You decide to start a business, and you need advice, guidance, and funding. Where can a start-up access this type of support? We examine the successes and pitfalls of three entrepreneurial accelerator programmes
by Jade Cumberbatch, Freelance writer
Published in CONTACT Magazine
Globally, about 97% of new businesses fail within their first five years. Business incubators and accel-erator programmes can reduce this rate, especially in stagnated economic climates. Therefore entrepreneurs and small businesses are key factors in the recovery and diversification of Trinidad and Tobago’s economy.
UTT’s entrepreneurship drive
“In order to mitigate against failure, we need to understand the environment of the company, the regulatory aspects, access to finance, and the competitive environment that the organisation is in,” said Inshan Meahjohn, Assistant Vice President of The University of Trinidad and Tobago’s (UTT’s) Entrepreneurship & Technology Commercialisation Unit.
“The other thing you need to take into consideration is that Trinidad does not have a prevailing culture of entrepreneurship. In order to inculcate that culture, we need specified programmes that would encourage students to start a company rather than simply find a job.”
Not only do entrepreneurs create jobs for themselves, but they do so for others as well. They support the country’s GDP and foreign exchange market, and they help to diversify the economy away from oil and gas in the long term.
Incubator and accelerator programmes provide many services, Meahjohn explained. The difference lies in the stage of the company – start-ups and new companies on one hand, companies in a growth phase on the other.
The uSTART programme
Business registration support, assistance with business plans, and pitch development for start-up companies are all provided by UTT’s Business Incubator/Accelerator programme, uSTART.
It also provides seed funding, business coaching, finance and accounting assistance, legal, intellectual property and compliance assistance, and shared administrative support. It also supplies networking opportunities with other bodies and state agencies, mentorship, access to UTT-hosted seminars and workshops, and other business development services.
Resident entrepreneurs have 24-hour access to physical space at the O’Meara campus, which is equipped with conference/meeting rooms, work spaces, office equipment, and a suite of computers with specialised software and internet access. There is also a green room, and cameras for developing business marketing material.
Since uSTART’s inception in September 2014, it has assisted in the growth and development of over 50 new companies from among students, staff, and alumni. This year, about 30 participants from 13 companies graduated from the programme, and 17 companies currently access its services.
While uSTART has had many success stories, for now Meahjohn cannot say with certainty exactly how many of these companies survived and thrived in the critical early years. “Because we have only now come up to the five-year mark, we will not be able to do the tracer studies until the end of this year.”
Hatching success with CARIRI
At the Caribbean Industrial Research Institute (CARIRI), Executive Manager Meghnath Gosein believes incubators and accelerators are necessary because current employment opportunities are slim, making it necessary to create new jobs.
He believes the country will see more incubators and accelerators in the future as more young people graduate from university and search for opportunities. Therefore, he said, it is important to provide an environment of support, involving financial institutions, trade partners, and legal professionals.
“We believe the potential for growth in our economy lies in SMEs [small and medium-sized enterprises]. Support programmes are sustainable once they have success and people can see that they are working. But you require an entire ecosystem to support this type of entrepreneurship.
“There is now talk of other investment options. We think we could see growth in venture capital companies, angel investors, and equity financing which can support entrepreneurial growth. It may not necessarily be traditional bank financing.”
According to Gosein, funding has been one of the biggest challenges for CARIRI’s Business Hatchery programme since it began in 2015. He said, as a result CARIRI is in discussion with several financial institutions to determine how they can assist with start-up business funding.
The objective of the Business Hatchery, Gosein explained, is to help people establish new businesses and to advance early start-ups through group and one-on-one sessions. Like UTT, it provides the soft skills for starting, managing, and marketing a business.
“We do this by giving you hands-on experience. So you do your own market study, prepare your financial documents and so on, and we guide you. We also expose entrepreneurs to intellectual property as it relates to their business.”
The Hatchery also provides technical support, technology bays, office space and meeting rooms, and one day hopes to establish an alumni association for networking, advice and support.
So far 15 cohorts, each with an average of 10-12 people, have graduated, including some groups sponsored by corporate organisations. Close to 100 people either started or expanded businesses through the three-month programme.
Finding its niche: the Arthur Lok Jack Global School of Business (ALJGSB)
The Arthur Lok Jack Global School of Business started its business incubator programme, BizBooster, in 2012, but switched to an accelerator model in September 2018, after 24 people had successfully completed the programme.
Interim manager Bhushan Singh said the switch was made for several reasons. The incubator was expensive to conduct, as it was free of charge to participants. Also, there were other incubators in the country, so BizBooster felt somewhat redundant.
Furthermore, the school already trained its students in the basics of starting and managing a business through its main business courses, including marketing, finance, logistics, managing the supply chain, advertising, customer service, and succession planning, so an incubator seemed unnecessary.
“Having a plethora of incubators without significant output is a waste of resources. We had to look at our core competencies and what we do best. We had the idea generation, we provided the knowledge and training, but part of what was missing was networking, mentorship and financing.
“So we have moved on from the incubator concept. We are taking this to a higher level, to a programme where you must have your own business to get in, and we will offer it online so we don’t take you away from your business.”
The BizBooster accelerator only accepts Lok Jack alumni. It is focusing on export-oriented businesses, and is in the process of signing partnerships with financiers to provide entrepreneurs with financial assistance such as loans and joint ventures.
Despite the training, financing, and support, the key to a successful business is passion, Singh explained. “If you don’t have passion for your business, it will be a failure from day one.
“We are not in it for the numbers. We’re looking for passion and the ability to execute. Passion is about perseverance and dedication. When you start, you have a lot of negativity to deal with. You have to believe in yourself so much that when anyone tells you ‘no’ you ignore that and say you will make this venture a success.”
uSTART: Coded Arts
- Founded by Andy Berahazar and Brian Perry in 2013, Coded Arts was registered in 2015
- Commenced UTT’s uSTART programme in 2013. It is still part of the incubator
- Provides game development studio services, focusing on video game outsource projects for local and international companies
- Implementation of strategies: how to manage a team, approach to relationships with clients, and project management
- Challenges: team members leaving, financing
- Programme outcomes: increased revenue generation, increased number of clients, gained clients in Canada, hired 8 employees, 10% annual growth
- Future plans: move from UTT’s physical space in October 2019 into its own office, gain clients in the United States, expand the team – add more employees and recruit remote employees from other Caribbean countries.
CARIRI: Aurora Bitayson Limited
- Founded by sisters Lyndi and Lynissa Jordon in June 2016, registered in September of that year
- Started CARIRI’s Business Hatchery programme in January 2017 to give the business structure
- Produces coconut oil, fruit syrups, and wines
- Implementation of strategies: marketing and branding. Executed surveys to get feedback on products, compared packaging and price points of competitors. “This is something we continue to do even today, not just for items similar to our products but in general. We are always looking at form and function.”
- Challenges: packaging. It is difficult and expensive to import glass bottles, and distributers do not import in small batches
- Programme outcomes: sales increased by 300%, the production and formulas of products are now more efficient, larger batch sizes; supplies retail businesses as well as individual customers throughout Trinidad
- Future plans: export to other Caribbean countries and North America, establish factory.