Business Start Up And Expansion Presentation Comparatively Jamaica

Business Start Up And Expansion 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 • • • Decide if you really want to be in business: You will be putting some (not all, hopefully) of your net worth at risk. You will run the risk of becoming eccentric, meaning creating a life that is out of balance, with working hours taking away from other family or pleasurable activities. There may be levels of stress you have not experienced as an employee. Decide what business and where: Once you have decided you have the characteristics of a successful entrepreneur and that you definitely want to be in business, then you must decide which business is best for you and where to locate that business. Decide whether to start full-time or moonlight: There are some interesting advantages and some pitfalls in starting as a moonlight business. (That is, a business you start in your off hours while still working at your current job. ) More often than not, the advantages of starting as a moonlighter outweigh the risks: You avoid burning your bridges of earnings, including retirement, health and fringe benefits and vacations. Your full-time job won't suffer if you maintain certain conflict of interest disciplines, including

• compartmentalizing your job and business into completely separate worlds. • You can avoid conflict of interest with your job by choosing a business that is appropriate for moonlighting, such as: single products, real estate, specialized food, e-commerce, direct marketing or family-run operations. • There are great advantages for operating a family business. The family can run the business while you are at work. You have a builtin organizational structure. You can teach your kids the benefits of being in business. • But there also some pitfalls to consider in starting a moonlight business: • There is a temptation to spend time at your job working on your moonlight business. That is unfair to your employer and should not be done under any circumstances. (You may need a family member or some trusted person to cover emergencies when you are at your job. ) • Another problem may be competing with your employer, which, again, is not right. Think of how you would feel or handle this employee if you were the boss. • Any kind of conflict with your regular work can jeopardize your job and your moonlight business. • Overwork and mental and physical exhaustion can also become a very real problem for moonlight entrepreneurs.

Selection Strategy • • 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. • Things to Watch Out For: • 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? • Before you start, get completely qualified: • The best way to become qualified is to go to work for someone in the same business. • Attend all classes you can on the subjects you need, for example: accounting, computer and selling. • Read all the appropriate "how-to" books you can. • Don't be afraid to ask questions or seek help from the most successful people in your intended business. • • • FOUR AREAS OF INTEREST IN STARTING A BUSINESS Research Investment/startup Marketing Savings/expansion

Research ideas when Starting a 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. paopen 4 business. 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.

• Costs Business Start-Up Business start-up costs are the expenses you incur before you actually begin business operations. Your business start-up costs will depend on the type of business you are starting. They may include advertising, travel, surveys, and training. These costs are capital expenses, which are expenses you deduct over a number of years. However, if you never begin business operations, you cannot deduct start-up costs.

A business plan is a tool with three essential purposes: planning, communication and management. Use the advice here to create or update your business plan. Gather additional advice from fellow entrepreneurs and experienced business owners on our business Forums. Planning. The business plan guides you through the various phases of your business. Preparing a business plan requires that you look realistically at almost every phase of business because you must show that you have worked out all the problems and decided on potential alternatives before actually launching your business. A thoughtful plan will help identify roadblocks and obstacles to avoid and help you to establish alternatives.

• Communication. As a tool for communication, the business plan is used to attract investment capital, secure loans, convince workers to hire on and assist in attracting strategic business partners. A comprehensive, clearly-written business plan shows whether or not a business has the potential to make a profit. Many business owners share their business plans with their employees to foster a broader understanding of where the business is going. • Management. As a management tool, the business plan helps you track, monitor and evaluate your progress. It is a living document that you will modify as you gain knowledge and experience. By using your business plan to establish timelines and milestones, you can gauge your progress and compare your projections to actual accomplishments.

• A business must have a business plan. If there is no plan, then there is no business. ". • The importance of a comprehensive, thoughtful business plan cannot be overemphasized. Much hinges on it: outside funding, credit from suppliers, effective management of your operation and finances, promotion and marketing of your business, and achievement of your goals and objectives.

• to persuade someone to buy them. When you write your business plan, consider yourself a salesperson. The product you're trying to sell is your business idea. Your customers are potential investors and employees. Since you want your customers to believe in you, you must be able to convince them that you know what you are talking about when it comes to your business. • Before you begin writing your business plan, consider four core questions: • 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?

• In order to answer these questions, you must become an expert about your own business (or to fine-tune your knowledge if you already believe you are one). You must be willing to roll up your sleeves and begin digging through information. Since not all information that you gather will be relevant to the development of your business plan, it will help you to know what you are looking for before you get started. • What part does you business plan play? • The business plan often is called the blueprint for success. Without a good business plan, you will find it nearly impossible to obtain capital. The business plan starkly exposes your business knowledge (or lack of it) to lenders or investors. Preparing a business plan forces you to think through your ideas and helps you communicate

• them clearly. Not only does this help you obtain financing, it is vital for successfully establishing your goals and managing your business and employees. Much of the information requested in other portions of this booklet is necessary for completing the business plan. The business plan ties together this and much more information into a document explaining most things an investor or lender would want to know about your business. Preparing a business plan isn't easy. It takes time and money to collect the necessary information, to analyze that information, and to properly communicate your findings. This cannot be done overnight. Successful entrepreneurs usually spend six to 10 months researching and preparing their ventures. Ninety percent of them utilize professional advisers, such as lawyers or accountants, while almost 70 percent attend business seminars and regularly read business material.

• Business Plan Outline • Executive summary (to be completed last) – A broad overview of your company's activities, management and objectives – Distinguishing features of your products/services – Attractiveness of your market – Summary of historical financial results and financial projections – Amount of money you seek, in what form and for what specific purposes Description of your business and industry – Your business – The industry, its history and its anticipated future Features and advantages of your products/services – Description – Competitive advantage and market niche

• • – Proprietary position – Future potential You should consider including some products or sales literature as exhibits. Market research and analysis – Existing and potential customers and markets – Critical customers (over 10% of sales) – Market size and trends – Competition and strategy for competing Estimated market share and sales – Marketing plan – Marketing strategy – Pricing – Sales tactics – Service and warranty policies – Advertising, public relations and promotion Product design and development plans – Development status and tasks – Difficulties and risks – Costs

• • Operations plans – Production or service delivery process (flow charts may be helpful) – Geographic location – Existing facilities and projected improvements for future needs – Strategy and plans – Labor force – Product/service distribution – Availability of material and supplies – Dependence on critical suppliers – Unique or novel processes used Management team – Organization and ownership (charts are helpful) – Key management personnel (credentials) – Management strengths and weaknesses – Management compensation – Board of directors – Key business advisers – Professionals retained (accountant and attorney) Include personal financial statements of principal owners as exhibits.

• Overall schedule – Timing of critical activities before opening (obtaining funds, incorporating the company, selecting the location, ordering supplies, hiring employees, starting operations) – Timing of critical activities after opening (expansion, product/service extension) Response to critical risks and problems – Working capital shortage – Price cutting by competitors – Unfavorable industry-wide trends – Design/operating costs over estimates – Low sales – Difficulty obtaining supplies, raw materials – Difficulty obtaining credit – High inflation – Lack of trained labor – Recession Financial statements and projections – Five years of annual historical financial statements (or from the period the business has been in operation, whichever is shorter) – Profit and loss forecasts for each month of the first full year and for each of the first three years of operation

• Cash flow projections and an operating budget for each month of the first full year and for each of the first three years of operation – Pro forma balance sheet at start-up, monthly balance sheets for the first year and at the end of each of the first three years – Financial controls to be implemented – Person responsible for finance and accounting matters – Outside accountant or bookkeeper who will audit, review or compile the company's financial statements • 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