Online Course: Introduction to Finance (Feb 3)

COURSE TO BE TAUGHT BY PROFESSOR KAUL OF THE UNIVERSITY OF MICHIGAN

This course will introduce you to frameworks and tools to measure value; both for corporate and personal assets. It will also help you in decision-making, again at both the corporate and personal levels.

About the Course

This course is primarily devoted to the fundamental principles of valuation. We will learn and apply the concepts of time value of money and risk to understand the major determinants of value creation. We will use both theory and real world examples to demonstrate how to value any asset.

Recommended Background

This is a tough issue.  I do not believe in prerequisites, except for a sense of curiosity and an attitude. Having said that, exposure to economics (the mother discipline of finance), accounting (the language of business), and/or algebra and statistics (we all need it) will clearly help.  I will however try and cover everything starting with fundamentals and will highlight when there is a need for you to do some further work in specific subjects.  In fact, I hope the class will motivate you to learn more.  I believe that learning usually happens when you are motivated by a curiosity to understand something.
Check out the Syllabus here

Jamaica Can Do More to Profit from Organic Products

Today the first caller of the midday show “The Open Line with Winston Barnes” (WAVS1170.com) was the famous “farmer” who runs successful farms in Jamaica and reports on the business periodically.

He related a recent story about how he contacted a food and beverage personnel at a hotel chain in Jamaica. He was told the hotel chain was importing organic food from Spain. After some questioning and research he found out that there is not enough locally grown organic food to satisfy the demands of the local hotels and restaurants. His research also determined that the hotels’ cost could be cut in half if the hotels bought organic food locally.

Jamaica is missing out on a growing trend. Many foreigners who visit the island are demanding organic food. The hotels and restaurants are forced to import organic products to keep up with demand.

This view is also shared by Daniel Schweizer, the executive chef at Goddard Catering in Montego Bay. He spoke back in October last year during The Gleaner’s Food Editors’ Forum at Mystic India Restaurant. He called on the Government and farmers to invest in organic farming to capture a piece of the lucrative private airline industry.

Schweizer said “the number of food and beverage managers of private airline asking for organic foods has been on the increase, but Jamaica has not been responding to the requests as it is not empowered to do so.”

One group that has stepped forward is Farm Up Jamaica Ltd. According to its website

“Farm Up Jamaica Ltd. is a non-profit organization formed to help reduce the importation of foreign food into Jamaica, through the cultivation of organic healthy foods. Strategic organic farming of vacant and under-farmed lands will help re-establish the agricultural sector to its maximum potential.”

The organization recently started the 1st of many organic NON-GMO seed farms in St. Elizabeth that will produce Scotch Bonnet Seeds. Follow the progress of this organization on Facebook and contribute to their efforts.

Those interested in getting into organic farming should consult the Jamaica Organic Agriculture Movement. They provide answers and certification for the prospective organic farmer.

WORTH READING
The Jamaica Organic Agriculture Movement (JOAM)
Farm Up Jamaica to grow organic foods, save money
Grow Organic
As Cost of Importing Food Soars, Jamaica Turns to the Earth
Farm Up Jamaica on Facebook
JOAM Organic Standards

Growth in Construction Industry A Business Opportunity for Some

According to numbers provided by the Planning Institute of Jamaica there has been a steady rise in residential and non-residential construction. Here are the relevant stats:

APRIL – JUNE 2013
Real Value Added in the Construction Industry grew by 1.5%, reflecting:
Growth in Building Construction due to 1. Higher levels of Residential Construction and 2. increases in the number of housing starts (up 219.6%), housing completions (up 37.4%) and the volume (up 17.7%) and value (up 25.3%) of mortgages for the period

JULY – SEPTEMBER 2013
Real Value Added in the Construction Industry grew by 2.5%, reflecting:
Increased Building Construction activities due to 1. expansion in residential and non-residential construction projects and 2. increase in the volume of mortgages by 71.7% and value of mortgages by 68.8%

When a homeowner takes possession of her new home, she is likely to spend more in the first year than at any other point in time. Here is a list of things a new homeowner is likely to purchase:

1. furniture
2. curtain, blinds, drapes and other window treatments
3. bed spread/sheets/blankets, pillows, pillow cases
4. kitchen appliances and cooking wares/utensils
5. bathroom accessories
6. door locks
7. lawn equipment and lawn services
8. phone/cable/satellite services and Internet access
9. alarm system
10. banking services

The list so far covers things most likely to be bought within a few months of home ownership. However, the list can be expanded to include certain high price items like high-end audio and video equipment, exercise equipment, pool accessories and services, solar panels and investment banking.

There are companies in the USA that rents list of new homeowners to sales persons of all types. It is very common for a new homeowner to be bombarded with flyers, sales letters and phone calls promoting many types of products and services. Is there an opportunity for your company?

The Numbers Behind Jamaica’s Economic Performance

The Planning Institute of Jamaica publishes economic performance reviews that covers the performance of the Jamaican economy for a given quarter. Listed below are links to some of the recent reviews. What do they reveal?

These reviews show the performances of different sectors of the economy such as agriculture, fishing, food & beverage, hotel & restaurants, transport, mining, manufacture and construction.

It also reveals the amount of money into the country from remittance, the currency exchange rate at the end of each quarter and the rate of inflation.

For January to November 2012 remittance from abroad was US$1859.0 million. Remittance accounted for US$1841.6 million for the first eleven months of fiscal year 2012/13. These numbers tell us that remittance to Jamaica is somewhere between US$150 million and US$170 million per month.

The reviews tell a story about the work force:

Total population in July 2013: 2,715,200
Labour Force: 1,309,700
Employed Labour Force: 1,108,100
Unemployed Labour Force: 201,600 (15.4%)

If you belong to the hotel, restaurants and tourism industries you can use recent trends to help with your planning:

January 2013
Airport arrivals declined by 3.2%
Cruise passenger arrivals increased by 8.9%

April 2013
Airport arrivals declined by 1.9%
Cruise passenger arrivals decreased by 12.2%

July 2013
Airport arrivals declined by 0.2%
Cruise passenger arrivals increased by 7.0% to 7994

October 2013
Airport arrivals grew by 12.5%
Cruise passenger arrivals up by 30.4%

Although numbers can be manipulated to argue for or against a certain position, these stats provided by the Planning Institute of Jamaica are very valuable. They can be used to monitor trends, to make projections and to assess the the likelihood of a business surviving in a given industry.

RECENT ECONOMIC PERFORMANCE REVIEWS

Jul – Sep 2013

Apr – Jun 2013

Jan  -Mar 2013

Oct – Dec 2012

 

Is the Free Basic Paid Premium Business Model for You?

In some other world or century you would be able to offer a free basic service, get loads of customers and gradually convert most of them to the paid premium service. The concept sounds like a winner. However it does not always work that way in today’s real world.

The following article offers a true story of an entrepreneur – Ruben Gamez – who offered his service for free hoping to convert many to the paid version. After weeks of testing he realized that the number of paid customers declined. He dropped the free offer and was stunned by the result. He gained more paid customers. How much more? Take a look at the article:

Why Free Plans Don’t Work

WORTH READING
How Ruben Gamez Turned Bidsketch Into A Successful Online Business
Bootstrap To Quitting Day – with Ruben Gamez

Biz Trends & Stats

According to the Pew Research Center Facebook is still the social medium of choice for small businesses to reach customers. 71% of adults use FB in 2013, up from 67% in 2012.

The American Bankruptcy Institute reported that business bankruptcy filings were down 24% in 2013, the lowest level since 2006. The climate for business startups is a little more favorable than in previous years.

Online Course: Developing Innovative Ideas for New Companies… (Jan 13)

About the Course
#1 Entrepreneurship Course on Coursera*
#8 Overall Business Course on Coursera*
*CourseTalk’s “Top Rated” MOOCs (November, 2013)

This course assists aspiring entrepreneurs in developing great ideas into great companies. With strong economies presenting rich opportunities for new venture creation, and challenging economic times presenting the necessity for many to make their own job, the need to develop the skills to develop and act on innovative business opportunities is ever present.

Using proven content, methods, and models for new venture opportunity assessment and analysis, students will learn how to enhance their entrepreneurial mindset and develop their functional skill sets to see and act entrepreneurially. The initial steps to creating a business plan, and raising financial capital to launch the firm, are examined as well. Our goal is to demystify the startup process, and to help you build the skills to identify and act on innovative opportunities now, and in the future.

Course Syllabus
Week One: Entrepreneurial Perspective
Welcome
Course overview
What is entrepreneurship?
Who is an entrepreneur?
Entrepreneurship, creativity, and innovation
The world’s most innovative companies
Types of innovations
Entrepreneurs and strategic decisions
The opportunity analysis canvas

Week Two: Entrepreneurial Mindset, Motivations and Behavoirs
Entrepreneurial mindset
Entrepreneurial motivations
Entrepreneurial behavoirs
Risk taking in entrepreneurial decision-making
Risk, uncertainty, and stakeholder involvement

Week Three: Industry Understanding
Knowledge conditions
Demand conditions
Industry lifecycle
Industry structure
Competitive advantage
Learning curve
Complementary assets
Reputation effects

Week Four: Customer Understanding
Macro changes that increase new venture opportunities
Exploring real market needs
Satisfying real market needs
Strategic positioning
Strategic planning

Week Five: Business Modeling
Value innovation
Opportunity identification
Introduction to business models
The business model canvas
Partnerships
Outsourcing

Week Six: Business Planning
Defining the business plan
Authoring the business plan
Sales forecasting
Managing the sales pipeline
Developing the marketing mix
Pricing
Building financial statements
Sources of financial capital
Final thoughts

Online Course: The Power of Microeconomics: Economic Principles in the Real World (Jan 6)

About the Course

In this course, you will learn all of the major principles of microeconomics normally taught in a quarter or semester course to college undergraduates or MBA students.

Perhaps more importantly, you will also learn how to apply these principles to a wide variety of real world situations in both your personal and professional lives.  In this way, the Power of Microeconomics will help you prosper in an increasingly competitive environment.

Note that this course is a companion to the Power of Macroeconomics.  If you take both courses, you will learn all of the major principles normally taught in a year-long introductory economics college course.

Course Syllabus

Lecture One: An Introduction to Microeconomics

Lecture Two: Supply and Demand

Lecture Three: Demand and Consumer Behavior

Lecture Four: Supply and Production Theory

Lecture Five: Perfect Competition

Lecture Six: Monopoly and Monopolistic Competition

Lecture Seven: Oligopoly and Strategic Behavior

Lecture Eight: Land and Rent

Lecture Nine: The Labor Market and Wage Determination

Lecture Ten: The Capital Market, Interest and Profits

Lecture Eleven: Public Goods and Externalities

MORE INFORMATION

Review of Jamaica’s Economic Performance July – September 2013

The Planning Institute of Jamaica published an economic performance report dated November 20, 2013. This report covered the performances of different sectors of the economy such as agriculture, forestry & fishing, manufacture, construction and tourism.

Here are some of what you will find in the report:

Agriculture, Forestry & Fishing
The Agriculture, Forestry & Fishing industry grew by an estimated 5.0%, reflecting:
Other Agricultural Crops up 8.7% due to increases in six of the nine crop groups
Potatoes, up 22.2%; Condiments, up 16.1%; Legumes, up 15.2%
The smaller weighted components recorded contractions
Traditional Export crops, down 0.1%; Animal Farming, down 4.0%; and Post Harvest activities, down 51.6%

Financial Services
Real value added in the Finance & Insurance industry increased by 0.4% during the quarter, due largely to:
Increased net interest income at deposit taking institutions
Real increase in total assets at deposit taking institutions
Higher Fees and commission income
Gains on foreign exchange transactions.

Hotels & Restaurants
Real Value Added for Hotels & Restaurants grew by 0.8%.
This largely reflected Stopover arrivals, up by 0.7%.
Cruise passenger arrivals, down 9.8% resulting in
Total arrivals, down 2.7%
Provisional visitor expenditure, down 2.5% to US$475.6 million

Fiscal Accounts
The fiscal deficit was $0.5 billion for the quarter
This was $6.3 billion less than budgeted due to:
$0.6 billion (0.6 %) more than programmed revenue
$5.7 billion (5.5%) less than programmed expenditure
Revenue & Grants totalled $97.7 billion in July–September 2013, while Expenditure totalled $98.3 billion.

Exchange Rate
The average nominal exchange rate at the end of September 2013 was $103.60 per US$1.00, representing 2.14% nominal depreciation compared with end of June 2013.
This translates into a real exchange rate appreciation of 1.1% relative to the US dollar

SOURCE: Planning Institute of Jamaica