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Are You Building Your Business To Last Or To Sell?



Building a business is tough but simple. Identify your market and the problems they have. Gather the herd and produce product to suit by helping them meet their needs and solve their problems. Service them so well so that they love you and tell their friends and routinely sell at a profit. Easier said than done? Marcus Cauchi Managing Director, London Sandler Training

One of the first questions I ask new clients is, “Are you building this business to last and pass on to future generations or are you building to sell and cash out?” The reason for this question is that it gives me a better idea and understanding as to how the person or persons are running the business and why.

Entrepreneurship is all about starting, growing, and building a business that matters. It is the deliberate use of one’s life to create a significant company that helps to solve one or more problems plaguing humanity. And why you do it is very important.

John Warrillow in his book, Built to Sell outlines that “Your business can grow and prosper without sacrificing the freedom to live the lifestyle you want. And that you can build a company that you can cash out and sell one day so you can retire comfortably or go after your next big idea. These two ideas are not mutually exclusive. The idea that you have to work your fingers to the bone for years to build a sellable company is flawed. In fact, the opposite is true. If you want to sell your business for the maximum amount of money, it needs to be designed to thrive without you, so the next owner can continue to grow and profit from your hard work when you’re gone”.

Norm Brodsky, Inc. columnist and co-author of Street Smarts suggest that “Most entrepreneurs don’t think about selling their businesses until it’s time to leave, which is a big mistake. As John Warrillow shows in his highly readable book, Built to Sell, you adopt sounder business practices if you build to sell from day one. Not only will you wind up with a better, stronger, more valuable company, but you’ll put yourself in a position to earn a larger financial reward if and when you do decide to sell.”

Rich Sloan, Co-founder and chief startupologist of StartupNation weighs in with the view that “As we’ve always advised at StartupNation, the end depends upon the beginning. Built To Sell, like other great business books, brings into clarity the game-changing importance of clearly envisioning the destiny of your business. But even more, it tells you how to bring that destiny to life.”

Greg Fisher (an associate faculty member at the Gordon Institute of Business Science (GIBS) and currently researching Technology Entrepreneurship at the University of Washington in Seattle), writing in Entrepreneur magazine South Africa suggests that “Research shows that business owners generally take home less money each month than their corporate executive counterparts, yet business owners are, on average, more wealthy than corporate executives. The reason for this is that much of the business owners’ wealth is tied up in their businesses. To realise this wealth they need to sell their business at some point in time”.

“A small minority of people may wish to never sell their business because they are building it as a family enterprise that they will pass on to their children, but for others, the sale of their businesses is critical to realising the fruits of their entrepreneurial and management efforts. The earlier business owners consider the realities of selling a business, the more likely they are to build a business that is actually saleable.”

John Warrillow in his book reports that just one out of every one hundred business owners is successful in selling their business each year. The primary reasons that so many businesses are unsalable are that:

(a) The business is too dependent on the current owner
(b) The business offers nothing unique or distinguishable
(c) The demand for the business offering is no longer growing or
(d) The business is too messy because of poor records or potential liabilities.

Depending on the opportunity that presents itself, it may be best for all concerned if you design a company that will start fast, grow quickly, and then be sold or merged with another. Ask yourself whether you truly want to commit yourself and your company to the goal of a long and independent life. Each presents different challenges and approach to how the business is managed and resources allocated.

For Business that are been built To last:
 Growth is slower, paced and structured.
 Equity distribution is designed to encourage retention of key executives.
 Succession planning is clearly defined and
 Capital structure is designed to facilitate the long term growth of the business.

In the article Building a Family Business to Last written By James Olan Hutcheson and published in Businessweek magazine, he argues that “If you’d like your enterprise to be around for a long time, construct a foundation of passion, clear communication, and rock-solid ethics. If you want your family business to endure, strengthen it from the foundation up. Making a conscious choice to create a long-lived company is the first step in building a strong foundation. It takes some luck to survive for generations, certainly, but these things don’t happen by accident either. It starts with your intentions”.

Some of these foundation building elements start by exposing your children to the business. Take them to work with you. Tell them about the things that you love in your business. Mentor them to have a romance with the enterprise.

Also, make sure your business has good governance in place. This means creating an independent and strong board of directors with a significant number of outside directors.

Neglecting things such as wills, buy-sell agreements, or dividend payout policies is akin to inviting disease into your business and home. Keep your company healthy with prenuptial agreements, employment policies, and other corporate documents defining the strong and lasting business structure that you desire.

A business that are been built To Sell:
 Growth is much faster, but still paced and structured.
 Timeline and horizons for the owners and entrepreneurs are much shorter.
 Clearly defined cashouts
 Equity distribution is designed to allow the sale to the buyer.
 Capital structure is designed to facilitate the short term growth of the business.

According to Greg Fisher, one of the keys to being effective in selling a business is to clearly understand why the buyer wants the business.

There are four primary reasons why another company or individual will purchase a business:
1. Access to the cash flow and profits
2. Access to the customer base
3. Ownership of the technology in the business or utilisation of the technology.
4. Talented mix of employees.

As a business owner, it is important to recognise what kind of value you are creating. Is your value embedded in the operating cash flow of the business, in its customer base, in the technology that is being developed or in the talented mix of employees. Often a combination of these factors will be discussed in the sale negotiation, but in the end one of these factors will be the primary reason someone wants to buy your company. If you wish to sell your business one day, you need to create significant value in at least one of these areas.

Other factors to consider include the number of interested buyers and of course the timing to sell.

So when building a business, it is important to begin with the end in mind. Therefore, if you wish to build a business you can sell one day, think about what will happen at the time of the sale.

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Leadership Conversations

Encourage Entrepreneurship, Make It Easier For Who Have Ideas To Find Finances On JSE Junior Market



“We know there are some concerns that big businesses may try to take advantage of the tax incentive of listing on the junior market and it is a real concern because it will crowd out the genuine small entrepreneurs, so we will pay attention to that. We are not approaching it [the renewal of incentives] in an ad hoc way — we are approaching it systematically and knowing that economic growth comes from the growth of businesses and not just large firms. Indeed, growing the economy means growing it at the base — small -and medium-sized enterprises.

Encouraging entrepreneurship, making it easier for those who have ideas to find finances to take risks, and creating a system where when you take risks you get rewarded and that is the essence and nature of a free market. That is what this Government hopes to achieve and we believe that if you make a profit, you keep it, and instead of taking it from you in taxes, encourage you to invest further.

The government must work to create an environment where people can immediately identify value for investment, and with that, lessen the dependence on Government. He added that the Government will be reviewing its state-owned enterprises over the coming months to see which ones can be placed on the stock market.

That’s the role of Government. The old model of trying to end poverty through Government has not worked and has never worked in any country. The model that has been proven to work is when we fully liberate the enterprise industry and initiative from the people and this is what we are doing as an example.”

Prime Minister of Jamaica Most Hon. Andrew Holness

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Leadership Voices

If Teachers Are Going To The US They Have To Be Licensed, If They’re Going To Canada, They Have To Be Licensed



“There is no cause for alarm at this point. Teachers leave the system every year for reasons such as retirement. In any given year, between five and seven per cent of teachers are on their earned leave, for example, which means that there is always a need for temporary and permanent replacement teachers. I am not aware of the specific numbers who are leaving the system due to migration. So there is turnover in the sector, but to date, I’m not seeing where it’s out of line with anything that we would have seen in other years. If that number changes as we move further into August, then it would be an update. But as far as I can see we have gone through the normal process of approving leave for persons who are eligible to go on their leave [and] teachers who retire. I have not seen any numbers that would cause alarm at this time. As for the anxiety of teachers surrounding the JTC Bill, which a joint select committee of Parliament started discussions on last in February, I have pointed out that even for those who leave, there is no escaping similar requirements for licensing. If teachers are leaving because of that, the environment into which they are going has a similar regime. If they’re going to the US they have to be licensed, if they’re going to Canada, they have to be licensed [but] I haven’t heard that there is any particular departure as a result of the upcoming passing of the JTC Bill. The focus must now be turned to the upcoming school year to ensure that all preparations are in place for students to return. The ministry will again renew its efforts to bring back students to the classroom, which it has not been able to account for, since 2020.”

Education Minister Fayval Williams

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Leadership Voices

The Teachers Of Jamaica…Are Seen As Among The Best In The World…But Teachers Cannot Continue To Scrape By, Unable To Meet Their Basic Needs.



“Hundreds who have left so far have done so through three of seven agencies which are actively recruiting Jamaican teachers. There are many others who have probably gone and I don’t know yet. You will have plenty more leaving and I will not say to a teacher, don’t leave. If you care, demonstrate that you care and pay the teachers properly. Teachers remain severely undervalued here, even though they are touted by other countries to be among the world’s best. There is a severe shortage of teachers worldwide [and] the teachers of Jamaica…are seen as among the best in the world. Two countries told me personally that Jamaica and the Philippines have the best quality trained teachers, but the Jamaican teachers are ahead because the teachers speak English properly, while the Filipinos, though they speak English, their accent makes it difficult. Therefore, the recruiters will be coming to Jamaica to get as many as possible from us; people are saying if they don’t want to stay in the classroom, why they don’t go. Well we are taking their advice,”

Winston Smith President of the Jamaica Teachers’ Association

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Leadership Conversations

The Tourism Linkages Network (TLN) Was Established As An Initiative To Increase The Tourism Sector’s Consumption Of Goods And Services That Can Be Competitively Sourced Locally



“The principle of establishing the linkages network is first of all to identify why people travel. The study identified five reasons why tourists travel. These areas are gastronomy where they come to enjoy local foods, shopping, health and wellness, entertainment and sports and then there is knowledge where people travel for learning and seminars.

These things are owned by people in the destination and when they come and buy these things the money is spent here. We know we don’t produce everything, because we don’t grow rice or wheat, but we grow fresh fruits and vegetables such as bananas and yams, we can then do canning like for agro-processing to produce things like jams and jellies, manufacturers can produce sheets and blankets which will also help to retain more of the money in Jamaica.

Since the study, the government has been giving incentives for those interested in producing for the tourism sector and extending financing to facilitate ventures. We were able throughout that process to increase the retention of the tourism dollar from 25 cents in 2010 to 40 cents in 2019. And at 40 cents we are 20 cents away from the best-performing destination for tourism dollar retention in the world which is India, which retains 60 cents of its tourism earnings.

In the Caribbean, the country retaining the highest level of tourism dollar is the Dominican Republic which retains 50 cents out of every dollar its tourism sector earns. That country earns about US$8 billion from tourism which means US$4 billion is retained that country. Jamaica’s tourism retention rate can increase from 40 cents of every dollar to 50 cents if Jamaican farmers and manufacturers, entertainers and retailers and knowledge producers ramp up their offers to the sector which boasts 32,000 rooms and is set to welcome over 3 million stop over tourists this year.

The Tourism Linkages Network (TLN) was established as an initiative to increase the tourism sector’s consumption of goods and services that can be competitively sourced locally. Delivering billions in retained earnings over the years, the body said it remains committed to ensuring that there is a reduction in the purchasing gap between tourism and other sectors.”

Tourism Minister Edmund Bartlett in an interview with the Jamaica Observer newspaper recently.

From leakages to linkages

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Leadership Conversations

Our Vision Is To Increase Viewership By Allowing Content To Be Broadcast On A Combination Of Traditional Media That Doesn’t Require Any Premium Service Or Premium Access.



This Emphasis On Expanding The Availability Of The Product Was Key To O Ur Successful Bid To Secure The Highly Coveted Rights.

“What our vision is, is to distribute and present that content in ways that it hasn’t been done in previous times to a much wider audience. So, by way of example, when I say that I mean that, you know, content like the Premier League and other premium content like that has only been available to a smaller percentage of the market, not the wide market, because of how it was broadcast. Our vision is to increase that viewership by allowing it to be broadcast on a combination of traditional media. By broadcasting on traditional media that doesn’t require any premium service or premium access as well as on premium services.

In addition to that, you know, we are building our own digital media offering and our own architecture behind that. So, the way that we will offer it to the public, We think will not only drive uptake in digital media, but also drive the audience on digital media.

“We believe VertiCast is ideally suited to show Premier League matches across the Caribbean and fans will benefit from VertiCast’s broad distribution plan across multiple platforms. VertiCast will help us to maximise reach and viewership and to further grow the Premier League fan-base in the region.” Paul Molnar, Premier League Chief Media Officer

We’re definitely not moving away from pay-TV or our premium services. What we’re looking to do is compliment the way it’s done currently. So, we just think that combination of traditional media alongside pay-TV, cable and trying and structuring a way on digital media that allows for the average person to view the Premier League and you know that doesn’t take place as much as it should right now. And we think we have come up with some ways that we can do that. We have certain dynamics here in the market that precludes us from broadcasting it or making returns on it like they do in the UK or in Europe or the US, right? We don’t quite have the distribution infrastructure that they have there. We don’t quite have the economy that they have there. We don’t have the fanatical fan base that they have there. So, you know, we have figured out ways that we think we could enhance what’s currently being done.

“VertiCast is a vertically integrated media company that will incorporate broadcast across all media platforms into multiple markets in the Caribbean. A regional media entity with the intention to broadcasting over traditional media, cable television and digital media via streaming and mobile via partnerships and on its own channels.”

Within the media industry as you know, everything is founded on strong content. Obviously, the ways of distribution have diversified and increased over time. But the first step is always to make sure you have the right content. The announcement we made this week about the Premier League rights is a step in the direction for us to make sure that we first have the, you know, the most in-demand content.

I think for too many years, we have been looking at broadcasts in silos. That is, you know, there is free to air and then separately there is pay TVs that’s cable and then separately there is radio and then separately there is digital media, right. And, as you said, a lot of the traditional media or even the cable media has been reluctant to get into the digital media. How am I going to make a return on that in isolation? Our view is that you can’t do it in isolation. You have to treat it almost as a convergence of media, and how do you make one compliment the other? And that is our approach. Our approach is that we’re not going to operate in silos. We’re going to seek to have traditional media benefit off of digital media, and vice versa digital media benefit from traditional media.

A major emphasis of ours is going to be to continue working with local producers, the IPPs (Intellectual Property Producers) around the region, and when I say work with them, it doesn’t mean you know, we say to you okay, come in and present your content that will decide if we show it or not, or we’re going to rent your airtime. A major emphasis of ours is going to be IPPs typically don’t have enough production resources to really complete their content packages.

What we will do is we will work with a lot of the IPPs by providing them with certain resources that they can then utilise to complete their productions and content packages. So that it becomes a certain quality that then can be broadcast on our platforms. So, so we will spend a lot of time working to curate local content and helping producers to curate local content.”

VertiCast is aiming to serve content to a market of nearly 45 million people in over 26 countries including the English-speaking Caribbean, the Dominican Republic, and parts of South America. The multi-platform company has reportedly secured support from major content providers which the company will rollout over the next couple of weeks.

Oliver McIntosh President And CEO VertiCast Media Group Ltd


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