"The playing field is now set for entrepreneurs in Jamaica. There is debt available, there is equity available -- as an entrepreneur you can't want anything better," he said, confident that the restructuring of the debts undertaken by the government through the Jamaica Debt Exchange (JDX) will result in lower interest rates, which will in turn result in greater investments within the productive sectors.

The Mayberry CEO said that if interest rates on government paper decreases to 10 per cent, a six per cent after tax rate will not be sufficient to encourage investors to hold out on potentially more lucrative investments.

"When people realise that the interest rates regime will hold, what you realise is that, now more than ever, everybody is looking to invest," Peart said.

As a result, Peart explained, many persons will be looking at the stock market as a place to get not only equity funding for businesses but better returns for investors.

He's bullish on the Junior Stock Exchange, which he said has opened up the opportunity to get funding for small businesses.

"This thing is likely to be one of the most transformative things the country has ever seen," Peart said of the Junior Exchange.

"There is nothing that prevents you from listing a medical practice or an accounting firm," he noted.

Additionally, he said, with the reduction of interest rates, the cost of debt will also be reduced.

"For the first in a long time for entrepreneurs, both sides of financing for their business has opened up. Both debt and equity financing, both sides are in place," Peart said.

He said that despite the suggestion that investor confidence is low and people are more inclined to hold on to their money rather than invest in a venture that might fail given the macro economic conditions, people are willing to invest in a good deal.

He used newly formed investment company Proven Investments and Barita Investments Limited, which listed on the Jamaica Stock exchange on January 14 this year, as examples to indicate that investors will seek out attractive opportunities.

Peart added that as more small firms move to listing on the Junior Stock Exchange, more structures will have to be put in place to accommodate the process, and more businesses will benefit.

However, for those entrepreneurs who are not ready to go the route of listing, there are other avenues.

There are two main strategies that potential entrepreneurs can utilise in order to increase the chances of being successful, said Peart, adding that an examination of the issues that affect Jamaican businesses can help persons decide on a lucrative business to pursue.

First, he said, think exports. Jamaica's exports have declined over 50 per cent within the last year. Any business that can generate sufficient exports or higher value-added items are likely to not only be successful, but contribute towards improving Jamaica's overall trade deficit. The crux of the matter for the entrepreneur is sustainability.

"Anything that is export oriented that will allow you to earn foreign exchange...with the continued devaluation of the dollar your revenues will increase and your expenses will be reduced over time," Peart said.

Secondly, consider priority agricultural industries. Peart said there are many incentives for those who choose to produce these priority items. Jamaica's National Export Strategy (NES) document will be a good source of information for which industries are priority. These include agroprocessing (food and beverage), aquaculture and coffee. Other non-agricultural industries include minerals and entertainment.

According to the NES, the objectives for the agro-processing industry include increasing exports by 15 per cent each year by improving access to overseas buyers, introducing five new products to the export market by 2012 and driving the adoption of full global best practices by 60 per cent of the industry. Entrepreneurs who can harness the full potential of these industries can expect to get support from the government.

Entrepreneurs can access grants and a lower tax rate for some capital equipment that will be used within these sectors. "There is an EU (European Union) grant if you can infuse technology into your agricultural pursuit," Peart advised. "Look at all aspects of the business and assess it along with the incentives that are available in the country," he said.

Import substitution is also a great means of earning and developing the economy. Peart suggested that persons focus on items that are both import intensive and have a significant local demand.

Sunday Finance
The Jamaica Observer
January 31, 2010