Establishing A Business: Caribbean Business Chapter Three

3 Establishing a business
Establishing a business
Caribbean Business
Chapter Three
Caribbean Business for CSEC® Principles of Business © OUP 2010

3.1 The entrepreneur
3.2 Three successful entrepreneurs
3.3 Steps in planning a business
3.4 Building a new business: case studies
3.5 Regulations for a new business
3.6 Sources of capital
3.7 Managing risk
3.8 Ethical and legal issues
3.9 Start-ups and the dream business

3.1 The entrepreneur

Caribbean Business
Chapter Three

Who can be an entrepreneur?
● Anyone starting a business is an entrepreneur.

● Many people would like to be an entrepreneur.
● An existing company may be an entrepreneur.
● A government or state agency may be an entrepreneur.

Would you like

to become an
entrepreneur or
business owner
in the next five
years?
According to this
telephone survey in
Trinidad and Tobago,
what proportion of the
population would like to
own a business?

Discussion points
● How many of the people who would like to start a business will
succeed in doing so?
● Would you like to run your own business?
● Why?
● At what age would you like to start your own business?
● What sort of business would you like to run?

Roles of the entrepreneur

● Conceptualizing
● Planning
● Accessing funds
● Organizing
● Operating the business
● Evaluating performance
● Taking the risks
● Earning profits

Characteristics of the entrepreneur

● Creative and innovative
● Flexible
● Problem solving
● People oriented
● Goal oriented
● Persistent and persevering
● Taking calculated risks

Reasons for starting a business

● Financial independence
● Increased income
● Increased control of working life
● Self fulfillment and self actualization
Even in a successful new business, these goals will not be achieved

immediately.

Discussion point
● 62% would like
to run their own
business.
● Only 15%
currently do so.
● Why are the
others not
running a
business at
present?

3.2 Three successful

entrepreneurs
Caribbean Business
Chapter Three

Dr Anthony Sabga, ANSA McAL

● Was it easy for Anthony Sabga
to start his own business?
● What was his first successful
business?
● What step did he take in 1986?
● What were the results of this
investment?
● What advice does Anthony
Sabga have for the young
entrepreneur?

Patrick Casserly, e-services

● How old was Patrick Casserly
when he started e-services?
● How much did he sell the
business for, nine years later?
● What is the main activity at e-
services?
● What characteristics of a good
leader does Patrick Casserly
demonstrate?
● What leadership styles does he
show?

3.3 Steps in planning a

business
Caribbean Business
Chapter Three

Establishing a new business

Concept ● A new business concept.
Research ● Research and market probe.
Resources ● Identify resources – human, material, financial.
Feasibility study ● Does the feasibility study indicate that success is likely?
Business plan ● Prepare a detailed business plan.
Funds ● Funds from investors, banks, other sources.
Operation ● Operation – equipment, staffing, production, marketing.

The business plan

● A detailed plan for the first years of operation
● Examines the concept in critically and in detail
● Shows investors and lenders that the proposal is likely to
succeed.

The business plan

Business plan: A detailed plan setting out the objectives of a
business over a stated period, often three, five or ten years. … For
new businesses it is an essential document for raising capital or
loans. The plan should quantify (give numbers for) as many of the
objectives as possible, providing monthly cash flows and production
figures for at least the first two years … Anticipated profit and loss
accounts should also form part of the business plan … (Oxford
DBM)

The business plan

Starts with an executive summary.
Continues with sections on:

● Production
● Marketing
● Finance
● Other aspects of business.

Data for the business plan
Primary data Secondary data

● Questionnaire surveys to ● Published population and
test the market income data to estimate
● Production data on work market size
rates and production ● Trade journals for
methods information on production
● Suppliers’ information on methods
cost of materials and
equipment

Other types of plan

● SWOT analysis – Strengths, Weaknesses, Opportunities and
Threats
● Contingency plans – for example, how to deal with a hurricane
or a sudden shift in demand
● Project plans – implementing a specfic proposal
● Short-term plans – weeks or months
● Medium-term plans – up to three years
● Long-term plans – looking further ahead

3.4 Building a new

business
Caribbean Business
Chapter Three

Hayden Mahabir, Anti-Corrosion

Technical Services
● What was Hayden Mahabir’s
first business?
● What did he achieve and learn
while working for an
international energy company?
● What is his current business?
● What ideas does he end with,
for success in business?

Dexter Roberts, Mangoes

Restaurants
● What were Dexter Roberts’ first
jobs?
● What does he mean by ‘I gave
up seven years of my life to
building a business’?
● What does he mean when he
says ‘you have to be the rat …
and the eagle?
● Why does he eat in other
restaurants three times a week?

3.5 Regulations for a

new business
Caribbean Business
Chapter Three

Business regulations
Local government Regional
● Building operations ● Caricom invoice
● Billboards ● Caricom external tariff
● Barbers’ and Beauty shops
International
● Amusements
● Copyright and intellectual
National government property
● Tax ● Money laundering
● Occupational safety and ● Transport of hazardous
health waste
● Business registration ● Trade in Chlorofluorocarbons

3.6 Sources of capital

Caribbean Business
Chapter Three

Sources of capital
● Personal savings
● Equity capital
● Loans
● Grants
● Venture capital

Loans may be from …

● Family and friends
● Government agencies
● International agencies
● Credit unions
● Non-government organizations

Collateral
The borrower offers collateral as security.
If loan repayments stop, the lender can take the collateral.
Collateral may be:

● Shares in an established business
● The borrower’s home
● Other land and buildings
● Machinery, equipment or vehicles.

3.7 Managing risk

Caribbean Business
Chapter Three

An offshore drilling rig

Where CGX
intends to find
oil and gas

CGX Energy – what are the risks?

● Oil price risk – will the price rise or fall?
● Geological risk – is there oil or gas?
● Political risk – the maritime border dispute.
● Changes in drilling costs and other expenses.
Which of these have been resolved?

How much does it cost to drill a well?
What are the chances of success?

3.8 Ethical and legal

issues
Caribbean Business
Chapter Three

Ethical and legal issues

● Tax
● Environment
● Advertising standards
● Money laundering

How should these be dealt with?

● An oil spill which damages the environment
● Advertising of cigarettes
● Tax evasion
● Dumping hazardous waste without proper procedures
● Paying low wages in overseas factories and employing child
labour
● Unsafe work practices which place lives at risk

Small things?
● “We did not get permission for our new building extension – it
would take too long.”
● “I have no problem if our drivers exceed the speed limit or use
their cellphone in traffic.”
● “I can’t check if all of our customers are old enough to buy
cigarettes or alcohol.”
● “Safety helmets, boots and harness are too uncomfortable in this
heat. I can’t keep checking that staff are wearing them.”

A statement of core values

● Integrity – Interact with others ethically and honourably.
● Respect – Empathise and fully consider the diverse needs of
others.
● Commitment – Achieve success for customers, team, and self.
● Insight – Use a high level of knowledge to proactively respond
with the right solutions.
● Spirit – Enrich the work environment with teamwork, contagious
enthusiasm and a ‘can-do’ spirit.
Scotiabank Trinidad and Tobago

Risks from breaking the law

● Fines for the company
● Prison sentences for senior executives
● Closure of the business
● Industrial action by trade unions
● Legal action by employees
● Legal action by customers
● Legal action by other stakeholders

3.9 Start-ups and the

dream business
Caribbean Business
Chapter Three

Keston Price, electrician

● What were Keston Price’s
first career steps?
● What has he done so far
to establish his business?
● What is he planning to do
next?

Leasel Rovedas, make-up artist

and radio host.
● How many activities does Leasel
Rovedas cover in her work
schedule? Make a list.
● Why does she think her working
life is a ‘dream come true’?

Che Lovelace, painter

● Why does Che Lovelace
find his way of life
satisfying?
● Could he earn more in
another activity?

Teasea and Duane Bennett, Rêve

Jewellery
● How did Rêve Jewellery start as a
business?
● What sources of advice and
finance were used?
● Both Teasea Bennett and Leasel
Rovedas use the phrase ‘image is
everything’. What do you think
they mean by this? Does it always
apply?

Niger Lowhar, veterinarian

● Why did Niger Lowhar start his
own business?
● What do you think was his main
source of capital?

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3 Establishing a business

Caribbean Business for CSEC® Principles of Business © OUP 2010

Caribbean Business for CSEC® Principles of Business © OUP 2010

3.1 The entrepreneur

Caribbean Business for CSEC® Principles of Business © OUP 2010

Who can be an entrepreneur?

● Anyone starting a business is an entrepreneur.

Caribbean Business for CSEC® Principles of Business © OUP 2010

Would you like

Caribbean Business for CSEC® Principles of Business © OUP 2010

Caribbean Business for CSEC® Principles of Business © OUP 2010

Roles of the entrepreneur

Caribbean Business for CSEC® Principles of Business © OUP 2010

Characteristics of the entrepreneur

Caribbean Business for CSEC® Principles of Business © OUP 2010

Reasons for starting a business

Even in a successful new business, these goals will not be achieved

Caribbean Business for CSEC® Principles of Business © OUP 2010

Caribbean Business for CSEC® Principles of Business © OUP 2010

3.2 Three successful

Caribbean Business for CSEC® Principles of Business © OUP 2010

Dr Anthony Sabga, ANSA McAL

Caribbean Business for CSEC® Principles of Business © OUP 2010

Patrick Casserly, e-services

Caribbean Business for CSEC® Principles of Business © OUP 2010

3.3 Steps in planning a

Caribbean Business for CSEC® Principles of Business © OUP 2010

Establishing a new business

Research ● Research and market probe.

Resources ● Identify resources – human, material, financial.

Business plan ● Prepare a detailed business plan.

Funds ● Funds from investors, banks, other sources.

Operation ● Operation – equipment, staffing, production, marketing.

Caribbean Business for CSEC® Principles of Business © OUP 2010

The business plan

Caribbean Business for CSEC® Principles of Business © OUP 2010

The business plan

Caribbean Business for CSEC® Principles of Business © OUP 2010

The business plan

Continues with sections on:

Caribbean Business for CSEC® Principles of Business © OUP 2010

Data for the business plan

Primary data Secondary data

Caribbean Business for CSEC® Principles of Business © OUP 2010

Other types of plan

Caribbean Business for CSEC® Principles of Business © OUP 2010

3.4 Building a new

Caribbean Business for CSEC® Principles of Business © OUP 2010

Hayden Mahabir, Anti-Corrosion

Caribbean Business for CSEC® Principles of Business © OUP 2010

Dexter Roberts, Mangoes

Caribbean Business for CSEC® Principles of Business © OUP 2010

3.5 Regulations for a

Caribbean Business for CSEC® Principles of Business © OUP 2010

Caribbean Business for CSEC® Principles of Business © OUP 2010

3.6 Sources of capital

Caribbean Business for CSEC® Principles of Business © OUP 2010

Caribbean Business for CSEC® Principles of Business © OUP 2010

Loans may be from …

Caribbean Business for CSEC® Principles of Business © OUP 2010

If loan repayments stop, the lender can take the collateral.

Collateral may be:

Caribbean Business for CSEC® Principles of Business © OUP 2010