Finance woes hobble growth for small leather and jewellery business
Jan’s Accents, located in Liguanea, St Andrew, designs and makes exquisite leather sandals, handbags, ladies’ belts, and creative jewellery pieces from stones and metals.
Business has been steadily growing, creating more hours and earnings for the three stitchers in her workshop and sales staff of two, housed in an expanded retail space at Shop 7, 92 Hope Road.
For the past three years since the venture graduated from a micro home-based hobby-like operation to a manufacturing and retail business with its own storefront and workshop, sole proprietor Janice Forrester says she has dipped into personal savings, borrowed informally, taken out small unsecured loans, and drawn down on expensive credit card debts to finance the business to the tune of approximately $5 million so far.
Now she is ready for the next level of growth, but cannot access the cheaper small business credit windows with collateral assistance, which she knows are being facilitated by the state-owned Development Bank of Jamaica (DBJ) through various approved financial institutions (AFIs).
“I have not been able to access a proper SME type of loan, which is something I have pursued and will continue to actively pursue,” she said of her quest to secure small and microbusiness credit being promoted by the Government and its institutions.
What has been the stumbling block? “It has just been a lot of bureaucracy. The bank I am with now says that in order to access the DBJ loan facility, you must have maintained a business account for two years. And the people who are in charge of assessing and approving the loan just make themselves scarce,” she says of her experience.
“I get offers for more credit card debt. I keep getting the emails: ‘You have been preapproved’ … but that is not the financing I need. Certainly not the kind of interest rates I need and want,” she says, almost in exasperation.
“I have come to the end of that cycle where you buy inputs with credit cards at 45 per cent interest, take an unsecured loan at 16 per cent to pay those off, so that the money is cheaper. You can only get so much unsecured money to borrow.”
She notes that an officer at the DBJ has connected her to at least four business bankers at various branches of one institution. “When they heard it was the DBJ facility I was interested in they said, Oh, I will call you back’, but they never did,” she recounts.
The entrepreneur adds that her request for access to the DBJ loan through another bank was met by the loan officer promptly offering her the bank’s own loan facility. She is left to wonder if the AFIs have a vested interest in not promoting or offering the DBJ small business loans to entrepreneurs.
Forrester told the Financial Gleaner in an interview that the loan funding she now seeks is required to scale up the business in order to expand into the markets of the Caribbean, the United State, Europe and Japan.
Specifically, the funds are required to patent Jan’s Accents designs, invest in more stock, build out the retail space, upgrade machinery in the workshop, and establish a secure online store with e-commerce capability.
Some amount of traditional media advertising on radio and television for greater market reach, and added brand authenticity, is also contemplated for the business that is now marketed almost exclusively on social media.
Having more than doubled the retail space from 200 square feet to a new store of 500 square feet in the past month, Forrester says the current growth is being stymied by the lack of appropriate financing.
The entrepreneur, who is also the creative force behind the Jan’s Accents designs, is keen on establishing the business as a uniquely Jamaican brand with a global presence. She concedes that the profitability of the business is also constrained by the lack of economies of scale.
Forrester is, however, not worried by the current low margins and complete reinvestment of small surpluses into the business. “Right now, we are in growth mode. Eventually, we are going to get to that optimal size where it levels out with the profits becoming apparent,” she notes.
Before going into business, Forrester, who studied marketing and brand management at the bachelor’s and MBA levels at the University of Technology and Nova Southeastern University, respectively, worked in brand management for the fast-moving consumer products industry.
Pursuing her creative passions, she was for a short time a clothing fashion designer before understudying master goldsmith Garth Sanguinetti in Kingston. Though she wanted to enrol in jewellery art at the Edna Manley College of the Visual and Performing Arts, Forrester said that did not happen, as the institution was never able to get a cohort together to start the classes.
Forrester works full-time in the business, which started out making and selling jewellery. She manages the workshop, spends a lot of time selecting and doing her own importing of leather, which, she laments, is no longer tanned in Jamaica, and ensures that customers get personalised service in-store.
“We pride ourselves on being able to offer the total look,” she says, echoing the business’ tagline that explains how the various product lines, which are wearable art pieces, complement each other.
For Janice Forrester, merging her art with business has given rise to a bold enterprise driven by her creative passion. Jan’s Accents’ products, she says, are bold and outside-the-box, a function, she suggests, of her not having had formal art education and therefore not knowing where the box is.