The financial crisis, crime, unemployment and earning much-needed foreign exchange are the main concerns of the Government of Jamaica at this time. According to the latest report from the International Monetary Fund (IMF), Jamaica is on the road to recovery amid the ongoing debate about the truth of our current economic situation.

Jamaica’s fragile economy is heavily dependent on foreign exchange used to pay off debts and purchase goods and services. The country continues to earn foreign exchange from other sources such as tourism, exports, the entertainment industry, and bauxite/alumina.

The global recession dealt Jamaica a devastating blow that stunned economic growth and sent small business owners into a panic. The good news now is that oil prices are on a downward trend and are at their lowest level since 2008. For us it is a jubilee because the cost of oil is the biggest consumer of our scarce currencies.

Effect on small businesses

During the economic downturn, small businesses were hit the hardest, some industries were hit harder than others, with manufacturing being the hardest hit. Budget constraints, reduced purchasing power, and inadequate preparation for a recession made it impossible for many of these small businesses to survive.

The economic recession crushed the dreams of hundreds of entrepreneurs here in Jamaica. More than 100 small businesses closed between 2008 and 2014, according to reports from Jamaica’s Director of Small and Micro Businesses.

5 Effects of the Recession on Small Businesses in Jamaica

1. Customer shortage

The purchasing power of customers has been drastically reduced, and as such, many small businesses have suffered. The struggling economy has forced consumers to develop strict tax practices that focus on needs.

This is where you now need to think outside the box and start looking at other ways to earn income. Have you ever thought about online marketing?

This may not be suitable for all companies, but there is nothing wrong with considering it. Online marketing takes many forms and doing your research will prove helpful in determining which technique will benefit your business the most.

2. Increase in the cost of public services

The increase in the price of oil resulted in astronomical electricity bills that severely affected the manufacturing industry in particular. This high overhead spending resulted in reduced production, mass layoffs, and eventually the closure of some businesses.

Business owners began defaulting on their loans, unable to meet wage bills, unable to pay the legal deduction to the government, and the cost of customs duties increased as their monthly utility bills increased.

So how do you solve this? There are so many ways to save money on utilities, reduce what is not essential. If you can turn lights off more often without business operations suffering, then do so. Consider switching to other forms of energy such as solar. You can also use less expensive packaging methods or materials, you must try it.

3. Ridiculously high bank charges

Inflation is likely to occur during a recession, which means your expenses may be higher than normal. Banks have also added to this expense with their high charges, especially credit card interest rates.

If you have been relying on your credit card for payments, you should consider alternative ways to make payments to reduce the high interest rate.

This can become a problem later on when you really need a loan and you don’t want to have problems with your credit score because the credit bureau is now ready to start operating in Jamaica soon and a bad score won’t help much when you are dealing to get loan approval.

4. Decreased cash flow

If you started your business with a bank loan, you may be in a position where you have no cash flow to keep your business afloat and the business is slowly going under.

To control this, you should write down an amount to save on your monthly expenses, this will help you during rainy days.

5. Low morale staff

During these periods, employees are also affected, becoming anxious and more worried about the future of their jobs.

You have to add incentives and create contests to boost your team’s morale. This is the best time to let your creativity flow and help motivate your employees. Having motivated employees means production. Therefore, do not be too stingy with incentives and praise.

Alternative ways to earn currency

• Are you still experiencing the effects of the recession or are you slowly recovering? Try something new, let the entrepreneurial spirit in you come to life once more and dive into the world of internet business or online business as it is more popularly known.

The demand for online business is a phenomenon and it is growing every day. There are so many opportunities to choose from, the possibilities are endless. People from all over the world can come together and come together in a small space to share ideas, trade and explore different avenues to acquire wealth.

An online business gives you a better opportunity, you are more flexible, you can work on your own time, it is basically a 24/7 business. Although the global economic climate remains unstable, online business continues to grow. Anyone who is willing to learn, who puts in extra time and effort, who has access to a computer and internet service, can earn an income online, regardless of their educational background.

Choose wisely and take the first step today.