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Presentation
• Comparatively, Jamaica is considered to be very
entrepreneurial. Approximately 17% of the
population had an interest in conducting some
form of business according to a Global
Entrepreneurship Monitoring (GEM) report. The
report further highlighted that, “Jamaica’s overall
rate of entrepreneurial activity compares
favorably with countries such as New Zealand,
(2005 – 28.26%) considered among “the world’s
most entrepreneurial countries”. Further
comparison with nations with similar economic
structure, showed Jamaica ahead of nations like
Argentina, Chile, Mexico, South Africa, and
Venezuela based on the number of nascent
entrepreneurs who continued on to operate
sustainable enterprises 1.
• Entrepreneurship is one of the core pillars of developed
economies, particularly due to the fact that it enables
positive contribution to economic growth and is essential
in driving community sustainable livelihood.
• Studies have pointed to the fact that the establishment of
new and small business is an engine for job creation and
not necessarily the mega-corporations. Comparatively,
countries with greater entrepreneurship impetus
experience significant reduction in unemployment rates
5. Therefore, it is important that Jamaica take the
corrective actions to nurture this great potential to
creating culture of entrepreneurs.
• When one considering the Jamaican scenario, it
becomes more crucial to focus on the development of a
culture where young people are enthusiastic about
creating wealth and their own employment. It is evident
that young people are faced with several challenges.
The rate of unemployment for young persons is three
times higher than that of adults 6. Skill levels among
youth entering the labour force are significantly low over
70%, 7. Additionally, the youth cohort dominates those
most affected by poverty 8.
• Create trust fund and finance programs for young
entrepreneurs
• One of the greatest challenges for young people in
their quest to start a business is the deprived access to
start-up funds. That is one of the primary reasons
saving is a positive behavior which should be
vigorously promoted. However, if Jamaican youth are
to excel in the field of entrepreneurship, access to
start-up capital is a fundamental prerequisite. With the
risks and high failure rate in business, it is being
proposed that special funds be put in place that reduce
the requirement to access loans and also provide
grants for solid business ideas.
Simple Business Ethics and Research
• Selecting the wrong business is the most frequent mistake that start-up
entrepreneurs make. Here is a checklist to help you select a successful one:
• Take your time and wait for the business that is just right for you. You will
not be penalized for missing opportunities. The selection process takes a lot
of planning and your experience and complete knowledge is vital for your
success.
• Don't tackle businesses that may be too challenging. It is better to identify a
one-foot hurdle than try to jump a seven-footer.
• Try to identify a business that has long-term economic potential. Follow
Wayne Gretzky's advice, "Go to where the puck is going, not to where it is."
• A big mistake can be an error of omission. This means you may fail to see
an opportunity that is right in front of you.
• Look for a business that will grow in today's and tomorrow's markets. Many
small retail stores are no longer in business because huge stores provide
more choices to the customer and often at a cheaper price.
• Businesses to avoid are "commodity" businesses where you must compete
entirely on price and in which you must have the lowest cost to survive. As
Mr. Buffett has said, "In a commodity type business you're only as smart as
your dumbest competitor."
• Most service businesses have pricing power.
• If you intend to manufacture a product, consider the pros and cons
of contracting out production to a low-cost supplier. In other words,
operate a "hollow corporation." A "hollow corporation" is a company
that subcontracts manufacturing and packaging.
• Impatience
• Do not let overconfidence short-circuit you from analyzing your
selection of businesses carefully. You must not fear of hearing the
negative aspects; it is much better to be aware of them and face
them early on.
• Be realistic. Do not become lured by high rewards. They will come if
you choose the right business and if you understand every aspect of
the business before you open its doors.
• Required Activities
• It is worth repeating again: The most common mistake and the most
costly one is not picking the right business to begin with. This is the
time for soul searching.
• How to Evaluate a Specific Business you have in mind.
• Here are some questions to help clarify your thoughts:
• Is it something I will enjoy doing?
My favorite activities are:
__________________________
I like to serve people by:
________________________________
• Will it serve an expanding need for which there is no
close substitute?
• Can I be so good at a specialized, targeted need that
customers will think there is no close substitute?
• Can I handle the capital requirements?
• Can I learn the business by working for someone else
first?
• Could I operate as a hollow corporation, without a factory
and with a minimum number of employees? ("Hollow
corporation" refers to a business where everything is
"outsourced," meaning you would subcontract
manufacturing and packaging to outside sources. )
• Is this a product or service that I can test first?
• Should I consider a partner who has complementary skills to mine or
who could help finance the business?
• What service or product does my business provide and what needs does it
fill?
• Who are the potential customers for my product or service and why will they
purchase it from me?
• How will I reach my potential customers?
• Where will I get the financial resources to start my business?
• Self-Confidence
Entrepreneurs are self-confident when they are in control of what they're
doing and working alone. They tackle problems immediately with confidence
and are persistent in their pursuit of their objectives. Most are at their best in
the face of adversity, since they thrive on their own self-confidence.
• Sense of Urgency
Entrepreneurs have a never-ending sense of urgency to develop their ideas.
Inactivity makes them impatient, tense, and uneasy. They thrive on activity
and are not likely to be found sitting on a bank fishing unless the fish are
biting. When they are in the entrepreneurial mode, they are more likely to be
found getting things done instead of fishing.
• Comprehensive Awareness
Successful entrepreneurs can comprehend complex situations that may include
planning, making strategic decisions, and working on multiple business ideas
simultaneously. They are farsighted and aware of important details, and they will
continuously review all possibilities to achieve their business objectives. At the same
time, they devote their energy to completing the tasks immediately before them.
• Status Requirements
Entrepreneurs find satisfaction in symbols of success that are external to themselves.
They like the business they have built to be praised, but they are often embarrassed
by praise directed at them personally. Their egos do not prevent them from seeking
facts, data, and guidance. When they need help, they will not hesitate to admit it
especially in areas that are outside of their expertise. During tough business periods,
entrepreneurs will concentrate their resources and energies on essential business
operations. They want to be where the action is and will not stay in the office for
extended periods of time.
• Symbols of achievement such as position have little relevance to them. Successful
entrepreneurs find their satisfaction of status needs in the performance of their
business, not in the appearance they present to their peers and to the public. They
will postpone acquiring status items like a luxury car until they are certain that their
business is stable.
• Interpersonal Relationships
Entrepreneurs are more concerned with people's accomplishments than with their
feelings. They generally avoid becoming personally involved and will not hesitate to
sever relationships that could hinder the progress of their business. During the
business-building period, when resources are scarce, they seldom devote time to
dealing with satisfying people's feelings beyond what is essential to achieving their
goals.
• General Start-Up Activities
• Determine the business you want to start and determine:
• Your qualifications for the business.
• The feasibility of making that business profitable.
• Conduct research on your industry, target market and
• competition.
• Select a location and analyze it for traffic, parking, and customer
• and delivery access.
• Investigate all start-up procedures specific to your industry.
• There is a lot to think about when you are starting your own business.
• The following checklist will help guide you on:
• Checklist for Business Start-Up
• 1
• www.paopen4business.state.pa.us
• Write a business plan that includes your strategies for
• management, marketing, production and financial contingencies.
• Develop a list of all potential monthly expenses.
• Determine potential sources of financing for your type of
• business.
• Develop a list of all equipment and purchases required to
• start your business. Identify the costs of each.
• Research potential suppliers and investigate credit terms
• with each.
• Develop descriptions of all duties within your firm and
• determine the person responsible for each. Identify future
• educational needs.
• Business Start-Up
Costs
• Ownership structure
– Owners and how much they are investing
– Shareholder agreements
– Which owners are making personal guarantees
Proposed company financing sought
– Desired amount and terms of financing and form (equity, grant or
loan)
– Timing of required financing
– Proposed use of funds, scheduling
• Simpler Outline
• Executive Summary - summarizing key
• points of the plan in one or two pages.
• Overview - introducing the reader to your
• company and the industry.
• Description of products and services.
• Analysis of the market in which your
• business will compete.
• Marketing strategy - summarizing the
• product, promotion, pricing, and distribution
• strategies of the business.
• Operations plan.
• Description of the experience, training,
• and talent of your staff.
• Schedule of activities outlining your
• timeline.
• Analysis of critical risks and problems.
• Financial plan - including pro-forma
• balance sheets, income statements and cash
• flow statements. A balance sheet compares
• what your business owns (assets) to what it
• owes. A cash flow statement compares how
• much money will be coming in to how much
• you will be spending. An income statement
• compares your revenues to your expenses to
• see if you are going to make money.
• Once you have worked through your business plan and have a good
product, you should work on your personal presentation. Remember, your
ability to effectively manage is being judged, as is your business plan
itself. Preparing key visual aids, developing responses for likely questions
and repeated practice are good strategies.
• What are some sources of investment capital?
• Many people interested in starting a business immediately look to
commercial banks for financing. This is understandable because of the
important financial role banks play in our society. However, banks are only
one source of possible financing; often a business combines several
sources. The following list of potential financing sources is presented for
your consideration.
Yourself
In addition to contributing your own sweat equity, you have to be willing to
put up a good share of the money. No lender will give you money if you are
not at personal financial risk. You may be asked to personally guarantee
repayment of any loans made to your business. As well as indicating your
commitment to the business, personal investment is one of your easiest
sells. If you can't convince yourself to invest, who can you convince?
Savings, mortgages, personal possessions and life insurance policies are
just a few sources of money that can get you started.
Relatives and friends
Again, these are people you should have a good chance of
• convincing to loan you money. They know
you better than any potential outside
lender. However, be careful. Make sure
your relatives and friends know the risk
involved and formalize the lending
arrangement with a promissory note or
loan agreement. Many personal
relationships have been ruined by small
business failure.
• Government-sponsored financing programs
State and local governments offer financing options for
your company, as well. Many have subsidized loan
pools that provide fixed-rate, below-market business
loans or grant programs. JBDC.
• Small business investment companies are private
companies that offer financing JNBS. Licensed by the
Small Business Administration, they provide debt and
equity capital to many small businesses. They will
undertake more risks but also demand greater rewards
through either higher interest rates or equity positions.
Commercial banks
Banks operate on a small margin of error and are
extremely wary of investing in a risky
business. Collateral to more than fully secure the loan -
including personal guarantees - is necessary to convince
a bank to lend you money.
THE END