Thinking about starting a business? Ready to leave the nine-to-five grind behind? Well, before you jump into the wonderful world of entreprenuership, a reality check is in order. The hard truth is that only half of all small and medium enterprises (SME) make it to the four-year mark.

And for those who do, the good news is that four out of five make it beyond five years. With that information in mind, it is best to tread the entreprenuerial waters carefully. At the recently held Mayberry Investments Limited (MIL) Forum, the executives and their invited guests spoke on the topic near and dear to many of their clients - how to successfully manage and finance a SME. Gary Peart, chief executive officer of MIL, noted that there are several factors that speak to sustainability.

.Stability of buyer and seller relationship
.Value-added offerings
.Upgrading of equipment
.Employment of new skills
.Ability to access financing
.Moving business from downstream to more
sophisticated capabilities
.Development of products and services for
priority/target growth markets.

So just who amoung us are the entreprenuerial type? Marcus James, managing director of Access Finance, shared, his findings on the SME demographic with the Mayberry audience. "Majority of our business loan customers fall within the 36-45 age group. And 77 per cent of business loans clients are female with the majority of clients residing in St Catherine. Nearly half of our clients own their own home with 68 per cent of clients involved in trading, plus 94 per cent of loans provided businesses with working capital support. And finally, 60 per cent of borrowers had been in business for excess of three years."

Harold Davis, executive director of the Jamaica Business Development Centre, outlined the steps needed to have a launch and maintain a SME.

Step 1: Examine your motivation for business ownership
.Your Personal Objectives
Have you defined your personal needs and your financial objectives? Are you mainly interested in money, power, or flexibility?

.Your Talents
Do you have special skills or education in a particular industry? How will these talents help you in the development and operation of your own business?
.Your Personality Traits

Are you an authoritarian or a team player? Can you handle the stress of time deadlines from customers? Can you live with yourself if you have to fire an employee?
Step 2: Evaluate the feasibility of your chosen business
. Do you have enough money to start your business without going into debt?

. If you need to borrow money, do you have some cash and own other legible assets?
. Have you researched market demand or have you just assumed that people need or want your product or service?

Step 3: Consider start-up requirements and common pitfalls
. You should not expect or depend upon others to write a business plan. This is your business, not theirs.
. Thinking it will cost less and take less time to get into business than it actually will. It will cost more and take longer than you imagine.

Step 4: Create a business plan as a tool to:
. ensure that you have considered options and anticipated potential difficulties.
. evaluate progress against your business goals.
. use in the development of financing proposals.

Step 5: Develop your financing request and obtain initial capital
Most businesses are started with money from personal savings, family, or friends.
. Only about 20% of new business owners start their business with money borrowed from commercial lenders.
. As a rule of thumb, you will need to provide a minimum of 25-30% of personal investment toward the total start-up costs of your business.
. As a general rule of thumb, you will need $1.50 in quality collateral for every $1 you want to borrow.
. Be realistic. Lenders are in the business of making money, not buying ideas.

Trousers in Denim

Cream of the 'Crop'

Cheeky's World