Eat a Food Mentality
The ‘Eat a Food Mentaity’ can best be described as how Jamaican people tend to focus more on one-off gains instead of long term value. Let’s say a construction worker goes from one job to the next, he spends his earnings at the bar and does not reinvest that money in himself. Ten years pass and he remains at essentially the same level he started.
This is normal because his goal is merely being able to pay bills each month and survive. I could use another example but the basis is the same, ‘get a one job’, get paid, and go off to do another job. No real value is being created for the individual or the society at large.
Now, if this worker had upskilled himself over the years then he could have moved up the line and become a ‘higher value’ worker. With his skills, he would be paid more and be in higher demand because ‘low skilled’ workers are much easier to find. In some cases, people start their own businesses using the skills gathered, social capital, and support systems in place(business loans and/or venture capital).
Healing Old Wounds
Building a business takes a lot of time, effort, and resilience. Through businesses we can create value by providing employment, charitable donations, bringing in foreign exchange, etc. We have numerous businesses in Jamaica but the ambition can be quite lacking. Many of these owners have refused to expand the business and instead opted to just ‘keep one store open’. For us to move forward we need the entrepreneurial spirit to be reignited.
It must be noted that the country has a lot of healing to do. During the FINSAC era, hundreds of entrepreneurs were burned and still haven’t recovered. Those entrepreneurs tell their children about the horrible experience which scares some of them away from starting a business. In recent years, things have been improving with a record number of businesses registered in 2021. Jamaica’s economy has seen a miracle turnaround that is constantly touted locally by our Finance Minister Dr. Nigel Clarke and internationally by organizations like the IMF.
The Way Forward
One of the most common complaints by young entrepreneurs is access to capital. Growing their business requires more money which can be used for local and regional expansion. We now have several options available for example Venture Capital Funding(VC), Private Equity(PE), and listing a company on the Jamaica Stock Exchange(JSE). The end goal of some PE/VC firms is to partially or fully exit the company via a listing on the Jamaica Stock Exchange. First Rock Private Equity(FRPE), a popular PE firm, listed Dolla Financial in June 2022. It was a combined Offer For Sale and Prospectus which saw FRPE selling 187,500,000 shares and Dequity(the only other shareholder pre-listing) selling 62,500,000 at $1 for each share. Dolla as of today has a market capitalization of $7,250,000,000.00. You can read the Dolla Prospectus here.
The JSE has become a vibrant market with 100s of active investors buying and selling shares. It was rated as the best performing stock exchange in 2018 by Bloomberg. Over the past 3/4 years, 1000s of new investors have joined the market, and many Initial Public Offerings(IPOs) have been oversubscribed. This means companies were able to raise the money they wanted and refund individuals the extra due to the volume of applications. This money is often used to pay down debt and fund expansion plans. There are several other great benefits such as increased visibility, access to more methods of funding, stronger governance practices, and generational wealth planning. Those shares can now be easily tradeable by anyone which means that if I wish to sell some shares to access money, that can be done as shares are ‘always’ available on the open market.
I believe that we should encourage every Jamaican company to become listed. Employees of these companies should ensure that they are shareholders. This is a great way to benefit from growth in the company.
Using the money acquired from listing to support regional and international expansion means hiring qualified individuals to carry out new roles. High skilled jobs will be created and Jamaicans will have more options for places to work and higher salaries.
For us to help with the reduction of the USD to JMD Exchange Rate(FX), we need to be earning more foreign exchange. The majority of Jamaica’s FX comes from tourism. A great way to bring more FX to the country is by exporting. The good news is that efforts are currently being made to encourage local companies to export more.
Recently Minister Aubyn Hill commented on how to turn Jamaica into a wealthy country. He was right on the mark by saying that we should emphasize exporting. Some of our local companies, for example, Grace Kennedy already export internationally and have plans to earn 70% of their revenues and profits outside of Jamaica, as per the company’s vision 2030 goal. Spur Tree Spices generates 90% of its revenue from export sales. The world craves Jamaican food and culture. There is a wide range of opportunities that we have yet to fully explore. As the country continues down a positive trajectory more people will see these opportunities and create value.
Here is a list of resources that you can check out: DBJ BIGEE, NCB SME BOOST, Branson Center of Entrepreneurship, PitchDeckJA, JMMB SME Resources, Young Entrepreneurs Association, and Lynk for Business.
“It doesn’t matter how great your idea is if you never execute”