The head of a local organisation which grants loan guarantees and offers advice to small businesses yesterday called for another source of venture capital and financing outside the Island's banks.

Bermuda Small Business Development Corporation general manager William Spriggs said this was one of the main issues small business entrepreneurs faced as the marketplace entered the 21st century.

"The situation in Bermuda now is that there are several businesses that would be interested in securing $200,000 to $600,000, outside of the bank, under the right conditions.

"The problem is that there are no formal organisations set-up to offer venture capital or creative equity financing of this sort.'' Many small enterprises had a need for this capital to grow and take advantage of profitable opportunities, he continued, as did businesses which started wrong, built up sizable arrears and needed money to back a fresh start.

Mr. Spriggs was addressing members of Hamilton Lions at their weekly luncheon at the Royal Bermuda Yacht Club. The Lions' April Speaker's series is entitled Minding Our Business.

Since 1981, the Corporation has supported over 425 businesses with almost $8 million in guarantees on loans totalling more than $18 million.

This issue and others were developing from trends the global market place was experiencing, pointed out Mr. Spriggs.

Businesses required a pure service culture -- where the business' front line genuinely cared about the customer -- and quality and price were prerequisites for entrepreneurs to even enter the market.

"Service and the consumer relationship will be the new success factors.

Consumers will have options like never before and will establish prices while defining value for products and services.'' They also had to adapt to change rapidly and be prepared to tap the creative energies of their employees to create a win-win partnership for the employee and the organisation, he said.

The other issues these trends raised in the small business community were the need for up to date strategic planning to ensure, short, intermediate and long term success and the willingness to embrace professional advice.

Mr. Spriggs said: "Gone are the days when a couple of pieces of scribbled paper and a gift of the gab can get the loan, overdraft and company credit card.

"Today a thorough business plan is a given with plan updates and revisions on an annual basis, if not sooner.'' Management needed to address the rapid change needed to survive in the 21st Century by continually answering core questions including: Who are we? Who are our customers? Where are we going? How are we going to get there? How are we measuring ourselves along the way? What are our values? Mr. Spriggs noted: "The answers will in part provide corporate stability and focus to effectively compete in the changing marketplace. Too many small businesses discover they are in need of a new strategy when it's too late.'' And he advised small businesses to take the advice of professionals and consultants who could keep them on track to achieving their goals when events threatened to derail them.

"In Bermuda there exists real thinking that says better to be proud, look good, and seriously in debt trouble without a plan, than to invite someone in to see the mess and help figure it out.

"I have heard of numerous situations where individuals have blatantly ignored sound advice repeatedly only to find themselves crippled financially.

"To find yourself laden with significant business debts to be repaid over a number of years out of personal income can be quite stressful.''