Fri | Oct 19, 2018

Lessons for entrepreneurs

Published:Friday | September 5, 2014 | 12:00 AM
Ambassador Audrey Marks (right), chairman and chief executive officer of Paymaster Jamaica Limited, and Natalie St Louis, vice-president - operations and marketing at Paymaster, at the recent launch of Paymaster's Loyalty Rewards Programme at The Knutsford Court Hotel in Kingston.- Rudolph Brown/Photographer

IN JULY, Paymaster Jamaica Limited, the island's first multi-payment agency, achieved yet another first in its nearly 20-year history - the Paymaster Loyalty Rewards Programme.

Dubbed Paymaster Shield, it offers earnings of more than J$1.5 million in benefits and rewards to loyal Paymaster customers. It will cover critical illness and death and provide a lump-sum payout if the cardholder is diagnosed with a heart attack, stroke, cancer, paralysis, major burns, blindness, coma, deafness, loss of speech or multiple sclerosis.

A true innovator/entrepreneur, Paymaster's chief executive officer, Ambassador Audrey Marks, in a recent email interview, told The Gleaner how she knew when she has a winning idea for the market. She said she knows the timing is right when she is seeking to serve a basic singular need of a multitude of customers or serving a general need of a specific market segment.

"My entrepreneurial spirit is influenced initially by instinct. However, the idea must be supported by data or empirical evidence to ensure that there will be a captive market and a sustainable response to make the product and/or service a success," Ambassador Marks said. She said, if data is not readily available, she bounces her idea off trusted associates or her management team to confirm that her assumptions/expectations are reasonable.

"However, as an innovator, it is advisable to first discuss your copyright and intellectual property protection with an attorney before you start sharing your ideas," she cautions those venturing into business.

Winning Idea

Marks revealed that a winning idea consumes her conscious thoughts and ignites an excitement that resonates within her. That, she notes, enables her to articulate the idea in such a way that causes others to buy in and work with her to make it a reality. "There are many visionaries in the asylum. Many times, both innovators and the inmates are seeing things that are not yet manifested in reality. What will keep you out of the asylum is the ability to get others to buy into your vision," Marks said.

The Paymaster boss added, "In the case of Paymaster, after years of going to separate places to pay bills each month, people were tired of the inconvenience, but never thought it would be possible for a one-stop shop experience to pay all bills." She revealed that the due diligence work on Paymaster started in 1994, a year before even the Internet became a commercial reality. So an online payment system was definitely going to be transformational.

a huge challenge

Asked about some of the challenges to business innovators in Jamaica, Ambassador Marks cited access to affordable capital for start-up as a major hurdle. She said business innovators with great ideas but limited capital have a challenge in accessing affordable funding to start or grow their business. "Starting out with funding via debt or other high interest cost options sets the business at a disadvantage and reduces the company's probability of success and sustainable profitability," Marks said.

Added to a lack of start-up capital, Marks said that limited availability of current statistics for use in business analysis and decision-making for persons with new and innovative ideas for a product/service is another hurdle. "Our statistical agencies typically do not have current data available and the cost of commissioning an independent survey is often prohibitive for business innovators who are not adequately financed," said Marks. She noted that innovators are, therefore, left to make business decisions based solely on gut instincts, which increase the risk of starting a new business and the uncertainty of success.

costly professional services

Marks cited a third challenge to prospective entrepreneurs as the high cost of professional services because new businesses typically need expertise to create a comprehensive business plan, test business processes and other areas, to ensure that their internal processes will be sustainable, and provide adequate support to the business.

"After the business starts, a wide range of administrative services are required. These include accounting and information technology. However, the business would not yet have attained the scale to finance all these operating costs. Business incubators and outsourcing can provide relief and support in this area. However, innovators need to feel confident that their intellectual property or business idea will not be cannibalised by any of the supporting entities/service providers," Marks cautions.

The final hurdle to business start-up is the length of time it takes the legal system to complete civil and business cases. Marks maintains that innovators and entrepreneurs rely on contracts for protection and remedy in the event of a breach or default by one party.

The commercial value of an innovative idea, product or service is connected to how well it is implemented and the ease of replication by a competitor. The business cycle to develop and implement an innovative product or service can take one to three years, but the average time for a court ruling spans five to 10 years, she said. Marks opined that it is for this reason that many innovators do not pursue their contractual rights and continue to be vulnerable.

Against the background of next Tuesday's venture capital conference, The Gleaner asked Marks how would venture-capital investment have benefited her at the start of Paymaster? Having done quite a few businesses from an export farm, a transport company, furniture company and a real estate company, she said that, in all cases, venture capital investment would have made a tremendous difference to ease of start-up and scale of operations.

"In the case of my current business, Paymaster, I started expanding this business at the peak of the financial sector meltdown, so all normative institutional capital had disappeared. Without venture capital, we could only start with locations that we could afford to fully manage, monitor and manage quality, and refine the internal processes before building out an agent network. Because we were operating on personal funds such as my savings from previous investments, for start-up capital, we had to grow our locations at a slower rate and, therefore, took a longer time to achieve economies of scale and associated profitability," Marks said.

She added that venture-capital support would have enabled her to establish the brand in a shorter time, aided by aggressive advertising, however, with limited self-funding, her funds were directed towards working capital for the business and capital for branch-network expansion.

Marks said because Paymaster did not engage in heavy advertising, branding, signage, and paid promotion, it, therefore, took a longer time to become the household name that it is today.

She said further that the expertise and industry connections that a venture capitalist could potentially bring to the table would have pivoted her business further at that time while also providing vested interest for expert opinion and balance in the boardroom.

(For details on next Tuesday's conference visit: or call: 977-1650.)