A dozen of our Mogul in the Making nominees got to quiz our expert panel on Wednesday.
This is an edited transcript of their questions and the answers they were given.
Q 1: Aisha Morgan, Nettle and Moss
What are the characteristics of a successful, sustainable business and what are the factors that cause failure?
A: Patrick Casserly: The business cycle needs constant innovation. You start with an idea, a germ of an idea, and you acquire some clients and those clients will stay with you as long as you continue to innovate.
You have two clients, those who you sell to and your internal clients, your employees. You need to constantly invest in them, because they are the face of your company.
Q 2: Juliet Thompson, MJ Body Concepts Spa
Where should we look to raise funds for a business in its first three years?
A: Christopher Berry: Most small businesses get their capital from friends and family and people they know. When your company is small, the people who are likely to invest are people who either know you or have an interest in your idea. So you have to tell a lot of people your story.
Banks don’t like square pegs in round holes. They will try to help, but it will take forever to go through the system unless you know what they look for.
You have to prepare yourself to receive financing. There are questions that investors and banks and investment bankers are going to want answered. If you can’t answer these questions, they will think you’re not serious.
Q 3: Alex Morrissey, represented by Jacquie Juceam, Jamaicanmusic.com
What are the advantages and disadvantages of equity and debt financing and how should we balance the two?
A: Patsy Latchman-Atterbury: The advantages of debt financing reside in the fact that you maintain full ownership of your company. There are also tax benefits that come with the interest paid on a loan. Debt also allows you to build you credit rating as you go along.
Equity allows you to sleep a bit better in the night because you do not have a burden of debt in your business. However, with equity you lose the ability to direct your company totally, because you have a third party who may want to have a say in which direction the business goes.
Q 4: Jason Dear, No Brand Chemical
What strategies should we employ when expanding, either across the island or internationally, and should we take baby steps or dive in?
A: Adam Stewart: There are pros and cons to both sides. Take a deep look at what it is that you do and where it works and why it works. Mr Tony Hart was asked a similar question recently and he said something that could not have been said better. He said cashflow, cashflow, cashflow. Just because something works in Kingston, doesn’t mean it will work in Montego Bay and just because it works in Jamaica, doesn’t mean it will work in Barbados.
But you also have to take risk, you have to diversify and find a way to spread your wings so that all your eggs are not in one basket. So yes, you have to role the dice and yes, you do need to expand, but understand your cashflow and make sure that you have all your ducks in a row first.
Q 5: Melville Lumley, Food Express
If you were mentoring a small business owner today, what advice would you give regarding the current economic climate?
A: Tina Matalon: We have to understand the longevity of this economic climate. It’s not gong to return to economic levels we’ve seen in the recent past. We’re in it for the long haul. To survive at a time like this you have to be in it to win. You have to be at first or second spot or get out.
A cost saving strategy is absolutely imperative. Monitor your costs daily or it