BizWorld Jamaica

Forbes Magazine list Jamaica as number 70 , one place up from last year , as the one of the Best Countries for Business.

Why is Jamaica on the list?

The Jamaican economy is heavily dependent on services, which now account for more than 60% of GDP. The country continues to derive most of its foreign exchange from tourism, remittances, and bauxite/alumina. Remittances account for nearly 15% of GDP and exports of bauxite and alumina make up about 10%. The bauxite/alumina sector was most affected by the global downturn while the tourism industry was resilient, experiencing an increase of 4% in tourist arrivals. Tourism revenues account for roughly 10% of GDP, and both arrivals and revenues grew in 2010, up 4% and 6% respectively. The Economic growth faces many challenges: high crime and corruption, large-scale unemployment and underemployment, and a debt-to-GDP ratio of more than 120%. Jamaica's onerous public debt burden - the fourth highest in the world on a per capita basis - is the result of government bailouts to ailing sectors of the economy, most notably to the financial sector in the mid-to-late 1990s. In early 2010, the Jamaican government created the Jamaica Debt Exchange (JDX) in order to retire high-priced domestic bonds and significantly reduce annual debt servicing. The Government of Jamaica signed a $1.27 billion, 27-month Standby Agreement with the International Monetary Fund for balance of payment support in February 2010. Other multilaterals have also provided millions of dollars in loans and grants. Despite the improvement, debt servicing costs still hinder the government's ability to spend on infrastructure and social programs, particularly as job losses rise in a shrinking economy. The GOLDING administration faces the difficult prospect of having to achieve fiscal discipline in order to maintain debt payments, while simultaneously attacking a serious crime problem that is hampering economic growth. High unemployment exacerbates the crime problem, including gang violence that is fueled by the drug trade.

Source;Forbes.com

Several years ago, people started highlighting the green movement as a popular trend among the small businesses. Though it isn’t easy to go green when the economy was going blue, yet according to the financial experts the US economy will look brighter as they hope that most business organizations will be more focused on long-term sustainability. Presently, it is being studied that business practices that are environmentally responsible are becoming a top priority for most business organizations in 2011 as most of them are beginning to realize the multiple benefits and the competitive advantages that come with going green. However, being a ‘green business’ now and in the near future demands more transparency over the green practices and lesser tolerance of fussy green marketing. Here’s a look at the most famous green business trends that you can expect in 2011. Go green to save the environment and also set up a debt advice and fiscally sound business that’ll help you save your dollars during this financial frenzy.

Charting the success and progress of a company: If you study the business practices of the big companies like Microsoft and Walmart, you’ll come to know that they are busy creating separate teams that entirely focus on environment stability and they also employ executives to monitor the effective functioning of this team. As such ‘go green’ practices are adopted by the big shot companies and this is simply raising the bar of every other company, whether small or large. Seeing the bigger companies adopt green business practices, their smaller counterparts will also weave environment sustainability within their business budgets. They will create full-blown environment friendly plans to benchmark their progress.

LEDs will get more play within the green business organizations: As per some reports suggested by the New York Times, the price of some LED (light emitting diodes) light bulbs dropped to less than $20 in 2010 and they are expected to decrease further in 2011. As lighting is one of the biggest energy-costs for most businesses, an increasingly large number of them will start replacing the older lights with LEDs, which use at least 75% lesser energy than the traditional lights. Moreover, there are many utilities that are introducing a number of rebates in order to make the advance costs of LED lights appetizing.

Eco-managing the suppliers of the business: If your consumers find out that your products are sourced in highly environment unfriendly ways, it will not take much time for them to unravel your green image. Dig in deep into the green business practices that are adopted by your suppliers and set higher standards for them to better monitor their practices.

Green business marketing will get smarter: With the popularity of the green business trends, more companies are becoming savvy enough to let their customers known about their environment sustainability initiatives. You must converse with your customers in creative ways and get involved in public awareness campaigns. People should know why and how the green business practices make a difference in the way they run their organization. Companies will devote particular sections of their websites explaining their carbon-saving and resource-saving initiatives.

Is there a myth that going green can cost your business more money?

Well, yes there are many business organizations that think about the profit in terms of short term cash flow. The challenge is set when the small businesses think in terms of long-term growth. If you do it right by adopting the right techniques at the right time, you can save enough dollars in the long run. Make sure you assess each purchase to determine whether or not going green is more cost-effective for your business organization.

What’s the cost of not going green and faking it?

The harsh reality of the green market trends in 2011 is that not going green will cost you as a service provider and will also cost your customers in the long run. As the customers are becoming aware of the green services and products, you may even lose on customer retention if you do not go green. Nothing can be worse than faking it and duping your clients. They can see through the token attempts of adopting green business practices and they will smartly pass you by if they detect that you’re not entirely committed to going green.

Environmentalism is not for the wackos any longer. Consumers, across America are trying to lead more environment friendly ways to stay frugal and save energy. If you’re someone thinking of starting a new business, go green to stay an edge over others. Stay satisfied as you get to make your own contribution in making the world a better place to live in.

Samantha Spuckler is a  writer for various finance related Communities including Debt Consolidation Care. She is a financial writer by profession and has specialization in dealing with financial problems and its solutions.  She is well equipped to write articles on debt consolidation, savings, planning, frugality, debt settlement etc.

I hate my nine-to-five job, and I would love to work in a business of my own. I’ve always dreamt of one day leaving a large, vibrant company for my son to carry on, to give him a good start in the world. I opened a wholesale shop once, but I ended up losing a lot of money. I would like to start another venture, but don’t think I can afford to fail again. What can I do to guarantee success in business?”

It’s wise for you to approach starting a business with some amount of caution. A business venture can be a potentially profitable form of investment, and it’s probably the route to eventually achieving financial freedom. Unfortunately, there are many stories of people who have gone into business and lost a lot of money, even ending up seriously in debt.

Even though the failure rate is high for start-up businesses, it is possible for you to eventually achieve your dream if you approach it with careful planning. Here are some factors to consider for your next business idea:

Set A Goal

The first thing you need to do is to set a goal for what you want to achieve in business. Do you have some talents and knowledge that can translate into dollars by offering your services for sale? Are there any products you could provide that can solve a problem, or satisfy an unmet consumer need? What is it that is going to make you different from the rest of persons offering similar services or products? These are some of the considerations that can help you to focus your idea into a workable business venture.

Make A Plan

Would you build your dream house without first getting a blueprint made? Probably not. However, many people jump into businesses, without first designing a plan how this venture will operate. A business plan can help you to create a strategy to carry out your overall goal, identify your target market, see how much money you will need to stay afloat, and identify potential threats before they arise.

The plan doesn’t have to be a large, complicated document. For a small business, a simple, realistic and specific plan can be your road map to guide you through to business success. In fact, it can help you to decide if the business idea is actually feasible or not. You can contact the Jamaica Business Development Centre at 14 Camp Road, Kingston 4, to receive professional assistance in business planning.

Accumulate Working Capital

Many businesses fail, not because the business idea was bad, or that it couldn’t be profitable, but because there wasn’t enough cash flow to meet everyday expenses. Your business plan will help to identify your working capital needs, and if your profit margins will be enough to cover your costs. Once you have identified how much you cash you need to start the business, you can start saving toward that goal. You may also require additional funding. Lending agencies typically require business plan outlines and cash flow statements before they will provide a loan. You can also interest other people to invest in your business idea for an equity stake in your business.

Learn About Business

Success in business is not usually dependent on luck. Like any other skill in life, you must learn how to develop by experience, trial and error, and getting advice from successful business people. If you want to provide a service, become an expert in your field through training sessions, apprenticing, and research. Read entrepreneurial magazines and books. If you are currently working in a thriving company, study the strategies that have been used to grow the business. Identify areas that are not working well. Get professional guidance from an accountant to ensure that your profit margins are sufficient and that you comply with the tax laws.

Be Persistent

Business success is usually not an overnight achievement. Most start-up businesses won’t turn a profit for a few years. Your business plan will show you if you are on target, or if you need to make adjustments in your strategy to succeed. Learn from your errors, but don’t let them defeat you. Persistence and a strong belief in your original goal will help you to survive when the difficult times come.

While you’re planning to start your own business, try to find a product or service to provide while you continue with your nine-to-five. Perhaps you can supply your office with phone cards, or type up documents for a fee. You could start a network marketing business supplying vitamins or household products. Small successes can give you extra cash and the confidence to begin your business venture.

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(c) Cherryl Hanson Simpson

Cherryl is a financial consultant and money coach, and founder of Financially S.M.A.R.T. Services. She is currently writing her first book "The 3 Ms of Money." See more of her work at www.financiallysmartadvice.com

It’s a common belief by new entrepreneurs that the route to business success lies in easier access to start-up financing for their fledgling operations. The reality is that an injection of money can sometimes be insufficient to help an enterprise prosper if the owner is inexperienced in business.

From observing the mistakes of many young entrepreneurs (myself included), I know that working capital will often be misused and wasted in the hands of someone who is just starting out in business. The saying “Experience is the best teacher,” could very well have been written by an entrepreneur who gained worldly wisdom after several costly business errors!

The challenge for most young entrepreneurs is that they usually don’t have the money to pay for expert business guidance that can make their journey smoother and less stressful. Many business newbies also don’t recognise the value of cautious advice, thinking that no one can understand their business ideas better than they do.

Mentorship: The Voice of Experience

I believe that one of the most essential factors for the promotion of a thriving youth entrepreneur sector in Jamaica is the availability of mentors to provide business counselling. Business mentors are experienced business owners who volunteer to coach persons on how to successfully run their own operations.

While consultants can be hired to provide business guidance, mentors usually offer their services without charge. It might seem strange for someone to offer this valuable advice for free, but mentors are usually looking to give back to society by playing a part in the economic advancement of their community, or are actually honing their own strategising and consulting skills.

One of the major problems in self-employment is that there is no boss to turn to for direction. There are so many pitfalls and wrong turns along the entrepreneurial journey for someone who has never run a business before, that it’s crucial to have expert advice every step of the way.

Another benefit of business mentors is that they usually have access to a network of other influential persons who can be tapped to support the new business in several ways. Mentors can also supply emotional encouragement, as entrepreneurship can often be a lonely and overwhelming occupation for young persons.

Where Can You Find A Business Mentor?

One of the simplest ways to locate a mentor is to examine your contact lists and look around your community to identify persons who may have the expertise you need for your business. Your relatives, teachers, business owners, church colleagues, service club members, newspaper columnists, even your former bosses may have a wealth of information to guide you.

If you are going to be requesting advice from strangers, it’s important to be prepared with the appropriate questions so that you don’t waste their valuable time. It would be best to write a letter or email explaining what you’re trying to achieve, and asking for a brief meeting where they can help to guide you from their years of experience.

Once your initial contact is successful and the prospective mentor seems willing to help, ask for a follow up discussion within a month or two to review your progress. If a relationship develops, it’s important to respect your mentor’s time and expertise by being punctual, taking notes, carrying out suggestions, taking initiative as you grow, and showing appreciation for his or her efforts.

Young Entrepreneurs Association of Jamaica

Although we don’t have established business mentoring institutions like those that exist in the United States of America, Canada or New Zealand, there is at least one organisation where young entrepreneurs in Jamaica can get guidance.

The Young Entrepreneurs Association of Jamaica (YEA), a non-profit organization designed to support young people in business, was created by the Jamaica Employers’ Federation (JEF) in 2005. According to its website, www.yeajamaica.com, the YEA provides members with “an opportunity to learn from each other’s experiences and take advantage of peer mentorship as they grow their businesses.”

President of the YEA, Stephen Spence, explained that mentoring is a key focus of the association, as groups meet monthly to discuss their business issues and get confidential counselling and advice. There is also valuable interaction with entrepreneurs within the 55-member enterprises currently in the YEA, along with the wider business community at their training and networking events throughout the year.

Spence noted that the YEA is about to embark on an ambitious programme to significantly impact the development of youth entrepreneurship in Jamaica, which will be revealed at its annual expo on July 3.

I like to encourage persons who are experts in their fields of endeavour to pass on their knowledge to youngsters. I’m throwing out a challenge to every successful Jamaican business owner - help to create a more viable business sector in our country by becoming a mentor to young entrepreneurs!

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(c) Cherryl Hanson Simpson

Cherryl is a financial consultant and money coach, and founder of Financially S.M.A.R.T. Services. She is currently writing her first book "The 3 Ms of Money." See more of her work at www.financiallysmartadvice.com

One of the major complaints that I receive from small business clients is that banks are too rigid in their demands whenever they are seeking financing. A common cry is that many financial institutions are happy to collect their money, but never show the same appreciation when a loan request is made. Anyone who has made pitch for financial assistance and left the bank rejected and dejected has probably wondered, “What exactly does this bank want from me anyway?”

Recently the Small Business Development Agency in association with Scotia Small Business held a workshop on strategic business planning to assist small organizations to grow their operations. Peter Mohan, manager of Scotiabank Morant Bay, gave an insightful presentation which revealed some key issues that bankers focus on when considering whether your loan application would be successful or not.

Mohan opened the participants’ eyes to the bankers’ point of view, by explaining why it was essential for business owners to prepare a plan with as much information and supporting material about their operations as possible. “Banks are concerned with the sustainability of your business, your ability to repay the loan, and the risks surrounding your operation,” he pointed out.

Mohan noted that an effective business plan would assist the loan officer to assess these keys areas of an organization. “The quality of the information presented indicates the strength of the business,” he emphasized. Whether they need a loan or not, a business plan would also help entrepreneurs to arrange their ideas, check the viability of their businesses and anticipate problems before they happen.

Let’s look at some key concerns revealed by the banker, which can help you to obtain financing, and to succeed in your venture:

Is your business sustainable?

The longevity of your enterprise will depend on how practical your business idea is, how you have structured the entity, and the controls you put in place. Consider these questions:

• - Do you have a vision for your business?
• - Does your business idea satisfy a real need in the marketplace?
• - Have you evaluated the market in terms of competition and suppliers?
• - How do you differentiate yourself from your competitors?
• - What systems are in place to ensure proper monitoring of business
• activities (cash, inventory, receivables, record-keeping)?
• - Is the business insured?
• - What succession plans are in place?

Can you repay the loan?

Mohan pointed out that banks lend other people’s money, so they have to be convinced about a borrower’s ability to repay the loan. This is why lending institutions insist that applicants provide realistic financial documents accompanied with supporting evidence. The records needed are:

(1) Balance Sheet

Bankers use this to get a picture of your asset base and the nature of your liabilities.

(2) Profit & Loss Statement

Lenders want to see sales projections that are realistic based on your business. They also want to assess if your expenses are projected to grow ahead of your sales.

(3) Cash Flow Statement

This reveals the net of your cash inflows and outflows and is really the key to the success of the business. Mohan noted that profit is not equal to cash flow; and that a business could show a profit but still be in trouble because the cash was not coming in sufficiently to pay the bills on time. To help manage cash flow, he recommended that business owners assess these areas:

• - Are your credit terms reasonable and give you enough time to pay your bills?
• - Are you carrying too much inventory?
• - Are you collecting from your creditors fast enough to meet your obligations?

What risks does your business face?

Risks to your business can come within and outside of your organization, Mohan revealed. Some of the external threats may be out of your control, but it’s wise to be aware of them when making projections. Some questions to consider include:

• - What is the state of the industry your business is a part of? It is under
• threat from economic forces or changes in technology?
• - Is your own product at risk? Can it be easily copied by competitors,
• or are you protected by patent?
• - Could your small business be swamped and overshadowed by a
• larger competitor with more resources?

Mohan stressed that it was important to prepare a simple, interesting executive summary which would grab the loan officer’s attention. He revealed that the summary was oftentimes the only part of the plan that was read, and it could determine whether the banker continued to look at the rest of the proposal. Scotiabank has a business plan outline on their website www.jamaica.scotiabank.com, to help entrepreneurs with their planning. You can also access an interactive business planner via at www.financiallysmartonline.com.

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(c) Cherryl Hanson Simpson

Cherryl is a financial consultant and money coach, and founder of Financially S.M.A.R.T. Services. She is currently writing her first book "The 3 Ms of Money." See more of her work at www.financiallysmartadvice.com

“I need to get a loan to expand my small restaurant. However, many of the micro financing options charge interest rates that would kill my business. Regular banks ask for collateral that I don’t have. No one wants to sign as a guarantor for my loan. I’m getting very frustrated, because I know that if I got financing, my business would really take off. What can I do?”

The universal answer facing small business owners in search of financing is “No Collateral, No Deal.” If you’re an entrepreneur with a viable business idea or an expansion plan, at some point you’ve probably faced the challenges of raising capital without collateral.

There is an increased business-friendly focus in most of the commercial banks. With more people going the route of self-employment, it makes sense for financial institutions to pay closer attention to the development of the Micro, Small and Medium Enterprise (MSME) sector. Small business can eventually bring big business in the long run.

Despite the best efforts of the banks to woo entrepreneurs, some business operators still complain that not much has changed in the process of securing financing. If you don’t have the backing of a guarantor or some tangible collateral, it’s very difficult to get more than a token amount of funding.

It’s understandable that lending agencies choose to proceed with caution, as they have to protect their depositors’ funds. Delinquent borrowers have only made it harder for honest, hardworking entrepreneurs to get ahead. Laurence Adamson, consultant with the Corporate Finance Broker Unit of Jamaica Trade and Invest (JTI), explained that there are businesses that ‘bank hop’ for loans. “They rack up debt at one institution, default on the loan, then go to another bank for more money,” Adamson revealed.

There is currently no standard method of checking the credit worthiness of loan-seekers, unless they had previously done business with the institution. Therefore, to protect themselves, lending agencies may have to paint all prospective borrowers with the same negative brush. The good news is that there is now an initiative in place that will hopefully make it easier for small establishments to access funds.

A programme to develop a credit rating system for MSMEs was recently launched at the Technology Innovation Centre (TIC) at the University of Technology. With funding from the Inter-American Development Bank, the TIC, in association with the Institute of Law and Economics, will seek to devise a reliable system of judging the credit worthiness of small businesses.

These entities, called the MSME Alliance, will first interview 20 small operators drawn from five trade groups including cosmetologists, hardware merchants and taxi drivers. The objective is to gather more information about their business practices and to assist them to improve their operations. The alliance will then seek to develop a standardised method of rating the stability and viability of each business for credit purposes.

Adamson was optimistic about the development of an MSME credit rating system. He noted that a credit bureau would allow banks to operate in an informed environment where they could know their customers better. “If the bank has information that the business is not indebted elsewhere, or has a good track record of repayment, it will be more likely to approve the loan.” The lending institutions would also be able to reduce delinquency rates by avoiding habitual bad debtors who would be tracked by the rating system.

The JTI consultant also indicated that the department was lobbying for the establishment of a Mutual Guarantee Facility that would be underwritten by the government. The proposal is that the government would guarantee a portion of the amounts loaned by financial institutions to MSMEs. Adamson explained that this would allow small businesses to get lower interest rates and easier access to funding, by removing some of the default risks involved in lending to the sector.

So if you’re a small business operator currently struggling to find affordable financing for your operations, take heart. Improve your credit rating by ensuring that you’re current with your debt obligations and that your bills are paid timely, and this might help to increase your ability to access loans in the future.

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(c) Cherryl Hanson Simpson

Cherryl is a financial consultant and money coach, and founder of Financially S.M.A.R.T. Services. She is currently writing her first book "The 3 Ms of Money." See more of her work at www.financiallysmartadvice.com

“I’ve been thinking about starting my own business, but I’m nervous about the current economic climate. Is it advisable to begin a business in the middle of a recession? Are there any industries that might be less vulnerable at this time?”

It’s understandable for people to disbelieve the financial pundits who declare that crises can bring tremendous possibilities for new businesses. Prospective entrepreneurs might think, “Easier said than done,” as they are encouraged to look for business opportunities that have been created by the recession.

With consumers cutting back on spending, large corporations laying off workers and governments facing economic hardships, how can it be feasible for a small operation to navigate these turbulent times and create a solid foundation for success?

Despite these challenges, it’s not impossible for a business to begin life in the middle of financial upheaval and become a thriving enterprise. In fact, Microsoft emerged in 1975 during an economic downturn and Walt Disney began his empire in the recession of 1923. Our current crisis may just provide the perfect background for the birth of another mega business mogul!

Here are several considerations that can help you to be courageous and forge ahead with your business plans:

This recession won’t last forever

Historical data indicates that periods of stagnation are always followed by longer cycles of financial boom. Now is the perfect time to position your company to take advantage of the coming economic growth. If you wait until conditions are more favourable, then you may be bypassing your break to establish a solid footing in your industry.

Small businesses recognised as agents of growth

As the country grapples to find solutions to reverse the economic downturn, the importance of a vibrant small business sector is becoming increasingly evident. Financial institutions, government agencies and international funding organisations are now focusing on providing additional educational and financing support to help small businesses to develop.

Other people’s losses can be your gain

Unfortunately, the prevailing economic conditions will cause some companies to contract or close. On the flip side, these challenges can supply good deals for the new business owner. Going-out-of-business auctions can provide furniture, fittings and equipment at low costs; while turn-key operations with great potential can be available for lease or for sale at attractive prices.

Qualified workers are readily available

As thousands of workers join the ranks of the unemployed, they create a significant pool of resources that normally would not be accessible to a start-up enterprise. Your new business can hire experienced team members at affordable rates; and their expertise can greatly enhance your growth rate. In addition, you may gain employee loyalty by providing them with jobs.

Consumers have changing needs

Although people usually reduce expenditure on non-essential items in tough times, this situation actually allows new entrants to offer products and services that are cheaper and bring added value. As consumers are eagerly looking for ways to stretch their dollar, they will be more receptive to businesses that can meet their needs in innovative ways.

However, while the recessionary conditions can open doors for new enterprises, not every business opportunity will succeed at this time. In order to create a business that’s geared for growth, you have to understand changes in consumer demands and recognise new spending trends. You should also look to industries that will actually flourish in hard times.

Here are some of the fields that will present great potential for development:

Services for other small businesses

Many redundant employees will opt to become self-employed; so there will be thousands of new entrepreneurs requiring support services in the areas of business planning, marketing, accounting, administration, graphic design and website development, among others. To save costs, most business owners will choose to outsource instead of hire employees for these roles.

Educational services

With so many persons trying to find jobs, they will be forced to obtain new skills to compete in today’s marketplace. Businesses focusing on resume writing, computer education, foreign languages, and tutoring must-have subjects such as Math and English will be in high demand. You can also train persons in skills they can use to earn extra income such as baking and craft-making.

Environmentally friendly options

Many people are looking for ways to conserve money while preserving the environment at this time. Various agencies will also provide financing for businesses involved in supplying alternate energy. Look for opportunities in wind and solar power generation, biofuel production, water sourcing, recycling and eco-friendly landscaping.

Pet services

Despite the tough economy, several persons are choosing to acquire high-maintenance pets. These animals will require services beyond the basic veterinarian checkups, such as grooming, breeding, pet sitting, boarding facilities, and even pet photography. You can also supply products such as pedigree foods and pet toys to meet the needs of these pampered animals.

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(c) Cherryl Hanson Simpson

Cherryl is a financial consultant and money coach, and founder of Financially S.M.A.R.T. Services. She is currently writing her first book "The 3 Ms of Money." See more of her work at www.financiallysmartadvice.com

The concept of this is for you to offer a subscription type product as an upsell or backend product. For example, if you're selling an ebook for $37 offer a subscription to a related e-zine for $9.95 a month.Instead of an e-zine, it could be monthly updated information for the ebook.

It's not just for e-books, you can make it work for any product or service you sell. Some subscriptionsthat might work for your product could be:

•  - e-mail/telephone consulting
• - a private or members only web site
• - print newsletters/magazines
• - product updates
• - subscription warrantees
• - product insurance
• - e-zine/webzines
• - the ideas are endless.....

The subscription product should be related to the'product or service you're selling. You could charge'a weekly, monthly, or yearly subscription for the'upsell product. You could sell your main product'and upsell product as a total subscription package'deal. You wouldn't charge the one-time price for'your main product; you would just charge the basic'subscription price of the upsell product.

The major benefits are that you don't have to keep creating new upsell and back end products. Once you get enough subscribers you won't have to sell anymore, you just keep generating income from your current subscribers. You would only have to sell again if you lost a lot of subscribers.