January 2008 Archives

Great article today from SME Insight. Read the excerpt:

There’s a new food craze in town, and if you haven’t heard of it yet, you’re either out of touch or you’re getting too old. That’s because since 2006, many young kids, from grade school to college, have been saving up their baon for bowls of cereal they can buy in school. And a lot of yuppies troop to the nearest outlet for their cereal fix too. So what’s with the bowl of cereal, you ask. At Cerealicious, a cereal bowl is not just a cereal bowl. True, cereals are drowned in milk here, but the toppings go from fruits to chocolates to puddings to coffee jelly and more. In fact, Cerealicious offers 40 cereals and 40 toppings and you can mix them any way you want to or go for any of the 20 certified “blockbuster” mixes cheerily named after blockbuster movies. Thus, you can munch on Charlie and the Chocnut Factory today, order Nutting Hill tomorrow, and snack on Oreo Afraid of the Dark the day after. Nothing like it has been offered yet in the country, although cereal bars and cereal cafes have been mushrooming in the US lately. This is the reason why a group of young people—friends, classmates and officemates all aged 24 then—banded together in 2005 to offer that concept here.

Read more here. Key learnings from Cerealicious: 1. Offer something new and unique 2. Educate the market 3. If at first you don’t succeed… 4. Consider franchising after more than a year of successful operation 5. Don’t poo-pooh the creation of an operations manual 6. Think carefully how to improve the backend system 7. Stay on top of marketing gimmicks Hope these give you a little bit of encouragement! Good luck on your businesses. (Photos by Shaira Luna, courtesy of SME Insight.)

Success takes team effort. We see this in nature all the time. Human beings, however, sometimes step on others to succeed, not knowing that doing so takes him far away from real success. Not in Open For Business. We just announced today that marketing professional Willy E. Arcilla will mentor eight INQUIRER.net readers who need help in growing their businesses, for one year, for free. Read our news article on the business mentoring activity:

MANILA, Philippines -- MARKETING professional Willy E. Arcilla has agreed to help eight readers of INQUIRER.net who need guidance to grow their start-up businesses in a business-mentoring activity for the publication’s entrepreneurship blog called Open For Business. Arcilla will meet with ten selected readers once a month for 12 months, and help them with their strategies in positioning and marketing their products. The progress of these businesses for the duration of the exercise will be published in Open For Business so that other entrepreneurs can benefit from them. A panel of judges that include Arcilla, INQUIRER.net editor-in-chief Javier Vicente Rufino, multimedia editor Joey Alarilla and business editor Ma. Salve Duplito will choose which readers will be introduced to Arcilla. Readers who are interested in joining the mentoring activity should have a business that is at least one year old, need help in marketing and selling strategies, and who are not in the high-technology or engineering sectors. Readers may send the following information to lightdream (at) gmail (dot) com: name, company name, location, year/s of operation, product or service description and description of business difficulties. Arcilla is the president of Business Mentors, Inc., a newly formed management consultancy firm, and concurrently regional director of ZMG Ward Howell, a provider of human capital solutions. He is also a professional lecturer in business schools. He has worked as an expatriate for 18 years across the Asia-Pacific region for leading multi-national corporations and Philippine conglomerates.

So send in your applications! Who knows, you might be one of the eight. :)

(Ants know when to come back to places where they can find food. How do you help your customers come back to you?) Near my place, there are around four sari-sari stories all in one row and two bakeries that sell morning hot pandesal. When you’re in that kind of market, what do you make sure buyers will choose you over the other store? The next bakery and convenience store is, after all, just a few steps away. Logically, I thought the answer is simple. If your price is lower, they will come to you. Not so. From my vantage point, I saw that consumers bought from stores with a “tindera” who had a pleasing personality and who can share a piece of gossip and a smile while fishing out a candy bar without looking. It was no different from my experience when I ate lately at Mamou, a restaurant on Serendra in Fort Bonifacio. That extra friendly chat with the owner of the restaurant and her mom (I think) made me want to come back. Somehow, it made the food taste better. Being an entrepreneur requires hands-on attention. I know this from experience, when my small business many years ago folded up because I failed to manage it well. Believe me that warm smile and extra small talk will want your customer to come back again and again. Assuming, of course, that there's no problem with the product you're selling.

I stumbled on this short film by Nic for www.monday9am.tv that shows an interview with one of my favorite authors Seth Godin. There's a lot of talk in the video about curiosity, faith, getting stuck and why one of the smartest things done by the smartest people in the world was turn off their television. But what I really want to share is how he talked about attitudes towards risk. He says:

Curious is the key word... It has to do with a desire to understand, a desire to try, a desire to push whatever envelope you are interested in... [Curious people matter because they] are the ones who talk to the people who are in a stupor. They are the ones who talk to the masses in the middle who are stuck. The masses in the middle have brainwashed themselves to think that it's safe to do nothing.

Seth Godin is a genius at creating strategies to market stuff. He wrote bestselling books such as Meatball Sundae, The Dip and All Marketers Are Liars. Imagine what would have happened if he was not curious enough to try out his ideas. But it wasn't easy for him, too. He further explains:

It's easy to underestimate how difficult it is for someone to be curious. For 7, 10, 15 years of school you are required not to be curious. Over and over the curious are punished....It's more about a 5, 10, 15-year process when people start finding their voice and they start realizing that the safest thing they can do feels risky and the riskiest thing they can do is play it safe.

Repeat after me: "The safest thing we can do is feel risky and the riskiest thing we can do is play it safe." How does that sound? Last week, I observed several small entrepreneurs (just your run of the mill ones) and discovered that even for something as small as a fruit stall, they had to be curious and they had to learn not to play safe. Entrepreneurs cannot afford to get stuck in the middle, in a stupor and just let the world pass by because it feels safe to do nothing. If you are one of the masses in the middle who are slowly starting to get out of that stupor, and realize that you want to be an entrepreneur, you've got to make a conscious effort to resist playing it safe, as Seth experienced. It will not just happen. It will require curiosity, will and a healthy dose of courage.

Why is the Bank of the Philippine Islands promoting science and technology? In this video, BPI vice-president Florendo G. Maranan, who was chairman of the BPI-DOST awards committee for the bank's "Best Project of the Year" awards explains that science and technology is a catalyst of business and the economy. Just think of all the outstanding Filipino scientists out there. They need angel investors who will believe in their inventions and turn these into living, breathing, "employing" national treasures. Who knows, you may be investing in the next Microsoft?
Online Videos by Veoh.com

I made a very interesting discovery. Filipino inventors are not rare. In fact, we have quite an impressive roster of them in some websites. Google “Filipino investors” and here are some of the information you would find. Inventions range from incubator, fluorescent lamp, a water-powered car, the karaoke system, a videophone, erythromycin, a chip that makes computers work a lot faster and the Ethernet controller chip that made the Internet possible, and a revolutionary fuel half-composed of water. (Source, DOST website) So why haven’t we heard of them? Why do we know more about Microsoft and Post-It and other products that are were not invented in our own shores? Fortunato de la Pena of the Department of Science and Technology said in this article I wrote that only 15 percent of Philippine entrepreneurs use innovative technology. “We are too good at copying and adapting,” he says. What a waste of talent. Are you ready to break the trend? Here are some new researches from students that could present new opportunities. At the BPI Foundation-DOST search for “The Best Project of the Year” last week, officials chose three outstanding researches in pioneering areas.

“Carla Gisela Ysabel P. Concepcion, a graduating BS Molecular Biology and Biotechnology student at UP Diliman, won first place for her research on tracking the growth of cancer cells in the human body. Second place was Christina Lora M. Leyson, another graduating MBB student at UP Diliman, for her research on detecting a virus that kills abaca. Juan Paulo M. Antonio of the University of Santo Tomas won third place for his research on the inedible and common Bitaog seed as an alternative source of biodiesel.”

BPI has been recognizing budding scientists for almost two decades as part of its corporate social responsibility efforts. Makes you wonder why a bank is into science projects? Think of it this way. More innovative companies, more clients :). Strategic thinking. Back to the bright, young students I met last Friday. It was the light in their eyes that caused me to hope that someday, these students will find a mentor to help them develop their products and market them to the world and not just sell the idea to a foreign company. How I wish you are the one! Inedible, common Bitaog seed (Photos by Revoli Cortez, courtesy of BPI Foundation)

Few businesses can operate without using a computer, and computers need software to operate. Does it still make sense to cut corners by using pirated software? Consider the following figures: 1,962 – the number of raids made by the Philippine Anti-Piracy Team 3.3 million – optical disks seized in the raids P876 million – estimated street value of optical disks seized 206 – computers seized as of November last year 15 – sacks of pirated CDs of software valued at P14.3 million seized The team claims its campaign will affect both small and big businesses. I checked with a few big corporations this month and it seems that their IT teams have begun the purges in earnest last year. They can well afford to lose computers and CDs, but damaged reputations will take a lot more time to repair. Small businesses are the ones that can get really hurt if caught. I didn’t care about piracy before. I loved buying pirated CDs and displayed them as trophies of being “smart.” But having worked with publishing firms lately opens your eyes to the perils of piracy like nothing else can. ☺ Besides, Microsoft and other firms have knocked down their prices and buying licensed software might be better than losing your entire computer, plus paying fines.

How hard is to be a full-time employee with a business on the side? For many of us, it will not be practical to leave our full-time employment and depend totally on our small business. This single mom found that it was very tough, yet she succeeded due to hard work, persistence and because she had another quality that is so important to entrepreneurs – the ability to find help when the going gets tough. Of the many entrepreneurs I interview, I notice that a common trait is the ability to network and find the person who can provide the needed help at the right time. This is especially important for those whose time is divided between a full time employment and a part-time business. When Fe Frialde was talking in the article about her difficulties in financing, I found it quite striking that she went directly to the head of the communication department of her first client – the International Rice Research Institute – and told him about the problem. Instead of admitting to defeat, she met the problem head on and communicated her difficulties. Result? The head of the department gave her a downpayment that helped her with the cash flow issue and allowed her to deliver the goods on time. Lesson learned: don’t be afraid to communicate and face the problem head on. Entrepreneurs are strong willed and open-minded. They don’t mind asking for help.

A few months back, a friend proposed a franchise business to me that cost only P10,000. The business plan would allow me to choose whether to get a waffle stand, a burger stand and some other options I don’t recall anymore. She had forked over her money to the company before she met with me and she told me it would be a good business for both of us. I winced. I didn’t want any part in the business. First, it had no track record and sounded too much like a network marketing business that was trying to sound like a franchising business. I know some very good companies that use network marketing strategies, but when there’s deception involved – even just a little bit – I know from experience that it’s best to stay away. This article from MoneySense talks about five franchising myths to watch out for: Myth #1: Bigger is better. Sure, bigger companies have stronger marketing and more sophisticated systems. But there are smaller franchisers in the market who provide more “tender loving care” to their franchisees. Myth #2: Cheaper is better. You might get tempted to buy the first franchise you can afford. But be wary of little-known franchisers. “Ilan na ba `yung tindahan nila? Mayroon na ba silang commissary? Ilan na ba `yung franchisees nila? And be wary of scam artists. Many try to sell you concepts that are too good to be true,” Rommel Juan, president of Binalot (also the PRO of the Association of Filipino Franchisers, Inc. [AFFI]) cautions. To make sure you don’t get scammed by fly-by-night operators, check the members of organizations like AFFI (caters mainly to local businesses) and the Philippine Franchise Association (addresses both homegrown and foreign businesses).   Myth #3: Waiting is better. Dare to be the first franchisee in a system – that is, after your thorough research shows your prospective franchiser is established and reputable enough. There are quite a number of companies with a long track record of success in the market but have just started to open their business to franchising. Consider them.  Myth #4: A franchise makes it easy to get financing. Generally, lenders are more likely to finance franchises than unknown startups, but they won’t necessarily believe in you or the franchise you choose. With that, Rommel suggests that if you have minimal capital, tap your family and friends, or approach institutions known to help small businesses like Small Business Corporation and Planters Development Bank. “If you’re starting with a small fund, better prepare to lose it. There are many ways to tap funds basta, babayaran mo sila pagkatapos,” Rommel ends. Myth #5: A franchise always spells success. A franchise’s success rate goes up to 95%, according to the US Department of Commerce, but a franchise alone will not instantly ring your cash register. Any venture involves risks, so work together with your franchiser to increase your chances of success. “We really screen our applicants. Hindi dahil may pera ka, puwede ka na mag-franchise. You should have the passion. Gauging the success rate of franchises, as expected, those who are more focused are more successful,” Rommel cites.   To give you an idea of the success rate among Filipino franchising businesses, here are some figures from another franchising group, the Philippine Franchise Association: Plus some figures from a USAID-funded study on high growth areas in franchising: Hope these help all of you would-be entrepreneurs out there. Good luck!

We received this question from Mr. Edwin Catindig in response to my blog post on how to increase your chances of getting that bank loan approved.

I am interested in getting a loan for my projects next year. I want to know the ins and outs on how to get a loan. Can I use an “APPROVED PURCHASE ORDER” from my customer as a collateral for my loan or what other options can I avail? My expected loan amount is approximately P2 million and what collateral can I offer to the bank in order for my loan to be approved. Thank you and I hope to hear from you soon. Edwin Catindig MJJP Enterprises

Here is BPI’s response: Mr. Catindig's purpose is one of the many purposes of our loan product called Property Equity Credit Line (PECL). It is a credit line that can be accessed via checks. Once the PECL of the borrower is approved by our Credit Committee, we provide him with a PECL checkbook consisting of 50 leaves instead of giving him promissory notes to sign. The PECL checks the borrower issues become his promissory notes. Very convenient, isn't it? Our PECL is collateralized by deposits, real estate, selected blue chip shares of stocks, selected club shares and/or AMTG investment products. Mr. Catindig may call me up for further details. Regards to you and Happy New Year! Tony Abad BPI Note from Salve: Mr. Catindig, please email me at lightdream (at) gmail (dot) com for Mr. Catindig’s telephone number. Good luck!

(Photo from Agence-France Presse) By J. Randell Tiongson, RFP® Personal Finance Educator I was thinking of a New Year's Resolution for 2008, something I can choose... then not follow, haha! In my hobby forum (www.reefphilippines.com), someone asked us about our New Year's Resolution and one wittingly answered that he will only make one, that is not to make any resolutions -- funny guy. Seriously though, this is a great time to reflect on what I want to do for 2008. I want to pursue my entrepreneurial endeavors for 2008. I have been happy with my career these past few years. I have a job I really love and I work with a lot of people I really like. I am thankful for what I have now... how many people can really say they like being an employee? I actually sincerely do. If only I get that promotion, then everything will be perfect (I really hope my boss reads this, haha!). Now if this is the case, then what seems to be the problem? Well, there's a tiny voice in my head that keeps on telling me that I can also be a successful entrepreneur. I grew up in an family of entrepreneurs. I am the lone employee in my family. In a brood of about 45 cousins in my mother's side, there are only about 10 employees, maybe even less. My siblings can’t comprehend the concept of vacation leaves! That voice that keeps telling me to set up my own business is somehow rooted in my subconscious. There are times that I am happy that I am employed when I see my siblings go through some business reversals but I still feel that I also have the smarts to be an entrepreneur too. I tried to go into business when I was much younger but I lost big time in that business and I swore never to go back into business again. I don't know if I am entering into some mid-life crisis but this itch is nagging me. So for 2008, I have resolved that I will, once and for all, quench my thirst to give the entrepreneurial run a good try. I'm not sure if my many years in the financial services industry will be a plus or not. My years in insurance sales can be viewed as being in business, but somehow I don't think that’s exactly the same. I started to lay the foundations of some business endeavors in 2007 and this year, I hope to see it bear fruit. What was the catalyst that started the ball rolling? Let me tell you a story. I arranged for an interview of Francis Kong by Salve Duplito (of Inquirer.net) some months ago. During the interview, I kept on hi-jacking the interview as if I was the journalist (sorry Salve) and in one of my inquiries about the Francis’ success, he mentioned that it was because of leveraging that he got to where he is right now (Francis Kong was foremost a successful businessman prior to becoming a sought-after speaker and training expert). He said that he had great ideas but he lacked capital -- leveraging allowed him to hook up with people who were willing to jump into business with him and the rest, as they say, was history. That fateful interview started to plant seeds in my mind. Once I opened up my mind to the possibility, ideas gushed out and opportunities started to open up. I was overwhelmed. Rather than spend time over-analyzing things, I started doing something about it. My boss once told me it is easy to get bit by 'analysis paralysis'. I started to think about getting into businesses about my passions in life and work with people I really look up to and/or share my passions with? I can't really talk about them yet as we are still in the process of executing our plans... but we've laid down the foundations and are about to start seeing our plans in action. I have three major endeavors planned... one is already running and another is about to start next week. The third endeavor, the biggest one of them should be a reality by the middle of the year, assuming things go as planned. I am overwhelmed with all these considering I hardly put up much capital. Francis Kong was right. Leveraging really works! It took some time to realize the Lord really has a lot of things in store for me. All I needed to do was ask! Is it that simple? Yes, it is. Being surrounded by entrepreneurs also helps you think clearly... you start thinking of opportunities rather than doubts. I'm fortunate to be friends with good business people, their energies really rub on you. Our new forum http://www.income-tacts.com/ has so many discussions on business ideas aside from the usual financial planning and investment threads. I recommend that you go there and read the posts. They are well worth your time. You might be wondering about my job. I'm glad to say that despite starting those endeavors, I managed to have an extremely productive year, hitting and surpassing all my objectives and have began embarking on bigger objectives in 2008. I'm having the time of my life as an executive and I don't think my employers can complain with my output. Will I quit my job? I don't think so -- I love it too much! However, I can also find fulfillment in pursuing my entrepreneurial spirit. I hope I can have my cake and eat it too! With the help of others and the guidance from above, I think we can. Here's to a fruitful 2008! * J. Randell Tiongson is a director of the Registered Financial Planning Institute and has been engaged in the various facets of the Financial Services Industry for nearly two decades. He is the co-founder of www.income-tacts.com with Efren Ll. Cruz, an inter-active site dedicated in the financial literacy of every Pinoy.