Micro, small and medium-sized enterprises (MSMEs) are being urged to put compliance, governance and financing at the centre of their growth strategies, with experts stressing that early preparation and disciplined financial practices can support long-term survival.
A panel of finance and legal professionals spoke on the topic at the EmpowerJA forum hosted by the Private Sector Organisation of Jamaica (PSOJ) and the Inter-American Development Bank (IDB) at the Jamaica Pegasus Hotel recently.
It was highlighted that although MSMEs often have the knowledge and technical skills to operate their businesses, a clear pathway to success is frequently missing, often due to issues such as poor income tracking, incomplete documentation or lapses in legal compliance.
“Get to a lawyer early,” shared Senator Sherene Golding Campbell, principal attorney at Golding Campbell & Associates, while emphasising the need for businesses to be structured and registered.
Serika Sterling, managing director of Senior Accounting Services Limited also recommended that MSMEs “start early [with bookkeeping and tracking your income]” noting that some clients have had expansion plans derailed and funding opportunities dashed, because they failed to keep receipts, invoices or separate business accounts from personal accounts.
“The reason I don’t have auditable information is because you [the client] didn’t start early, didn’t write down that John Tom bought 10 bottles of wine and you sold it for $100 and Mary dropped it off for [another] $100 and you went to the market. If you had that information and you’re that intricate in your business it makes it easier for an accountant to interpret your account information and build out a financial statement that will be favourable to an investor and a banker,” she added.
MSMEs were also encouraged to “shop around” for services critical to their sustainability, while ensuring that the people they engage are genuinely aligned with the long-term success of the business.
“If a rate doesn’t meet your expectations, go to another bank. All the big companies shop around and you should do the same,” said Alex Johnson, manager of origination and structuring at NCB Capital Markets. “Start early by compiling documents and reaching out to financial institutions to find out exactly what is required to fund your business needs.”
Echoing this point, Gillian Hyde, deputy managing director of JN Bank and moderator of the panel, emphasised that grit is essential. “It takes passion on both sides. If you’re working with someone who doesn’t share that passion for MSMEs, you’re talking to the wrong person. Your financial advisor must have a passion for supporting MSMEs. MSMEs also go through a journey of ups and downs and in-betweens, so you have to have the grit to go through all those cycles.”
While agreeing that strong financial partnerships are essential, Marc Gayle CEO of Golden Shoots Capital Inc., also emphasised the importance of negotiation and strategic reinvestment. “Negotiate everything. Closed mouths don’t get fed,” he said adding that businesses can generate momentum by reinvesting profits and supporting growth from their own earnings whenever feasible.
“Understand your pricing. You want to have enough margin so that every product you sell you will make a sizeable profit on it. You’ll then reinvest [that profit] in the business, sell more and get more cash,” he said.
The panel also agreed that enhanced collaboration and discussion among all industry stakeholders, including accountants, bankers and legal teams, will be critical in “moving the needle forward” and creating the environment where all entrepreneurs can thrive, access funding and build sustainable, well-structured businesses.
EmpowerJA, sponsored by JN Bank, was held under the theme: The New Finance Frontier – Empowering SMEs with Tailored Capital Solutions.
