Business

A strong financial foundation is key to entrepreneurial success

by Vintoria Bernard

Wednesday, October 18, 2017

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For many Jamaicans, the decision to be our own bosses did not come easily. Like many of our peers, we left university wanting to find a great company, work hard and aim for the top. We were assured of a monthly cheque, and as we climbed the corporate ladder, status and recognition would be ours. Indeed, if all went well, upon retirement there would be a nice pension package.

Unfortunately, actual unemployment or the fear of redundancy has been the catalyst for many people becoming self-employed. The World Bank reports that within the past four years, 19 per cent of new businesses in Latin America and the Caribbean were founded by someone under the of age of 35. With the current market offering fewer opportunities to secure traditional forms of employment, an increasing number of young people are clearly following the trend towards self-employment.

This trend is expected to rise with the rapidly increasing shift to robotics for routine operations in developed countries. Small, underdeveloped economies such as ours will find it increasingly difficult to attract large, labour-intensive operations. It is not surprising, therefore, that there has been a rising trend in many countries to promote entrepreneurship and small business development to combat the unavailability of quality jobs.

While entrepreneurship is vital to economic growth and with prudent management can create sustained wealth, success in self-employment is not guaranteed and people are encouraged to carry out the requisite due diligence before start-up. This enables one to endure the rough times and to plan for the future with confidence.

Financial literacy is key. It allows an individual to make informed and effective decisions about his or her financial resources. It also enables one to identify the pain points in the business model before they become a problem. Anyone in control of a small business will benefit from recruiting the services of a professional accountant who will provide support on how to get hold of sustainable finance, navigate through the government procurement process, and offer guidance on how to comply with regulations.

Regrettably, regulations and taxes are generally designed with the larger businesses in mind, and then retro-fitted to the smaller ones. Every tax or regulation break and nuance later created to help small businesses only add to the weight of regulation that small business owners have to understand and apply.

Good financial support is a must to ensure growth, sustainability and success. Any good accountant must be as flexible as a business needs him or her to be, and should be able to explain anything that is unclear to ensure that the best decisions are made.

There are many attractions and great benefits to becoming self-employed. However, the reality is uncertainty is the new norm. Anyone who makes the brave decision to go it alone will have to factor in turbulence as a very real possibility, and should develop strategies for a range of different economic, market and, of course, personal scenarios. The path will certainly be less rocky with a good accountant to advise you.

Vintoria Bernard is the managing partner of VB Chartered Accountants, and has been in practice since 1991. She has a wealth of experience in general management, as well as internal and external auditing, some of which was acquired during her employment to PricewaterhouseCoopers where she spent eight years. Her range of skills was widened by corporate stints in statutory organisations and the manufacturing and distribution sectors. A member of the Institute of Chartered Accountants of Jamaica since 1987, Miss Bernard is a Fellow of the Institute, as well as a Fellow of the Association of Chartered Certified Accountants (ACCA). Since 1997 she has actively served on the Institute's Continuing Professional Education Committee and has chaired the Public Relations & Publications and Taxation Committees. She is a former ICAJ President.

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