Mature small companies in ‘50/50 survival toss-up’
BY NEIL HARTNELL
Tribune Business Editor
A small business consultant says it is “a 50/50 mistake” whether many of his “more mature” small business clients can survive the slow recovery of the Bahamian economy from COVID-19.
Mark A Turnquest, president of the proposed 242 Small Business Association and Resource Center and head of his own consulting firm, said the struggles of his long-time clients were contrasted with a surge of new entrepreneurs he mentored who accessed the $ 5,000 grant on offer have from the Small Business Development Center (SBDC).
However, he announced that many of his larger small and medium-sized customers are now having “difficulty” repaying the up to $ 20,000 in business continuity loans they received through SBDC at the height of the COVID-19 pandemic last year had received.
“They received $ 15,000 to $ 20,000 and a grant of $ 4,000 to $ 5,000,” said Turnquest, “when the government was spending funds to existing businesses through February. Some of those who got the money gave it all out early to maintain the existing staff and product levels.
“Unfortunately, it didn’t live up to expectations. They spent a lot of money upfront to keep staff high and certain stocks and products high, but customer demand did not meet their expectations for return and purchase.
“You are just feeling the pinch. Many of them knew they were in a good location and could negotiate the rent with the landlord, and some had to pay the full amount so that this burden was on them. Nobody wanted to move. I have advised them that in order to survive they will have to make adjustments again and face reality. “
Mr Turnquest said many of his corporate clients in this position are between 50 and 60 years old and “just know they are in business. They don’t know how to survive when they are out of business and they don’t know how to deal with it. It’s not that they can start from scratch and take stock. “
He warned that economic activity is unlikely to return for two to three years in 2019, adding, “They are barely surviving due to their gross margins. If you don’t hit that, you’re done. In my judgment it’s a 50/50 litter; 50 percent chance that they will make it. It all depends on how much tourism product comes into the country. I don’t see any major change this year. “
Mr Turnquest said many of his clients, such as wedding and destination planners, worked in the tourism and services sector of the economy, which has been particularly hard hit by the pandemic. He added that small businesses seeking $ 40,000 or more funding through the SBDC had to turn to banks, which were often somewhat reluctant to lend.
