Start-ups start feeling the Covid-19 heat

Entrepreneurs calling for rent waiver and extension to stay at centre

Yangchen C Rinzin

With uncertainties surrounding the Covid-19 pandemic and many Bhutanese working overseas returning home, one of the priorities of the government is looking into creating job opportunity for the returnees.

At a press briefing on Friday, foreign minister Dr Tandi Dorji said that recognising that it could take few more months to a year for the workers to return, the government is already planning and according importance to job creation.

Lyonpo said the government is looking in the areas of start-ups, agricultural entrepreneurship, CSI flagship programmes, and that the labour ministry is already working on the Build Bhutan project.

“We’re keeping records of the returnees and their skills so that we can create opportunity based on these,” Lyonpo said. “We’re doing everything possible, but we are not rushing and taking time to plan properly,” Lyonpo said. “The government would announce as and when concrete plans are finalised.”

However, while the government is planning to create opportunities, many entrepreneurs at home are facing several challenges in the face of the pandemic.

Some existing 30 entrepreneurs at the Start-up Centre at Changzamtog are already struggling, especially because of the lack of market and raw materials.

The entrepreneurs expressed that entrepreneurship is not easy in Bhutan given the business atmosphere.

They blame almost everything from layers of bureaucracy to lack of customers and preference for imported goods or services.

“If entrepreneurs have to succeed, we’ll first have to change people’s mentality to start opting for Bhutanese products,” an entrepreneur in Thimphu said. “Where there is an international market opportunity, such businesses are usually taken up by established big businesses.”

Whether at the start-up centre or home-based businesses, many entrepreneurs shared that some of the challenges that hinder many are product diversification, innovation, and transportation, lack of raw materials, and rigid rules and regulations.

Some said that even with a market, lack of human resources and capital has made it difficult to grow. “These challenges have hindered us from going beyond one product design,” an entrepreneur said. “People hardly trust local products and always compare with imported goods.”

The Covid-19 pandemic has crippled its businesses. Many said they had zero products since the lockdown in India, as raw materials are stuck across the border.  Majority of their customers were tourists.

The 30 entrepreneurs were provided space for two years at minimal fees at the Startup Centre, after which they would have to leave and give away to other upcoming entrepreneurs.

Constructed at the cost of Nu 67.5 million, business ideas are nurtured and developed, at the centre, through support programmes such as training, marketing, product designing and development, linkages to financial institutions and other business development services.

However, these entrepreneurs are expected to start their own business after completing their tenure in June. But many entrepreneurs are worried and are not prepared to go out and establish a business.

One entrepreneur said that although they have tested the market and products, they have not earned enough cash to roll out and continue business.

“Before or after the Covid-19 pandemic, situation has been the same. How are we supposed to leave the centre, it’s difficult?” an entrepreneur said.

Majority of the entrepreneurs want to appeal to the department of cottage and small industries (DCSI) to waive rents for six months. They are also appealing for extension of the tenure.

“Even if we produce good with raw materials available, there are no customers. The restriction on the movement has also affected,” one said.

Some of the entrepreneurs whose raw materials are available in the country said that just as their business was picking up, Covid-19 disrupted the market.  “Sometimes, we feel that the whole concentration is on the big business and small entrepreneurs are forgotten.”

Although they are on the lookout for space to move their business, high rent discouraged them. Some employ more than 10 employees who are mostly youth and housewives. Although many have managed to pay the full salary, they are worried if the situation worsens.

Many have also applied for the Druk Gyalpo’s Relief Kidu.

Meanwhile, DCSI director general Tandin Tshering said that it would be unfair to extend the tenure because this would deprive of about 77 who have applied and are waiting to occupy the space for the last two years.

“We’ve helped them in every possible way and if they want, we can help them get places in the industrial parks to start their business,” the director general said. “We’re not chasing them, but we must ensure we create equal opportunities for other start-ups too.”

The director general said that they would also help the entrepreneurs get raw materials if they approach through soft working capital loan and bilateral arrangements.

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