Most businesses have to deal with an overdue or unpaid account at some point or another. The best way to avoid collection hassles is to take preventive measures up front to ensure that accounts don’t become delinquent. Here are some steps you can take to help improve your receivables turnaround.

Don’t grant credit

It’s not always possible or practical, but some companies can be run without offering credit. Require cash or certified checks/money orders. Ship products C.O.D. (cash on delivery), especially to new customers who don’t have a payment history with you.

Accept major credit cards

Make it convenient for customers to do business with you by accepting charge and credit cards. While you will pay out a small percentage of each transaction for processing, you also will get paid within days. If you follow the regulations, you won’t be liable for fraudulent charges, although the customer will have the option to withhold payment if there is a dispute about a bill.

Require deposits

Both service and product businesses can ask for advance payments. Product firms can ask for 50 percent payment up front and the balance on delivery, or request a deposit amount based on standards for their industry. Service businesses might want to ask for 20 to 50 percent up front, depending on the project, with remaining payments due when certain milestones are met.

Offer terms

Terms outline how you expect to get paid, and what interest or penalties you charge for late payment. State these clearly on your contracts and invoices because you cannot request that these terms be met if customers do not know about them beforehand. It is common to ask for a small percent per month for late payments.While this won’t net you much money, it indicates that you are serious about timely payment. You also might want to offer a discount of one percent or more for early payment as a way of speeding cash flow.

Get a signed agreement

Never extend credit without getting something in writing. If there’s ever a collection problem, having a signed agreement makes your case much stronger. Use a purchase order or contract that details how much a client will owe and when it will be due. Take a moment to review payment deadlines with clients and express that you expect to be paid on time. Point out the terms for late payment. Always record changes or compromises in writing.

Check credit

Collect the information you’ll need to run a credit check on a credit application or “new customer form.” For consumers, this data includes address and phone numbers, whether homes are owned or rented, how long at last address, and bank account and credit/charge card account numbers. For businesses, you can ask for business name/dba, names of owners/principals, address, phone number, and at least three credit references. You can get credit reports from major credit reporting agencies such as Caribbean Credit Bureau.

Create a billing/overdue notification system

You can’t collect if you don’t know how much is owed to you and when it is due. Set up a system that alerts you to overdue accounts – most accounting software programs do this automatically. Once you have a system, make sure someone in your company is responsible for keeping it up to date.

Businesses can speed collection of their receivables and avoid late payment problems by developing an effective billing plan. Here are some steps you can take to help protect yourself from slow paying clients.

Create an effective invoice

Make sure that your invoices are clear, accurate, detailed and easy to decipher. Each one should include the amount due; a purchase order number; customer name and address; and your business’ name, address, and ID number. You should also include the name and phone number of a person in your company to contact if there are any questions. If possible, itemize the charges. It is harder to contest a bill that is itemized, and if there is a dispute over one of the charges, you can legitimately ask to be paid for the uncontested, itemized charges. Invoices should also contain a clause instructing the customer to contact you if there are any problems with your services, and a clear outline of late charges.

Mail invoices promptly

The sooner you get invoices out, the sooner payments will come in. Some small businesses send invoices out monthly, but this is a mistake since it can delay some receivables by two to three weeks. Instead, try to send invoices within a day or two of delivery of your product or completion of a project.

Bill the right person

Sending a bill to the wrong person can push payment off as much as 30 or 60 days as it gets routed around a company. Talk directly with your client and ask to whom you should send your bill. If the bill is going to someone other than your day-to-day contact, call and introduce yourself before you put the bill in the mail. If you are sending a bill to your client’s bookkeeper or accounting department, copy your client as well and follow with a phone call.

Follow up

It is easy for a bookkeeper to ignore an invoice if there are no follow up phone calls to check on its status. A quick check-in can confirm that your invoice was received and is being processed. If payment does not arrive by the due date, check in with the bookkeeper again to determine when the invoice will be paid, and follow up weekly until you receive the money.

Financing is the number one concern of business owners. The below links have information on financing for small businesses.

U.S. Small Business Adminstration

The essence of successful cash flow management is regulating the money flowing in and out of your business. Increasing your cash flow reduces the amount of fixed capital that you need to support the given level of your business. An increased, consistent cash flow also creates a predictable business pattern, making it easier to plan and budget for future growth. Here are 10 things you can do to increase your cash flow:

1. Organize your billing schedule

The faster your receivables turn over, the more capital you’ll be able to spend on growing your business. To help you bill early and often, put yourself on a billing schedule with an accounting software program like Intuit’s Quickbooks Pro or Peachtree Software’s Peachtree Complete Plus Time & Billing. These two programs can automatically classify the age of accounts receivable — fewer than 30 days old, between 30 and 59 days, between 60 and 90 days, etc. This kind of automated flagging system allows you to act immediately on overdue accounts.

2.Stretch out your payables

Take the maximum amount of time allotted (often 60 or 90 days) to pay your suppliers. Think of these terms as an interest-free line of credit from your supplier. It gives you sufficient time to collect receivables without spending money on short term credit lines

3.Take advantage of early payment incentives

If your suppliers offer you a discount for paying early (usually within two weeks of receiving the bill), take them up on it. Think of it this way: a 2% on a 30-day invoice is equal to a 24% annual return if the money was invested. If your suppliers don’t offer this kind of incentive, ask for it; they may be willing to offer the discount in return for speeding up their receivables.

4.Balance your client base

Many service and professional companies — such as advertising or PR agencies, accountants, attorneys, real estate management firms, etc. — work with certain clients on a project-by-project basis. Look for ways to convert some of these clients to a retainer relationship, where they pay you a set amount of money per month for a certain number of services. You might want to offer them some kind of incentive — value-added services, a discount — to encourage them to shift to a retainer. This might reduce your profit margin, but it will help make your cash flow more predictable.

5.Check your pricing

Have your prices kept pace with your rising costs? When was the last time you raised your prices? Many small businesses hesitate to increase their rates because they’re afraid they’ll lose customers. However, customers actually expect their suppliers to institute small, regular price hikes. Also, be sure to check out your competition on a consistent basis. If they’re charging higher prices, you should too.

6.Don’t buy all in one place

You can save money by splitting your business between suppliers. Closely examine where you need to pay for added service, and where you can save money by paying commodity prices. For example, you might want to buy your computer hardware from a value-added reseller who can help you choose the right system to meet your business needs, while you can purchase other items — such as printer cartridges, cables, or off-the-shelf software — from a mail order catalog or other price merchant.

7.Form a buying cooperative

Save money on supplies by rounding up a few colleagues and buying supplies like floppy disks and printer paper in bulk, then divvying them up amongst yourselves.

8.Renegotiate your insurance and supplier policies

Are you getting the best possible deal on insurance, phone service, and other regular business expenses? Review each of your insurance policies annually and get three quotes for each to ensure you’re getting the most for your money. Keep a close eye on price sensitive services such as your long distance phone service or your Internet access service. Regularly examine these bills and call around to make sure you’re getting the lowest available rate.

9.Tighten your inventory

Overstocking inventory can tie up significant amounts of cash. Regularly gauge your inventory turns to make sure they are within industry norms. You can do this by calculating your inventory turnover ratio (cost of goods sold divided by the average value of your inventory). Avoid buying more than you know you need when suppliers lure you with big discounts; this can tie up cash. Periodically check your inventory for old or outdated stock, and either defer upcoming orders to use that stock or sell it at cost to improve your liquidity.

10.Consider leasing instead of buying

Leasing generally costs more than buying, but these costs often can be justified by the cash flow benefits. By leasing computer equipment, cars, or other tools you need to expand your business, you will avoid tying up cash or lines of credit that might better be used for running your business day-to-day. Lease payments are also considered a business expense, so the tax benefits are maintained even though the items are not purchased.

Embezzlement and other kinds of financial fraud are perhaps the most common kind of employee theft. Small businesses tend to fall prey to this swindle because they don’t have the controls in place to prevent it. Use these tips to help protect your business from unethical staff members.

Keep duties separate

No single employee should control a financial transaction from beginning to end. The person who writes your checks should never be the person who signs your checks. The person who opens the mail should not also record the receivables and reconcile the accounts. By dividing up responsibilities, you will make it more difficult for a person to steal from you and manipulate your records to cover it up.

Get your bank statements personally

Don’t give a person who is in a position to embezzle a chance to destroy or remove evidence of the wrongdoing. The business owner or an outside accountant should receive unopened bank statements and canceled checks each month. Review these checks carefully. Examine the payees, signatures and endorsements on each check. Keep an eye out for indications of fraud such as:

• Checks to suppliers or people you don’t know
• Checks made out to cash that are larger than the amount you allow for petty cash
• Signatures that look forged
• Missing checks, or check numbers that are out of order
• Checks made out to a third party but endorsed by someone in your company
• Checks where the payee listed does not match the name in your register

Closely guard your company’s checks

Don’t be careless with your corporate checks. Keep them in a locked drawer and don’t give out the key. Use pre-numbered checks, and check for missing check numbers frequently. Have a “voided check” procedure in place that requires you (the owner) to validate all voided items. Require all checks above a nominal amount to have two signatures (one of which is yours). And never, ever sign a blank cheque.

Sign every payroll check personally

This may take some time, but it is generally worth it. Review the checks to make sure they are for people you know. If there’s a name you don’t recall, go find that person. Keep a weekly count of the number of people on your payroll, and verify that number against the number of checks you have. Make sure that changes can not be made to your company’s payroll master file without your approval and signature. Another option: have a separate bank account for payroll, and deposit the exact amount of your payroll in that account; then insist on a prompt monthly reconciliation.

Watch your receivables closely

Have more than one employee involved in counting and verifying incoming receipts. Make sure all incoming checks are properly endorsed. Consider buying a “for deposit only” stamp, and use it on all incoming checks – this can prevent an employee from cashing them. Personally investigate customer complaints that credit has not been received for payments. Get a copy of the front and back of the customer’s check, and be sure it was deposited into your business account.

Make your bookkeeper take vacation

An employee who is embezzling from you may need to make a continuous effort to conceal this kind of stealing. Many small business owners are surprised to discover employees who appear loyal-they never take vacations and never stay home sick-are actually stealing from them. The reason these people have to be in the office constantly is to cover a complicated paper trail. Insist that employees who perform accounting/bookkeeping take vacation every year. Ideally, this vacation should be at least two weeks in length, and occur at month end, when the books are being closed. Use this time to have someone else review your books and look for discrepancies.

Have your books audited regularly

Bring in a third party at least once a year to conduct an audit of your books. This makes it difficult for an embezzler to cover his or her actions. This audit should be unscheduled and a surprise; make sure it does not occur at the same time every year. If you suspect fraud, consider specifically requesting a “fraud audit” instead of a “general audit.” This type of audit is designed to uncover and prevent these kinds of losses.

Make sure you understand your books

Embezzlement commonly occurs when bookkeeping is sloppy and unsupervised, which makes it easy for an employee to keep cash and receipts. As the business owner, you must be familiar with your company’s bookkeeping and record keeping system. This way you can easily review the books and make sure nothing is amiss. If you’re not a “number person,” have your accountant spend some time with you to show you what to look for, or take an accounting or bookkeeping class at your local college. Trusting someone else to oversee this most important part of your business only opens the door to fraud.

Secure your bookkeeping software

Don’t allow unauthorized access to your bookkeeping software. Don’t put the computer that holds your books on your network. Make sure both the computer and the software are password-protected. Change the password frequently to lock out unauthorized persons from this program. If you still use paper ledgers, keep them under lock and key.

To project your cash flow you will need to know the amount of cash, sales and expenses among other things.

Cash flow problems often catch small business owners by surprise. An accurate cash flow projection can protect entrepreneurs against this situation. A cash flow projection charts the amounts of money your business expects to receive and pay out each month in a rolling six- or 12-month period. This forecast takes into account the lag time between billing your clients and getting paid; incurring an expense and paying for it; and collecting taxes that aren’t due to the government until a later date. A well-prepared cash flow projection will allow you to plot anticipated cash flow positions over time. It will help you anticipate shortfalls in time to do something about them, protecting you from a cash flow crisis. Also, a cash flow projection can help you spot sales trends, tell you if your customers are taking too long to pay, and help you plan for major asset purchases. In addition, should you decide to seek a loan, banks will ask to see one-year cash flow projections by month, and three- to five-year projections by quarter. The following step-by-step process will guide you through preparation of a cash flow projection:

Step 1: Cash on hand

Count your cash at the beginning of the first month of your projection. This amount is your “cash on hand.” In succeeding months, the ending cash balance from one month will be carried over as the beginning cash balance of the next month.

Step 2: Cash receipts

Record cash sales, credit card sales, collections from credit accounts, and any interest income. The key to doing this successfully is recording receipts in the months you actually expect to get the money, not the month a sale is made.

Step 3: Accounts receivable

Record anticipated receivables in the months you expect them to be paid. If you have not kept records that show you how long it takes individual customers to pay their bills, calculate your “average collection period” by dividing your total sales for the previous year by 365. That gives you your average daily sales volume. Then, divide the dollar value of your current accounts receivable by the average daily sales volume. That number is the average number of days it takes you to collect on a bill. Using that number as a guide, record payments as they will come in over the next year.

Step 4: Miscellaneous cash

Account for anticipated miscellaneous cash infusions, including new loans from banks or family members, or stock offerings.

Step 5: Total cash available

For each month in your projection, add the amounts in steps one through four. This figure shows the total cash available to you in each month.

Step 6: Cash paid out

Now it’s time to calculate how much cash you anticipate spending in each month of your rolling projection.

First, assess operating expenses. Again, the secret is to note every expense in the month it will be paid, not the month it is incurred. Be sure to include the following items in your list of operating expenses:

• Gross wages, including anticipated overtime
• Monthly stipends to owners
• Payroll taxes and benefits, including paid vacations, paid sick leave, health insurance, and unemployment insurance
• Subcontracting and outside services, including the cost of labor and materials
• Purchases of materials for use in making your product or service, or for resale
• Supplies for use in the business
• Repairs and maintenance (be sure to include occasional large expenses for remodeling, renovation, etc.)
• Packaging, shipping and delivery costs
• Travel, car, and parking costs
• Advertising and promotion, including fliers, direct mail, print or TV ads, yellow pages listings, web site maintenance and design
• Professional services such fees paid to attorneys, bookkeepers, accountants, consultants, etc.
• Rent
• Telecommunications such as phone, fax, Internet Service Provider
• Utilities such as water, heat, electricity, gas
• Insurance including fire, liability, workers’ compensation, etc.
• Taxes
• Interest due on loans

Other expenses focusing on costs specific to your business
Miscellaneous (include a small cushion for miscellaneous expenditures)
When you’re finished recording these, subtotal your operating expenses.

Step 7: Other costs

Calculate the other ongoing costs of doing business. Be sure to include the following items:

Loan principal payments – vehicles, equipment purchases, etc.
Capital expenditures – depreciable expenditures such as equipment, vehicles, construction of new or improvements to existing buildings, and improvements to leased facilities and offices
Start-up costs – expenses incurred prior to the first month of operation and paid for over the course of the following year(s)
Reserve or escrow – money set aside monthly for taxes paid at the end of the year, plus any money escrowed to help make payments on large insurance or machinery bills, for example
Owner’s withdrawal – payment of owner’s income tax, health and executive life insurance, etc.

Step 8: Total cash paid out

Once you have listed all other costs of doing business, add them to your subtotal for operating expenses. This figure is your “total cash paid out,” and reflects your estimates for the total cash you will have to spend each month.

Step 9: Determine your monthly cash flow

Subtract your total cash paid out (Step 8) from your total cash available (Step 5). The difference is your monthly cash position or cash flow. As you plot your projected cash flow, check to be sure your cash position at the end of each month is positive. If it is not, take steps early to cover these anticipated shortfalls.

Update your cash flow projection monthly, making adjustments whenever you encounter an unexpected expense or income. As actual sales and disbursements are made, list the actual amounts next to the estimates on your cash flow projection. Check for accuracy in your forecast, and make adjustments to future months as needed. As one month ends, add another month to the end of your rolling projection.

FundAccess is Barbados’ Agency for Micro Enterprise Development Ltd. The agency, which began operation in January, 1998, is a financial institution that assists persons who want to start-up or expand their small businesses.

Currently FundAccess has a NO CASH policy. Therefore suppliers’ pro forma invoices, quotations or estimates of items to be purchased must be submitted. For working capital purposes (e.g. utilities, raw materials etc.) a proposal detailing the intended use of funds is required.

So just how much money can a business borrow? What does a business needs to access these finances? And which businesses are eligible? The answers to these questions are outlined in this article, so read on.

How much can a business borrow?

The loans can range from as little as $700 up to $100,000 bds, there is an interest rate currently (March, 2009) of 6% which is calculated on the reducing balance and the maximum repayment period is ten (10) years.

Other fees/payments which apply are:

• 3% administration fee
• legal fees which may be necessary depending on the amount borrowed and the type of security used.
• Insurace premiums as all approved loans are insured in the event of the client’s death. This insurance premium must be paid prior to disbursement.

What does a business needs to access these finances?

A business needs to have the following ready when approaching FundAccess:

• A business plan may be required for loans over $50,000.
• A copy of the rent/lease agreement must be presented. In cases where a lease agreement is unavailable the PROVISIONAL LANDLORD/TENANT AGREEMENT (available from FundAccess) must be completed.
• Statutory approvals, if applicable, must be obtained from the relevant authorities e.g. Ministry of Health, Town and Country Planning Department etc.
• A recent passport-sized photograph and satisfactory photo-identification (e.g. I.D card, passport).
• The PERSONAL INFORMATION FORM (available from FundAccess) must be completed.
• If the loan being requested is $30,000.00 or less you will also need to have:
  • (i.) THREE (3) GUARANTORS who have either been permanently employed for at least three (3) years in their present job or self-employed for five (5) years. Guarantors CANNOT be clients of FundAccess or a guarantor for another client.
  • (ii.) A recent job letter or pay slip for each guarantor.
  • (iii.) The GUARANTOR FACT SHEET and GUARANTOR INFORMATION FORM (available from FundAccess) must be signed and completed by each guarantor.
  • (iv.) A Bill of Sale may be taken on business owned assets.
• If the loan being requested is more than $30,000.00 you also will need to have other forms of security or combinations of security options will be considered e.g. Mutual Funds, Government Bonds, property, fixed deposits etc

And which businesses are eligible?

• The business must be commercially viable project.
• The business, once developed, must be the primary source of income and employment for the applicant.
• Applicant must be willing to supply FundAccess with information relative to the project for the duration of the period of the loan.
• Applicant must demonstrate a willingness to be trained in enterprise development and receive technical assistance from FundAccess.
• Applicant should make a tangible investment in the project either in cash or in kind.
• The business should create job opportunities.

If you need more information you can contact Fund Access (228-1366) or visit their website (http://www.fundaccess.org/smbloans.cfm)

PROCEDURES FOR CONTAINER RELEASE AND GOODS EXIT

1 THE CONTAINER EXIT PROCESS IS TO BE COMPLETED AS FOLLOWS:-

1.1 A prerequisite for the examination of containers at importers’ premises is that the importer must provide a computer system for the Customs’ examiner/s to access the ASYCUDA++ system and perform the necessary documentary checks in addition to the physical examination of the container.

2 THE ENFORCEMENT DIVISION

2.1 The Enforcement Division has the option of scrutinizing the REGISTERED manifests and make indications as to that cargo required for their examination.

2.2 This option can be done by the Enforcement Division selecting the module, MODCAR, manifest screening, as is completed for goods at Transit shed 2, the COURIER sheds and the airport.

2.3 All bills of lading screened by the Enforcement Division and selected to be examined would result in the ascribed declaration(s) being selected to the “RED” lane.

3. SUBMISSION OF THE DECLARATION

3.1The Importer/Declarant having submitted the declaration’s data in ASYCUDA ++ and after requesting the local check, should on the completion of the attached documents page, add additional information regarding the container examination in an information page.

3.2 To access the information page, select F9/Local menu, Quadrants, Information page; as you select the option, the system will display the Information Page screen to insert in the information page the details of the location for the container examination; e.g. container to be unloaded /examined at #2 Walker’s Terrace, Graham heights, St. Michael... When completedpress the OK button to return to your main declaration form.

3.3 The Information Page and the Attached Documents page are also part of the declaration.

• i Note: The Information Page is not saved when you do a Local Store of your declaration; but is added when the declaration has been assessed.

3.4 The importer/agent must lodge the declaration/s for container release as well as the “released” bill of lading; (as is currently being done), for the container at the Reception desk, to be attested and recorded.

3.5 The Customs Reception must check the status of the declaration to verify the importer submitting the declaration and to record the time and date, for submission to the Outdoor and Enforcement Sections.

• 3.6 The declaration/s submitted must be mark/stamp “PREMISES/OUTDOOR” by the Reception officer on the top of the declaration, (usually submitted as one lot).

• 3.7 The declaration/s triggered by the Enforcement Division will be marked/stamped “CED”, and if necessary be submitted to the division for scrutiny to ensure the importers comply with Customs regulations.

• 3.8 The container declaration/s selected “yellow”, for documentary check by the Entry Processing Unit’s examiners; must continue to be re-routed to the “RED or GREEN” lane by the examiner.

• 3.9 If the declaration is re-routed “RED” the Chief examiner in the EPU must re-assigned for premises examination by the Outdoor officer.

4 THE CUSTOMS OFFICER – OUTDOOR SECTION

4.1 All declarations whether checked by the Enforcement or not must be verified for examination at an approved premises, the importer informed and an appointment made for examination.

4.2 When required to release the Container, the Customs Outdoor officer, CO, must select the module MODSHD; click Functions, Release Order, Clearto select the declaration/s for the container/s to be released.

4.3 The Customs Outdoor officer, set the parameter codes for:-

a. the Section, as Outdoor; (allows for Outdoor declarations only)

b. the Examining officer to all,

c. the declaration/s assessment date/s, and

d. the sort should be as Customs reference; and select the declaration for release.

4.4 To clear the declaration/s for release from the Port. The Customs officer must select the declaration/s Customs reference number/s, and then click Clear; this permit the declaration/s to be selected for release, to which the Inspection Act can be completed by the CO if applicable.

5 TO RELEASE THE CONTAINER DECLARATION/S

A To release a single container declaration

5.1 When the list of declarations for exit note is displayed; select the appropriate C reference number and then click “Release”.

B To exit multiple declarations per container

5.2 When the list of declarations for exit note is displayed; select and double-click the declarations Customs reference numbers entered for the particular containers. The system will place a check mark at the front of the reference of these declarations selected.

C Selectivity

5.3 If queried, the query form must be attached to the declaration and the query data entered into the inspection act.

5.4 Once allowed for premises examination, the Outdoor officer must select the appropriate Customs reference number/s and re-route the declaration/s to the “BLUE” lane.

5.6 The Customs reference number/s must be noted on the “released” bill of lading for submission to the officer at the Container Park/ Shed 3 or 4.

6 THE CUSTOMS OFFICER – TRANSIT SHEDS

6.1 The Customs officer at the Transit shed 3; 4 (or container park) must complete the “exit note”, thereby inserting the vehicle number, nationality, driver’s name, and the shed location from which the container was released.

6.2 A printed copy of the exit note must be issued to the driver (importer/agent) for submission to the Customs Guard at the gate. If the container is to be sealed then the word “seal” must be written on the exit note.

* Note -The declarant code must be given to the Customs Officer at the shed to complete the goods exit in the system.

6.3 To select the declaration/s for the “exit note” theCO, selects Functions, Exit Note, Multiple declarations and when given the menu for the exit note; set the criteria for:-

a. the Model of declaration, e.g. IM 4, IM 7 etc.

b. the declarant*, i.e. the company’s VAT number

c. the importer/clearing agent, (*, i.e. the company’s VAT/ Broker number)

d. the consignee, i.e. the company’s VAT number

e. the assessment date/s,

f. the status must be Paid or All and

e. the sort must be the C reference number; and select the declaration for release.

6.4 To validate the exit note; at the exit note transport menu, the CO, select “Release”, the option Exit tagged or Exit current will be shown, and the system will request to exit those entries tagged.

6.5Next, click Ok.

6.6 TheCO select F9/Local menu, Action, and Validate.

6.7 The system will validate and indicate the exit note number in the goods exit note field.

7 THE CUSTOMS GUARD

7.1 To complete the goods exit, the exit note number must be presented to the Customs Guard at the gate for the Acknowledgement of the exit to be completed

7.2The Customs Guard must perform the “acknowledgement of exit”, by selecting the module, MODSHD, Functions, Acknowledgement of Exit.

7.3 To acknowledge the exit of the container (goods) at the gate, the Customs Guard, at the menu “retrieval of exit note”, inserts the exit note number previously indicated by the system and presented to the Customs Guard at the gate.

7.4 The Customs Guard then selects Ok.

7.5 The Customs Guard clicks on the exit goods menu when shown, and inserts the name of the gate, then the seal number/s if the container/s exited is to be sealed.

8 GENERAL EXIT OF CARGO

8.1 Loose cargo will be released and exited by the officers in the Transit sheds, similarly to that completed for container release.

9 PREMISES EXAMINATION

9.1 The container/s when taken to the importer’s premises will be checked and examined by the Enforcement and/ or Outdoor examiner/s.

9.2 The Outdoor (or other section) examiner/s must on completion of the

examination, enter the relevant information to the examination in the “inspection act”.

9.3 Once completed the officer must then complete the release for the goods to the importer as is currently being done by completing the exit note and acknowledgement of exit.

9.4 The examiner will still be able to access MODSHD to complete the Inspection Act, trigger the declaration “GREEN” and complete the exit and place of examination.

Note - An IMPORT DECLARATION which has not been paid or which has to be refunded cannot be exited.

10 EMPTY CONTAINERS

• The Barbados Port Inc will electronically provide on a daily basis a list of all containers which have left the port.

• The empties will be identified and all containers which have not been returned to the port within fifteen days will also be clearly identified.

To read the container goods and exit release manual click here.

If you need to import any raw materials and equipment for your business:

• Ascertain from the Customs and Excise Department whether import licenses are required or imported duties payable on any such items
• Write a letter to the Comptroller of Customs if you require any duty concessions
• Register with the Computer Department of Customs to receive an import number before proceeding with importation of any items
• All manufactures must register with the Approved Undertaking Division of Customs if they will require duty concessions, and the Consumption Tax Division to pay consumption tax
• Register with the Certification Department of the Export Promotion Division of the Barbados Investment and Development Corporation to facilitate duty free entry of your products into USA, Canada, Venezuela, Columbia and CARICOM member countries.

What is that?” is the first response offered by most Barbadian small business owners.

This article will outline that, as well as “How does one qualify for the Small Business Approved Status?” and “What are the benefits?”

In a nutshell, businesses that have Small Business Status are entitled to a set of incentives offered by the Government of Barbados.

So, “How does one qualify for the Small Business Approved Status?”

In order to qualify, the company must satisfy the definition of a small business as outlined by the Small Business Development Act and it must provide socio-economic benefits. To find out what is the definition of small business is and what socio-economic means click here.

“What are the benefits?” The benefits are:

• Reduction in corporation tax. Currently a company would pay 25% of their profits in corporation tax. With this stamp of approval, your company would pay 15%.
• Exemption from import duties on plant, equipment and raw materials. It should be noted that depending on what you are importing and its intended use, your business may already be able to qualify for exemption duties (i.e. without seeking small business approved status). The Comptroller of Customs can further advise on this issue.
• Exemptions from withholding tax on dividends and interest. The dividends or interest must be earned on any investment in an approved small business or in any fund approved for investment in small businesses.
• Exemption from stamp duty.
• Access to Technical Assistance up to $50, 000 BDS.
• Access to a loan guarantee.

For more information contact the Ministry of Trade, Industry and Commerce. It costs nothing to find out if this approval can help your business.

And as part of the process, your business must become incorporated. This process is not free. However the government has set up a system whereby you can be refunded the cost of incorporation.

To read the entire Small Business Development Act click here.

To get your product sold, it must be seen. And often for many manufacturers the supermarket is the ideal place to get their product “out there”.

The Small Business Association (SBA) hosted the seminar “Penetrating Local Distribution Channels” on 26th February, 2009 where the Director of Operations at BS&T (SuperCentre) gave a good presentation to the members. Some of the highlights of his presentation were:

• Niche products make a difference. Every retailer wants a product that stands out.
• Understand what the retailer wants. This is key to establishing a good working relationship with them.
• Persistence is necessary.
• 80% of shoppers want to buy local produce.
• The unreliability of small and medium businesses continues to be a problem. This was a very critical issue noted.
• Do not mark down your prices. Your costs are not another business’ costs. Hence you may not be able to survive at the low prices which are set by another business.
• Understand the value of money, plan, price and brand.

Before you can sell anything to anyone, you must first understand what it is they need. Here are some ways to do that:

Do your homework

Prior to your meeting with the customer, do your homework to find out as much as you can about his business. Read relevant trade journals, do a periodicals search for articles about his product or industry at the library, read the Wall Street Journal. Find out who your customer’s competitors are, what changes are coming in his business and what his chief concerns are likely to be. But always keep in mind that you will gain the most valuable information and insight into your customer’s business concerns by talking directly with him.

Open your mind, not your sample case

Don’t walk into a customer meeting with a pre-conceived idea of what you’re going to sell them and how you will sell it. You’ll sell more in the long run by finding out what aspect of the transaction matters most to your customer. For example, even if you and your competitors are each selling the same widget at the same price, your customer may be most concerned about payment terms, another might be focused on the reliability of shipments, while yet another may care most about product warranties. If you walk in and flip open your widget case before you find any of this out, you’ll have missed an opportunity to distinguish yourself from your competitors.

Listen closely

When you’re on a sales call, you’re there to gather at least as much information as you communicate. This means asking questions and then keeping quiet until your customer has finished with his answers. Don’t start answering objections before your prospect has finished talking. The more you can get your customers to talk, the better you will understand what matters to them. Once you know that, you can make sure your presentation addresses their concerns — and eventually get their business.

Ask questions that provoke dialogue

Avoid asking closed ended questions that will get you “yes” or “no” answers. Such questions typically start with words like “Is,” “Do,” “Are”. Instead, try to ask questions that begin “what” “when” “where” “how” “tell me” and “why,” because they almost force the person to elaborate. You will get replies that start conversations. For example, “Do you have problems with vendors?” won’t get you as far as “Tell me what you would like your vendors to do better.” Your goal is to get your prospect talking about his problems and concerns so that you can determine ways your business can solve them.

Beware of questions that will slam the door shut

Instead, ask questions that will solicit key information. If you ask a customer “Can I give you a proposal on that project?” you’ll get a “yes” or “no” answer and that’s that. But if you start the process by saying “Tell me the criteria you look for in a proposal…” you are learning critical information instead of ending the discussion.

Survey your customers and prospects

Use written questionnaires or telephone surveys to learn more about your customers and prospects. Solicit comments from current customers about their level of satisfaction with your product or service. Or you might design a survey that will educate you about your prospects’ business needs. When a customer or a prospect takes the trouble to complete a questionnaire, you’ve achieved something more than just learning from the responses. The fact that he’s made even the minimal effort tells you something about his level of interest in your product or service. You now have a qualified lead to follow up.

Exhibiting at trade shows, expos, conventions, fairs and other exhibitions gives you a unique sales opportunity that can also help you generate new leads, find suppliers, check out the competition, do some networking, and get publicity. In short, you can achieve at one trade show what it would take you weeks or months to do if you stayed home. But to accomplish all of the above you must plan carefully. That means choosing the correct show, setting clear objectives, creating an effective exhibition, and promoting your presence. All this, before you even get to the show! The following are some tips which can help you to get the most out of your trade show experience. Click here to read more.

The following documents are required to be sent to the Minister with respect to an application for approved small business status.

• Form I Application for Approved Small Business Status-to be typed triplicate (no carbon copies accepted)
• Statement containing particulars set out in Section 4 (3)(b) and (g) of the Small Business Development Act.
• A copy of the Certificate of Incorporation, which includes the Articles of Incorporation (Submit in triplicate)
• Statutory Declaration verifying the particulars specified in Section 4(3) of the Act.
• A copy of the Audited Financial Statements of Accounts for the last financial year or, in the case of a new businesses a Copy of Financial Projections for the next three (3) years of operation.
• Notice of Directors.
• Notice of address of Registered Office
• A copy of each shareholder’s Share Certificate
• A Certificate of Clearance from the Director of the National Insurance Department.
• A Tax Clearance Certificate from the Commissioner of Inland Revenue
• A sworn statement indicating that the applicant company has no agreement for the payment of fees on a continuing basis for mangerial or other services to persons who are not resident in Barbados where those services do not form part of normal business operations of the enterprise.
• Where the nationality of origin of the director(s) and shareholder(s) of the applicant company is Non-Barbadian but the said persons are citizens of permanent residents of Barbados, the application must be accompanied by proof of such status as granted by the Chief Immigration Officer.

The completed forms must be submitted to the Ministry of Commerce, Consumer Affairs and Business Development.

Looking to buy a business? Just go to the link(s) below and make sure you have this information before taking that step:

U.S. Small Business Adminstration

Developing a business idea is a matter of creating a vision, leveraging your strengths and determining what the market needs. These three steps should get you started.

Create a vision

Close your eyes for a few minutes and conjure up a detailed image of what you want your life to look like in 5 years. Be as specific as possible.

• Where do you live?
• How do you spend your days?
• What kind of work do you do?
• Do you work alone or with other people?
• Who are you surrounded by?
• What do you do when you aren’t working?

Don’t limit yourself to these questions; create a vivid vision of yourself, touching on things that are important to you. These are all personal issues that will impact the type of business you pursue – being a city or country person; wanting to travel or sit at your computer; liking to meet people or work on the phone. This activity will help you create a foundation for choosing a business, making business decisions, and setting clear goals.

It is best to do this exercise with someone else and share your vision. If you can’t, write it down to make your vision more concrete.

Determine what you’re good at and what you like to do

It’s often useful to look inside yourself to figure out what you like and dislike, and where your talents lie. It’s one thing to come up with a winning business idea. It’s another to come up with one that fits your skill set and interests you. Your business has to keep you excited so you can thrive over the long haul.

One of the best ways to do this is to make three separate lists:

List 1: What you’re good at
Everyone is good at something and many skills can be the foundation for a business. You might be naturally organized or have a knack for fixing things. You may be so used to your skills that they don’t immediately come to mind, so assemble this list by observing yourself for a few weeks with an eye out for your aptitudes and by asking people who know you well for their impressions of what you excel at.

List 2: Skills you’ve acquired over the years
Whether or not you’ve worked in a conventional environment, you no doubt have accumulated many. Write down all the work responsibilities you’ve had; think about the varied tasks you know how to complete. Make sure this list is complete – there should be at least 10 distinct items.

List 3: Things you like to do
List the things you enjoy doing. This may not be as easy as it sounds. This list should be at least 10 items long. Stretch beyond your hobbies and interests that spring to mind immediately. If you’re stymied, ask people who have known you for a long time — particularly people who knew you as a kid — what they have seen you doing when you’re happiest.

Keep these three lists in an accessible place (for instance on your desk) for several weeks, and every time an idea comes to you, jot it down in the proper category. Ask people who know you well for their input or to help you jog your memory.

Figure out what the market needs

So far, you’ve been looking inward to come up with your business idea. Now its time to look outward to discover an unfilled need that you can meet with your product or service.

There are plenty of “Top 10″ or “Hot New” business lists out there. These may stimulate some ideas, but the best business ideas will come from you and will be based on who you are and what the market is looking for. So while you’re doing your soul searching and list making, put up your antenna and look out for business opportunities.

When you’re considering starting your own business, you have a choice of either starting from scratch, buying an existing business, or looking at a business opportunity like a franchise. Owning and operating a franchise can be as much work as other options, and it can also be quite profitable. This article gives some basic information about how you should investigate potential franchises.

There are thousands of franchised businesses, covering nearly every conceivable industry, from well-known national brands to smaller, local opportunities. The challenge is to decide on one that both interests you and is a good investment. Many franchising experts suggest that you comparison shop by looking at multiple franchise opportunities before deciding on the one that’s right for you. Use the answers to the questions below to help you learn more about the concept.

What is a franchise? How does it work?

When you buy a franchise, you are buying the right to use a specific trademark or business concept. The business you run is essentially the same as all other business being run under the same name. In order to do this, you may have to buy things like products, tools, advertising assistance, and training from the franchisor (the company that owns the rights to the business).

While you own the business, its operation is governed by the terms of the franchise agreement. For many, this is the chief benefit of franchising — you are able to capitalize on business format, trade name, and support system provided by the franchisor. The oft-quoted line is that franchising allows people to go into business for themselves, not by themselves.

What are the benefits of being a franchise over starting my own business?

You get a number of advantages when you purchase a franchise:

• Reduced risk – Franchises traditionally have a much lower failure rate than other start-up businesses. The reason? You’re buying a business concept where most of the kinks have already been worked out by someone else.
• You get a complete package – The guesswork usually associated with starting a business is taken care of. Your total package can include trademarks, easy access to an established product; a proven marketing method; equipment; inventory; etc.
• Strength in numbers – When you’re become a franchisee, you have the buying power of the entire network, which can help you get product and compete with larger national chains.
• Business processes – Many franchisors provide their franchisees with various proven systems including financial and accounting systems; ongoing training and support; research and development; sales and marketing assistance; planning and forecasting; inventory management; etc. They’ll show you the techniques that have made the business successful and help you utilize them in developing your own business.
• Financial and site selection assistance – Some companies will help you finance your initial franchise, letting you get by with as little upfront cash as possible. They also may help with site selection, making sure that your business is located in an area where it can thrive.
• Advertising and promotion – Not only will you benefit from any national or regional ad and promotional campaigns from the franchisor, but they may also help out in other areas — from providing camera-ready copy for your own advertising efforts to developing in-store point-of-sale materials designed to drive customers through your business. It would cost you a great deal to develop these materials on your own.

Is there a downside to being a franchisee?

Franchising is certainly not for everyone. Here are some of the potential disadvantages:

• Lack of control – The essence of a franchise — buying and operating a proven concept — can make it seem like you’re more of a manager than a boss. This may be difficult for some people, especially those that are more entrepreneurial. This type of person may find it hard to conform to someone else’s system.
• Cost – It can take a good deal of cash to open and operate a franchise. Upfront costs can be significant, and you may find that ongoing royalty fees will have a major impact on your cash flow.
• You’re not alone – Just as a franchisor’s reputation can benefit your individual business, the franchisor’s problems are also your problems. So if the parent company comes upon hard times, your individual franchise may also suffer because of how closely you’re tied in.
• You’re committed – Your franchise agreement is a binding contract, and can be quite restrictive. You’re locked in to certain business practices, fees, and even the look of your business. If you don’t agree, you may have no recourse except to adhere to these guidelines.

What franchising laws do I need to be aware of?

You should consider having your attorney, accountant or other advisor review the disclosure documents and proposed contracts before entering into any agreement. This advice, coupled with your own research, can help save you money and keep you from making a bad investment.

What should I look for in the disclosure documents?

The disclosure document provided to you by the franchisor can serve as a window into the company’s operations. It is important to review it completely (preferably with the assistance of an attorney, accountant or business advisor) to learn all you can about the franchisor.

Some things to look for:

• Does the franchisor have a track record of success? – Learn all about the franchisor’s personal and business names, its organization; its background; and its financial history. You’ll also need to determine whether this success can be duplicated in your area.
• What will it cost me? – The circular should have a complete list of fees that you will be required to pay both to start your franchise and operate it. It will also tell you other obligations, such as inventory or equipment that must be purchased from the franchisor.
• Will my territory be exclusive? – You will want to determine whether or not the franchisor can open other stores in your area, or even sell its product by mail order to customers in your region. You also might have to meet certain sales criteria to maintain your exclusivity.
• What products can I sell and how can I sell them? – You may only be allowed to sell certain products that are on the franchisor’s approved list. And you may be limited in the ways you can sell them. For instance, you might be allowed to handle walk-in traffic to your store, but you may be prevented from selling outside your location.
• What services will the franchisor provide to me? – Look for what services will be provided to you prior to opening, and after you’re open for business. You’ll also want to read about what training is necessary, where it will take place, and what it will cost you. Also, check to see what trademarks and patents you will receive.
• Is there any bad news I should know about? – The documents must disclose any actions involving violation of franchise law, fraud, embezzlement, or unfair business practices. They also must disclose whether the franchisor, any predecessors, or any partners or officers have declared bankruptcy in the past 15 years. And be sure to read financial statements closely.
• How much can I expect to make from this business? – The circular contains hypothetical profit projections, along with the formula for how these figures were created. Be aware that economic conditions vary from region to region, so these figures do not assure success of a particular outlet. Instead, use these figures combined with estimates of costs and expenses in your area.

What should I look for when selecting a franchise?

Here are some of the things you should look at when evaluating a franchise:

• Profitability – Make sure that both the franchisor and individual franchisees are healthy.
• A track record of success – Is this concept viable? Has it succeeded elsewhere? Does the franchisor have a good credit rating?
• A strong presence – You’ll want a business that stands apart from the competition, since you don’t want to be perceived as selling the same old thing.
• Effective financial management and other controls – A strong monitoring system will help you identify your problems and deal with them more effectively.
• A good image – It’s important that the public has a positive image of the franchisor, since you’re basing your business on its reputation. Also, look for a concept that can expand nationally so your business can grow locally.
• Integrity and commitment – You actually want the franchisor to spend a lot of time checking you out, because you want to make sure it has strong requirements for all its franchisees, since your success in intertwined with its.
• A successful industry – Look for opportunities in industries that are growing.

Is there other research I can do to learn more about a particular franchise?

It’s important to learn as much as you can before purchasing any kind of business so you can make an informed decision. There are a wide variety of sources you can approach to learn about a franchise opportunity. Here are some things you can do:

• Interview the franchisor – Make sure that you feel comfortable with the franchisor, and that all your questions can be answered to your satisfaction.
• Interview existing franchisees – Speak with current franchisees to see how they feel about the business. Are they happy with their investment? Are they making as much money as the expected?
• Read the business and trade press – Spend some time in the library or on the Internet looking through the media. Often, you’ll learn a lot more about the company than they volunteer in disclosure documents.
• Check references – Don’t just speak to franchisees. Call bank and other business references supplied by the franchisor.
• Go to independent agencies – Find out whether any complaints have been lodged against the company.
• Get a credit report. You’ll learn a lot about how the company conducts business.

What fees should I expect to pay for my franchise?

There are basically two types of fees you should expect to pay for your franchise — upfront fees and ongoing fees.

The first is the initial upfront fee, which is what you pay the franchisor for the rights open your franchise. Essentially, you are purchasing the rights to use the franchisor’s trademarks, business methods, and distribution rights. This licensing charge can be significant, especially for a well-known, established franchise — it’s not unusual for it to be in the tens of thousands of dollars. Often, it is also based on the value of the territory or trading area, so the larger your market, the more you could end up paying.

Be aware that this upfront fee may be in addition to any other start-up costs you will have to incur. The initial franchise fee may or may not include things like training costs; start-up promotional fees; inventory; build-outs (some franchisors require your space to have specific architectural elements); equipment/fixtures (you may be required to purchase or lease specific equipment and fixtures from the franchisor); and any other costs that are necessary to open your business.

You will also have to pay ongoing fees to maintain the rights to your franchise. Most franchisors charge a royalty fee, typically a percent of your gross sales, not your profits. This royalty fee can range from 1 percent to as much as 15 percent, although 5 percent is typical. Remember, you are paying this royalty on gross sales (your total receipts, less sales tax, returns and refunds), so it can potentially take a significant bite out of your profits.

Some franchisors charge a regular fee (payable weekly, monthly or quarterly) in lieu of royalty payments. This type of fee may also be part of the mark-up you are charged for goods or services you are required to purchase.

It is also common for franchises to pay a portion of the franchisor’s local, regional and national advertising and promotional costs. These fees are usually put into a cooperative advertising fund that ultimately benefits all franchises through increased exposure to your trade name.

Should I look into established franchises or rising stars?

This is one of the key decisions you will need to make if you decide to go the franchise route. There’s a trade-off you will need to evaluate in terms of risk and ultimate pay-off.

A franchise with an established track record has many benefits — significant name recognition; proven marketing methods; entrenched business plans and training systems; strong management; and a history that is easy for you to investigate. On the downside, you might find that the franchisor has already saturated your market (so good locations may not be available, or other outlets may encroach on your area); fees may be higher; and you may find that the larger the company, the harder it is for you to be heard should any disagreements arise.

An emerging franchise gives you the chance to get in on the ground floor of what could be a highly profitable growth opportunity. Newer franchises also tend to have lower upfront and royalty fees, and they may be more willing to negotiate and accommodate individual franchises. On the other hand, smaller franchise opportunities may lack name recognition; they may not have enough experience to make their system work; you may find yourself being a test-case for their procedures; and the chance of franchisor failure could be much greater.

The basis legal requirements are outlined in this article.

• Register with THE CORPORATE AFFAIRS AND INTELLECTUAL PROPERTY OFFICE, located at the Barbados Public Workers Co-operative Credit Union Complex, Melbourne, Belmont Road, St. Michael. There you must register your business as a sole proprietorship, partnership or limited liability company. (Website: www.caipo.gov.bb)
• Register with the NATIONAL INSURANCE DEPARTMENT Sir Frank Walcott Building, Culloden Road, St. Michael where you will be issued with an employer’s national insurance number. (Website: www.nis.gov.bb)
• Register with the INLAND REVENUE DEPARTMENT, Treasury Building, Bridge Street, Bridgetown for income tax. (Website: www.barbados.gov.bb/ird/)
• Contact the VALUE ADDED TAX (VAT) Division located at the ICB Building, Roebuck Street, St. Michael for guidance regarding the registration requirements. (Website: www.barbados.gov.bb/customs/vat)
• Obtain a liquor license if you propose to sell liquor
• Obtain a vendor’s license if you propose to be a street or itinerant vendor
• Obtain a permit from the Child Care Board , Bay Street, Bridgetown if you propose to get into the child care business
• Register with the Paramedical Professionals Council, Ministry of Health, Jemmott’s Lane, Bridgetown if you are in the medical profession
• Register with the Ministry of International Transport if you are setting up a Travel Agency

There is no “one size fits all” approach to starting a business. Having said that there are some aspects of all businesses that will be similar.

Below are some resources (links to websites) that should be reviewed by persons looking to start a business.

• Barbados Investment Development Corporation (brochures). These brochures speak specifically to the Barbadian environment.
• U.S. Small Business Adminstration

Most, if not all persons, who have started or are looking to start a business have been told that they need a business plan. Probably a financial institution or a mentor that told them that they needed a business plan.

But how does one write a business plan? Below are some links to websites which have information on writing a business plan.

• U.S. Small Business Administration
• My Own Business
• Bplans

• Register a trademark for your business or a brand name for your product with the Corporate Affairs and Intellectual Property Office if you so desire
• Ascertain from the Barbados National Standards Institute, Flodden, Culloden Road, St. Michael whether any mandatory or other standards exist for your product with which you should comply.

What does sole proprietorship, incorporated or partnership really mean? The following resources should help you:

• Barbados Corporate Affairs and Intellectual Property Office (CAIPO)
• U.S. Small Business Adminstration

The following resources can be used:

Corporate Affairs and Intellectual Property Office

Under the Economic Partnership Agreement (EPA), CARIFORUM countries committed to significant liberalisation in a number of sectors for both goods and services. With respect to services, liberalisation commitments became effective as of January 1st, 2009. In terms of goods, there is a three year moratorium before the commencement of liberalisation (2008-2011) after which liberalisation will take place on a phased basis for up to twenty five years for a wide range of products.

To learn more about the goods liberalised under the EPA that could affect small businesses in Barbados click here.

Under the Economic Partnership Agreement (EPA), some businesses in the European Union (EU) will be allowed to provide services in Barbados.

For example in most instances Barbados will allow European businesses to supply advertising and management consulting services but in most instances has not commited to allowing construction service companies to operate in Barbados.

To find out which services companies in the EU will have greater access in Barbados please click here.