VM Wealth – Supporting Jamaica’s SMEs

It was impressive to see 23 local brands representing a variety of food-industry Small and Medium Enterprises (SMEs) at the recent Jamaica Observer Food Awards. Proudly displaying everything from pastries and preserves to sauces and seasonings, and even a curried goat burger! It was a tasty spread of no mean proportions, but for those who understand the value of entrepreneurship, it was an inspiring display of innovation that augurs well for Jamaica.

SMEs are widely regarded as one of the cornerstones of a country’s economic growth. They are usually responsible for the bulk of a country’s new jobs as well as a disproportionately high incidence of innovation. In Jamaica, we are surrounded by examples of the Jamaican Dream – entrepreneurs who’ve made good on their vision and are supporting their families, and their communities – sometimes even fuelling whole industries. Sadly, many of our SMEs fail during first few years of their existence.

When asked what their biggest challenge was last year, Jamaica’s SMEs said it was access to financing. Devon Barrett, however, disagrees. The General Manager of VM Wealth Management believes the money is available, but the real difficulty SMEs face is in making their businesses attractive to investors.

After working to get their businesses through the early years, and eventually building something worthwhile, SME owners usually get to that point where they need to expand, purchase equipment or refinance debt. They need to take their enterprise to the next level, but having spent so much energy on simply making it through that statistical danger period, many find they haven’t paid enough attention to the structure of their business.

“We have a range of clients,” explains Barrett, “but many of them come to us not knowing what they need. They have an idea of where they want to go, but it’s up to us to help them find their focus and figure out the best way for them to get there.”

Wealth management for SMEs is about identifying business objectives and looking at the most efficient ways to meet or exceed those. It means getting to know each business we serve inside out, and coming up with ways to improve structure, efficiency and long-term plans with each entrepreneur that are unique to their business.

While the business model, and operational and accounting practices we recommend depend on the needs of each business, there are some general lessons we can share with every business person whether you’re just getting started or have been at it for years.

Some simple bits of good advice for 8 aspects of business:

Your Product
You’ve spent years honing your skills, perfecting your recipe, and improving your methods to create your product, so always work to keep it great. No matter your customer, staff or the size of your business, never compromise quality and always sweat the details. In an Entrepreneur Magazine interview, Virgin’s Richard Branson said “… I remain obsessive about traveling on our planes and visiting our businesses with my notebooks to chat with staff and check the little touches that make our experience unique.” Your product is your core.

Your Customers
Look at your product and service from your customers’ perspective and always ask for feedback. Focusing on your customers will help you chart your way forward. It’s tempting to listen only to positive feedback but the best way to improve is to pay attention to negative feedback as well. Find out why your unhappy customers are unhappy and work on those areas.

Your Suppliers
Make your relationship with your vendors a partnership. They provide you with raw materials, infrastructure, sometimes even functioning as the back office, so you ought to do what you can to help your vendors succeed and choose vendors who will reciprocate. Building strong relationships with your suppliers helps you get the best of their products and service, and even credit when you need it.

Your Staff
Treat your employees fairly, pay them well, and encourage them to share. They’ll feel empowered which will in turn increase productivity and decrease turn-around. Empowered employees will do their job as if they’re working for themselves.

Your Financial Partner
Have a financial partner that you can get on a first name basis with, tell them what’s going on with your business. A good financial partner will appreciate your openness and give you advice where they can. Ask for help, whether you think you may need more credit, overdraft services, time or guidance.

Your Cash Flow
Too much inventory, overbuying and underestimating the cost of input can all equal problems with your cash flow. Many business owners focus on profit but neglect cash flow, but you need good cash flow to survive. Work with reliable, quick-paying customers even if the initial profit margin isn’t huge. Set clear payment terms compatible with the payment terms of your suppliers and the pay cycle of your staff. And invoice quickly — as soon as the work in complete or the product is delivered.

Your Investments
You probably spend 60 to 80 hours each week focused on the day-to-day running of your business, so ask yourself if you really have the time to read prospectuses and follow the daily running of the stock market. If you don’t, get help. Keep your investments simple, spreading your eggs across stock, bond and cash baskets. And work with a financial partner who focuses on your investments at least as much as you focus on your business.

Your Growth
Create a system for any task you do more than once, it might take time to set it up, but will save time in the long run. Here’s where your financial partner comes in again, they can help you to put systems in place to maintain your core values as you grow. If something isn’t working, change it, agility is your key to survival. If something is working, do more of that, expanding is exciting but take it slow and steady and remember to always be guided by lesson number 1.

Related Articles

Saluting the women of VM

The Power of VM Membership

VM Group asserts power of Mutuality as commercial banks hike user fees

Find the resources for you

Achieving Financial Goals
Budgeting
Debt and Credit Management
Home Ownership
Investing
Real Estate
Retirement
Saving

Financial
Education
Newsletter

This website uses cookies to ensure you get the best experience on our website. Read More