Small Business Hurdles in Ecuador

A convenience sample of small businesses in Quito, Ecuador, was consulted under the sponsorship of the Kentucky-Ecuador section of Partners of the Americas. Problems of small business in Ecuador include: 1. insufficient numbers of educated and trained personnel, 2. lack of trust of nonfamily members, 3. the inability of employees to follow instructions, 4. limited economies of scale, 5. a limited supply of foreign exchange with which to buy goods from other countries, and 6. lack of understanding of the concept of trade associations. These problems are partly culturally based and partly macroeconomic in nature. Therefore, widespread change in Ecuador probably will depend on long-range central planning. The Partners of America program emphasizes the importance of advance planning as opposed to reaction to events as they occur. The program covers cost accounting for individual products, basic budgeting, and cash flow for small plants.