BEING COMPLIANT MATTERS!

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“I have a business idea and wanted to make sure that I’m on the right track to get it started,” said Mrs. Jean Brathwaite to us, when she met with our team one day.

“I was told that I should speak with you guys before making my next move,” she informed us.

“We applaud you, Mrs. Braithwaite for coming to us at this phase of your business plans,” we said with a smile. “Most people don’t even stop to design their structural framework that underpins and support their business rollout.”

What are we talking about here?

Well, it’s great to have most of your funding and staff hiring processes identified among other key aspects of your business plans but there are other foundational structures that will need to be put in place immediately.

These are centered around the need to ensure that your business is compliant with the business regulations within Barbados.

Here are a few that we shared with Mrs. Brathwaite to consider.

1. Determine the legal structure that suits your business risk, such as the formation of your business as either a sole proprietor, partnership or incorporated company.

2. If you’re hiring staff, make sure you seek advice on things like, how to prepare employment letters; understanding the various Employment Acts, like the Holiday with Pay Act and the Employment Rights Act, among others. These will ensure that you are compliant with the employment legal requirements.

3. Record keeping is critical to your business. It accounts for the financial transactions of your business’ activities. These in turn result in the compilation of your financial reports which are used primarily for your financial review and forward planning. The secondary use of the financial reports is to be compliant with the reporting requirements to the Barbados Revenue Authority. It’s a myth that you only need to report or ‘file a tax return’ if you’ve ‘made a profit’. No. It’s about reporting as a compliant requirement.

4. Reporting to the National Insurance office is another statutory compliant requirement. This comprise providing documentation of monies deducted from your employees’ wages or salaries including your employer’s corresponding portion of levies. Payment of these deductions and levies must be paid into the department on time to avoid any penalties.

5. Another statutory reporting requirement to the Barbados Revenue Authority, using their Tax Administration Management Information System (TAMIS), is that of income tax deducted from your employees’ pay and collected by the employer. All deductions must be remitted to the department on time in order to be compliant.

6. From income year 2015, the Corporate Affairs and Intellectual Property Office started to enforce an already established requirement, stating that all incorporated companies (except external companies) report certain legal and financial information on their annual returns within a specific timeframe along with the associated fee. Failure to report on time resulted in penalties of $10 per day for each day the filing was outstanding up to a maximum, at that time, of $3,650 per year! Fast forward to income year 2019 and onwards; the maximum penalty is $3,000 for each outstanding year. Most companies don’t even know of this compliant requirement and even those that know, often miss their deadline.

7. Here’s one more. If you are registered for Value Added Tax (VAT) which means that you can charge VAT on the goods and services you provide and similarly you can claim VAT on the goods and services that you purchase from VAT registrants, you must comply with the Barbados Revenue Authority’s reporting requirements. That is, file a VAT report and return once every two months while you’re a VAT registrant. That is, even if your business is not buying or selling anything. To cease reporting you must de-register or else you’ll pay penalties for non-compliance.

Well, during our 30 minutes, Mrs. Braithwaite was sitting there soaking in all of this in amazement!

And we recall her saying: “I didn’t know all of these were compliant requirements with seemingly severe and costly penalties for non-compliance! I’m really glad I took the advice and stopped by to chat with you all.”

Mrs. Braithwaite is now armed with the information from us as to what else she needs to sort out in order to be structurally ready for getting her business pillars in order.

Please do not do this on your own or Google it as a means of DIY. Find the right person(s) to advise and guide you along this phase of your business journey! It could cost you more than you think if you don’t.

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Igniting the Entrepreneurial Spirit from Within

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I’m fed up, tired and frustrated with working for someone. Doing the same routine every day, week and even, every month…for the past 20 years!

I’ve had enough! For the past few months, I’ve been thinking of starting my own business.

Maybe, next year?

Does this sound familiar to some of you?

Well, if it does, here are some things that somehow seem to consume our thoughts…

1. Fear! Fear! Agggghhhh! Fear of the insecurity associated with making the decision.
2. Where will I get clients from?
3. Where will I find the money to start this?

Banks don’t want to take any risks in lending their money to start ups.

4. What do I know about running a business?
5. Can I make it on my own? Am I mentally prepared for this?
6. Who can I trust? I mean really, really trust to help see me through this?

These are just a few things that pass through our minds when we’re fearful of taking the plunge. But don’t worry…it’s natural to have such thoughts. We all did in the beginning.

But we should never stay in that place for too long. So here are a few tips to help get you past most of your paralysis.

1. Write out the real and objective reasons why you would want to start a business. Even, if you were doing it as a side hustle so far.

2. Create a checklist or set of actions leading to sound results that would move your ideas forward. Like preparing a plan to see how the business would be run across the fundamental pillars of the business. Finance, marketing and production, to name a few.

3. Do some research on the industry in which you wish to operate. Make sure that it leads you to designing and creating your business that distinguishes it from the others. Remember, businesses are created to solve consumers’ challenges or problems. Be innovative and investigate smart solutions wherever possible.

4. You would never have complete or perfect plans set in place before you actually activate the operations of your business. So, once you can get it to at least 80% readiness…then take the plunge!

5. Before you start though, gather your ‘inner circle’ of trusted advisors…ones you may need to contract. Most times, without prejudice, when you ‘ask’ people to assist you with guiding you through the process and they are not remunerated, their commitment is not necessarily at the level you require. That’s usually because they are just helping you in their spare time or as a favour. Although, they really mean well.

6. Finally, believe in yourself. Not out of mere self-belief but because of your gifts and talents that you bring to the table, that are relevant to the business. You must yearn to learn. Gaining knowledge through business training and advisory consultations from professionals, not just persons who are ‘successful ‘ in business, is invaluable. Just make sure you choose the right professional!

I hope these few suggestions help you ease into your decision. Only you and you alone, can know when you’re ready to make your move. However, if you need help talking though any of these, just contact us and we will be delighted to guide you on your path.

Send me your feedback with either comments, more suggestions or even how these suggestions helped you in any way.

By Olivet Hinds, COO, Dowell’s Advisory Services Inc.

 

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Your Response to the Pandemic

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It’s been more than 15 months as we continue to struggle through this pandemic season.

We have been challenged as never before to face and deal with:

1. Our personal relationships
2. Our business relationships
3. The next steps in our attempt to save our business
4. How to treat to the displacement of our employees and still retain talent
5. Re-engineering, re-positioning and re­ tooling our business processes to stay in the game.

The key to resolving all of these events lies in our response to each of them. That requires us to be calm, patient, thoughtful, innovative and action oriented.

Let’s explore how we respond to the business side of things. Remember, it is not what happens to us in life that matters, but how we respond to what happens to us, that’s what makes the difference!

If your business is closed right now and you are waiting for the Barbados economy to re­ open so that your business can be swept up in it, here are 5 actions or activities you may wish to consider as part of your plans in order to be ready.

1. We all need a Blueprint to guide our path. So, spend the time to really look over each pillar within your organization. Human resources; marketing; process flows; procedures and policies; security, information communications and technology, both internal and external. Even your legal structure. And don’t forget the important financial pillar.

2. Examine the need to pivot to a different delivery process to your customers. Or even determine if the demographics of your customer base have shifted materially.

3. Assess what cash and cash convertible assets are accessible to you. Check your 30 to 60-day liabilities as well. Use this to determine a 12-week rolling cash flow futurecast.

4. Have discussions with the key talent within your organization to see what, if any, things can be done, aside from the obvious paying of full salary, to both ease the financial pressure on their families while balancing any returns to your organization while doing so.

5. Stay mentally and physically active. Decide to either start or continue a weekly exercise routine. Involve your household if possible

and make it fun. If the exercise is outdoors, use the opportunity to keep your mind sharp by adding, subtracting, multiplying or dividing vehicle numbers on passing vehicle number plates. Or count the number of red cars you see along the way. Numeric exercises keep the dendrites in your brain alert and active.

I hope these few suggestions were useful and that you can actually apply them immediately.

Send me your feedback with either comments, more suggestions or even how these actions helped you in anyway.

By Oral R. Dowell CEO, Dowell’s Advisory Services Inc.

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