KINGSTON, Jamaica – Micro, Small and Medium-sized Enterprises (MSMEs) are being urged to become investor-ready with the simple and practical tool of budgeting. Speaking at the Jamaica Business Development Corporation’s (JBDC) first Virtual Biz Zone webinar of the year, Mrs. Shani Duncan-Falconer, Senior Corporate Manager, Jamaica Money Market Brokers, (JMMB) shared on the necessity of a budget in accessing funding.
The MSME and Entrepreneurship Policy in 2018-2019 highlights access to finance as a constraint for MSME operations. Though there is this constraint, the problem is two-fold and small businesses have proven that there needs to be more improvement in their own readiness.
In a bid to improve the accessibility of financing options to the MSME, the Government of Jamaica has stated “Our goal is to ensure that all MSMEs are prepared for and have access to finance through appropriately structured products, markets, and enabling environment, resulting in increased growth and employment. We aim to achieve this goal by: Providing technical assistance to MSMEs to improve their bankability.”
Duncan-Falconer suggests that improving financials through the effective practice of budgeting well through business accounts and tools is a simple yet effective way of increasing investor-readiness for small businesses. She said “Entrepreneurs must recognise the benefits of a business budget as it is often valuable in positioning them to receive help.”
She shared “A budget helps companies make accurate financial decisions, it allows them to identify areas that can be maximised to increase business profit, it also enhances the possibility of successfully implementing business strategic plan and improves the process of accessing financing and investors
She shared that “A budget is more than a piece of paper and individuals within the small business space must not underestimate the usefulness of it.” Explaining the need for a budget, Mrs. Duncan-Falconer said “A budget is simply a guide to ensure that the business has sufficient capital to operate and grow. The budget is used as part of the planning process in terms of setting goals, implementing activities, and the expenditure that is likely to be incurred.” She went on to say that “You may be in a situation where you need money and you need an investor, it may be an equity investor, it may be debt financing and so you need to go to those persons with something that is properly planned out.”
She posited that entrepreneurs need to think of budgeting as very strategic. “You need to use tools that aid in showing how much you have spent on various aspects of your business, so you will be able to report on it. The entrepreneur must be able to show what their spending history is and budgeting helps you to say I need more money and helps to figure out how you can get more money,” she said.
Speaking on monitoring a business budget, Duncan-Falconer advised participants, “Review your budget frequently, record all income and expenses regardless of value, compare your actual income and expenses versus projection.” Continuing, she said “Constantly monitor your cash flow, store receipts, efficiently monitor receivables and utilise accounting software.”
In concluding, Duncan-Falconer implored participants in the webinar to “Open a business bank account, as this helps with tracking your spend and it is necessary to be able to easily validate the business performance. The most reliable method accepted by banks and investors is funds passed through the business’ operating account. This information is useful to the business owner and any current or potential investor.”
The JBDC hosts its Virtual Biz Zone webinars twice monthly on Tuesdays at 10:00am, and entrepreneurs are encouraged to join the informational sessions by registering through the website at www.jbdc.net. Participants can look forward to the second session in the Financing Series on Tuesday, March 21, 2023 under the theme: Pension Planning for Self-Employed and Entrepreneur with Ms. Grace McLean from BPM Financial Limited. Interested entrepreneurs can subscribe to JBDC’s YouTube page @JBDCJamaica to watch the recordings.
