Op-Ed: Tiny and small businesses

Written by  //  September 11, 2012  //  Biz Views  //  1 Comment

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Author Radamés Rosado is president of the Radagroup advertising, strategic creativity and marketing agency.

I believe we’ve wasted our time trying to classify the unclassifiable. At least in this island. The government sector tries to establish margins, limits and a string of definitions on a sector that does not necessarily look like, or identify with, those efforts.

Usually, the state does not feed from entrepreneurs, as they aren’t unduly tarnished enough to leave their businesses and take part in a race of meetings, lunches, hand-outs and pleas that sustain and feed their ego, and which manages to make them feel like Olympic gods who have the proverbial pig caught by the tail.

So, slowly, we now have a hodgepodge of businesses that has evolved and is missing a proper taxonomy to establish real criteria for employers of different sizes; from the individual to the various factions of complexity of a tiny, small, medium or large company. Yet the classifications that exist are so limited they undermine the entrepreneurial spirit that many may have and who finally slips into that 30 percent of the informal economy that exists on the island.

I must confess, with more modesty than shame, that I’ve been able to avoid 95 percent of the procedures in government offices, with the help of my partner in the firm. The stories seem drawn from a series of “Tales from the Crypt,” ranging from the absurd to the ridiculous: government officials who collect folders and manipulate the order of priority; dramatic actors that give the illusion of doing something; baffling looks that challenge the most seasoned entrepreneur; passions; self-imposed divisions and factions, as every four years, a certain number of people with defined colors remain screwed into their jobs and gain, as in the Supreme Court, the majority, while dissidence becomes an issue not of logic or principles, but of a tribe ruled by chromatic inbreeding.

And so, we jump into the fight, into a bureaucratic adventure that must exist because the government needs to remain the largest employer.

At my workplace, it took almost 10 years to get the last of the permits, despite having all the criteria, laws and regulations to operate. Nearly a decade in a public clandestine status, replete with inconsistencies and apparent contradictions. In our case, we did it. But it wasn’t easy. Undertaking a business that looks to insert itself into the formal economy depends on a number of visits, paperwork, efforts and sophisticated initiatives to achieve it.

More than clear vision, mission required
A clear vision and mission aren’t enough. The equation lacks a definition of tenacity and willingness that don’t break down the spirit, which must overcome the uncertainty of establishing your dream business. About that, we must simultaneously go to agency after agency to meet the often-redundant government requirements on businesses, regardless of size and irrespective of their resources and capabilities.

Let me explain: a company that since its inception has capital, partners, customers and structure, goes through the same vicissitudes as the individual who is staring out, sometimes because they have no choice, and must stop producing to spend time, effort and money to meet their obligations. Then we read in the press the eternal complaint about why we’re behind in the so prostituted term, “competitiveness.”

To make matters worse, the tiny and small business owner must pay for water, electricity, and licenses and taxes the same way those with greater resources do. And as if that weren’t enough, many of those who produce more also enjoy subsidies, discounts and assistance that ultimately disturb the balance of the natural order and spirit of doing business.

But the issue of anti-competitiveness doesn’t end there. For years, small and medium entrepreneurs have felt insulted every time we see an ad in the press announcing the famous amnesties: if you haven’t paid the Municipal Revenue Collections Center (CRIM) your taxes, fines or any of the fees imposed by the government every two or three years, they announce that the debt can be settled with 25 percent less than what has accrued, without penalties and surcharges, and with a number of benefits given to the offending group, which makes no sense.

At the other extreme, large corporations enjoy a number of benefits and resources that facilitate their operations, which often end up financing political campaigns as is usually seen.

The business sector must be rethought, re-invented and re-structured. We could copy the sports system: multiple classifications from the small to the big leagues, and along the way, encourage sector participation and ensure its growth. Lowering the number of requirements is only a first step. And disallowing amnesties, although compliance plans would be okay.

The current route has only shown something quite certain: the brain drain and lack of citizen participation in government put us in a difficult position. I bite the pencil again and say, let’s do this. I know it can be done.

One Comment on "Op-Ed: Tiny and small businesses"

  1. Aramis September 11, 2012 at 4:28 PM · Reply

    There is only one thing government knows how to do best: take our money (CRIM). I have no idea why would government would want to become the largest employer since government does not generate revenue. It is businesses, large and small that by paying their taxes generates govermnet’s “revenue” – to quote Clint Eastwood’s RNC speech: goverment staff are our employees. Its time to start firing…I meant downsizing goverment. I like the analogy of the sport system, this really could work….hold on let me get my pencil…..

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