Jamaica Gleaner News - Big burdens for small businesses - Management pitfalls to avoid - Saturday

Edward Chin-Mook

Sonia Mitchell, Gleaner Writer

Many businesses crashed and burned in 2008 because managers failed to diversify their operations and reinvent companies' images, Edward Chin-Mook, president of the Small Business Association of Jamaica (SBAJ), told The Gleaner Tuesday.

He also said the operators of fledgling businesses lost their way by not rewriting their business plans to adapt to market volatility and financing fallout.

"Many businesses failed because of a lack of research, not finding creative ways to place their products and services in order to maximise on the market ... and competition from bigger companies," said Chin-Mook.

Second, poor money management was a major booby trap, the SBAJ boss said. Executives failed to rein in runaway expenditure, which suffered because of inadequate revenue intake.

Third, some business operators lacked the necessary skills to distinguish their products in a congested marketplace, by relabelling, rebranding and reimaging, Chin-Mook said.

Donnette Suckram, marketing manager at OBF and New Era Finance, said many enterprises foundered because entrepreneurs made bad decisions when capitalising their businesses.

"Businessmen and women should knock on the right doors that can entertain them in terms of the right resources, and persons who can force them to come up with the right business plan that will enable expansion on short-term goals to become long-term ones," Suckram said in an interview with The Gleaner Tuesday.

Business types determine size, Suckram advised, adding that those indices would provide the groundwork for expansion, niche marketing, and and understanding the demand-supply dynamics of the market.

Entrepreneurs are also urged to have reservoir funds to cushion any potential fallout from unforeseen events.

Both Chin-Mook and Suckram give tips to businessmen and women on diversifying their operations in 2009:

Get short-term finances that can cushion short-term loans.

Set up small businesses that have sustainable markets and business plans.

Always try to have other sources to draw from, especially when dealing with large companies which have lengthy credit-payment plans, so that you will be able to finance your operations.

Don't keep all business funds in fixed assets; ensure that some remain liquid.

Invest in government bonds and stocks that can realise into long-term sources of finance.

Develop a relationship with financial institutions that can cushion you in future business deals.

Do what you love and have a passion for.

Location is critical: Reach your market and let your market reach you.

Listen to your market and let your business model adapt to consumer needs and changes in taste.

Know the market and price products and services accordingly.

Think of your internal and external customers, and have a satisfied staff.

Develop a good customer service staff that will make a difference. Customer service is your voice, face, name, and point of contact.

Make your infrastructure and operations eye-catching to engage the interest of prospective clients.

Educate yourself and become aware of what's happening globally in order to maximise in markets that.

Research and develop, use the Internet, library, and seek information about new technologies. Get a proper business plan and look at other markets that are available internationally.

Take advantage of trade agreements, and network with other businesses, and join other business network associations to make links.

Take advantage of grants to pursue research and development in order to make your operations productive, and to compete locally and internationally.

Correction/Clarification

Alan Beckford, general manager of the Jamaica Automobile Association, was incorrectly identified as Edward Chin-Mook on Page C8 of yesterday�s Gleaner. We regret the error.