Your Money eZine by eZines Limited

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YOUR MONEY INSIG H T S

Coming Of Age: The video game industry outplays the field

ired eyes tend to play tricks on even the most seasoned online skimmer. After a hastily arranged face wash and a hit of an energy drink, the headline still read “VIDEO GAMES SALES REVENUE DOWN TO ONLY 1.17 BILLION IN JUNE”. Hmm… let’s break this down; “Down would suggest that revenue had fallen and “only” would suggest that US $1.17 billion is disappointing. Something’s definitely afoot.

This form of entertainment has etched itself into the very fabric of existence in today’s world and it is nice to see that maybe our parents were wrong about one thing after all.

Usually the only entertainment industry that makes over $40billion yearly and complains of tough times is the film industry but the videogame industry is fast making its bid for a contender in that contest. With record companies and movie studios cursing the day the internet was ever created, it seems that the industry once dubbed a “fad” has exceeded even the wildest of imaginations.

Things weren’t always this rosy however, getting to this position was an arduous journey. In 1983, the videogame industry began to crash under pressure from emerging personal computers and poor quality third party products. Companies went bust and the industry focus shifted east to Japan. The Japanese, with a penchant for anything with circuitry and a rather draconian method of ensuring quality from third party developers revitalized the fledgling industry in the late eighties. Today, the average video game has a production cost of between US$1 million dollars and $20 million. The average movie damages a studio’s wallet to the tune of a $102.9 million. According to United States’ National Association of Theatre Owners (NATO), the film industry grossed $9.78 billion in 2008, versus a record $21.3 billion by the video game industry as reported by the NPD group.

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These numbers might be a splash of cold water into the faces those who insisted that video games would never graduate from being simply timewasters geared towards children. The simple fact is that those kids have grown up and the developers are making games for these new adults who have the spending power to make any investment worth its while. The massive increase in the industry in 2008 was also due to the release of a console with a far wider reach than your usual game. The “Wii” pronounced “we” racked up record sales last year because of its ease and potential exercise benefits.

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BUSINESS LOUN G E

Marketing the Future:

Wayne Marsh shares with the business lounge Andre Burnett

“The answer was Internet Marketing”. This was the realization that Wayne Marsh came to after launching an investigation to find out why it was that companies all across the world were dedicating a large portion of their budget to the development of their online development.

Most times when people speak of the rise of an innovation it is sometimes coupled with the demise of another. According to Mr. Marsh, he does not see traditional marketing competing with online marketing; instead he sees them complementing each other where the latter plays a critical role in determining how to use the former.

Wayne Marsh, Internet Marketing Consultant, used this realization to become Jamaica’s foremost digital marketing consultant, using Wayne Marsh his unique skills to bring Internet Marketing Consultant attention to the products of his clients using the World Wide Web. Mr. Marsh sat in our Business Lounge to share his experience and his knowledge about the business landscape in Jamaica and its readiness, or lack thereof, to accept his particular brand of medicine. “The internet marketing industry is over ten years old in first world countries but it is in its infancy in Jamaica”, stated the consultant, “this is because internet penetration rates were relatively low in Jamaica until recently when it passed 50%. According to www. worldinternetstats.com, Jamaica’s penetration is 53.5% as of 2008, growing by 21.6% since the year 2000. This means that Jamaica is way ahead of the Caribbean average and as such Mr. Marsh says he is sure that local companies will utilize the internet to effectively communicate with their customer base. Mr. Marsh stated that since the economic woes that have befallen most companies, he has seen where companies are cutting their marketing budget instead of increasing. “The thing is that the other companies, however, have found proven innovative ways of reaching their target audience including internet marketing”, stated Mr. Marsh, “as the tide of economic recovery rises, the bottom line of these companies will rise also as they are already surfing the marketing wave.”

Ultimately, success will breed success and as more Jamaican make the transition to online endeavours so will local companies. This is the reality that we are faced with and it is in this reality that Wayne Marsh is poised to be one of the forerunners in a soon to be indispensable service.

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money smart

10 Smart Reasons to: Write a Business Plan

Question: I started a catering business last year, but I don’t seem to be moving ahead in the way I want to. Sometimes I feel unsure of the best route to take my business to the next level. What should I do?

Answer: A lot of small businesses get started without a plan of

action to guide the operations. It’s advisable to take some time to strategise for the growth and development of your business. Here are some smart reasons to write a business plan:

1. Check if your business idea is feasible: A business plan can help you to think through your business concept to determine if it can really be viable in the marketplace, before you actually commit to it. 2. Get input from others: A written plan can be shown to

business experts who can help to guide you in structuring your ideas, and offer useful suggestions that you may not have considered.

3. Clarify the vision of the business: Many

entrepreneurs get caught up in the operational activities of business, and fail to concentrate on the long term vision of what they are doing. The plan will help to keep you focused on the ‘why’ of the business.

4. Provide a business blueprint: In the same manner

that you would use a technical drawing to construct a building, your business needs a plan that will guide its development on each step of the way.

plan will help potential backers to determine if your business is a worthwhile venture.

9. Prepare for changes: Business planning is not static, as your environment is constantly changing. As your business grows, you will need to continually make adjustments to your game plan. 10. Determine your success: Use your

plan to periodically review your progress to see if your original objectives are being met. The plan can be used as a benchmark to measure the success of your business.

……………………………………………………… Financially S.M.A.R.T. Services is Jamaica’s number one source for practical, down-to-earth and independent answers for all questions relating to personal finance. Get more money smart advice at www.financiallysmartonline.com. Email advice@ financiallysmartonline.com with comments or questions.

5. Think about possible challenges: The planning process forces you to think about weaknesses and threats that could impede the success of your business; and think of ways to avert these issues. 6. Know what is essential for success: Thinking ahead

allows you to know what kind of facilities, personnel, marketing and financing are going to be needed for business success. You can plan effectively how and when you are going to acquire these resources.

7. Obtain business financing: Whether you need start up capital or funds to expand operations, financial institutions will require you to submit a business plan for their consideration. It can save time if your plan is already prepared. 8. Appeal to investors: Sometimes you may have to depend

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on equity investors to provide necessary financing. A well conceived

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Mind Your Business

Overcoming a History of Weak Management Francis Wade

he recent debacles in West Indies cricket and Jamaican athletics have powerful lessons to teach local companies.

In West Indies cricket, third-stringers recently lost two series to lowly Bangladesh. Jamaica came ever-so close to losing half its medals at the IAAF championships because of internal disagreements between administrators and a top coach over attendance at a training camp. Poor management obviously trumps top talent. Here in Jamaica, the same happens in companies. Bright people are hired with the right credentials from the best universities. Then, months later, there’s no announcement made when the team falls apart. The individual potential on paper, when added up, is impressive. More often than not it has nothing to do with profits, competition or a recession. Instead, it has everything do with a failure of executives to set aside their individual agendas, and work together for greater good. But should this be surprising? After all, our traditional workplace is the plantation, and its influence has never been set aside.

The companies, organizations and athletic federations that we developed with our own sweat and blood will be burnt down to the ground by us... with our own hands... in protest... but this time, against ourselves. There can be no happy ending when we are the ones agitating against ourselves. We ALL lose when our best athletes sit at home cooling their heels, watching second and third-rate performance. We are left to ask ourselves how this could be, and why it seems to happen to Caribbean people with such regularity. Are we just bad lucked? ……………………………………………………… This is part 1 in a 2 part series. In the next issue of YourMoney, find out how Jamaican companies can overcome our inherited history. Francis Wade is a management consultant and author of FirstCuts ezine for Caribbean executives. For more information, visit www.fwconsulting.com

For our first 300 years, our companies were cauldrons of competing hatreds. European “Massas” loathed their slaves, free blacks and poor whites. Slaves despised all whites. House slaves looked down on field slaves. What kept this diabolical contraption together was mutual fear, brutal authority and the whip. Fast forward to 2009 and thankfully, the whip is long gone. But what remains looks a lot like the same stuff built into our earliest companies. Fear, excessive authority and intimidation are still the proven tools that being used to force others into line, as the author of the recently published book, Dead Yard, so accurately observed. Our response remains the same -- we continue the fight against the powers that be. The main difference is that now, we are also the losers, no matter the outcome.

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