Jamaica Gleaner
Published: Sunday | May 10, 2009
Home : Business
Should I throw in the towel?
Store proprietor U. Reid of Montego Bay is wondering if she should close down a new store - a cambio and book store started eight months ago - which she says has not taken off and is pulling resources away from her first store, which is "doing okay".

"I am in so much debt. How do you know when to call it a day? I am so stressed!" she wrote to SmallBiz: Problem Centre.

We turned to Lloyd Duhaney, credit officer of First Global Bank in Montego Bay, for answers. Duhaney visited the business and made an assessment.

fairly new plaza

The shopping plaza where Reid is located is fairly new and most of the shops are still empty. The shopping plaza is next door to one of Montego Bay's newest residential schemes.

Reid was advised to get some flyers and hire someone to distribute them door to door within the nearby residential community, and also have newspaper vendors in the shopping centre insert the promotional material in each newspaper they sold.

Reid is contemplating adding a Western Union outlet to the store, replicating the operation at the other businessplace in Anchovy, St James.

Duhaney considered this a good idea and said the Western Union operation would be a hook for new customers.

(For the purpose of disclosure, readers should note that GraceKennedy Limited operates the Western Union franchise in Jamaica and also owns First Global Bank.)

Currently, the main product in Reid's store is books, especially for schoolchildren.

The First Global manager recommended that she start an aggressive marketing campaign and promote the business before borrowing money and getting further into debt.

Additionally, the shop rental is US$2,000 - a little expensive at this time, especially due to the recession and a downturn in some businesses. Reid, Duhaney said, should consider negotiating for a smaller payment with her landlord, or relocating altogether.

accounts are missing

Edward Chin-Mook, president of the Small Business Association of Jamaica, who reviewed some of the company's documents, noted that recent accounts were missing and so it was difficult to assess the financial side of the operation.

"Put a little heat on the accountant and get me some rough numbers," said Chin-Mook.

"Let us investigate getting you an inexpensive accounting solution to run your business. You have already invested quite a lot and considering more. It is now key for you to take stock of your cash flow," was his advice to Reid.

"Accounting records will guide you in the right direction," he added.

"I know that at this time, the walls seem to be caving in; however, the signs did not occur overnight - they lay embedded in your accounts."

The Small Business Association president also advised Reid to increase security at the store.

"The fact that you are also operating in a high-risk 'cambio franchisee' environment compounds your responsibility to increase security," he said.

Reid said that both sets of advice were useful but she would have to put the changes on hold until she acquired financing. She was unaware of the fact that in April 2008, the Development Bank of Jamaica made available through its associated financial institutions - including banks, micro-finance companies and credit unions - some $1 billion for small businesses.

micro-financing assistance

SmallBiz: Problem Centre also sent her a list of local financial institutions which offered micro-financing assistance.

Email Lloyd at lloyd.duhaney@gkco.com. Email Edward chinmook@yahoo.com.

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