SME Booklet No.1 Web

Start-up and Operational Issues
for Small and Micro Enterprises
Living the Entrepreneurial Dream

Booklet No. 1
Start-up & Operational Issues
SME Booklet No.1_web.indd 1 10/27/2009 7:34:58 AM

Table of Contents
CONTENTS PAGE
1. Foreword ii
2. Introduction 1
3. Understanding Your Business 3
4. Preparing Your Business Plan 4
5. Executive Summary 6
6. Business Description 10
7. Management and Operation Plan 12
8. Development and Production Plan 15
9. Marketing Strategies 18
10. Useful Hints 19
11. Risks and Challenges 23
12. Appendices 24
© 2009 Central Bank of Trinidad and Tobago ISBN:978-976-8134-09-7

National Financial Literacy Programme

Foreword
The National Financial Literacy Programme (NFLP) was established in
January 2007 as an outreach function of the Central Bank. The objective of
the NFLP is to provide education and generic advice to the population on a
whole range of financial issues.
Since its inception, the NFLP has used various media to target and educate
a wide cross-section of stakeholders – students and young adults (primary,
secondary and tertiary), employees in the workplace, community groups
and associations, small and micro entrepreneurs as well as retirees. NFLP
staff members have prepared newspaper articles, strip ads and booklets on
several issues pertaining to money matters and insurance. The NFLP has
collaborated with the private and public sector in hosting “lunch and learn”
sessions targeted at employees in the work place and has provided financial
literacy sessions through the hosting of many public town meetings, all of
which have been well-received.
The NFLP has arranged for financial education classes in primary schools
throughout the country and has launched pilot programmes in a few
secondary schools. Recently, the Ministry of Education agreed to integrate
the NFLP secondary school programme into the regular school curriculum.
Several teachers have been trained to conduct this programme in the
secondary schools.
The Small and Micro Enterprise (SME) sector has been added to the
programme in recognition of the important contribution of this sector to
the economy and to allow for its continued dynamism in the future. Initially,
the focus on SMEs had taken the form of a series of educational expositions
and presentations to stakeholders in the sector. To date, expositions have
been held in Tobago (October 2008), Chaguanas (November 2008), Arima
(February 2009) and Mayaro/Rio Claro (September 2009). A final exposition
will be held in the borough of Point Fortin in January 2010.
As a complement to these initiatives, the NFLP has prepared a series of

three booklets to support the SME sector. The series entitled Living the
Entrepreneurial Dream is dedicated to the upgrade of the financial skills of
the small and micro-entrepreneur.
The first booklet in the series, “Start-Up & Operational Issues for Small and
Micro Enterprises”, provides a careful step-by-step guide to starting and
operating a new business. Some of the topics covered include registering
ii

the business, developing the business plan and marketing strategies.
The second booklet,“Record-Keeping – How to keep financial records of your

business”, focuses on the process of financial record-keeping for the small
and micro-entrepreneur. Although the emphasis is on financial records, the
booklet also highlights the importance of good record-keeping in general,
for the long term success of the business venture.
The third booklet, “Financial Services- Where to find assistance for your
business”, provides information on a comprehensive list of organizations
from which the small and micro-entrepreneur can obtain financial and other
technical assistance.
In compiling these three booklets, the staff at the NFLP worked closely
with:
• The Ministry of Labour, Small and Micro Enterprise Development
• The National Entrepreneurship Development Company Limited
(NEDCO)
• The Commonwealth Secretariat
• The Business Development Company Limited (BDC)
Valuable insights and suggestions were gained from each of these groups
as well as from Central Bank staff and members of the various NFLP
Committees.
It is with pleasure that this three part series, is being issued for the benefit of
a wide cross-section of the population. It is hoped that these publications,
written in clear and non-technical language, will provide readers, in particular
small and micro entrepreneurs, with a better grasp of the core concepts
related to successful business ownership.
Do enjoy the series!
Editorial Committee
Elizabeth Austin Victor Maloney
Penelope Forde Ann Marie Narine
Jennifer Greaves Avinash Ramlogan
Narissa Lezama June Stewart
Judy Chang Nallapernuma Sirisena
Marie Borely Clarry Benn
iii

Introduction
This booklet ‘Start-up and Operational Issues for Small and Micro
Enterprises’ is the first in a three part series for Small and Micro Entrepreneurs.
It is intended as a guide for you, the new or prospective entrepreneur. The
other two parts are “Record Keeping – How to keep financial records
for your business and Financial Services - Where to find assistance for
your business”. In this series, the small and micro enterprises are defined as
follows:
A small business is one which employs six (6) to twenty-five (25)
persons, has assets of TT$250,000 to TT$1.5 million and sales between
TT$250,000 to TT$ 5 million per annum.
A micro business is one which employs one (1) to five (5) persons, has
assets of TT$10,000 to TT$250,000 and sales of less than TT$250,000 per
annum.
A mini-micro business is one which has less than TT$10,000 in assets.
Starting a small or micro business (SME) is a unique experience. It can be most

satisfying and exciting if you follow the simple guidelines and procedures
Where do I start?

set out in this and the other two financial literacy booklets for SMEs.
Do you have the Entrepreneurial Spirit?

Succeeding as an entrepreneur is all about attitude!
As a person seeking to be in business on your own, you must possess or
acquire an entrepreneurial spirit which conditions your thoughts, thereby
providing you with the appropriate mindset needed for you to succeed.
It keeps you persistent and committed to your business venture. Before
getting into business, you should ask yourself the following questions:
1. Do I have the knowledge about the business I
want to get into?
2. Do I have self-confidence?
3. Am I persistent?
4. Do I have an inner drive to succeed?
5. Am I creative?
6. Am I a responsible and reliable individual?
7. Am I organized?
8. Am I willing to take risks and accept change?
9. Do I communicate well?
10. Am I a competitive person?
11. Am I open to constructive criticism and advice?
If you answered ‘YES’ to all of the questions above, then you are ready to be
a successful entrepreneur!
However, if you answered ‘NO’ to any of the questions above, these are
weaknesses that you have to overcome before you can venture into running
your business.

Note that:
º Being a successful entrepreneur requires you to be able to interact
and communicate effectively with others as you would need to
develop working relationships with your suppliers and customer
base in order to keep going!
º If you want to get into business only for the money you may
become disillusioned.
º If you want to be successful, you must provide quality products
and services to your customers.
As an entrepreneur, you need to identify your business

opportunities, evaluate your capabilities and select an activity that
is most suitable to your characteristics.
Once you have made the decision you must prepare a business
plan which is very important if you have to seek financing from a
financial institution. Institutions will want to read your plan before
they provide any funding that you may need to start the business.
Understanding Your Business

Before embarking on any business venture,
you must understand it. You need to become
familiar with the business environment i.e.
all the critical factors that may affect the
operation of your business. These include
knowing your
° Customers
° Competitors
° Suppliers
° Industry

Furthermore, you must appreciate that there are risks associated with
the establishment of any new business. Therefore, before starting your
new business, you should conduct research and be able to answer the
following questions:
1. Is there a market for my product or service?
2. Are the raw materials, tools, equipment and other resources
available?
3. Is the quality of my product or service such that it can compete
effectively with the already existing products on the market?
4. Where is an appropriate location for my business? E.g. home
based or rental.
5. What production processes do I have to use?
6. What are the production costs?
7. Can an initial lower price be charged for my product or service
in order to penetrate the market?
8. Who will undertake leadership and manage the resources?
What is Your Business Dream? (Vision Statement)

Your vision statement is your dream. It should state where you see
yourself and your business in the future.
What is Your Purpose? (Mission Statement)

Your mission statement describes the purpose of your business in
one or two sentences. It should include information on your product
or service and explain how you intend to please your customers. Your
mission statement should be a reflection of your enthusiasm as an
entrepreneur and should be short and to the point.
Preparing Your Business Plan

Planning helps you to think things through thoroughly. It can be time
consuming, but it can help you avoid mistakes that may be disastrous.
The core elements of a business plan should include:
° Executive summary
° Business description

° Management and Operations plan

° Development and Production plan (for businesses in the
manufacturing industry)
° Marketing strategy
° Financial plan
If you experience difficulty in writing your business plan, seek
assistance from a reputable source e.g. National Entrepreunership
Development Company (NEDCO), Business Development Company
(BDC). It is very important that your business plan be well thought-
out, straight forward and easy to understand.Your business plan should
be reviewed periodically and updated if circumstances, opportunities
or business operations change.
The Executive Summary

The executive summary explains the basic elements of your proposed
business. These include:
› Name, location and contact information of your business
› The owners
› A brief description of your product or service
› Your target customers
› How much financing is needed
› How this financing will be used to make your business profitable
› How you plan to attract and maintain customers.
Your executive summary should entice readers and stimulate interest
in your business. It is advisable to write the executive summary after
you have completed the other elements of your business plan. Then,
you will be equipped with all the necessary information from which
you can extract highlights to include in your executive summary. Your
executive summary should generate interest in the minds of its readers.
The completed executive summary, however, should be the first item in
your actual business plan document.

Executive Summary
Woodee’s is a specialty furniture store located at Quash Trace,

Sangre Grande. It is owned by Mr. Lawrence Woods and Mr.
Thomas Dee and is registered as a partnership. Woodee’s sells
hand made furniture that is tailored to meet clients’ requests.
Customized to the desires of its client base, Woodee’s range of
products include dining sets, work tables, wardrobes, space
savers, cupboards, doors, counter tops, computer desks, cabinets
and more. Giving persons the opportunity to obtain any of
these pieces made especially to his/her liking, will make the
service offered by Woodee’s sought-after by persons who crave
exquisite and unique furniture pieces to decorate their homes
or offices.
Our customer base includes home owners, business persons,

and persons renting apartments. Competition from other
joiners is limited as there are relatively few in Trinidad. Our major
competitors however are the large furniture stores like Courts,
Standards, Singer and American Stores. They all have business
outlets in Sangre Grande in close proximity to high customer
traffic areas. Woodee’s however, attracts customers because of
the options we give them in terms of personalized furniture.
Our customer base will be maintained because of the high
quality product and service we provide at competitive prices as
compared to the prices charged for the mass produced items at
the large furniture stores.
Woodee’s assets include cutting tools, staplers and other

manufacturing equipment. Our overhead costs include rent
and utilities. Our variable cost include raw material such as
treated wood, polish, handles, screws, and staples. Sources of
finance include personal funds pooled together by the partners
with the difference needed obtained from a NEDCO loan. The
loan finance would be used to purchase operating equipment
and initial stock.

What form of Business? (Business Description)

A business description details the characteristics of the industry in which
you wish to operate. For example, you will need to describe whether the
business is in:
° Trading such as wholesale or retail, for e.g. suitcase trading
° Manufacturing such as making preservatives e.g. sweet mango,
pepper plum
° Service-oriented e.g. catering, landscaping, hairdressing, etc.
Additionally, you should state whether the type of business is a sole
proprietorship, partnership or is in some other arrangement.
The sole proprietorship is defined as a business that is owned and
operated by one person who has full control of the business and who is
personally liable for all the debts of the business. This form of business
is very popular for self-employed persons. Examples include:
° Taxi-drivers
° Shopkeepers
° Vendors.
A partnership is a legally binding business relationship between two
or more individuals (not more than twenty). The partners are liable for
all the debts related to the business and no one partner has complete
control of the business. Examples of a partnership may include:
° Restaurant owners
° Land developers
° Small contractors (construction) etc.
A Limited Liability Company (LLC) is another form of business company.
It differs from the two types above because it offers limited liability to
its members. Limited liability refers to a situation where each owner/
member of a company is not personally liable for all the debts of the
company. Each member is only liable up to the amount contributed.
LLCs are formed by a group of entrepreneurs who see benefits of
collaborating with similar or related industries. For example a group
of farmers in a particular area may form an LLC and all contribute to
the purchase of a transport vehicle which they can all use to transport

goods, as opposed to each of the farmers purchasing their own vehicles

(which would be more expensive for each farmer) and have their vehicle
under-utilized.
Whatever the form of business operation, it is advisable that you register

your business with the Registrar of Companies to ensure that the name
selected is not similar or being used by another company. Additionally,
registering your business can be beneficial in several ways. Some of
these include the ability to:
° Access loans from reputable lending agencies so that you can
expand your business or acquire assets (refer to part three of
this series, Financial Services - Where to find assistance for your
business)
° Pay National Insurance and so qualify for the relevant benefits
° Access training programmes offered by institutions (in Trinidad
and Tobago) specialized in assisting SMEs (refer to part three of
this series, Financial Services - Where to find assistance for your
business)
Business is growing and I am thinking of expansion

Registering your Business Name
You will need to complete and file the Registration of a Business Name form.
This form is to be submitted to the Companies Registry with the applicable
fees. For a Limited Liability Company (LLC), once you have a name reserved
you will have to file Articles of Incorporation.
To register your business name, you can obtain forms from the Ministry of
Legal Affairs. Forms are available free of charge from the:
Companies Registry
Registration House
72-74 South Quay
Port of Spain
Trinidad, West Indies
Tel. (868) 624-1660
Forms could also be downloaded from www.legalaffairs.gov.tt
Protecting your product or idea
Trademarks, Patents and Copyrights
A trademark or service mark is a word, name, symbol, device or combination

thereof, adopted and used by a manufacturer, service provider or merchant
to identify goods and services in order to distinguish them from others. A
patent gives legal recognition of a new product or work of art. For assistance
with patents and trademarks you can contact the Intellectual Property Office
at the Ministry of Legal Affairs.

Business Description -
Dzign Clothing Concepts (DCC)
Dzign Clothing Concepts (DCC) is a personalized tailoring

service available to persons who experience difficulty obtaining
that perfect fit from ready made clothing. DCC has recognized
that it is really impossible for ready-made clothes to fit the
wide range of body shapes and sizes of different individuals.
Therefore many persons while shopping have the hassle of
finding the right sizes for pants, sleeves, waistlines, busts, etc.!
Many times compromises are made when purchasing ready
made outfits. With DCC however, persons can have all aspects
of their clothing suited specifically for their bodies!
The business provides specially designed clothing by the two
partners who also manage the business.
The industry within which DCC operates is relatively large as
there are a number of tailors and seamstresses. It has been
identified though that the high demand for personalized
tailoring services, outweighs the supply of these services.
Therefore, there is tremendous opportunity for business
growth.
Management and Operations Plan

Managing your business
You will need to think about who is going to manage your enterprise.
It may be you or someone you hire to work on your behalf. If hiring,
it should be someone you trust and who has the required skills to do
a good job. The person responsible for management should provide
leadership from the very beginning as many decisions need to be made
at the start-up stage. Decisions may include:
› Identifying a suitable business location and deciding on a
marketing plan
› Finding initial funds (capital)
› Managing the purchases required to start the enterprise
› Hiring additional staff.
10

These are managerial decisions that will dictate the future growth of
the business. The management plan should include details about the
ownership structure, management and human resource needs.
Operations Plan
The operations plan specifies where you will locate your business (along
with the physical requirements) and how you will service your clients. If
you are into manufacturing, your operational plan should provide details
on the manufacturing process. If in the service industry, you should
explain how you plan to serve your customers. Any implementation of
measures to maintain certain standards where your product or service
is concerned should be included in the plan.
Hint: You should find out about the regulations that govern or monitor
the type of business you are getting into! For example, if you are getting
into catering, there are certain standards around food preparation,
packaging, distribution etc. that you would need to adhere to.
If you depend on suppliers for certain inputs into your business, your
operations plan should describe the arrangements you have with your
suppliers in terms of re-orders (frequency and quantity) and costs.
Alternatives or back-up suppliers should also be included.
One for all and All for the company!!!
11

Management and Operations Plan -

Dzign Clothing Concepts
Management Plan
The business will be equally owned and managed by its two
partners. The small, personalized nature of the business and its
customer interaction eliminate the need for any hired management
team.
Operations Plan
Due to its small size and number of employees (2), the business
will be home-based, located at 16 Avenue Drive, Dinsley.
All the necessary equipment for operating the business will be

located at home. Our equipment would include sewing machines,
sergers, needles, iron and ironing boards, a steam press, pins,
thread, zippers, buttons, scissors and rippers.
Our mode of operation will involve persons visiting the business,

taking their measurements and deciding exactly what they want.
Persons may bring designs that they may have seen elsewhere or
we can provide them with a range of styles from which to choose.
After measurements are taken, we sew and have clothing ready in
a period of two – three weeks, however, provision can be made for
persons who want immediate delivery (less than two weeks).
We also visit customers at their homes/workplaces. In the first

meeting with customers, all relevant measurements are taken so
that for future orders/requests, fabric may be collected or bought
by us or dropped off by customers with instructions outlining
what they desire.
We have good relationships with our suppliers, who are mainly

variety stores and fabric stores from which we source items such
as fabric, buttons, needles, etc. Additionally, every six months
we have machines and other equipment checked. Regular
maintenance is done to ensure that machines are always in good
working condition.
12

Development and Production Plan

If you are in the manufacturing industry, you would find it helpful to
outline a development and production plan. Maintaining your output
level to satisfy your customers’ demands is an essential skill. The
following questions therefore need to be answered:
° What quantity and how frequently should my goods be
produced? (This would depend on sales turnover)
° What raw material is used in production?
° Is the raw material available?
° Do I need anyone to assist in the production?
° If special skills are needed, how can they be acquired and
retained?
° What are the total production costs?
Production Costs
All items directly and indirectly related to the manufacturing process
must be considered in the estimate of the unit cost of the product. In
order to estimate the cost of production you would need to do the
following:
° Identify all the inputs needed to produce and sell.
° Calculate the cost of the production of a specific quantity that
you can manage.
° Identify production inputs under the following headings:
13

1 Fixed cost: costs that will be incurred regardless of the level of

production e.g. if you rent space for a hairdressing salon, the
rent will need to be paid regardless of the amount of business
you receive from your customers.
2 Variable Costs: costs that are directly related to the level of

production. The more goods produced, the more variable costs
will be incurred and vice versa. For example, if you manufacture
furniture, the cost of fabric to upholster the furniture will vary
since the amount of fabric to be purchased will depend on the
quantity of furniture to be produced.
Total production cost is the sum of all fixed costs plus all variable costs.
BIlls! BIlls! BIlls!
14

Development and Production Plan

Sandira’s Preservatives
Sandira’s Preservatives provides preserved fruit for eight grocery
outlets and six local mini-marts. The preservatives stocked by us are
sweet mango, pepper mango, sweet plum and pepper plum.
Moderate demand exists for Sandira’s Preservatives’ products. It is
estimated that five hundred packs of preserved fruits will be demanded
monthly by our larger clients (groceries) and one hundred packs
demanded monthly by our smaller clients (mini-marts). Therefore,
an estimated four thousand, six hundred packs of preserves will be
demanded monthly.
A bulk-production and packaging method will be employed since the
fruits utilized are seasonal. The preservation process will be organized
in three batches. Each batch will commence in the respective months
of the fruits’ bearing seasons (which last approximately three months
each). Using the estimated demand for preservatives above, fifty-five
thousand, two hundred packs of preservatives will be required for one
year. Each month during the respective seasons for both fruits, nine
thousand two hundred packs of preservatives will be produced. Fruits
are packaged and distributed on a first-in first-out basis to avoid spoilage
and wastage. The preservatives have a shelf life of approximately eight
months.
After the fruits have been acquired, they will be washed thoroughly
and examined for imperfections. The mango will require cutting via
the use of cutting machinery or by a machete. After the fruit is cut
it is washed again and placed in barrels. A mixture of water, sodium
benzoate, saccharine (an artificial sweetener), salt, peppers and
colouring is added to the fruit. The barrels will be covered with air tight
lids and checked periodically to ensure that fruit does not become
too soggy. The actual preserving process time fluctuates and can be
between one and four months. After the fruit is preserved, it will be
placed on large tables for drying. When the fruit is dried, it is placed in
bags and sealed.
Raw materials required for production essentially include the
relevant fruits (mango and plum), seasonings, preservatives, colouring,
sweeteners, plastic bags, sealers and cutting machinery. The labels for
the packages will be outsourced and acquired from a design company.
15

Marketing Strategies
Your business venture needs effective marketing regardless of the
product or service you provide. In developing your marketing strategy
you must identify the customer you are targeting and how you plan to
reach them. To achieve this you should include the following issues in
your marketing plan:
º Pricing
º Distribution
º Product differentiation
º Advertising and
º Promotion strategies.
º Pricing
The price of your product or service will directly impact the success of
your business. If you want to stay in business, you must at least break-
even i.e. your income must cover your expenses.
It is however advisable to compete on quality rather than reduce your
prices in order to attract more customers. You must be able to compare
your prices with those of your competitors and determine the reasons
for their prices being higher or lower than yours. You should never
sacrifice quality for quantity and never compromise the quality of your
product to save on costs – this will inevitably lead to loss of customer
loyalty and future business.
º Distribution
Distribution is the process of getting your product or service to your
customers. The direct sales method involves selling your product
directly to the customer. For example, making pies and selling them
yourself. Wholesale distribution usually involves the sale of your
product to another party who would subsequently re-sell to customers
or use it in the production of his or her own business. Examples of this
include the making of preservatives to sell to grocery owners who in turn
sell to customers and farmers who sell their vegetables to restaurant
owners who will use the food stuff in the meals they prepare for sale to
customers. The distribution channel you choose will depend on your
type of business. If you are in the service industry, your distribution
16

strategy is likely to be a direct one.

Transport is extremely important when delivering a service. For
example, if you are in the landscaping business, owning a van may
become very necessary to move those tools which are bulky e.g. a
lawnmower.
It is important that the delivery channel you choose is able to
deliver your goods or services to customers on time. Late deliveries
may cause the customer to be dissatisfied and result in loss of customer
loyalty and future sales.
Promotion Plan
Your promotion strategy is the way you plan to entice potential

customers to purchase your product or service. Some common ways to
advertise include distributing fliers, putting up signs and posters, word-
of-mouth, newspaper advertisements, call cards, etc.
Packaging is another important aspect of promotion especially for food

items such as preservatives, juices, etc.
Sales promotion involve strategies specifically aimed at giving you

a boost in sales by offering special prices or discounts to customers,
or using competitions, etc. You must, however, be sure that the sales
promotion will not cause your income to be lower than your expenses.
° Product Differentiation
Product differentiation refers to your ability to use your creativity to
make your product or service as unique as possible to distinguish it
from the others in the market. If you are in the service industry, your
personal appearance, your package deals and the quality of your service
can set you apart from the others in your industry. On the other hand,
if you manufacture goods, the type of packaging as well as distribution
channels will be critical to your success.
17

Marketing Strategy – The Komputer Wiz

The Komputer Wiz provides maintenance and service repairs to personal
computers, laptops, printers and scanners for personal (as opposed to
commercial) use. There are many businesses which provide computer
services however the services of Komputer Wiz will be like no other!
Our target market has been identified as:
º Students
º Young adults
º Professionals
The Komputer Wiz, once contacted will solve customers’ computer
problems in a speedy manner. We offer special packages to customers
which will come at minimal cost to us, yet assist in maintaining customer
loyalty. We also plan to provide courtesy calls on customers to ensure
that they are satisfied and that their machines are in good working
condition. This will also allow us to create sales potential as customers
may have minor problems or issues that they wanted addressed but
did not get the time to call! We will also provide a shopping service
to consumers for computer parts, computer accessories and software
upgrades. This additional service will enhance customer loyalty and
contribute to widening our customer base.
We will advertise using classified ads, attractive flyers placed in strategic

locations, signage on vehicles and distribution of call cards. Additionally,
we believe that word-of-mouth will assist in promoting sales since we
anticipate satisfied customers communicating to their peers about our
effective and reliable service.
We will price our services competitively to attract and maintain

customers. Additionally, house visits is another benefit for customers.
Our strengths include
º Efficient service attributable to our experience and
knowledge about computers
º Access to new software, accessories and information relevant
to persons interested in staying on in the cutting edge of
developments in information technology
º The fast, high quality service we provide.
Our weaknesses include
º Location
18

Financial Plan
The financial plan is another important feature of the business plan. You
should be able to describe what your inflows and outflows of cash will be
(cash flow statements) profit and loss statements and balance sheets. The
second booklet in this series includes relevant information on these financial
statements.
Sources of Financing (Where do I get the money?)

A main reason for the failure of small businesses is insufficient capital (money).
To avoid this dilemma you should review your situation by answering:
º How much money do I have?
º How much money will I need to start my business?
º How much money will I need to stay in business?
º If I need additional financing, where can I get it?
When venturing into a small or micro enterprise, you must understand that
you will incur start-up costs for your business. If you do not have the initial
funds for start-up, you may need to approach a financial institution such
as a commercial bank, credit union, special credit-providing institution of
the state, etc. that may assist you in securing funding for your business. It
is important to have an effective business plan in order to access financing
from these institutions.
The third booklet in this series lists institutions specifically developed to
assist local SMEs in acquiring funds in Trinidad and Tobago.
Useful Hints
Location of the Enterprise
When deciding upon an appropriate location for your business, you must
consider the following:
º Health and environmental requirements must be satisfied
º Basic infrastructure and amenities e.g. water, electricity, roads, etc.
should be in place
º The location should be adequately secured
º Storage space will be required
19

º Adequate workspace will be necessary to function efficiently

º The location should be easily accessible to customers.
Home-based business
Most entrepreneurs start with their home as the primary business location.
Some of the pros and cons of doing so are as follows:
Advantages:
º You will not have to pay rent
º You will spend less time commuting
º You will be closer to your children and family.
Disadvantages:
º Domestic interruptions from children, spouse and other family
members
º Work and personal life may become too intertwined
º If your business is expanding you may not have enough space at
home.
Even though you may decide to operate from your home, it is still advisable
to register your business.
Availability of Raw Material, Tools, Equipment and Other Resources

The type of tools, equipment and other resources needed for the new
enterprise depends on the nature of the enterprise. You should put measures
in place to avoid shortages of resources that may result in setbacks that can
negatively affect your sales and customer loyalty. Therefore, you should
keep an inventory and have a stock management plan for your business. It
is also important for you to have an alternative plan in the event that you
are unable to acquire material from your regular source(s) or have a back-up
plan for machinery malfunction.
For example, if you use clear plastic bags to package your product, you must
ensure that you always have these bags in stock. It is wise to have business
relationships with more than one supplier so that in the event that you
are unable to source inputs from your regular supplier, you would have an
alternative.
20

If you are in the baking business it would be wise to have a second oven
so that if one malfunctions, you will still be able to continue your business
operations for some time.
Always remember that if you encounter problems that result in non-
completion of jobs, you may have dissatisfied customers, which may result
in loss of customer loyalty and future sales. If you are having difficulties
with delivery, you should inform your customers in a timely manner and
possibly refer the client to another service provider who you believe can
do the job. This way you could maintain your customer base and respect. It
is unacceptable to simply say to your customer that you can not do the job
Additionally, it is your responsibility to ensure that the service providers you
refer persons to or other persons with whom you work also provide a high
quality service to your customers in order to keep them satisfied.
Receipt of Payment
When operating your own business, especially in the service industry, you
must be sure to collect your funds when due as non-receipt of funds could
affect your ability to cover your operating expenses. You must be able to
prepare proper estimates for all your jobs. In your estimates (proforma
invoices), you should include the total cost of providing the service i.e. all
materials and labour including any individual(s) hired. You should request
a down-payment before you begin the job and ensure that the customer
signs to pay you upon completion of the job. Exercise caution when
providing services for credit.
Credit will be provided to

persons 80 yrs. and older,
accompanied by both parents
and 1 school principal
21

Additionally, you must prepare receipts for your customers. This will also
enable you to keep better records.
Workload
If you work in the service industry, do not take on more work than you can
handle. This may result in a number of unfinished jobs and lead to customer
dissatisfaction, loss of customer loyalty and therefore loss of revenue. You
must properly schedule jobs so that you would have an idea about how
much work you can take on. If you recognize that you have an increase in
business that you are unable to manage on your own, you should consider
hiring more staff.
Sorry sweetie, but i

won’t be able to finish
your dress for your
wedding tomorrow. Can
you postpone till next
week Thursday
22

Risks and Challenges
As an entrepreneur, you will be exposed to a number of risks and challenges.

A true entrepreneur however, is tenacious – able to withstand obstacles and
hold firm even in the face of adversity! Some of these risks and challenges
include the following:
º You may experience emergencies or unexpected events such as
becoming ill, getting in an accident, or natural disasters affecting your
business.
º Competition from other small and more established businesses. For
example you may set up a catering service in your area and when
doing well someone else may set up a competing business and attract
some of your clients.
º Your actual revenue is less than anticipated, rendering you unable to
meet some of your expenses.
º One mistake made that can affect future operations, especially if you
are in the service industry, e.g. food that was found to be tainted.
You should have measures in place to deal with these challenges as they
arise. You can do the following:
º Plan well - Budget
º Establish an emergency fund
º Constantly enhance your products or service in order to maintain
your reputation and your customer base
º Keep abreast of market trends and changes so that you will always
have a current product or service
º Manage your time well
º Have patience and give your business time to grow
º Provide a ‘top of the line’ service to whomever you are serving
º Be positive at all times even when everything looks bad
º Make every effort to maintain a high level of efficiency
º Think about the things that can go wrong and try to develop
back-up plans.
23

APPENDICES
24

Appendix I
Business Sectors which offer Potential for Small and Micro Enterprises
in Trinidad and Tobago.
1. Wholesale & Retail Traders

14. Manufacturing (Small & Large)
2. Frozen Bakery Products (Roti Skins)
15. Produce / Mini Mart
3. Beauty Salons / Barber Shops
16. Photography / Video Services
4. Printing / Desktop Publishing
17. Art & Craft / Leather Goods
5. Carpet & Upholstery Cleaning
18. IT Services
6. Security Services
19. Event Planning / Party Rentals
7. Dance Studio / Theatre Production
20. Agro Processing
8. Educational / Job Training Services
21. Restaurant / Catering Services
9. Nursing & Personal Care Services
22. Child Day Care Centers
10. Therapeutic Services
23. Tourism (Tours, Tour Guides)
11. Auto Body Shop / Mechanic
24.Housekeeping Services
12. Signs & Advertising Services
25 Plumbing, Carpentry & Masonry
13. Iron/Wood Working / Welding
26.Landscaping / Yard Maintenance
Source: NEDCO of Trinidad and Tobago
The above list is indicative of the potential business areas for entrepreneurs,
identified by NEDCO. In addition, agro processing, fish and meat processing
industries are also suitable fields for SMEs. However, the entrepreneur needs
to select a business most suitable to his or her capabilities.
25

Notes
26

Notes
27

Notes
28

HOW DO I KEEP PROPER RECORDS?
29

SME Booklet No.1 Web

Încărcat de

Informații document

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

SME Booklet No.1 Web

Încărcat de

Drepturi de autor:

Formate disponibile

Start-up and Operational Issues

for Small and Micro Enterprises

Living the Entrepreneurial Dream

SME Booklet No.1_web.indd 1 10/27/2009 7:34:58 AM

3. Understanding Your Business 3

4. Preparing Your Business Plan 4

7. Management and Operation Plan 12

8. Development and Production Plan 15

10. Useful Hints 19

11. Risks and Challenges 23

© 2009 Central Bank of Trinidad and Tobago ISBN:978-976-8134-09-7

SME Booklet No.1_web.indd 2 10/27/2009 7:34:58 AM

As a complement to these initiatives, the NFLP has prepared a series of

SME Booklet No.1_web.indd 3 10/27/2009 7:34:58 AM

the business, developing the business plan and marketing strategies.

The second booklet,“Record-Keeping – How to keep financial records of your

Do enjoy the series!

SME Booklet No.1_web.indd 4 10/27/2009 7:34:58 AM

Starting a small or micro business (SME) is a unique experience. It can be most

SME Booklet No.1_web.indd 1 10/27/2009 7:34:58 AM

Do you have the Entrepreneurial Spirit?

SME Booklet No.1_web.indd 2 10/27/2009 7:34:58 AM

As an entrepreneur, you need to identify your business

Understanding Your Business

SME Booklet No.1_web.indd 3 10/27/2009 7:34:58 AM

What is Your Business Dream? (Vision Statement)

What is Your Purpose? (Mission Statement)

Preparing Your Business Plan

SME Booklet No.1_web.indd 4 10/27/2009 7:34:58 AM

° Management and Operations plan

The Executive Summary

SME Booklet No.1_web.indd 5 10/27/2009 7:34:59 AM

Woodee’s is a specialty furniture store located at Quash Trace,

Our customer base includes home owners, business persons,

Woodee’s assets include cutting tools, staplers and other

SME Booklet No.1_web.indd 6 10/27/2009 7:34:59 AM

What form of Business? (Business Description)

SME Booklet No.1_web.indd 7 10/27/2009 7:34:59 AM

goods, as opposed to each of the farmers purchasing their own vehicles

Whatever the form of business operation, it is advisable that you register

Business is growing and I am thinking of expansion

SME Booklet No.1_web.indd 8 10/27/2009 7:34:59 AM

Registering your Business Name

Tel. (868) 624-1660

Forms could also be downloaded from www.legalaffairs.gov.tt

Protecting your product or idea

Trademarks, Patents and Copyrights

A trademark or service mark is a word, name, symbol, device or combination

SME Booklet No.1_web.indd 9 10/27/2009 7:34:59 AM

Dzign Clothing Concepts (DCC) is a personalized tailoring

Management and Operations Plan

SME Booklet No.1_web.indd 10 10/27/2009 7:34:59 AM

One for all and All for the company!!!

SME Booklet No.1_web.indd 11 10/27/2009 7:34:59 AM

Management and Operations Plan -

All the necessary equipment for operating the business will be

Our mode of operation will involve persons visiting the business,

We also visit customers at their homes/workplaces. In the first

We have good relationships with our suppliers, who are mainly

SME Booklet No.1_web.indd 12 10/27/2009 7:34:59 AM

Development and Production Plan

SME Booklet No.1_web.indd 13 10/27/2009 7:35:00 AM

1 Fixed cost: costs that will be incurred regardless of the level of

2 Variable Costs: costs that are directly related to the level of