Businesses in T&T need to develop a more risk-taking culture and also there needs to be more funding from financial institutions for businesses that take risks and make investments, says Kristine Thompson, director of the local franchise of Chuck E Cheese's and former chair of InvesTT.
"Innovation in the research and development (R&D) sense is difficult without critical mass and the economies of scale. If people know their prize is a lot bigger, it is easier to take the risk. In T&T, we are not, culturally, a risk-taking society. We also do not have the funding mechanisms in place. R&D and infant industries require government's support in the early stages to get off the ground; then it can be self-sustaining. T&T could have more of that," she told the Business Guardian on Tuesday.
Thompson, who previously was vice president of business development of the CariSal chemical plant project, said the transition from that project to setting up a US franchise in T&T was an easy one.
CariSal Unlimited was founded in 2005 for the construction of a chemical complex that was expected to produce caustic soda, calcium chloride, hydrochloric acid and sodium hypochlorite. It never got off the ground because of lack of financing.
"The CariSal project was a US$400 million project that we were negotiating with the Inter-American Development Bank and other banks. It was a complex and difficult process. Moving away from that to Chuck E Cheese's was much easier as the project was smaller and accessing financing was much easier. The CariSal project, in a way, prepared me for Chuck E Cheese's as I developed contacts, some of whom I used in setting up this present franchise," she said.
She added that traditional forms of financing for innovators are not readily available in T&T as in other countries.
"There are the angel capitalists, venture capitalism, other sources of equity funding that are not readily available in T&T. Getting bank funding for a new and proven idea is extremely difficult.
"In fairness, bank financing is not an appropriate source of funding for SMEs. Bank funding is not risk funding. You need risk funding supported by bank funding. I think young business owners need to be plugged into the right networks of people to help them develop their ideas. I believe bright minds do exist. There are lots of innovative, creative young minds in T&T but are not finding their path to success with their ideas."
Thompson said getting a business off the ground in T&T is difficult.
"We have lots of opportunities but, unfortunately, getting business plans executed takes a lot of stamina and persistence. We have a culture of autocratic governance where power is centralised at the top.
"The Cabinet of the Government of T&T is a perfect example of centralised decision-making where many different types of decisions need to go to Cabinet for approval. We have intelligent people in the Cabinet but they cannot get through the action items in an efficient manner. This causes delays for projects and investments. It is difficult."
She said one possible answer is accessing financing from liquidity from credit unions and other non-bank institutions.
"There is a lot of liquidity in non-bank financial institutions like insurance companies, credit unions and other places. I keep lobbying some of my finance colleagues. If we could get our legislation to allow even up to five per cent to back capital to be invested in projects outside of an admissible asset, something that does not have a three-year track record. You cannot play Russian roulette with people's retirement funds but perhaps you can take a small portion and collectively put it towards developing good ideas in a structured way."
She said T&T is not the only country in the world where corrupt practices have hurt business practices.
"You can find the example of business disasters caused by ethical failings all over the world. You can look at Wall Street, look at Lehman Brothers, look at Enron. I do not think lack of business ethics in business is a T&T thing. However, we need to be able to manage those judicial and regulatory systems swiftly and correct them so they do not happen again. We cannot have white-collar crime go unfettered."
She said T&T needs business leaders who are persistent and have the ability to cut through the bureaucracy that exists.
"Persistence is important. Also, there needs to be commitment. Never give up, follow up and, eventually, it will get done."
Thompson's business partner and co-owner of Chuck E Cheese's, Joanna Rostant, argues that T&T is more innovative than many people think.
"Firstly, innovation is not just about a product but about a service. Look at how maxi taxis evolved in this country. It was the answer to poor services in the public transportation system. Look at mas bands like Tribe and Bliss and how they have revolutionised that Carnival industry and taken it around the world. They have taken the partying experience to a different level."
Thompson and Rostant spoke to the Business Guardian at its Chaguanas office.
Expansion
Next month makes it one year since they opened the first restaurant in Brentwood, Chaguanas, on July 17, 2014.
Thompson spoke about expansion plans.
She estimates that the cost of a opening a new restaurant is $15 million.
"This does not include base building construction. This sum covers the outfitting like furniture, ceilings, carpet, walls, electrical, kitchen equipment and games. The truth is that it is 13,000 square feet that you have to outfit and close to a 15,000-square-foot restaurant in San Fernando."
She said they plan to open two more restaurants over the next two years and they will be bigger in size than the first store.
She added that their first year's experience "exceeded their expectations."
"Our most immediate next restaurant is San Fernando. We are opening that in the new C3 Centre where MovieTowne in San Fernando is going. That should be opened by the end of the year. It is going to be 15 per cent bigger in size and 20 per cent bigger in games and seatings. We have 65 games in Chaguanas and will have 85 in San Fernando. What they are replicating in that San Fernando development is like a MovieTowne. So we would be in the fiesta plaza equivalent, alongside other casual dining restaurants. The aim is that families would go there for entertainment and have a variety of options."
She said the economy will improve and it is important for business to look ahead and capitalise on the opportunities that exist.
"Our offerings within the competitive space is superior and I think, because of that, the concept will continue to do well. San Fernando is booming right now. What the US has found is a concept of resilience in a recession. Even if you have your last $100, mothers want to put a smile on their children's face. So they will pay for that."
Given their experience in the corporate world, Thompson and Rostant wanted to create a new project from the ground.
"We felt we had achieved a lot but we were not getting the balance in our lives that we wanted. We are mothers. There was the desire to create something from the ground up, something more entrepreneurial. A new challenge. Chuck E Cheese's for us filled a major gap in the market for family entertainment.
"We believed as mothers of young children there were not many options. This offering of the fun, entertainment and games which Chuck E Cheese's provide–having seen it in the US–we felt it was fantastic experience at an affordable price and it would do well in T&T."
Rostant said the Chuck E Cheese's concept is very easy as customers walk in and there is menu to choose from.
"Value meals are a package where there are drinks, meals and the token for the children to play. There are children's meals, platters, sandwiches, pizzas. The options are limitless so you can come and just play and come and eat or both. We average about $100 a person. If you come in with a family of four and spend $400 you can have a grand time for a few hours."
She attributes their success to being able to offer a wider variety than other restaurants in the casual dining restaurant industry.
"We have competitors that are doing some of what we do; there are pizza chains serving pizza, there are other entertainment centres serving entertainment with some snacks. We offer the holistic experience. The character of Chuck E Cheese is an orphan but he celebrates life every day. That mascot comes out in the restaurant every hour and provides a vibe and experience that is hard to replicate."
She said the Chuck E Cheese's mascot is more well known than Mickey Mouse worldwide and continues to grow.
"Chuck E Cheese's is now in Saudi Arabia, Dubai, Peru, Chile, Costa Rica and all over the world."
Thompson believes that it is their well-trained staff and investment in training that keeps employees happy. They do not have the major headache of labour shortages as other businesses do.
She acknowledges there is a shortage of labour in the country. She believes that the way business owners treat their employees has a lot to do with whether they stay or go.
"I cannot accept the premise that Trinis are lazy and Trinis are rude and we do not care. We brought down the Chuck E Cheese's team from the US for training and, up to this week, they were here. A significant proportion of the staff has been with us from the start. We are competing for employees the same way we are competing for customers.
"In the labour market you are going to have a competitive advantage if you treat your employees well."