When money matters | Adriens

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This is the sequel to our previous blog, ?when ideas are more important that money.? While the idea is the life blood of the operation, in our monetized economy, money is the lubricant that oils the engine of production in the business venture. In capitalist markets, one can?t start, grow or simply exist in business without the necessary money to pay the bills, buy the inputs (goods or services), purchase the technology (equipment of people who arte highly skilled), sell what you produce.

In our modern and technologically savvy society, the legal-tender medium of exchange matters. ?However, before one runs to the bank or the finance house, the smart entrepreneur should plan the size of the business; location of the business; the nature of procurement (how the input will be accessed); whether to use your own capital , family capital or someone else?s capital. And if the choice is to use external financing, what type of capital is best for the type of business venture ? a loan (debt capital); incubator financing (venture capital) or public funds (equity capital).

Why then, are some businesses doing so poorly? Why are some well managed companies performing below desired level? To a large extent, it is because there is not enough money to buy the desired inputs, produced the products that are in high demand and sell in markets that are willing and able to buy.

Moreover, for most Caribbean small businesses, the fact of small market; small private sector; low level of capital formation; fiscally-strapped economies; battered household economies and; falling international transfers (foreign direct investment flows, concessional finance, remittances and grants) limit the production options available to even the daring entrepreneur.

Our competitive business markets remind me of Mighty Sparrow?s classic entitled, No Money, No Love. In one stanza, the woman says to her boyfriend, ?We can?t make love without money; we can?t make love on hungry belly; Johnny, you will be the only one I am dreaming of; you are my turtle dove; but no money no love.

Jimmy Allen (Photo: Peter Adrien) who opted to play for money in World Series Cricket (WSC) in the 1970s despite the accusations with respect the commercialization cricket, a generation ago, understood the power of money in shaping the global sport business.

Depending on the nature and size of operation, the best option may be to start the business at home using your personal funds (savings); borrow from friends and family to finance operations and when the business is established and profitable; access a loan from your friendly banker.

Peter Adrien is a business & finance consultant, author, motivational speaker & sports analyst. Visit: www.goadriens.com; email: info@goadriens.com; call: (869) 668-9752 or (734) 864-3168; twitter: @goadriens; facebook: http://www.facebook.com/Goadriens

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