Although the Cayman Islands government has not officially defined what constitutes a small business, if the United States’ definition were used, nearly every company here would be considered a small business.

Department of Commerce and Investment Executive Director Dax Basdeo said that if the criteria of 10 or 25 employees were used to define a small business in Cayman, the numbers would still be very high.

“Fifty-five to 60 per cent are small by the criteria of 10 employees, and 80 to 85 per cent are small by the 25 employees criteria,” he said.

In terms of importance, small businesses are absolutely vital to the Cayman economy, Basdeo says.

“They drive most of the commerce and hire most of the people.”

Cayman Islands Chamber of Commerce CEO Wil Pineau agrees.

“Small businesses really are the lifeblood of our economy,” he says, noting that the Chamber defines small businesses as companies with fewer than 10 employees. Of the more than 700 corporate members of Cayman’s Chamber of Commerce, Pineau says 60 per cent are considered small businesses.

“That’s a very significant part of our membership.”

Cayman is not unique in the region in its predominance of small businesses, says Department of Commerce and Investment Head of Marketing Lesley-Ann Thompson.

“It’s the same as it is in the rest of the Caribbean, where small businesses are the engine of growth in the economy,” she says.

With the importance of small businesses recognised, several government and private sector entities do what they can to ensure Cayman’s small business owners get the help they need to be successful.

The Cayman Islands Chamber of Commerce has been around for 45 years and much of its work is designed to help small business members. Pineau says that one of the most important benefits of membership is the networking members are able to do with other members. Rhonda Kelly, president of the Cayman Islands Small Business Association, agreed that networking is very important to small business owners.

“All the surveys that we have done indicate that small businesses want more than most things the networking aspect, a chance to discuss their issues with others facing the same challenges,” she said. “We have also found that many of our members have been able to get work through the association from each other.  We all realize with the current economic situation, we can be very valuable allies to each other.”

Formed in mid-2009 and open to any company with less than 10 employees excluding owners, the Small Business Association also seeks to advocate to government and non-government organisations for policies that will support the growth and prosperity of small businesses. Pineau says that the Chamber’s advocacy efforts are also very important to its members because few have the time and resources to sufficiently analyse proposed legislation that might affect small businesses.  With Chamber members employing more than 20,000 people in Cayman’s workforce, it’s difficult for the government to ignore the representations made by the organisation.

Because the Cayman Islands has always had a lot of small businesses, Basdeo believes there’s a strong culture here for owning a business.

“Nearly everyone has a family member that has a small business or had a small business,” the said.

Kelly agrees that the history of small businesses in Cayman has made owning a business so common. She notes that her father and her grandfather owned small businesses, and so does she, her brother and her sister.

“I think this is similar for many Caymanian families,” she said. “I am not sure if statistically we have more small business owners than other countries, but it certainly feels that way.”

Although owning a business anywhere can be difficult, owning one in Cayman has its own unique challenges. 

“The costs of establishing a business tend to be higher here,” Pineau says, adding that access to labour, a crucial aspect to the success of almost every business, is more expensive in Cayman because of labour costs, recruiting costs and work permit fees.

Kelly also points out that market size, because of Cayman’s relatively small population, makes it difficult for some businesses here.

“Also, historically, buying locally has not been embraced by the community, making it challenging for small retailers,” she says.

Pineau points out that without direct taxation businesses in Cayman don’t have the same reporting requirements that businesses in other countries have.   Although this eases the administration burden somewhat, Basdeo says there is also a negative side to there being no corporate tax in that business owners don’t necessarily have to have the same financial discipline as business owners elsewhere.

Basdeo says owning a business allows people to be their own boss, giving them a certain level of freedom.  However, he warns that owning a business is by no means easy.

“You have to work twice as hard if you’re going to be successful,” he says. “You have to eat, sleep and breathe your business because if your business fails, your life fails.”

Basdeo says one key to the success of any small business is cash flow and budgeting.

“If you can’t pay your bills, you’re going to fail,” he says.

He also recommends people get feedback about their business before they start, and not just from family and friends, who tend to be supportive without looking at an idea with a critical eye.

Basdeo says people should be realistic in their expectations and make contingency plans if revenue doesn’t meet expectations.  He says it is often good to start slow.

“You can start a five-to-nine [o’clock] business after your nine-to-five,” he says. “You can do that for a few months and see how it goes.”

Kelly says people need to know the business they are getting into.

“Don’t just do something because you think it will make money,” she says. “Enjoying what you will do is also a good idea.”

Pineau says anyone starting a small business should create a business plan and then stick to the plan as much as possible.

He says new business owners should be prepared for hard work.

“You have to make a lot of sacrifices, especially in the initial stages, and there will be long hours,” he says. “But owning a business can be very rewarding and satisfying when you see it grow and you realise you’ve basically created something out of nothing.”