Talk is cheap. Cash is not.
We can talk till we’re blue in the face about taking the plunge, going after our dreams to start or expand our own business, or making our money work for us by being our own boss.
Unless we walk the talk, however, all that planning will not count for anything. Margie Quimpo-Espino, one of Inquirer’s business editors asked me pointblank during an interview, “So, have you started your own business? Hey, you have to walk the talk!”
Ouch.
To be fair to myself, I had been part of some start-ups – some successful and some that didn’t fly. But can I actually create a business from ground up and turn it into the next big thing? This had me tossing and turning for the next couple of days…
A few days after, I was having dinner with a classmate from RFP class. Joy asked me the same thing! She told me to list down things that keep me from making the first move and do something each day to take them out of the list one by one.
Cash was the first thing that came to my mind. A lot of people have magnificent business ideas, but you can measure how serious they are by how many phone calls they will actually make to find out how they can turn that idea into a business venture.
Now, people normally think of banks as the first source of cash for either starting a business or expanding. Banks are an option, but not the only one.
In an article today, Citibank recommended three options to a reader who was asking for advice where to find more cash to expedite the construction of new apartments they are hoping to rent out.
1. Get a partner. You can look for a business partner who can put up money for the cost of construction. You can then put up a partnership to handle the business aspect of building and renting out the apartments. This may be a good option since you can also ask your partner to be more involved in the business and oversee the construction of your properties while you are out of the country. In looking for a partner, make sure you deal with a like-minded person who has the same objectives and values as yours.
2. Take out a loan from your life insurance policy. If you have taken out a life insurance policy and have been paying diligently for a number of years, you may be eligible to take out a loan from the insurance company at a low interest rate. Review your policy and talk to your insurance agent or broker to find out the exact details of how to go about this.
3. Take out a loan from the Social Security System, Government Service Insurance System, or Pag-Ibig. Housing loans from these entities may also be of help to you.
Read more of the article here:
A word on taking on a partner. Tread very, very carefully. Money is a great blood thinner. Sometimes, even relatives can turn on you when there’s money involved.
PDI’s Michael Lim-Ubac also wrote that there would be P34 billion available for lending to MSMEs this year. Should be good news for small business owners. State-run Small Business Corp. will oversee the credit facility.
The article says:
Small industries can avail themselves of P1 million to P50 million and medium-scale industries can borrow more than P50 million, “with no cap but governed by the equity ratio,” which at most would be 80:20 after the loan, Remonde said. For franchisees, the ratio is 70:30.
Read more here:
Now don’t ask me whether this money will reach the intended recipients. I can only guess how many Filipinos will talk about it and where it will go, how many talk show hosts will pound on the table and demand for accountability and transparency. But guess how many Chinese businessmen and serious Filipino entrepreneurs will actually inquire how they can access those funds.
Talk is cheap. Cash and walking the talk, are not.
April 25th, 2007 at 4:52 pm
just my two cents worth about the need for cash and “teaching” entrepreneurship. i agree that cash, or the need for it, should not be a hindrance in starting a business. you can either find a business which requires less cash or, as pointed out, find partners who can provide it.
this brings me to the point about “teaching” entrepreneurship. it is not about passing on a skill but more on showing people like me, who want to go into business, the possibilities. that it can be done and they can do it. otherwise, going into business would seem so daunting.
April 25th, 2007 at 11:29 am
There’s a saying “if you can’t do it, just teach it.” It’s amazing when gurus teach entrepreneurship and they’re not entrepreneurs themselves. It’s like teaching others how to play basketball when you don’t play basketball at all.
I don’t teach, I just do it. I can talk about entrepreneurship bec. I have first-hand experience in failed ventures. MLMs, retailing, wholesaling, financial consultancy, call center, real estate, microfinance, trading, you name it. Failure is a better teacher than success. Btw, not all of the above are failure.
All I can say is entrepreneurship is a skill. Like all skills, it cannot be taught. It can only be learned by doing.
April 24th, 2007 at 11:09 pm
Hi Salve,
Very interesting article! I’ve been in several startups, both as an employee and as a founder. I have to say that while cash is of course important, an entrepreneur does not necessarily have the cash himself to start a business.
Think of it this way: you have 3 assets - Time, Money, Skill. You only need to possess two of these to acquire the third. For most people, it’s having time and skill to get someone else’s money
As a startup, getting money from banks is not a very good idea, they are not going to lend you money without collateral anyway. So unless you’re willing to put up your (or someone else’s) house as collateral, this isn’t a very good route to take.
So what to do? There are always people who have money that is earmarked for investment purposes. They may be angel or VC investors, or the “3 Fs” (friends, family, fools) that will believe in you when others do not.