Young Entrepreneurs Association of Jamaica feature on Entrepreneurship
Six tips on starting a successful business in Jamaica
The traditional cliché of entrepreneurs is that they have an idea and vision. They build companies to fulfill that vision. Here are few things to consider before starting your journey.
1. A large addressable market
This criteria is inherently personal and depends on the entrepreneur’s ambition, but there are good reasons to target larger markets:
This does not mean that the market must be a $1 billion market at the launch of the company, but that it must have the potential.
2. A valid business model understood from the get go
There is only a 5% chance that a company created today will still be around in 5 years. I have not seen official statistics, but many funding agencies seem to believe that only 0.1% of the companies started without a valid business model succeed.
By having a valid business model I mean understanding how you are going to generate money and having a good sense of the gross and net margins at the creation of the company.
3. A business where you have a real shot at being one of the top players - at least in the region you are targeting
Avoid entering businesses where many players are well funded or where the incumbents have a sustainable advantage. That is not to say not to enter businesses where there are incumbents - just make you have a hard to replicate edge on them - after all Skype did extremely well because it entered the telephony market with a radically lower cost structure than the traditional telephone companies and used it to its advantage.
4. A scalable idea
This is again a very personal criteria. KFC and Courts are great businesses, but I would rather not be in a business where I need to open a new store to increase my sales as it leads to slower growth and greater capital requirements. Internet businesses are magical as they give you the ability to build and grow global companies in record times - just look at what Google, eBay, Skype and many others accomplished in less than 10 years - in some cases in less than 5 years!
5. A business that is in a rapidly growing market
A rising tide raises all boats. Growing markets generate more interest from the press, consumers, customers and suppliers. Moreover, if you are gaining share in a rapidly growing market, this can create exponential growth.
6. An idea that I like and want to do!
One of the keys to happiness and success in life is to do things you love and are passionate about…
A few things to note:
As you can see, we did not mention barriers to entry as a business selection criteria. While it would be nice to be in a position to have strong barriers to entry from the get go - it’s relatively rare to be in a position to have sustainable barriers to entry from the start especially as it is becoming easier to duplicate technology or even get around many patents. I prefer to focus on building the barriers to entry with the business - the very fact of operating a business - having customers, suppliers, press attention, creating a brand - creates barriers to entry.
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