September 2007 Archives

Successful entrepreneurs are not afraid to tinker with their products. They are always experimenting and looking for ways to improve the quality of the things or services they sell. I guess that means entrepreneurs are not afraid of mistakes and know how to look for opportunities whether in failures and successful attempts. This story from the Philippine Daily Inquirer in Pangasinan is proof of this principle. Here’s an excerpt:

MANGALDAN, Pangasinan--This central Pangasinan town is starting to carve a culinary reputation for its delectable beef tapa. One brand, however, has led the pack in the local meat industry due to the efforts of its owner to experiment and improve her product. Marcela Barrozo, 64, is the woman behind Celas' Meat Products (Mangaldan's Best) and is considered one of the pioneers in the town's processed meat industry. "I am one of the original tapa makers in the town. Most of my contemporaries have passed away," said Barrozo. Aside from tapa, Barrozo's backyard factory here churns out tocino (processed meat), hotdog, embutido (steamed ground meat) and different flavors of longanisa (native sausage), using about 2,000 kilograms of beef and pork.

Read the rest of the article here: Some scenes from Pangasinan:   A farmer prepares to plant rice seedlings on a paddy field in Sison town, northern Pangasinan province 03 August 2007. Farmers complain that rice seedlings are smaller due to lack of rainfall in the northern Philippine island of Luzon. A farmer in the northern Philippines province of Pangasinan is silhouetted against the midmorning sky as he cuts sugar canes. AFP PHOTO Joel NITO In this photo dated 08 November 2003 shows a group of Filipino farm workers harvest rice from a field in Pangasinan northern Philippines. AFP PHOTO Joel NITO

Even if calamities, whether natural or man-made, conspire to stop you from jumping into the entrepreneurial world, don’t let go of your dreams. At least, that’s the lesson from this story from Tiwi, Albay, where coconut farmers fought the effects of a super typhoon, which caused them to lose their raw materials! Here is an excerpt of the article:

TIWI, Albay--Despite the setbacks caused by the consecutive typhoons last year, the coconut farmers of Bariis (village) and other upland villages here are finally off to an entrepreneurial venture of their own. Last year, the Tiwi Coconut Farmers Association (TCFA) was set to open a communal coco coir processing plant as part of the livelihood program initiated by the multisector organization Tiwi Cooperation for Research and Development. Chevron Geothermal Philippines Holdings Inc., which runs an energy plant in the municipality, earmarked a P250,000 grant as initial capital for the coco center. The farmers of the remote hilly area were poised to stand firmly on their own feet. But nature seemed to have other plans. The super typhoons that lashed the region last year denuded their coconut farms, robbing them of their raw material and their budding plans for a stable livelihood.

Read the rest of the article here: Some scenes from the super typhoons that hit Bicol last year. (All photos from AFP). (An aerial photograph shows the extent of damage in the Bicol region.) Smouldering rocks and lava bury a coconut farm in Bonga village where the lava is descending down the slopes of Mayon volcano 10 August 2006. The lava pouring from Mayon's crater has reached six kilometers, incinerating as it buries forests, farms and threatening villages.

This article brought back memories of a photo shoot and the experience of writing an article on Marikina a few years ago. I’m not really a shoe person, I only have more than 15 pairs of shoes and slip-ons in my closet :-D Unfortunately, none of my shoes were made in Marikina. A lot of people still swear by the quality of shoes made in that little remarkable city. This article from Philippine Daily Inquirer says Marikina shoes are getting a new shine. SikapMo, an association that markets shoes made by members, says sales in 2006 hit P50 million, a steep climb from a low P2 million three years earlier when they first banded together.

Globalization has opened the domestic market to cheap imported shoes, drastically cutting down demand for local shoes. Industry leaders estimate that since the 1990s, 1,500 small shoe producers have ceased operating and over 20,000 workers have lost their jobs. The age-old craftsmanship of Marikina's "sapateros"--working in their little shops with hand tools and outdated equipment--simply cannot compete.

How did they overcome these? Design improvements, supply chain management, quality control, product costing, processes and marketing… retooling in this age of globalization is important. Read how they are doing this here. Snippets of small business lessons:

• Join trade and industry associations
• Adapt to the changing environment
•  Try new ideas in marketing

Marikina Colossal Footwear team claim that this is the world's biggest pair of shoes, designed for a 37.5-meter (125-foot) giant at a cost of P2 million, at least the biggest when they unveiled it in 2002. Photo credit AFP. They finished the shoe in 77days and registered in the Guiness Book of records with 5.5 meters long, 2.25 meters wide and 1.83 meters high, has an insole with perimeter measurement of approximately 12 meters, size 753 based on French shoe standard, which made of Genuine leather on the upper, lining welt and outsole. (AFP)

Found these pictures from the Philippine Daily Inquirer photo archives.   Here’s a challenge: how do you market them? Marketing strategies can make or break a business. Karen de Asis, author of the book “Color Folders of the Mind: A Branding Story,” lists marketing myths that can harm your business. Here’s an excerpt from her article: Marketing communications, often associated with advertising, can be deferred or done away with as long as the products and services are massively available in trade. The truth is, without investments in awareness-building marketing activities, it may take time for end-users to know the product or service exists and in many cases, they may not know it at all. As long as the product or service sells, there is no real need to fortify with image-building and sustaining marketing activities. Not true. Marketing aims to optimize and sustain the brand for generations to come. What a business owner must assess is what segment of the universe of the potential market one wishes to serve and for how long will the market be served. Having good advertising is enough to compel consumers to buy a product. Not true. Successful marketing is the sum of complementary marketing activities that include having a good product, right pricing, wide distribution and awareness programs that reach the intended market with a unique, differentiated and compelling benefit. Being on the trade shelf is a guarantee of a product’s movement. Not always true. Here comes the special relationship of trade accounts and marketing people with retailers. The trade marketing people must make sure that the branch or area manager, category-in-charge, customer service people are aware of the product’s existence on the shelf. A call to the customer service counter or a query with the floor sales attendant can be a lost sales opportunity if the response is in the negative when in fact the product has been sitting on the shelf. Customer feedback is often negative. Not true. If the customer is satisfied with the product or service delivery, then positive feedback comes unsolicited. Business owners can chart and do the marketing themselves. True, but they need to understand what marketing and creating demand for products and services entails. Or they can avail themselves of expert skills. Still, they must ascertain the skill and know-how of the marketer or consultant they are getting on board. If marketing is not done well, it can be a costly and self-destructive exercise. From Open For Business: I’m sure you’ll agree that too many good products and businesses have died because their owners had no clue how to market them well. So use these tips! After all, they're free.

If you haven't found that one bright business idea, how about resuscitating a losing company?

This strategy is definitely not for the faint hearted. Read how 37-year old Tony Fernandes, Warner Music’s top honcho in Southeast Asia six years ago, turned his back on his company Jaguar and a lifestyle that included hobnobbing with recording stars and entertainment executives, to gamble on a Malaysian airline that was under an $11-million debt and seemingly dark future. “He quit Warner, mortgaged his home, and sank his lifetime savings into a Malaysian airline that had racked up an $11-million debt even before 9/11. To Fernandes, it was the realization of a boyhood dream to own an airline; to his peers in the corporate world, it was like jumping off a plane without a parachute.

"Most people thought I was crazy," says Mr. Fernandes. "When we started, they said it wouldn't work. They said we would die."

Mr. Fernandes not only survived the costly plane ride; he thrived. His Air Asia is now an international carrier world-renowned for revolutionizing Southeast Asian air travel as Asia's first budget carrier. Its no-frills business model has spawned copycats among Southeast Asian airlines offering low-cost fares and forced Asian skies open.

How did he do it? There’s that P word again. Hey, I meant passion. He also has a knack for hiring people who share his passion, cultivating a good corporate culture, having a good branding strategy and never losing sight of business goals. Read the entire article here.

Ronnel Domingo's article on SME financing urged small to medium-scale enterprises to tap a P280-million export fund. Here’s an excerpt from the article:

The Department of Trade and Industry is urging small and medium enterprises (SMEs) to tap a P280-million export promotion fund, or EPF, and advising them to follow the strict requirements. Interested exporters organizations and associations are being encouraged to submit their project proposals to the Export Development Council for evaluation, Trade and Industry Undersecretary Thomas Aquino said in a statement. Made available through the council, the EPF was put up jointly by the Department of Trade and Industry with a contribution of P100 million, the Department of Budget and Management with P100 million, the National Economic and Development Authority with P20 million, and the Philippine Exporters Confederation with P10 million.

Read the rest of the article here: Dreamers can get stuck with a business idea and never do something about it, especially when capital is lacking. The next step to dreaming is actually doing something to make that dream come true.  Don't get stuck. Get ready, get set, and go!

I’m beginning to think most good ideas come from high school buddies who want to change the world for good and coffee shop talks late into the night. An exaggeration, of course, but that’s exactly how it started for Paolo Benigno A. Aquino IV and Mark Joaquin Ruiz. These two thirty-somethings have come up with an idea to alleviate Philippine poverty one sari-sari store at a time through a business model that aims to create the first Filipino branded sari-sari store chain. They both gave up their leadership positions in their regular jobs – Aquino as chairman of the National Youth Commission and Ruiz as senior customer marketing manager in Unilever – to set up Microventures Inc. last year and begin the Hapinoy Store chain. If the idea sounds like a novel, idealistic and quite impossible idea, blame it on their youth and, perhaps, genetic make-up. Does the “Aquino” surname ring a bell? Paolo Benigno or Bam as he is known to friends, is the nephew of former President Cory Aquino and the late Ninoy Aquino. Interestingly, however, big corporate names like Smart Communications smell a good business proposition and have signed on for a long-term engagement. Smart public affairs chief Mon Isberto told me their main reason is definitely not altruistic. Nestle, Colgate, Century Tuna and the maker of Oishi have also signed up. They all think they can fulfill their “doing good while doing well” sort of thing in this new idea. The concept of the sari-sari store is a Filipino invention that comprises a major chunk of the Philippine economy, numbering to around 650,000. Question is, can Microventures make this thing work? Here are the mechanics: Beneficiaries of Microventures’ microfinance partner, Center for Agriculture and Rural Development Inc., who are in good standing and has an existing sari-sari store can sign up to join the Hapinoy Store program. Beneficiaries of CARD are mostly nanays, the more glamorous title being work-at-home moms. If you are familiar with how microfinance works, these nanays work together in groups of five or thereabouts, so when Bam says the nanays have to be in good standing to be considered for the program, I imagine they need to have good peer reviews. Reason? Under the program, Microventures will take a chance on these stores by giving sari-sari stores a makeover with bright paint and the huge Hapinoy smile plus additional capital from CARD. The stores will have direct access to manufacturers resulting in a bigger margin, the nanays can qualify for trainings under sari-eskwela where they will learn about inventory management, credit management and other stuff. That should be of interest to overseas Filipino workers who are always enticed to put up a sari-sari store and fail because of bad management. The Hapinoy idea is like franchising and professionalizing how the business is done. Eventually, if all goes well, Microventures wants to see the sari-sari stores evolving into bigger businesses. It’s not very hard to see how manufacturers will benefit from the scheme. Stripped of the PR lingo, they are merely expanding their market so they can reach areas where the big dealers cannot go. I asked Bam if Microventures itself could survive with a profit? Those trainings, makeovers, logistic support, the food we ate for lunch during the press conference – all those require money! “We are trying to fulfill our business and social objectives at the same time. We don’t want mere dole outs, we want to help people on the ground. But we will also fulfill our business objective and we will be sustainable once we have the scale,” he said. The targeted scale is at least 100,000 stores. Whew. That’s a lotta work, but it’s an idea that I personally think is worth trying. When you write business stories day in and day out as a profession, you see a neat idea immediately. This is definitely one of those.

Firm aims to make a splash in the stock market By Karen Lema Reuters Last updated 06:24pm (Mla time) 09/13/2007 MANILA, Philippines -- A Philippine company that took off selling hair spray in the 1980s and is named after that decade's romantic comedy "Splash" aims to take its fortunes a step further by listing on the stock market next year. Splash Corporation, the country's largest Filipino-owned personal care and cosmetics company, began as a P12,000-backyard business over two decades ago before growing into a multi-billion peso firm competing with the likes of Unilever and Procter & Gamble Co. Rolando Hortaleza, chairman and chief executive officer of Splash, started the business in 1985, selling nail polish remover, cuticle remover and solvents in recycled cough syrup bottles in a lower-middle class neighborhood in Manila. Now, his company is set to become the first Filipino personal care firm to list on the stock exchange, and is targeting its market debut for January 2008. Read more here. Those of you who believe passion is important in setting up a business, read Hortaleza’s advice:

Asked what advice he could give to the many Filipino entrepreneurs aspiring to hit the jackpot, Hortaleza said: "It can be done, as long as you have passion."

Here’s a question that readers always throw at us:

I am a teacher/OFW/work at home mom/accountant etc. etc. and I’m planning to set up my own business. What business should I get into?

People are all the time looking for that great, perfect, amazing business idea that will turn them into a successful entrepreneur. An entrepreneur myself, I understand the question perfectly and the burning need behind it. They may not know it, but people who ask this question aren’t really looking for a hot product or service to sell. They are looking for something that will inspire them to turn their backs on a boring 8-to-5 job that brings them all the security they need. Or an idea that will move them to turn the world upside down so they can shell out the money needed as capital. They are looking for an idea that will push them to take the big leap Sliders-style into a parallel universe they know nothing about. I just stumbled on a one-liner from master marketer Seth Godin that jumped from the webpage to me as I was chewing on some ideas for this blog post.

“Ideas are easy. Doing stuff is hard.”

It’s true. Ideas are everywhere! Entrepinoy for example is amazing. There’s something almost hypnotic about reading one good business idea every day. The Philippine Daily Inquirer every Monday has inspiring articles on how small businesses thrive and survive. Just imagine how many great minds there are in this world. As of July 2007, there are 6.7 billion people on Earth. What are the chances that your one big idea is not being considered by someone half across the globe? Doing stuff is the hard part. Acting on that idea, gearing up for production, learning the ropes, preparing for mistakes, planning and executing and selling, selling, selling – these are the stuff a good business is built on. There are guidelines that will help, however. A P125 book printed on newsprint by the Small Enterprises Research and Development Foundation and the popular GoNegosyo book with classy photos that sells for P280 at National Bookstore have the same recommendations. GoNegosyo of course makes it easier to understand :-) .

It says: Look for market opportunity by finding a business that answers a need. Ask yourself if you have the capability to fill that need. Find out if this activity is something you are passionate about.

Market opportunity, capability and passion, writes Andy Ferreria in the foreword, must exist together like a tripod. Passion is particularly important. Successful entrepreneurs have been known to develop capabilities along the way. Entrepreneurs have been known to make their own opportunities. But passion…that’s something else. With the risks inherent in entrepreneurship, a small business will easily turn into drudgery if it’s not wrapped around something you are passionate about. That one big idea is out there, somewhere. Go find it and more importantly – do something about it. Go take the leap. Photo credit: AFP

As Francis Kong climbed up the second floor of Dôme in Podium, I knew immediately I was face to face with a dyed-in-the-wool entrepreneur. First, he was comfortable in jeans on a weekday at three o’clock in the afternoon. Second, he spoke no jargon. These two things, and his Chinese surname immediately gave me a sense of what I was going to hear for the next hour or so. Or so I thought. The first revelation was that he was not born a wealthy Chinese. “I started from scratch,” Francis says. But he tells of how his father drilled into his mind not to become an employee, even as a kid. “Kahit manager ka diyan, di ka yayaman. Kahit konti kita mo, basta sariling negosyo okay,” he recalls his father telling him. Francis sums up the situation very nicely. If you are dependent on employment, you are dependent on pay and perks. If you are an entrepreneur, you are dependent on earnings, which can be a much more attractive option. It’s a nice thing to preach. Very inspirational, too. It’s not hard to imagine Francis working up a crowd during his seminars very quickly with his well-modulated voice and street smarts kind of smarts, if you know what I mean. But I just had to know, after all the preaching, if he believes that everyone in that crowd has the genetic makeup to be an entrepreneur. “Not everyone can be an entrepreneur. There’s the intelligence quotient and the emotional quotient. There’s also what you call the adversity quotient,” he says. AQ is shorthand for “tibay ng loob and kapal ng mukha”. It refers to a person’s ability to face failure and start again. If your business fails or let’s say you can’t collect from your clients, are you going to quit? Francis says this is the stuff that entrepreneurs are made of – the ability to work hard, eat your pride and fight the odds. “Around 70% of all startups fail. That doesn’t mean you should stop trying. That’s your tuition,” Fancis says. Fortunately, AQ is not something you have to be born with. Francis says it can be developed in a person. An entrepreneur’s mind is really made up of a deep desire to succeed even if it means taking risks and an inner meter that values time and opportunity. “The biggest loss is when you sit down and do nothing,” Francis says. When that happens, the invisible meter of inflation and opportunity loss takes its toll. He explains this concept through the true-to-life story of a young lady who asked him for a job when he was still running a business selling jeans. (I just love little anecdotes.) When this young lady applied for a job, Francis recalled that he didn’t have a position for her. After which, the young lady said she would work for free while she was waiting for other companies to call her. “Baka kalawangin ako, eh wala pa namang tawag,” she says. How do you say no to that? Long story short, Francis took her in and pretty soon noticed that this young lady was working longer hours than regular staff. Not surprisingly, after some time, the store manager was depending on this young lady for strategies in the store. What do you think happened? After eight months, they created a position for her. “There’s one thing we have in common with Bill Gates and John Gokongwei. We both have 24 hours in a day,” says Francis. Time and opportunity. They go together. Inside an entrepreneur’s mind, these two can be the magic combination.

PROFIT is heartless. Everybody in the corporate world knows that. That's why it's not very hard to find people committed to "doing good" as a career, who resign themselves to lives of poverty (or at least minimal comfort). If you are a socially minded entrepreneur, this heart surgeon's experience may give you some ideas. Dr. Devi Prasad Shetty refused to buy the usual profit language. He saw a need and he created a business model to fill that social need. He found a way to use technology so that he can save the lives of millions of Indians at the bottom of the pyramid (so goes the popular phrase), half of whom are children and infants. Just think of that: “McDonaldizing” heart surgery. You would think that he is either crazy or brave. From the INQUIRER.net article:

Every year, two and a half million Indians need to undergo a heart operation. They are three times more genetically prone to heart diseases than Australians, Americans, or Europeans. Yet few can afford even basic healthcare, let alone heart surgery. Currently, those who undergo the operation make up less than half of a percent of those diagnosed. Dr. Shetty's solution is simple yet bold: bring the mountain to Mohammed. His Narayana Hrudayalaya Hospital set up a network of coronary care units in remote government hospitals around India. These are all video-linked via satellite to the hospital in Bangalore -- allowing him to consult patients in far-flung rural areas who otherwise would never have access to specialist medical advice.

Here's a photo of Narayana Hrudayalaya Hospital. Shetty is very interesting as an entrepreneur because he is going where nobody has gone before and he is getting the community to thank him for doing what he is doing. Not a usual thing for company XYZs. And he didn't stop at his first great success. The article also says that Shetty has launched a health insurance program that benefits two million farmers. Schwab Foundation for Social Entrepreneurship in India named him “Social Entrepreneur of the Year” for his exemplary contribution to giving the poorest of Indians access to quality healthcare. Shetty's next vision: get every person to hold a smart card that gives him access to hi-tech healthcare in any part of the world with dignity. When I interview him this October, I'll tell you if he makes profit from his success. I would certainly let you know how he reacts to the question.

EVERYBODY dreams of making it big in his own business, but does everybody have what it takes to be an entrepreneur? Question worthy of a highly paid professor's two-full-hour lecture in the country's best business schools. Personally, I think the better question is: do you have what it takes? A little-known book called "Dreamers, Doers, Risktakers" published by the UP Institute of Small-Scale Industries tells of persons from all parts of the wealth spectrum -- from rags-to-riches dreamers to wealthy doers -- and how they made their dreams come to fruition. Different backgrounds, different training. Different personalities. A more popular book, "Go Negosyo," shows the same thing. What's the entrepreneurial gene that binds them all together? And on top of that gene, what behaviors and market conditions allowed them to build a business that not only made them wealthy, but also allowed them to employ other Filipinos? This new blog called Open For Business is a testament that Filipinos can be entrepreneurs. We may have to fight against years and years of cultural flaws that keep us from becoming dreamers, doers and risk-takers. We may have to train our minds to embrace and accept ways of thinking that might seem different and strange. We may have to accept that not everyone will eventually strike it big. But we can try. We can try to prove that entrepreneur is the one in front of the mirror. So jump in, and join the discussion. Let the idea viruses flow. Photos courtesy of Entrepreneur Bootcamp for Kids