Global Entrepreneurship Week: St Helena’s entrepreneurs

22 Nov. 2019 By Emma Weaver

This week is Global Entrepreneurship Week.

Local entrepreneurs are critical to the remote St Helena Island, but the economy in recent times has been extremely challenging for local business – Governor Dr Philip Rushbrook recently said the island is “firmly in an economic slump.”

But despite the challenging business climate, St Helena’s local entrepreneurs are constantly developing and reshaping their businesses in order to keep afloat.

They’re thinking creatively, finding ways their businesses can offer solutions to local problems, and learning to export services despite the lack of international banking for St Helena.

Last year SAMS, in partnership with ESH, interviewed 24 local businesses about their services, the challenges they faced and the solutions they were finding in order to maintain operations.

The picture we built throughout the year was of a business environment that both existing and new entrepreneurs were finding incredibly challenging. Nearly every business owner reported seeing no increase in footfall; and nearly every business struggled with shipping challenges and utilities costs.

But still, most of the local business owners were finding solutions to the challenges. They were learning to expand their markets online; to network with people overseas; and to take up and fully utilise available grants and support.

In celebration of Global Entrepreneurship Week, here’s an overview of some of the most memorable aspects of the 24 entrepreneur interviews.

 

Despite the new air access, remoteness was still an issue for local business
Rather than the five-day RMS journey from Cape Town to the island, St Helena can now be accessed each Saturday by air and by near-monthly voyages of the MV Helena cargo ship.
However, many local businesses last year said that importation of goods to the island was still one of their biggest challenges.


Cutting Edge Salon owner Sandie Walters, for instance, said many of her hair products couldn’t be flown in due to air freight regulations, so she had to import her stock via the MV Helena – typically she had to book cargo at least three months in advance.


img1
Sandie Walters inside Cutting Edge Salon.
“It’s difficult trying to get products to the island,” Sandie said. “The worst thing to say to a client is ‘Oh, I can’t do your hair today because we don’t have the product.’ We have to order three months in advance, so we have to think ‘Will we run out of this product or that product?”


And the shipping costs were almost as significant as the waiting time.


“We have to pay 20% when you buy straight from the manufacturers, and then another 20% getting it into the island,” Sandie said. “So it’s 40% on top of what you bring in, and if you want to aim for something different in quality products, it’s costly.”


And for Clint Stevens – who owns and operates Clint’s Haulage (providing industrial services such as JCB hire, truck mechanics and haulage) – replacing vehicle parts was a significant struggle.


Although he could order vehicle parts on air freight, costs for air-freighting heavy equipment like truck and JCB parts were prohibitively expensive. (Pricey air freight costs were demonstrated last year by air-freighted potatoes, which cost three times the potatoes imported by ship).


img1
Clint Stevens of Clint's Haulage.
Clint said rising freight costs on the MV had hit hard, complicating maintenance of his fleet; and if a vehicle broke down and Clint needed large vehicle parts like gearboxes, it could take months before he was back up and running.


“When you get a [vehicle] breakdown, you stay down,” Clint said.

 

Utilities increases affected business
Last year, the island’s water tariffs increased by a total of 40% and the island’s phone services increased even more.


The local businesses that relied most heavily on water usage reported being the most affected by the increases.


“To run an innovative [horticulture] system, my pumps are running 24/7 to get the water up the system and back,” said Martin Joshua of Joshua Brothers Covered Productions. “So utility costs are quite expensive.


“Price increases are linked to any increases in utility bills,” said Vanessa (Nessy) Baggett of Annie’s Laundrette, Napoleon Street. “Our main outlay is electricity and water, so as much as we try to keep our prices as reasonable as possible, we cannot help but pass on increases such as the last rise in water charges.”


And the island’s main butchers was greatly affected by electricity as well as water increases.


“The biggest challenge that we face right now is of course the prices of utility rates, they are really affecting our business,” said Vanessa Stevens of Stevens’ Family Butchery. “To put it into perspective – for just electricity, per quarter, for just one of our buildings alone, we pay on average £4,000.”


img1
Stevens Family Butchery.
Minimum wage on St Helena was £3.05, and Vanessa said that she often found herself thinking long and hard about whether her customers could afford a price increase, even if the increase seemed necessary for the Butchery.


“We have felt recently that our customers are being affected by what many are calling an ‘economy in crisis,’” Vanessa said. “At the moment I think St Helena is in a very bad state, so money isn’t always plentiful.”

 

Increased prices were not offset by increased footfall
The majority of the business owners echoed the same feeling – that perhaps the increasing amount of local businesses could survive if there were a bigger market on the island.


Many business owners felt they had been encouraged to invest but were not seeing the tourists they thought would by now be frequenting the island.


img1
A plate of food at Rosie's restaurant.
“Things got more expensive on the island,” said Rosie Bargo of Rosie’s Bar & Restaurant. “The spending power of the islanders didn’t increase with the rate of inflation. We’ve found that people really don’t have the money to spend over the last couple of months, and you can feel it, you can see it. It has been a bit of an impact[...] we were hoping for more people, but that didn’t happen, and that is crucial for the success of any business in the hospitality sector.”


But some business owners, like Tara Wortley of the Rose & Crown, identified that a few more tourists indeed were coming into the island since the opening of the Airport; but significantly, footfall to businesses seemed the same or worse because of the exodus of Basil Read and its subcontractors.


“I think it’s fair to say that we’ve seen a downward trend since the exodus of what was the Basil Read staff,” Tara said. “And so I think we’re also quite keen to see, as we approach this off-peak period for St Helena after the summer months now, to see how that affects the footfall coming to St Helena and then how that affects what’s happening on the shop floor and in our books.”


And Saints began leaving the island in greater numbers after the Airport opened – Tara said that not only was this an indicator of an economic slump being tangible to the local population, but it was a difficulty for staffing of businesses.


“So from November until the end of February we’ll be losing seven members of staff,” she said earlier this year. “We currently employ close to 40 people across all of our businesses, and seven of those people are moving either to Ascension Island, to the Falklands or back to the UK looking for better opportunity. And that is I think a strong indicator of what is happening [on St Helena].”

 

Despite the challenges, the Saint businesses were finding solutions
Although Sandie couldn’t herself do anything about the shipping costs for her salon products – and although she did set herself up as competition to other existing salons – she immediately tried to establish her own unique place in the local market. Cutting Edge aimed to offer “that little something different” by using and selling higher-quality products like KeraStraight, which weren’t available in any shops on St Helena.


And like many other business owners, Sandie said she was seeing an extremely low level of tourists. Despite lower-than-expected numbers, Sandie and other business owners decided to concentrate, at least for now, on building and maintaining their local market. Expansion would come if/when more tourists did.


And despite price increases, finding and maintaining existent areas of St Helena’s market where there was opportunity to capitalise upon, kept some businesses relatively stable. Both Annie’s Laundrette and Anne’s Place, for instance, focus much of the year on servicing the yachting community – a community that frequents the island especially during certain months but on which, said Jane Sim of Anne’s Place, other local entities don’t typically focus their efforts. And Martin Joshua was trying to offset water tariffs with more innovative and sustainable methods that cut costs in other areas.


img1
Anne's Place has also kept their traditional hog roasts going - these get booked out almost instantly and occur around once a month.
And in terms of a lack of footfall Giselle Richards of G-Unique wasn’t just idly waiting for more tourists to come. Instead, she made her import costs cheaper and more sustainable by using more locally sourced materials, and set up online ordering for international customers.


“We’ve started doing a lot more online work to try and export where we can,” Giselle said. “If you can’t make do with what you have right now, you have to try and do something to make it easier to access other streams of revenue.”


While mainly all 24 businesses were supporting themselves, each at some point sought help from ESH. Sometimes a business only needed a few extra plates or a single water tank in order to survive – sometimes the business needed a start-up loan or a bit more support.


While times continue to be challenging and stories of businesses closing will no doubt continue surfacing, each business The Sentinel featured last year remains open. Some have existed and adapted to a changing island for generations; while many have only opened within the past few years.


Clearly, while the business environment on the island is far from ideal, the business owners featured were all fighting to find solutions to the difficult and unique problems of St Helena today, to keep their local businesses alive.


It was perhaps Tara Wortley who best summed up this drive to keep local business afloat. We asked her if there was any secret to sustainable business on St Helena, despite the challenges:
“Hard work. And to be honest that’s the only way I can summarize it because obviously the business is managed between myself and my mum and dad, and I think at face value people look at the number of outlets we have and they see that the business is expanding – but that takes a lot of hard work underneath it all.


“When you’re running a business, you have to be willing to dedicate [yourself to] it, and it doesn’t come easy. So in this environment now, I think you will whittle out the weak businesses. And that happens in any economy – just because the businesses are closing down that doesn’t mean it’s bad, it’s a sign that we all have to be resilient and look for innovative ways in which we can create greater value in our businesses during this difficult time.


“Over recent years we’ve increased the number of lines that we import ourselves – we are constantly looking for new suppliers so that we can introduce new product lines... you have to be willing and responsive to identifying those kinds of trends. And we don’t always get it right, we still run out of stuff and the lead times with trying to get goods from the UK is quite challenging. [But] I like to think that we try to stay ahead of our competitors by keeping our products fresh, and always just looking for new opportunities.”

.