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he business of fun is fickle. Music, lights, glamour and glitz are the bait. Excitement and a good time is the promise. Satisfaction is the payoff. These are the ingredients of the entertainment industry, by and large. The Cover Story for this issue of Businessuite Magazine looks at the struggles of companies in the Jamaican entertainment industry – KLE Group, C2W Music, Pulse Investments, RJR Communications and others. A few common strands are clear. The quality of a company’s management (read leadership) is key to success. “The leadership and management are responsible for the financial performance of a company because they are vested with the authority to make any changes they consider appropriate to make the business profitable,” Sushil Jain, who has seen the operations of a few companies close up. But how do we know what the management is up to, given businesses’ propensity for secrecy? One of the advantages about examining publicly traded companies is that these companies can’t just hide bad news. Transparency is imperative. They can’t pretend as if the picture is overly rosy. And that bad news is often bared in the annual financial statement: Here is C2W Music’s CEO Ivan Berry trying to make the bad news sound as palatable as he can. “The company has not to date been able to

realize the projected revenues as it has sought to develop its catalogue of songs,” he wrote in the company’s end of year 2013 financial report. That sad fact combined with two years of losses and the decline of assets and the mushrooming of liabilities, Berry wrote, “may cast doubt on the company’s ability to continue as a going concern and that the company may not realize its assets and discharge its liabilities in the normal course of business.” In other words, the company’s longterm survival is uncertain. C2W is the kind of company that’s easy to root for. The story of the struggling Caribbean artist is a time-weary cliché. The company is trying to get songwriters paid royalties they are due - a very noble purpose. However, rooting for a company to succeed and investing in it are very different propositions. It requires two different organs – heart and head. As you read this month’s Cover Story, we hope to engage both as we continue to take a deeper look into the business landscape. As usual we would love to hear what you think. BM Andrew Skeritt Editor


many opportunities to reach local, national and international markets. Women are motivated to start a business by many factors, with carer responsibilities at the top of the list, followed by dissatisfaction with work and a real need for a more flexible work-life balance.

uring a recession, there are many opportunities to start a new business.

It’s a climate during which, that dream, can actually be converted into a reality. How would you feel about the chance of doing something that you really enjoy, while you also earn an income, and therefore never “work” again? Have you heard this before? Well, for some women, it is a bit like that you know, especially if you are turning a much loved hobby, or some creative endeavour into a real money spinner. Now how satisfying is that? “It will come as no surprise then that women are taking the plunge and working for themselves as they face redundancies and changes in the employment market.” In harsh economic times, large businesses with high running costs, can go under, especially when orders start to fall away, in a contracting market place. New business start-ups and smaller businesses emerging in this environment can therefore take advantage of the opportunities to supply goods and services, often at lower prices due to fewer overheads. The Internet has spawned

Yvonne Witter, Global Enterprise Consultant

“It will come as no surprise then that women are taking the plunge and working for themselves as they face redundancies and changes in the employment market.”

“I find that many of my clients lack confidence and are much more risk averse than their male counterparts. There are some very successful women who run million-pound turnover businesses.” Women constitute more than half of the population and 46 per cent of the British labour market. However, they are less than half as likely as men to start a business and make up only 28 per cent of the self-employed. So, you may well be thinking, ‘why are women inhibited from starting a business?’ In my experience as a business advisor and contributor to the UK Women’s Enterprise Strategy, I find that many of my clients lack confidence and are much more risk averse than their male counterparts. There are some very successful women who run million-pound turnover businesses. The fact that

women comprise a substantial proportion of the population it is not reflected in the proportion of women being self-employed. In business, we need to keep our motivation high and believe wholeheartedly in ourselves and our business ventures. Low selfesteem hinders our ability to be successful in business, because we place limits and barriers on ourselves. Women and men experience low self-esteem, but women tend to be more open than men about their selfesteem issues. Jennifer Warwick, a women’s career strategist based in Los Angeles, says, “Women are encouraged to build intimate and complex relationships, and part of building trust includes being vulnerable and sharing your flaws … so it’s no surprise that self-esteem is seen as a more ‘feminine issue, especially in business.’ Women tend to dwell on their insecurities more than men do. Business success can boost self- esteem only so much. We expect a lot of ourselves as business owners; it is a hard slog, and we often work in isolation. With only ourselves to rely on much of the time, it is incredibly difficult to keep our self-esteem on an even keel.” As women in business, we have to take a realistic look at our support systems, good friends, business associates and trusted business advisors are necessary to give us positive encouragement. There is a crucial need for women-friendly business support agencies. It is harmful to the self-esteem to be around doubters and people who do not believe in us and

what we are trying to achieve. It is inevitable that from time to time we will doubt what we are doing, especially when we hit an obstacle. So, in order to drive our business forward, we will need to be willing to let go of those who are not supportive of our dreams and aspirations. We need people around us who will boost our self-esteem when we are feeling a bit overwhelmed by the demands of our business. If the pursuit of a particular business venture is what you really want to do, and you believe whole heartedly in your business idea, then you will have a substantial amount of internal drive and be stimulated to overcome the rough times. Jennifer Read Hawthorne, coauthor of Chicken Soup for the Woman’s Soul, believes that learning to like and even love yourself is a lifelong process. You have to believe in yourself in order to keep your dream alive. Raising self-esteem is about letting go of fear and anxiety and replacing it with a feeling that you can achieve your goals and that you are good enough and smart enough and that your achievements are to be recognised, applauded and talked about. Low self- esteem can negatively affect all areas of our life, but in business, it can be crippling. Key tips! 1. Never think that anything is too advanced for you. 2. Do not downplay something important that you have done. 3. Remember that everyone is in your league! 4. Ask for clarification when you

sense you are being criticised. 5. You can conquer low self-esteem through seeing a counsellor, use positive affirmations and through selfmotivation exercises. 6. Essentially, as women we need to manage our expectations and not try to be perfect, but be satisfied with competence. I hope to see many more women take the plunge and follow their dreams. No one can stop us but ourselves. “If one dream should fall and break into a thousand pieces, never be afraid to pick one of those pieces up and begin again.” ~ Flavia Weedn, Flavia and the Dream Maker. Yvonne Witter is a Global Enterprise Consultant Tel: +442081232949


ne of the things I learned late in my business life was to discuss money first. There are hundreds of horror stories of business relations, professional and personal relationships that have been destroyed due to differences in money. My policy is always to talk about money first, especially when there is no money. Surprisingly, people are a lot calmer and more reasonable in their demands. Put a couple thousand dollars on the table and the transformation is frightening. Personal-Finance-Money - The odd thing is that many of us are very uncomfortable talking about money. We don’t like to ask for it and we don’t like to discuss it. This is noted as a significant challenge for women business owners and female consultants who research reports find it difficult to both price their services as well as ask for compensation that is properly aligned with the services being delivered. One businessman told me that he does not like to handle collections as he does not like asking people for money. He leaves it up to the accountant to handle all money related matters. There are even sales representatives who having concluded a transaction are reluctant to ask for the deposit or full payment. We recently concluded business tractions with a new client and one of the first things he said to me was, “Let’s agree on the money aspect. Once we have that sorted out, the rest is smooth sailing.” So said so done. Once we haggled over fees and payment terms and signed off on that, the rest of the meeting went like clockwork. What is it about money that makes it such a taboo topic? Why are we uncomfortable discussing fees

and compensation for products and services? In all negotiation seminars, participants are coached and taught how to state their fee with confidence and no hesitation. Is it because we fear we will not get our asking price, or is it that often the need for the sale is so intense that we feel if we lower the price, we improve the odds of sealing the deal? Usually the buyer knows the marketplace and the range of costs. Just make sure you provide quality products and services and negotiate your price with confidence. Some even say that attitudes about money are reflective of one’s innermost spirit; always make sure that both your spirit and relationship with money is positive. Recognize and respect it for the tool that it is, and remember that every cent counts. A business associate once told me that he observed how the Chinese, for example, will take and provide change for everything; they will not leave a penny or a cent on the table; they collect everything. He then asked me to reflect on the amount of coins and small change I have left on tables, in the car ashtray, just thrown down around the place with no apparent value. His teachable moment for me was the lesson a

Chinese’s businesswoman in Port Antonio told him. “It takes cents to make dollars. No matter how much dollars you have, it’s still cents. So I look after the cents and the dollars will by this process take care of themselves.” I have stopped throwing away coins and small change, preferring to place them in a glass jar, which I’ve had to replace twice as the amount of coins and change keeps growing. The benefit of this wisdom came home to me the other day when I needed funds to buy a part for my car. I was surprised at the amount of money I was able to extract from the jar and still left a lot behind.

The big lesson in all of this is that with the tightness of the economy, cash money is going to be key to survival. So ensuring that you have payment terms that you can live with is going to be important. Standing up and collecting monies owed to you is going to be even more important. So, ensuring that you can account for every penny will guarantee that you maximize every value. BM Aldo (Al) Antonio Chief Marketing and Creative Officer (CMCO) AMK Communications Limited

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their farms, toiling intently in the soil, they leave by 10 o’clock in the morn, just in order to escape the wrath of the mid day sun, returning during the cool shades of the afternoon so that the day’s necessary farming activities can be completed. The rich red ground in which they plant and grow these foods is at the heart and soul of what they produce. Blessed with an abundance of natural minerals and nutrients, this red ground is perfect for farming because of the fecundity of its deep red, rich soil, nurturing the earthly bounties produced by these farmers, allowing an abundance of fruits and vegetables to flourish from its essence. It is from these fertile red grounds that we source a range of products, picked and reaped at just the right moment, good enough to be packaged and presented for your convenience under the Red Ground brand name.

Banana Beetroot Broccoli Cabbage Callaloo Cantaloupe Carrots Cauliflower Cho Cho Cucumber Escallion Hot Peppers Irish Potato Lettuce Ice Berg Lettuce Romaine Pak Choi Parsley Plantain Pumpkin Rosemary Stringbean Sweet Peppers Sweet Potato Thyme Turnips Watermelon Yam Yellow Zucchini

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Virtual Assistance Is the New Buzz Word Among Internet Savvy Entrepreneurs, Small And Medium Sized Business Owners Worldwide. Let’s Explore Why This Is So; How Virtual Assistants (VAs) Provide Value For Their Clients And How Clients Benefit From A Relationship With a VA……Avril King Founder and CEO


n entrepreneur is that increasingly large group of individuals who sees an opportunity, starts a business to benefit from this opportunity and hopefully receives a monetary reward for his efforts. Initially, most entrepreneurs/ small business owners run their entire operation themselves. They struggle to grow their businesses and some are just a step away from success. But at this point, they have to practice efficiency and effectiveness in their operations. They can’t afford competent full time help; they can’t afford a wellequipped office; they can’t afford the technical support that, ironically, would make their businesses soar. The good news is that the benefits of purchasing administrative and technical services virtually are becoming easier to grasp, and entrepreneurs/small and medium-sized enterprises (SMEs) have become more open to the idea of buying competent assistance through the medium of a virtual assistant.

BUT WHO IS A VIRTUAL ASSISTANT? AND HOW DID THIS NEW BREED OF SERVICE PROVIDER EVOLVE? A VA is a highly-trained, independent entrepreneur who provides a myriad of administrative and technical support services mostly via the internet to meet the growing needs of entrepreneurs and SMEs, worldwide. PROFILE OF A VA This growing group of service providers came into being in response to varying circumstances such as: 1. Stay-at-home moms, who in their former lives were administrators, secretaries, admin/executive/personal assistants and techies in the IT

world, in search of opportunities to earn an income working from home, while taking care of their children, 2. Working persons, who garnered years of expertise and experience during their employment in the corporate world, now craved independence or grew tired of the daily commute. 3. As businesses downsized and jobs became difficult to find, unemployed persons also grasped the concept of starting their own virtual business, offering their skills. Before long, the number of persons so engaged grew into the thousands and their services were being snapped up by clients who are seeking ways to be more cost effective in their operations. The average VA is college or trade school educated, have years of experience in the corporate world, work full time from home, market their business online, charge their clients hourly and service a small number of clients at any one time. VA’s not only offer their administrative and technical expertise; they build collaborative partnerships with their clients. Over time, VA’s become familiar with their clients likes and pet peeves and know how a client wants a task to be done. The VA community is worldwide, large and varied in terms of skills; VA’s build solid networks and know the skill sets of their colleagues so they not only work virtually everywhere, but they know where to find a particular skill a client might need if they don’t have it.

A look at any reputable job board will show that working via the internet is big business. Thousands of jobs for VA’s are advertised daily, and there are thousands of persons applying for those jobs. 6 CHARACTERISTICS OF VIRTUAL ASSISTANTS: 1. VA’s work on contract as needed; they only bill the client for hours worked. 2. VA’s work from their fully equipped home offices. 3. VA’s have many years of experience and several skills 4. VA’s collaborate with their colleagues in the industry so they can outsource for skills they do not have. 5. VA’s build relationship with their clients. 6. VA’s undertake those time consuming tasks that clients do not like. This gives the client more time to grow his business. 6 BENEFITS CLIENTS DERIVE FROM VA’s 1. Clients are freed from the responsibility of employing permanent help, and paying salaries, deductions and other benefits. 2. Clients do not have to buy/lease office space and equipment. 3. Clients can get help with almost any task that an administrative assistant would do. This frees the client to take on the exciting tasks of growing the business. 4. Clients access the expertise they need when they need it without having to train someone and hire someone full-time. 5. After working closely with a client, a VA takes note of how a client likes the work to be done and doesn’t need to be reminded repeatedly. 6. When a client needs help, a VA is always ready. Those who have used the services of a VA will tell you that this new breed of service providers are competent, honest, reliable, ethical and very professional in their approach. Hooray for equal opportunity…a growing number of men are also offering their services as VA’s. BM By Avril King, founder and CEO If you would like to know how a VA can help in your business call me at (732) 525- 8113 (overseas) or (876)-313-5351 or email


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Investors flock to KLE” the Jamaica Observer headline trumpeted in October 2012. In eight minutes eager investors bought up the 27 million shares, oversubscribing the IPO for the Kingston Live Entertainment Group and surpassing the J$94.6 million (US$876,000) the young entrepreneurs were trying to raise. After all, the nightclub owners seem to understand their business and their customers. “Entertainment is among the most consistently demanded consumer products in the Jamaican economy,” the company’s website claims.

Under the leadership of CEO Gary Matalon and his team, KLE opened the Kingston nightclub and lounge, Fiction, in 2008. The company later added Famous Night Club and Lounge in Portmore and the Usain Bolt Tracks & Records sports themed attraction in 2012. Despite the glitz and the glamour associated with Usain Bolt’s name and fame, in the 18 months since the company went public, KLE Group has been bleeding money. KLE lost J$13 million (US$120,000) in 2012 and four times as much a year later, recording J$56 million (US$518,000) in losses in 2013, according to financial

Businessuite Magazine sought the views of financial analyst Sushil Jain on a number of related subject matters including, if Entertainment Stocks make Good Financial Investments. BM: In light of the poor historical performance of stocks such as the KLE Group, Pulse, Palace Amusement and C2W Music, would you agree that these make very poor investments?

Investment guru John Jackson

statements. The company’s liabilities outstripped assets by J$100 million (US$926,000). “KLE has been a disaster,” says investment guru John Jackson, publisher of the IC Insider, a market watch blog, and publisher of Investor’s Choice, “The restaurant has done well but the nightclub has been a drag,” Jackson says. The dismal returns have hurt the company’s share price, which dropped from $3.70 at the Initial Public Offering to an anemic $1.00 a share, down more than 70 per cent. Fiction, which was estimated to attract 2,000 patrons per week, contributed $89 million (US$824,000) in revenue to KLE’s bottom-line, but it did so against a backdrop of mounting expenses. Not surprisingly, KLE has opted to cut its losses. After years of falling revenues and mounting losses at Fiction, KLE has reportedly sold the Kingston nightclub to businessman P.J. Wright. The sale appears to be a tacit acknowledgement of the failure of the KLE’s retooled marketing strategy discussed at the company’s 2013 annual

stockholders meeting. Nightclub patrons are usually young and fickle. They are always looking for the newest, hottest, trendy spot with the in-crowd. When the economy sours and money gets tight, nightclub attendance suffers, Jackson explained. “The night clubs are not seen as things people have-to-go-to, if their income is challenged,” Jackson says. “Maybe in a different time, it might have worked. Things are much tighter now, and it’s more difficult for it to succeed.” Matalon blamed the nightclub’s troubles on stiff competition from lower end establishments that offer heavy discounts. “Things that have impacted us, in particular in the nightclub business, as well as in the casual dining business, is that there has been an influx of competitors, specifically over the course of the last 8 to 10 months,” Matalon said at the 2013 shareholders meeting. At six years old, however, Fiction was showing its age. The nightclub is being closed from March into the summer

SJ: The performance of any company depends on several factors. The factors which would have impacted the performance of each of them would have been specific to each of them. In the final analysis the performance of a company depends on the quality of management unless there are some extraordinary circumstances adversely impacting on the performance. The stock prices generally follow the profitability of the companies in the long term although sometimes the market conditions can also impact on them. For example, several Blue Chip companies are selling below book values in Jamaica at present partly due to market conditions. In the absence of any new developments, the past performance of these companies does not inspire any confidence about their future profitability. Hence, I would not recommend them for value investors for the time being. One can consider them as speculative investments which may perhaps reward the investors who are prepared to take the risk. My views can change if there are indications of any turnaround.

BM: Do you agree that there is an inherent flaw in the business models of these companies? SJ: I do not think that there is any

inherent flaw in the business models .I think it is more a question of implementation and management. Similar businesses are doing well at other places and can do well here as well. It is possible that startup costs and gestation periods were underestimated and financing was done at a high cost. BM: Do you think that the role and performance of the leadership of these companies play a role in the financial performance? SJ: The performance of a company depends on the quality of management. If we separate the leadership from management then it is possible that, in the short term, the leadership may play its role but the management fails to execute. In the long term, however, the leadership and management are responsible for the financial performance of a company because they are vested with the authority to make any changes they consider appropriate to make the business profitable. BM: Would you recommend these stocks as “Buy”? SJ: I would not recommend these stocks as “Buys” for value investors at present until I see some initiatives and signs of turnaround and feel that the same are sustainable. BM: Any other comments or observation you would like to make on this subject matter? SJ: I think that people should do proper feasibility studies before starting businesses and proper budgeting for existing businesses. The quality of such studies/budgets leaves much to be desired. Often they are done just to put some numbers together without proper explanations for the validity of the assumptions used in the calculations .If the assumptions used are not valid, the numbers become meaningless. The Jamaican Stock Market seems to be undervalued with several Blue Chips selling below book values. I wonder when the investors will take advantage of this unique opportunity. Thank you very much for your time and contribution.

for major renovation. KLE will retain a minority stake in the nightclub after the sale. “A lot of ambition has gone into KLE operations,” Jackson says. “I think there are some management issues there and the stock was over-priced.” C2W- Can royalties be turned into profits? Take the case of C2W Music Ltd. Founders Ivan Berry and Derek Wilkie had the novel idea of making profits by licensing the work of Caribbean songwriters and collecting royalties. The company was formed to obtain intellectual property rights, especially licensing and publication rights and developing the “talents of Caribbean songwriters, acquiring licensing rights to their compositions and promoting the commercial use of those compositions.” “When I see people moving to Third World countries to raise capital, I wonder what is it that makes them move from First World countries to Third World countries to do what they weren’t able to do in First World countries,” Jackson says. Berry, a St. Kitts native, was part of the Toronto, Canada, music scene for decades, while Derek Wilkie, a former record company executive in Canada and the U.S., is a Barbados resident who has been active in promoting copyright and licensing issues regionally. Both once owned record labels. With C2W Music Ltd, the game plan is to identify and

train Caribbean songwriters to write hip-hop, R&B, country and rocks hit songs, expand its catalogue and cash royalty checks. The company had created and or acquired 900 copyrights. C2W is also exclusive co-publisher for BMG Chrysalis and Warner Chappell Music, two to the world’s biggest music publishers. The prospectus predicted early returns. However, the balance sheet has quickly turned red. The accumulated deficit was J$134.4 million

John Jackson’s 5 tips for looking at management: 1. I can look at financial statements. Just the aesthetics of the document gives a good insight into the culture of management. 2. Consistency in performance. 3. Look at presentation of the report. It says a lot about the organization. 4. Look at how they communicate with the public. Need to communicate with investors about what to expect. 5. Prepare investors for bad news. Investors need to be warned early about bad news. There is nothing like investors hoping for good news and then get hit with bad news.

(US$1,244,414). Shareholder equity declined from J$71.5 million (US$662,358) to J$4.5 million (US$42,305). In 2013, C2W Music recorded a net lost of J$70 million (US$620,053) on the back of a slightly smaller loss of J$65.2 million (US$603,757) in 2012. The 2013 annual report strained to find snippets of optimism. Instead of profits, the report refers to light at the end of the tunnel.

current time, the executive salaries were then reduced by 75 percent and have been accrued but not paid out,” Wilkie wrote.

“They thought they would start making money at an early stage. That was too optimistic,” Jackson says. The big question is whether Berry and Wilkie and their board of directors “have the wherewithal to survive until revenues improve.” Jackson also questions their decision to set up operation in the Caribbean.

“They thought they would start making money at an early stage. That was too optimistic.”

“When I see people moving to Third World countries to raise capital, I wonder what is it that makes them move from First World countries to Third World countries to do what they weren’t able to do in First World countries,” Jackson says. “I’m prepared to give them the benefit of the doubt. But based on the Jamaican scenario, it’s not something I would be a first time investor in.” Reacting to news reports about high administrative salaries, the company issued a statement recently saying that as of September 2013 to the current time, “executive salaries were not paid out and therefore did not impact on the company’s cash flow.” “Due to financial performance, as of October 2013 to the

Sly Dunbar To the Rescue The company is also looking for new backers, potential investors who could recapitalize the company. To

John Jackson, Investment guru, publisher of the IC Insider, a market watch blog, and publisher of Investor’s Choice. jazz up its ranks, the company added new directors with heft - Sly Dunbar of the famed Sly & Robbie duo and entrepreneur Clyde McKenzie. “They bring vast amounts of experience and expertise in the entertainment industry and will no doubt not only make it more dynamic but will add a broadened perspective,” the C2W Music financial report

stated. By adding heft to its board, C2W Music is clearly trying to send investors a message about its management. And that’s not a bad thing. For RJR “The Voice” bet paid off While the quality of management is key to the running of any business enterprise, the vagaries of success and failure, profits and losses in the entertainment industry are laid out quite plain in the RJR Communications Group third quarter financial report. The communications giant’s bet paid off in securing the broadcast and cable rights to “The Voice” the season when Jamaican songstress and eventual winner Tessanne Chin made the show a must-see proposition for local viewers. “Strategic programming which included the acquisition of the broadcast rights of “The Voice” for both Cable and free-to-air television resulted in improved viewership and revenues in this quarter,” RJR stated in its interim report to stockholders in February. The strong viewership was reflected in higher advertising revenues and profits. The RJR Communications group reported $57.9 million (US$536,000) in profits for the nine-month period ending December 31. Those results more than tripled the J$14.6 million (US$135,000) from a similar period the previous year. Meanwhile, stockholders

That warning was prophetic. The company recorded a $7.1 million (US$66,000) net loss for the second quarter ending December 2013, and a $4.9 million (US$45,000) net loss year to date 2013. That came on the heels of a profitable 2012. Douglas Graham, Managing Director, Palace Amusement

could revel in the good news. Earnings per share quadrupled to $0.16 compared to $.04 for a similar period a year earlier. At the same time, RJR’s earnings were badly hurt by the poor showing of the Reggae Boyz football team in the CONCACAF World Cup qualifying. Direct expenses for the quarter were $188.6 million (US$1.7 million), an increase of $15 million (US$140,000) or 8.7 per cent, due to the high cost of broadcast rights for the final matches in the World Cup qualifying football competition, “which failed to secure advertising and sponsorship support due to the underperformance of the national football team,” the report stated. Palace Amusement: Hollywood is the key The theatre business is as much a hostage to external forces as is RJR. Just ask the owners of Palace Amusement, a company that can be considered the granddaddy of the Jamaican entertainment industry. Founded in 1921, Palace Amusement can trace its lineage back to the era of silent movies. Under

managing director Douglas Graham the company owns 13 movie screens across four cinemas in Jamaica and distributes movies in Jamaica and the Cayman Islands for some of Hollywood’s biggest studios. Most of its revenue is derived from ticket sales plus confectionary sales, and film rentals. But although Palace Amusement holds a monopoly on movie screens on the island, the company operates at the mercy of artistic, cultural and technological forces beyond its control. “With attendance and consequently revenues highly susceptible to the inconsistencies in movie quality, Palace’s earnings have been very volatile,” according to a market analysis on the Jamaica Stock Exchange website. “Its position as a price taker from international film studios, the resulting limited ability to negotiate pricing for licenses, proliferation of piracy in the local market and intense competition for consumers’ discretionary income. The company’s historically thin margins reaffirm the vulnerability of its earnings.”

Jackson isn’t worried about Palace, however. “They usually make a profit in the summer months or the Christmas period,” he says. “Generally, profits go up and down from time to time.” Pulse Investments Diversifying Revenue Sources One hedge against the uncertainties of show business is diversification – seeking other revenue sources outside your core business. That worked for Pulse Investment,

Kingsley Cooper, Executive Chairman, Pulse Investment

an entity founded in November 1993 under the leadership of executive chairman Kingsley Cooper. The company does model agency representation, multimedia productions, marketing, show production, sub-letting of leasehold properties – mostly at its Villa Ronai property in Stony Hill, St. Andrew. “Pulse has some management issues, but they have reported profits,” Jackson says. One drawback is that some of its income is bartering for in-kind services rather than cash, but the company has improved its bottom-line by developing its real estate assets,” Jackson says. “They have not been theoretically a bad company.” Operating revenue comes mostly from the sale of television programming and marketing sponsorships, followed by rental income from subletting leasehold properties, tickets sales from show production and promotion, and model agency income from representing models. Pulse recorded earnings of $0.48 a share for fiscal year ending June 2013 compared to $0.59 a share a year earlier. The operational profit J$128 million (US$118,000) compared to $165 million (US$15.3 million) in 2012. Things began looking up in the first quarter when the company recorded $55 million (US$509,000) in net profits. Of those profits, $33million (US$305,000) came from the company’s core operations and an increasing share - $21 million (US$144,000) – came from revaluations in its investment property. A Question of Management and Leadership? So to what extent does the role and performance of the leadership of these companies play a role in their financial performance? “Management is always a critical part of any business success,” Jackson says. And as a chartered accountant, he can gauge the quality of a company’s management by examining its financial statements. “When I see financial statements presented that don’t look neat and

“...the past performance of these companies does not inspire any confidence about their future profitability.” Sushil Jain, financial analyst aesthetically appealing, I put a question mark on the quality of what is presented overall,” Jackson says. Financial Analyst Susil Jain however places this squarely at the feet of leadership. “The performance of a company depends on the quality of management. If we separate the leadership from management then it is possible that, in the short term, the leadership may play its role but the management fails to execute. In the long term, however, the leadership and management are responsible for the financial performance of a company because they are vested with the authority to make any changes they consider appropriate to make the business profitable.” With glitz, glamour and the promise of profits, entertainment companies have made a splash on the Jamaica Stock Exchange in recent years. But questionable management and the fickle nature of customers and the economy have resulted in poor returns for investors. “In the absence of any new developments, the past performance of these companies does not inspire any confidence about their future profitability,” says Sushil Jain, who serves as a mentor and a director on several boards. He wouldn’t recommend buying stocks in any of these companies. “One can consider them as speculative investments, which may perhaps reward the investors who are prepared to take the risk.” BM

Business Ownership: A Conversation with Yourself or Your Partners


critical aspect of business strategy and survival is the matter of ownership.

Many people who go into business do so because they have had enough of not being in full control of their fortunes. Hence, ownership provides an opportunity to take full responsibility. Not surprisingly, some people propose a business idea because they have had some interaction with others with whom they feel some level of synergy and cooperative spirit. This spirit may be real, but it can die very rapidly. Collaboration in business is a vital way to minimize start-up costs because very often the resources needed to employ specialized skills are unavailable. This is even more

evident when one considers that one person rarely possesses the passion, organizational skills and raw capability to get started. Many ventures would not stand a chance without collaboration. Yet, like most relationships, partnerships in business are challenging, and perhaps because there is a tendency to judge commitment when some level of imbalance in efforts is detected, things often fall apart. And at times partnerships fail because of success. When the venture is successful and one party starts to wonder if he or she would not be better off if he or she were working only for himself or herself, then that threatens the bond. Collaboration

soon turns into suspicion, stress, insecurity and failure. What is the reason for this paradox? Why does the same thing that created the opportunity for success lead to the venture’s demise? And it’s not only the venture that suffers; friendships, relationships and finances sometimes follow. There are many reasons why people want to get out of being in business together, but there are many reasons for supporting a partnership too. This is something to consider carefully as part of the strategic deliberation before the start of the venture. Many people recommend things like partnership agreements, complementing skill-sets and so on. And these are good ideas. Yet, one aspect that is seldom explored is the matter of the heart and soul of the partners. Economic doldrums are common nowadays. The way out is to have more entrepreneurship and that invariably means more partnering. But going blindly into partnership is risky. The answer does not lie in neatly packaged solutions. A big factor is cultural and the new approach to the overall topic, especially from a macro-perspective, is to be aware of the cultural challenges confronting partnerships. People will make reference to what the “Chinese” or “Indians” do and why we cannot do this or that. Cultural factors are latent and few people are aware of them or understand what is happening.

Alrick Robinson,

rigors of the task or the need to divert time to or away from other life issues? If you are partnering, you still have to have the same talk with yourself and your partners-to-be. I refer to this area as the heart and soul. It is not about your financial contribution. It is not about turning up for meetings and agreeing to be a director or a manager. No, the answer lies, in an undefined way, in the area of that aspect of your being I call the heart and soul. If it is not detected, don’t bother to start the relationship and / or the business; it will almost certainly lead to disaster.

The big question is - why would anyone not want to partner – share ideas and risks – in an area of life that is almost guaranteed to drain you of your life’s energy and peace of mind if things go wrong?

This is why mentoring / coaching is useful and important. It is not so much the technical skills of the mentor/coach that are important here; it is the ability to understand what is necessary and to make it clear to the subject, the aspiring entrepreneur, what is important for success. Many successful athletes have coaches who are neither athletic in appearance nor abilities…it is not about appearance.

If the common complaint about “capital”, “skills” and so forth are correct, why do we make such a big effort to make it harder on ourselves by avoiding collaboration?

So before you do anything, have this talk with yourself or with your partners-to-be. It does not matter what else you do about business ownership and survival if YOU cannot depend on YOU.

A big part of your business’ strategy is to start right. Even if you are a single businessperson you have to have a conversation with yourself. What am I getting into? What am I prepared to give up? How much time might I give myself to achieve certain goals and how I am likely to respond to the

Alrick Robinson “We understand the small business”


here are many misconceptions regarding the psychological effects of redundancy. The most common thing we hear is about how awful, destructive and painful this experience is. I know this is only a part of the story. As a function of my work, I have been at ground zero in a number of organizations at the time when announcements are being made concerning possible closure and/or redundancy. I have also had the privilege of designing strategies to help both the organization and the workers to deal with the subsequent issues related to the redundancy. For most managers, redundancy is probably the most stressful event that they will have to contend with. One manager explained that he had been in an organization for about two years. The company was then sold and he had to prepare more than 400 packages for members of the workforce. At the end of this, he had to draft his own letter, take it to the chairman for it to be signed and then leave the premises. When he met the rest of the former employees outside, they were very surprised to see him because they thought that with the coolness that he had handled the process that he was ‘safe.’ The reality was that he was not. Most managers agonize over making the decisions when cuts have to be made. Who Really Feels The Effects? I often have to tell companies that at the end of the redundancy

operation, the persons who will have the least problems are those whose posts have been made redundant. They will move on, and in most instances, will have better lives. The reality is that most workers are dissatisfied with their jobs. But they are afraid to leave because they fear the unknown, even if there is the promise of better things. The result is that they stay, grin and bear it. When redundancy options become available, a range of emotions comes into play – fear, hope, sadness, joy. For some, it means loss of friends, status, and uncertainty. For others, it means looking forward to the chance to move on and to find new experiences. Most workers find that even if they did not look forward to the exercise, once they are forced to move on, they are able to improve their situations within two years. The persons who often have real problems after redundancies are the workers who are left behind. We have had the opportunity to do research in this area and now share the findings from two industries with you.

So How Prepared Are You For Life After Redundancy?

The Realties At Ground Zero Study One – Insurance Sector In 2004, I worked with Insurance Industry workers who were survivors of a redundancy exercise. The survey asked them to indicate which one of four options they were experiencing. * 63 per cent were thankful that they still had

a job * 23 per cent wished that they had been made redundant, paid off, and hired back in a contract position * 13 per cent wished they had been made redundant, paid off and had a chance to move on with their lives * 1 per cent was fearful of future redundancies What this tells us is that 36 per cent wished that they had been made redundant. This sentiment results in serious adjustment issues, which most companies are not prepared to handle. Study Two – Banking Sector In 2005, we surveyed employees who were the survivors of a redundancy exercise in the Banking sector. Given the same options, the results indicated that 54 percent were thankful that they still had a job. However, 17 per cent wished that they had been made redundant, paid off, but hired back in a contract position. Thirteen per cent wished that they had been made redundant, paid off and moved on with their lives, the same figure has we found last year with the insurance employees. However, in this case, 15 per cent were fearful of future redundancies. What Is The Result? Redundancy - What is evident from these figures is that a lot of effort is required to deal with workers post-redundancy because of those who wished

Leahcim Semaj, PhD

Views of Surviving Employees After Redundancy Exercise Options

Insurance- 04 Banking- 05

Thankful to still have a job





Wish you had been made Redundant, Paid, Hired Back Wish you had been made redundant, Paid, Moved On


Fearful of Future Redundancies that they had moved on but who are still there. Those who are fearful of future redundancies will also be working well below their potential because of the inhibitions inherent in their new situation. More often than not, organizations do not achieve the projected benefits of redundancies because of the lack of effort directed to rebuilding the energies and refocusing the workforce after the redundancies. This evidence comes from data gathered from international sources. This is also true in the Jamaican situation. Based on the amount of energies and resources


13% 15%

used up for the redundancy exercise, most managers have very little insight, creativity and energy left for the rebuilding process, which must begin on the first day after the redundancy. What is the result? A major dip in energies and more likely than not another redundancy exercise within two years. Leahcim Semaj, PhD Leahcim T. Semaj & Company Limited, The JobBank

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