3 types of businesses Jamaica needs
Yaneek Page BUSINESSWISE
QUESTION: I am a young aspiring entrepreneur looking to do business in Jamaica soon. I moved away when I was six years old, but always said I would start a business there and eventually purchase a home. I read your articles in The Gleaner often and find them very helpful and informative. I have done a little research on the business world in Jamaica, and I know quite a few people who have brought businesses to Jamaica. My ultimate goal is to establish a business that will be very beneficial and profitable. I want to help improve Jamaica. My question is, what businesses do you feel are much needed in Jamaica? Is clothing a great industry to enter at this point? I am funding my business and building from the ground up, so I do not want to build a business that doesn't have long-term potential.
BUSINESSWISE: I'm glad you have not left Jamaica and 'throw stone behind you', as we would say in local tongue, and that you are eager to return to improve the country.
I have been fascinated by the number of Jamaicans living overseas, mainly North America, who have contacted me recently about starting businesses in Jamaica.
On one hand, I'm inspired by the enthusiasm for entrepreneurship and their confidence as investors but, on the other, I am curious about why they have not explored starting businesses where they live - particularly since those countries have better-developed entrepreneurial ecosystems, more conducive economic environments and lucrative markets, among other advantages.
That's not to say we have no entrepreneurial opportunities here. We do, as evidenced by the many foreign investors who have amassed great wealth in areas such as construction, retail trade, mining, technology, tourism and financial services.
Nonetheless, be mindful this is a very challenging environment for businesses and it takes much more than introducing a popular North American idea or business model to this market to be prosperous.
You are off to a good start by asking one of the best questions possible: What businesses are much needed in Jamaica? Before I delve into specific industry opportunities, let me share three types of businesses we need now:
1. Businesses that export/earn foreign exchange;
2. Businesses that locally produce/substitute what we import; and
3. Businesses that can solve pressing societal problems.
Unfortunately, these businesses are often difficult to start and usually require significant skills and capital.
An important disclaimer: there are many businesses that don't fall into any of the categories above and are less beneficial to the country, but can be very lucrative for entrepreneurs, such as the industry you're interested in, retail clothing from imports.
However, since your driving force is as much about positive impact as it is profits, you may want to reconsider that business.
Jamaica has a serious balance-of-trade problem in that we import far more than we export.
According to the Statistical Institute of Jamaica, total imports for January 2014 were valued at US$441.893 million, wheras exports were about a mere quarter of that at US$114.595 million.
We export mainly alumina, bauxite, machinery, raw sugar, rum and tobacco, coffee, other food and beverages, chemicals and mineral fuels.
Our National Export Strategy, aimed at increasing exports, highlights opportunities in agro processing, aquaculture, education, fashion, furniture and building material, entertainment, coffee and information and communications technology. You can view it at http://www.slideshare.net/CRNM/jampro-national-export-strategy-jamaica.
Some businesses with export potential, are more feasible for young entrepreneurs are fashion and entertainment, agro-processing, nutraceuticals and cosmetics, and business-process outsourcing.
I outlined, in some detail, some of these opportunities in previous columns, 'Big Hairy Audacious Opportunities' and 'Untapped BPO Start-Up Opportunities'.
An opportunity that remains largely untouched is import substitution, which is basically replacing foreign imports with locally produced products.
Our largest imports are oil, food, manufactured goods, beverages and machinery and transport equipment.
The Jamaica Business Development Corporation, Scientific Research Council and the Jamaica Manufacturers Association can provide information and support for productive endeavours.
Alternate energy and energy efficiency, food and beverage and manufactured goods are all areas you can look to for viable, sustainable entrepreneurial opportunities with significant job-creation prospects.
Finding solutions to the country's pressing social problems and developing viable business models around them can make for a great business.
Some of the challenges impeding our social and economic development are education, crime, corruption, governance, low productivity, bureaucracy and waste and law and order.
These areas are ripe with opportunities for the innovative and enterprising to uncover to make an impact as well as money.
My final suggestion is to do more research and select what works best for you because happiness and self-fulfillment are also important drivers of success.