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Table of Contents
CONTENTS PAGE
1. Foreword ii
2. Introduction 1
5. Executive Summary 6
6. Business Description 10
9. Marketing Strategies 18
12. Appendices 24
Foreword
The National Financial Literacy Programme (NFLP) was established in
January 2007 as an outreach function of the Central Bank. The objective of
the NFLP is to provide education and generic advice to the population on a
whole range of financial issues.
Since its inception, the NFLP has used various media to target and educate
a wide cross-section of stakeholders – students and young adults (primary,
secondary and tertiary), employees in the workplace, community groups
and associations, small and micro entrepreneurs as well as retirees. NFLP
staff members have prepared newspaper articles, strip ads and booklets on
several issues pertaining to money matters and insurance. The NFLP has
collaborated with the private and public sector in hosting “lunch and learn”
sessions targeted at employees in the work place and has provided financial
literacy sessions through the hosting of many public town meetings, all of
which have been well-received.
The NFLP has arranged for financial education classes in primary schools
throughout the country and has launched pilot programmes in a few
secondary schools. Recently, the Ministry of Education agreed to integrate
the NFLP secondary school programme into the regular school curriculum.
Several teachers have been trained to conduct this programme in the
secondary schools.
The Small and Micro Enterprise (SME) sector has been added to the
programme in recognition of the important contribution of this sector to
the economy and to allow for its continued dynamism in the future. Initially,
the focus on SMEs had taken the form of a series of educational expositions
and presentations to stakeholders in the sector. To date, expositions have
been held in Tobago (October 2008), Chaguanas (November 2008), Arima
(February 2009) and Mayaro/Rio Claro (September 2009). A final exposition
will be held in the borough of Point Fortin in January 2010.
The first booklet in the series, “Start-Up & Operational Issues for Small and
Micro Enterprises”, provides a careful step-by-step guide to starting and
operating a new business. Some of the topics covered include registering
ii
The third booklet, “Financial Services- Where to find assistance for your
business”, provides information on a comprehensive list of organizations
from which the small and micro-entrepreneur can obtain financial and other
technical assistance.
In compiling these three booklets, the staff at the NFLP worked closely
with:
• The Ministry of Labour, Small and Micro Enterprise Development
• The National Entrepreneurship Development Company Limited
(NEDCO)
• The Commonwealth Secretariat
• The Business Development Company Limited (BDC)
Valuable insights and suggestions were gained from each of these groups
as well as from Central Bank staff and members of the various NFLP
Committees.
It is with pleasure that this three part series, is being issued for the benefit of
a wide cross-section of the population. It is hoped that these publications,
written in clear and non-technical language, will provide readers, in particular
small and micro entrepreneurs, with a better grasp of the core concepts
related to successful business ownership.
Editorial Committee
Elizabeth Austin Victor Maloney
Penelope Forde Ann Marie Narine
Jennifer Greaves Avinash Ramlogan
Narissa Lezama June Stewart
Judy Chang Nallapernuma Sirisena
Marie Borely Clarry Benn
iii
Introduction
This booklet ‘Start-up and Operational Issues for Small and Micro
Enterprises’ is the first in a three part series for Small and Micro Entrepreneurs.
It is intended as a guide for you, the new or prospective entrepreneur. The
other two parts are “Record Keeping – How to keep financial records
for your business and Financial Services - Where to find assistance for
your business”. In this series, the small and micro enterprises are defined as
follows:
A small business is one which employs six (6) to twenty-five (25)
persons, has assets of TT$250,000 to TT$1.5 million and sales between
TT$250,000 to TT$ 5 million per annum.
A micro business is one which employs one (1) to five (5) persons, has
assets of TT$10,000 to TT$250,000 and sales of less than TT$250,000 per
annum.
A mini-micro business is one which has less than TT$10,000 in assets.
Where do I start?
set out in this and the other two financial literacy booklets for SMEs.
If you answered ‘YES’ to all of the questions above, then you are ready to be
a successful entrepreneur!
However, if you answered ‘NO’ to any of the questions above, these are
weaknesses that you have to overcome before you can venture into running
your business.
Note that:
º Being a successful entrepreneur requires you to be able to interact
and communicate effectively with others as you would need to
develop working relationships with your suppliers and customer
base in order to keep going!
º If you want to get into business only for the money you may
become disillusioned.
º If you want to be successful, you must provide quality products
and services to your customers.
Once you have made the decision you must prepare a business
plan which is very important if you have to seek financing from a
financial institution. Institutions will want to read your plan before
they provide any funding that you may need to start the business.
Furthermore, you must appreciate that there are risks associated with
the establishment of any new business. Therefore, before starting your
new business, you should conduct research and be able to answer the
following questions:
1. Is there a market for my product or service?
2. Are the raw materials, tools, equipment and other resources
available?
3. Is the quality of my product or service such that it can compete
effectively with the already existing products on the market?
4. Where is an appropriate location for my business? E.g. home
based or rental.
5. What production processes do I have to use?
6. What are the production costs?
7. Can an initial lower price be charged for my product or service
in order to penetrate the market?
8. Who will undertake leadership and manage the resources?
Executive Summary
You will need to complete and file the Registration of a Business Name form.
This form is to be submitted to the Companies Registry with the applicable
fees. For a Limited Liability Company (LLC), once you have a name reserved
you will have to file Articles of Incorporation.
To register your business name, you can obtain forms from the Ministry of
Legal Affairs. Forms are available free of charge from the:
Companies Registry
Registration House
72-74 South Quay
Port of Spain
Trinidad, West Indies
Business Description -
Dzign Clothing Concepts (DCC)
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These are managerial decisions that will dictate the future growth of
the business. The management plan should include details about the
ownership structure, management and human resource needs.
Operations Plan
The operations plan specifies where you will locate your business (along
with the physical requirements) and how you will service your clients. If
you are into manufacturing, your operational plan should provide details
on the manufacturing process. If in the service industry, you should
explain how you plan to serve your customers. Any implementation of
measures to maintain certain standards where your product or service
is concerned should be included in the plan.
Hint: You should find out about the regulations that govern or monitor
the type of business you are getting into! For example, if you are getting
into catering, there are certain standards around food preparation,
packaging, distribution etc. that you would need to adhere to.
If you depend on suppliers for certain inputs into your business, your
operations plan should describe the arrangements you have with your
suppliers in terms of re-orders (frequency and quantity) and costs.
Alternatives or back-up suppliers should also be included.
11
Operations Plan
Due to its small size and number of employees (2), the business
will be home-based, located at 16 Avenue Drive, Dinsley.
12
Production Costs
All items directly and indirectly related to the manufacturing process
must be considered in the estimate of the unit cost of the product. In
order to estimate the cost of production you would need to do the
following:
° Identify all the inputs needed to produce and sell.
° Calculate the cost of the production of a specific quantity that
you can manage.
° Identify production inputs under the following headings:
13
14
15
Marketing Strategies
Your business venture needs effective marketing regardless of the
product or service you provide. In developing your marketing strategy
you must identify the customer you are targeting and how you plan to
reach them. To achieve this you should include the following issues in
your marketing plan:
º Pricing
º Distribution
º Product differentiation
º Advertising and
º Promotion strategies.
º Pricing
The price of your product or service will directly impact the success of
your business. If you want to stay in business, you must at least break-
even i.e. your income must cover your expenses.
It is however advisable to compete on quality rather than reduce your
prices in order to attract more customers. You must be able to compare
your prices with those of your competitors and determine the reasons
for their prices being higher or lower than yours. You should never
sacrifice quality for quantity and never compromise the quality of your
product to save on costs – this will inevitably lead to loss of customer
loyalty and future business.
º Distribution
Distribution is the process of getting your product or service to your
customers. The direct sales method involves selling your product
directly to the customer. For example, making pies and selling them
yourself. Wholesale distribution usually involves the sale of your
product to another party who would subsequently re-sell to customers
or use it in the production of his or her own business. Examples of this
include the making of preservatives to sell to grocery owners who in turn
sell to customers and farmers who sell their vegetables to restaurant
owners who will use the food stuff in the meals they prepare for sale to
customers. The distribution channel you choose will depend on your
type of business. If you are in the service industry, your distribution
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Promotion Plan
° Product Differentiation
Product differentiation refers to your ability to use your creativity to
make your product or service as unique as possible to distinguish it
from the others in the market. If you are in the service industry, your
personal appearance, your package deals and the quality of your service
can set you apart from the others in your industry. On the other hand,
if you manufacture goods, the type of packaging as well as distribution
channels will be critical to your success.
17
18
Financial Plan
The financial plan is another important feature of the business plan. You
should be able to describe what your inflows and outflows of cash will be
(cash flow statements) profit and loss statements and balance sheets. The
second booklet in this series includes relevant information on these financial
statements.
When venturing into a small or micro enterprise, you must understand that
you will incur start-up costs for your business. If you do not have the initial
funds for start-up, you may need to approach a financial institution such
as a commercial bank, credit union, special credit-providing institution of
the state, etc. that may assist you in securing funding for your business. It
is important to have an effective business plan in order to access financing
from these institutions.
The third booklet in this series lists institutions specifically developed to
assist local SMEs in acquiring funds in Trinidad and Tobago.
Useful Hints
Location of the Enterprise
When deciding upon an appropriate location for your business, you must
consider the following:
º Health and environmental requirements must be satisfied
º Basic infrastructure and amenities e.g. water, electricity, roads, etc.
should be in place
º The location should be adequately secured
º Storage space will be required
19
Home-based business
Most entrepreneurs start with their home as the primary business location.
Some of the pros and cons of doing so are as follows:
Advantages:
º You will not have to pay rent
º You will spend less time commuting
º You will be closer to your children and family.
Disadvantages:
º Domestic interruptions from children, spouse and other family
members
º Work and personal life may become too intertwined
º If your business is expanding you may not have enough space at
home.
Even though you may decide to operate from your home, it is still advisable
to register your business.
20
If you are in the baking business it would be wise to have a second oven
so that if one malfunctions, you will still be able to continue your business
operations for some time.
Always remember that if you encounter problems that result in non-
completion of jobs, you may have dissatisfied customers, which may result
in loss of customer loyalty and future sales. If you are having difficulties
with delivery, you should inform your customers in a timely manner and
possibly refer the client to another service provider who you believe can
do the job. This way you could maintain your customer base and respect. It
is unacceptable to simply say to your customer that you can not do the job
Additionally, it is your responsibility to ensure that the service providers you
refer persons to or other persons with whom you work also provide a high
quality service to your customers in order to keep them satisfied.
Receipt of Payment
When operating your own business, especially in the service industry, you
must be sure to collect your funds when due as non-receipt of funds could
affect your ability to cover your operating expenses. You must be able to
prepare proper estimates for all your jobs. In your estimates (proforma
invoices), you should include the total cost of providing the service i.e. all
materials and labour including any individual(s) hired. You should request
a down-payment before you begin the job and ensure that the customer
signs to pay you upon completion of the job. Exercise caution when
providing services for credit.
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Additionally, you must prepare receipts for your customers. This will also
enable you to keep better records.
Workload
If you work in the service industry, do not take on more work than you can
handle. This may result in a number of unfinished jobs and lead to customer
dissatisfaction, loss of customer loyalty and therefore loss of revenue. You
must properly schedule jobs so that you would have an idea about how
much work you can take on. If you recognize that you have an increase in
business that you are unable to manage on your own, you should consider
hiring more staff.
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APPENDICES
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Appendix I
Business Sectors which offer Potential for Small and Micro Enterprises
in Trinidad and Tobago.
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Notes
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Notes
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Notes
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