EMBARKING on the entrepreneurial journey can be both exciting and challenging, but Shudene Ramsay, director of Ramsay’s Professional Services Limited, and Jeffrey Azan, managing director of Select ‘n’ Start, are lending a helping hand to SMEs and MSMEs to get started and stay in the race.

In a recent business workshop titled ‘Structuring Your Business from Top to Bottom’, held at the AC Hotel in Kingston, Ramsay and Azan spearheaded a transformative business workshop aimed at empowering 50 participants with the essential tools for launching and scaling their enterprises.

“A lot of people don’t know what it is to have a proper business structure or infrastructure in place, in general,” Ramsay explained during an interview with the Jamaica Observer. “They didn’t even know how to access a business loan; they didn’t know how to get a business bank account; some of them totally did not understand the tax portion, the finance portion, or just the details in terms of where to put their money and how to deal with it,” she added, elaborating on the rationale behind hosting the workshop.

The workshop dived into a range of topics, covering everything from the business basics like registration and banking to tackling trickier areas like finance, human resource management, and compliance. Taking the process in steps, the journey of the business begins with its registration at the company’s office and the selection of the appropriate business structure — whether it’s as a sole trader, partnership, business name, limited liability company, or nonprofit.

“If the business ends with you, that is leaning towards the sole trader business; if it is a case where you are just starting out and you just want to secure the name, that is more of a business registration of a sole trader or basic partnership,“ Ramsay explained to the Sunday Finance.

However, a microfinance institution or loan business cannot register as a sole trader but only as a limited liability entity, and a law firm must operate as a sole trader. Additionally, obtaining the necessary licences is crucial.

“If somebody wants to be an entrepreneur, it doesn’t make sense to try and beat the system; you can’t beat a system that you’re not a part of, so if you are not trying to be compliant and you’re trying to run your business on the side, more likely than not, it’s going to be a situation where you’re putting yourself at a disadvantage because you won’t be able to access anything,” she warned.

She advises that businesses should be registered after moving beyond the concept stage, as it’s difficult to define the business at that early phase.

“If you’re still in the conceptual stage and haven’t committed to starting a business, it’s best not to register yet because registering entails taking on liabilities,” she cautioned.

Moving forward, she highlighted the importance of opening a business bank account. While the process varies among institutions, the trend towards greater ease of doing business in Jamaica has led some financial institutions to streamline the process. Generally, required documents include business registration certificates or company incorporation documents, a 12-month cash flow projection, a tax compliance certificate (TCC), and the proprietor and director credentials, such as a government-issued ID and TRN.

“First and foremost, you shouldn’t combine business funds with personal accounts,” she emphasised. “It raises red flags in the banking system and could be mistaken for money laundering.”

To avoid complications where your funds are scrutinised and potentially tied up by the bank, it’s crucial to keep personal and business finances separate.

“At least 80 per cent of self-employed benefits are linked to the business bank account. As a self-employed person, to access anything in the system, you need to have verifiable income,” she stressed.

Ramsay further explained that while funds in a personal account could originate from various sources, a business bank account is presumed to contain business-related funds. Banks typically request two years of financial statements or verifiable income from self-employed individuals to consider loan applications. Consistent income in your business account over a period of two years is often required for loan approval. Some institutions may require only one year, but the primary goal is to verify your income. Ramsay further explained that while funds in a personal account can originate from various sources, a business bank account is presumed to contain business-related funds. Financial institutions typically require two years of financial statements or verifiable income from self-employed individuals to approve loans. Consistent income in your business account over a period of two years is often necessary for loan approval, although some institutions may accept one year, depending on the circumstances. This process helps build leverage as banks assess cash flow and business activity to determine loan eligibility. Following this, Ramsay emphasised the importance of implementing internal systems, particularly in accounts and record-keeping, to ensure the smooth operation of the business.

“If you’re running a business, you are in it for money, right? Really and truly, when it comes down to the bottom line, you need to know if you’re actually even making a profit or making any money, because revenue is not the money that you make; profits are the money that you make,” explained Ramsay.

Revenue encompasses the total income generated from the sale of goods or services within a specific period, representing the money earned by a company before deducting expenses. Ramsay highlighted the legal requirement to maintain accurate financial records to fulfil taxation obligations, assist with banking activities, and inform business decisions. These records must be retained for up to seven years, with Ramsay recommending the use of accounting software and diligent record-keeping of receipts and invoices as essential practices for business owners. Alongside managing the finances of the business properly, Ramsay pointed to implementing operational and procedural systems as equally crucial for effective business management. This includes stocktaking and task execution processes.

“This helps with the management of everything; it also helps with training, to train other people how to complete these services; it helps maintain the business’s standards in terms of how they’re expected to always be operating; everything becomes easier to manage and smoother,” Ramsay explained to the Sunday Finance.

She highly advocates for embracing technology in business operations, as it’s imperative to use technology to assist business people. Ramsay recommends utilising tools like QuickBooks for accounting and platforms such as Asana and Monday.com for task management, any document or procedural manager, and a manual to lay out how to execute each task. Once a business is up and running, the focus shifts to staying competitive. This involves a strategic approach to marketing and sales, with an emphasis on branding and reputation.

“Marketing should be a part of your budget every month,” she advises. “Even if it’s not for direct sales, it contributes to brand awareness, which has its perks.”

She also highlights how effective marketing can increase revenues and presence in the market, making a business more competitive. Ramsay uses an analogy to explain that often competitors aren’t inherently better; rather, their visibility gives them an edge.

In addition to marketing, maximising human capital is vital for long-term business success. As businesses expand beyond sole proprietorships, owners must delegate tasks while ensuring employees are well-trained representatives of the brand.

“Staff training and getting them to operate at a high standard is important because they can make or break your business,” she stressed.

Ensuring that employees are passionate about their work, rather than just seeking a paycheck, is essential for the long-term success and sustainability of SMEs. However, she made it clear that the process of structuring a business from top to bottom is ongoing, with business owners continuously striving for improvement and adaptation to ever-changing circumstances.

“From there, you just remain consistent, continue to improve, and inform yourself of any changes in your industry, in the laws, and so on, so that you can keep maintaining that standard,” said Ramsay.