I picked up this little pamphlet in Cebu, City that can be easily put inside your wallet while on coverage last year. It has little snippets of wisdom that any microenterprise owner can use to improve his business.
Prepared by The Academy for Creating Enterprise, an organization that trains small business owners nationwide, the pamphlet is one of those little wonders that has helped thousands of individuals across the country develop the confidence to step into entrepreneurship.
So here are ACE’s 12 rules for microenterprise success:
1. Practice separate entities
Keep business cash and products that you sell separate from your personal money and family use. No family member or employee should ever take money or goods without paying for them. One good way to make this work is to regularly pay yourself a livable salary.
“Attitude determines altitude.”
2. Start small, think big
Some want to get really big, really fast. Too rapid growth, without experience or money in reserve, can kill a great business faster than almost all other mistakes. Learn from costly mistakes when the business is small, then grow at a sustainable pace.
“Anything the mind of man can conceive, it can achieve.”
3. Differentiate your business
Selling the same product as your neighbor is bad for business as it drives prices down which then hurts everyone. Make your business different by carrying unique products, displaying your products differently and not locating near your competitors.
“The harder I work, the luckier I get.”
4. Buy low, sell high
To make money in business you must sell something for more than you paid for it. The difference between the price you pay and the price you charge for a product is the gross profit or margin. The bigger the difference, the more money you will make. Negotiate with suppliers for lower prices.
“Winners speak in specifics, losers speak in generalities.”
5. Buy on credit, sell for cash
Many owners have this backwards; they buy in cash and sell on credit. If you can get your supplies on credit and collect cash from your customers at the time of sale, you can carry a lot more inventory and possibly turn it faster. You must, however, pay suppliers on time.
“Compete with someone, even if it’s yourself.”
6. Turn your inventory often
If you buy a product for P100 and sell it for P300 you earn P200. If you do this 10 times a week, you earn P2,000 that week. If you do this 10 times a day, you earn P2,000 that day. Small inventory turned everyday is best.
“If you can’t measure it, you can’t manage it.”
February 2nd, 2009 at 9:19 am
[...] If you are interested in part 1, click on this link. [...]
February 1st, 2009 at 8:45 pm
When do we get the 2nd installment! suspense naman.Very useful advise indeed.
January 30th, 2009 at 8:39 am
in times like these when job losses are so prevalent here and there, an article such as this is so essential to help people find alternative by engaging into business. please send me the whole article. thank you
January 30th, 2009 at 12:33 am
very nice article. the tips are short & straightforward, it goes straight to your heart & mind. In this time of crisis in the electronics industry, we really need some tips in how to improve our system. Many times, you already know these advices but it really helps a lot if someone will remind of you of these things. i hope you publish the next 6 tips asap for us to read. thanx!
January 29th, 2009 at 4:27 pm
it is very interesting article.could send me at einskak@yahoo.com a compelete 12 rules..maraming salamat