position are aged in their 50s an d 60s, and “only know being in business. They don’t know how to survive if they’re not in business, and don’t know how to cope. It isn’t like they can start over and take stock”.

Warning that 2019 economic activity levels are unlikely to return for two to three years, he added of these entrepreneurs: “They’re barely surviving based on their gross margins. If they don’t meet that, they are finished. Based on my judgment it’s a 50/50 toss up; 50 percent chance they’ll make it. It all depends on how much tourism product comes into the country. I don’t see a significant change this year.”

Mr Turnquest said many of his clients, such as wedding and destination planners, were in the tourism and services sectors of the economy that have been especially hard hit by the pandemic. He added that small businesses seeking financing of $40,000 or more via the SBDC were having to “pitch” to the banks, who were often somewhat reluctant to lend.