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ELECTRONICS OR tech companies earning between $20 million to $200 million annually have the chance to tap financing to expand their reach and market penetration. DMC Capital Funding, a New York-based private equity growth capital firm launching this January at the Consumer Electronics Show in Las Vegas, is making available much-needed funds to companies that have moved from the venture stage to the revenue stage. This is good news for such companies traditionally tapping debt and equity markets to finance expansion. And further good news: the fund is available for companies outside the US. DMC Capital Funding is part of the Distribution Management Consolidators, LLC group. In the past, it has launched major consumer brands such as Unisonic and Bell South, and sold more than $2 billion worth of products. Andrew Lowinger, CEO of DMC Capital Funding, said the company “has the financial strength and capital resources necessary to provide growth capital and seasoned management to drive growth and success in this period of credit contraction and equity-market upheaval.” “The current credit crisis, as well as reduced consumer spending, has placed many established technology and consumer product companies in a precarious position. These companies may have superior products and significant potential, but have been locked out of the credit markets, leaving them without the capital needed to foster growth or penetrate the shelf space of major retailers,” said Lowinger. “Therefore, many companies are finding themselves without the necessary infrastructure and channels to localize their offering for consumers in disparate regions of the globe. DMC Capital Funding can add value to these already successful organizations in the form of funding, marketing experience and management expertise.”

UPDATE: Editor's note: Added video taken by INQUIRER.net business editor Ma. Salve Duplito. COMTEQ COMPUTER & Business College is one growing enterprise in the Subic Bay Freeport Zone. Started in 1990 as an institution offering computer literacy courses to high school students, it has now become a full college offering bachelor’s degree courses in Computer Science, Information Technology, Accountancy, and Business Administration. It also offers shorter two- and three-year courses in computer programming, animation, and electronics technology, among others. Hundreds of students now go to Comteq wanting to be equipped with the technological know-how needed in the marketplace. What attracts the students to Comteq is the school’s strong on-the-job (OJT) training program and affordable tuition fees. “We want our graduates na may alam na paglabas [ng school] because of OJT,” says John Bayarong, Comteq’s dean. In fact, students have already done websites for organizations. The students have also been joining competitions and have in fact won in some contests already. Here's a video taken by INQUIRER.net business editor Ma. Salve Duplito. Bayarong and Ausbert Joaquin of Comteq Computer & Business College listen with Allan Cruz of Business Mentors Inc. to mentor Willy Arcilla (not in video) as Arcilla advises strengthening Comteq's hold in the market first before venturing into franchising. Because of the projected increase in enrollees, Comteq, a non-stock, nonprofit company, wants to expand the business, either by franchising it or by inviting new investors. They also want to bring the concept to other areas of the country and have Comteq campuses there. They have seen the concept work and know that it will help a lot of students. John says they have the business model but there are still some areas that need fixing. For instance, Comteq does not have a marketing officer. The recruitment of human resources also needs to be improved as they just get fresh people internally; they know that people with external experience will bring a lot of needed insight to the company. Mentor Arcilla suggests focusing on strengthening Comteq as a company first. “Ayusin muna ang operations to be able to franchise later,” he says. Once Comteq’s operations are problem-free, Willy says the people will be the one to go to them to ask for a franchise. "Make Comteq the leading computer and technical school for the masa first." Here are Willy’s other recommendations: 1. Make the mission and vision sharper and clearer. 2. Fix the operations bug. Recruit more highly qualified staff. 3. Go aggressive in marketing. Go on campus tours and target the best students in high school. Take part in symposia to let more students to know about Comteq. 4. Rebrand the OJT program as “Comteq Incubation Lab” or something like that. For every website done by students for organizations, brand this as “Powered by Comteq Incubation Lab.” This is a marketing strategy. 5. Make a business plan. 6. Look into availing of educational grants or fund assistance. Franchising is a fast way of getting the needed funds to expand a business. But there’s a right time and a right way to do it. Let’s follow Comteq’s actions in the coming months and see if they’re on the right track.

AT THE DANGWA Flower Market, some 50-plus vendors sell an array of fresh cut flowers 24 hours a day, 7 days a week. This market has been there for more than 30 years. Retail buyers and those with floral businesses flock to this market for their floral needs. Jay Domingo and his wife Gina run a branch of Pat’s Flowers & Supplies in Dangwa. The main outlet located in Quiapo was put up by Gina’s grandmother in the early ‘70s. It still exists today. As the name suggests, Pat’s Flowers & Supplies does more than just provide flowers: They also make available to flower shops the supplies they need, from pots, ribbons, and other tools of the trade. But five years ago, they started doing retail floral arrangements for consumers. They called this business Flora Grande. Business is brisk on Valentine’s and All Saint’s Day, when sales would be ten times higher than a normal day’s sales. Flora Grande also gets a lot of requests for sympathy floral arrangements, wedding arrangements, and arrangements to decorate stages during school affairs. Jay said they would like to expand the business by putting up a website offering gifts and flowers so OFWs abroad can send these to their relatives in the Philippines. They can even do exports. There is a lot of competition now for Pat’s Flowers & Supplies in Dangwa, and profit margins have become leaner. Jay and Gina are thus faced with a dilemma: Should they still continue Pat’s Flowers & Supplies in Dangwa? Or should they just close it and focus on Flora Grande? The thing holding them back is sentimentality. Gina was raised by her grandmother Pat, and so is reluctant to let go of the business. The couple is also reluctant to take that step as they will not be able to absorb the 12 people employed -- all old-timers -- by Pat’s Flowers & Supplies. Mentor Willy Arcilla sums this up as the couple’s “fear factor -- fear of the future.” How can Jay and Gina address this dilemma? Willy suggests the following: 1. Define your mission and vision. Ask yourself: What do you want to be? A business with P50 million as long as grandma is happy, or a business with P100 million even without grandma’s business? 2. Make a business plan. Putting it on paper will force you to think. “A business plan is not just for multinationals,” says Willy. Study the cost benefit of keeping or letting go of one business. 3. Find out how you can differentiate yourself from other vendors in Dangwa. Jay and Gina said the flowers they use for Flora Grande’s arrangements are different from others’. That can already be the company’s competitive edge. 4. Segment the market. Decide whether you want to focus on institutional customers or retail customers, and whether you want to focus on sympathy, romance, or wedding arrangements. Decide which market you want. “You cannot be everything to everybody,” says Willy. 5. Know your consumer. Once you have identified your target market, find out what he/she likes: his/her favorite color and favorite flowers, then prepare arrangements to suit his/her likes. 6. When putting up the website, beat the top competitor. Show the flowers and the benefit one can get from them. “Find the human emotion -- it is the highest form of consumer need.” Think of Kodak offering not just photos, but memories. What would happen if Jay and Gina follow Willy’s recommendations? Abangan! :) Editor's note: Photo courtesy of Jay Domingo

UPDATE: Editor's note: Added video taken by INQUIRER.net business editor Ma. Salve Duplito. DELILAH GALANG is a retiree with a mission. Having seen how cancer can take away the lives of people dear to her, she has, since 2000, embarked on a personal mission to offer Filipinos an alternative way to treat and care for cancer patients. This alternative way is the Gerson therapy introduced by the German physician Max Gerson in the 1920s. Gerson therapy is an all-natural non-toxic treatment program using organic foods, juices, coffee enemas, detoxification and natural supplements. Dr. Gerson founded the Gerson Institute based in San Diego, California to spread the word about Gerson therapy and to train caregivers to administer the therapy program. How she got into Gerson therapy is interesting. Delilah’s nephew was just six years old when he was diagnosed with advanced non-Hodgkin’s lymphoma. Doctors gave him only a 25-percent chance of survival. He was having chemotherapy every three weeks. After losing her mother to pancreatic cancer, Delilah didn’t want to lose her nephew to the dreaded disease. And so she researched on the Internet and found out about Gerson therapy. The success rate for treating cancer using Gerson therapy is reportedly 85 percent. The more she read, the more she wanted to learn, and so she enrolled in the practitioners’ intensive training program in San Diego. She became the only licensed practitioner here in the Philippines. Applying what she has learned on her nephew, the boy got better. After six months of therapy, his blood was cleared of cancer. Today, he is 19 years old and has not been back to the hospital ever since. If her nephew got well on Gerson therapy, Delilah knew many more people can benefit from the alternative therapy program. And so in 1990 she established the Cancer Council of the Philippines, a charitable organization. The organization has since been providing financial support to indigent patients. Delilah has also been practicing the Gerson therapy program on some patients. Now here’s what she wants to do: Raise enough funds. These funds will be used to train more people as caregivers of the program. She also wants to get government accreditation for that caregiving training. She also wants to have an office and a wellness center where patients can come and relax. The funds will also be used to build the organization’s website so more people can know about it. Right now, Delilah is Cancer Council’s one-woman team. 9( But how does one raise funds for a cause when there is donor fatigue? In the Philippines, alternative therapy is also not as well-received by people as traditional medicine. Mentor Willy Arcilla recommends the following: 1. Raise the level of awareness about Gerson therapy by using mass media: TV, newspapers, and even websites. Doing so will educate people about the benefits of Gerson therapy. 2. Network with other cause-oriented organizations. Some organizations may have needs that Cancer Council of the Philippines may provide, and so a “swap” can be made for funds Cancer Council needs. The business is laudable, says Willy. Let’s hope things work out in the coming months as Delilah does her homework.

UPDATE: Editor's note: Added video taken by INQUIRER.net business editor Ma. Salve Duplito. Attention to detail, ability to multi-task, tendency to think hard – many times – before taking a big leap, and that thing called women’s intuition. These things have allowed Filipinas for many decades to excel in entrepreneurship. With the changes of the times, women have become more outspoken, assertive and confident. They are more vocal and visible, proving all the more that in the coming years more and more women will be entering the world of business. The Good News Kapihan yesterday in Makati City was bustling with women power. The speakers themselves were the statement. In this video, Elizabeth Lee (left), executive vice president of Universal Motors Corp. and president of the Chamber of Automotive Manufacturers of the Philippines, and Ma. Aurora Geotina-Garcia, chairman and president of CibaCapital, explain why more women are going into and becoming successful in entrepreneurship. (BootsGeotina-Garcia and Anj Decena) There was Ma. Aurora Geotina-Garcia, former top SGV “honcho” (in quotes because the word sounds so much like “macho”!) who is now president of Women’s Business Council and holds the title chairman and president of CIBACapital Philippines, Inc. The other speakers were Elizabeth Lee, president of the Chamber of Automotive Manufacturers of the Philippines, Inc. and executive vice-president of Universal Motors (and you thought trucks and engines are guy things?), and Anj Decena, glowing in her motherly role, but tough as a businesswoman. Anj started Hotshots (flame-grilled burgers, not KFC) but more importantly has a group called Network For Enterprising Women. Check out my article ‘Chauvinism has been broken’ in business – women’s group. Excerpt below:

MANILA, Philippines -- Women in the Philippines are becoming more and more entrenched in business, successfully navigating the world of golf, cigars and big deals, women business leaders said Wednesday. Ma. Aurora Geotina-Garcia, president of the Women’s Business Council, said higher need for double incomes in many Filipino families would pave the way for this trend to continue. “I think the macho chauvinist has been broken,” Garcia said during the Good News Kapihan at Figaro in Makati City. Filipino families are struggling with a worsening job picture and escalating prices, forcing many women to go abroad for better pay. “Now the women does the work and the husband becomes the houseband,” Garcia said. When overseas Filipino workers come home to their families with some savings, a common decision is to set up their own business because local jobs cannot match their overseas income. Pacita Juan, owner of Figaro, a company in a male-dominated industry, pointed out that husbands don’t seem to mind staying home anymore. Elizabeth Lee, president of the Chamber of Automotive Manufacturers of the Philippines Inc., and executive vice-president of Universal Motors Corp. pointed out that 51 percent of entrepreneurs in the Philippines are women. Read more here.

51 percent. That’s a pretty amazing figure. Many businesses are also started by women and taken over by their husbands when the businesses grow bigger. It appears that women are good in creation and men are good with expansion. And to think universities like the University of Asia and the Pacific initially allowed only men to enroll in their entrepreneurship courses! There are still big hurdles, though. Philippine banks require husbands’ signatures in loan documents. So middle ages, huh? Family demands are high on the list, too. For women entrepreneurs out there who want more inspiration and enlightenment, go to the Philippine Trade Training Center today for a whole-day seminar on Women to Women Mentoring organized by the WBC. Speakers include the Philippine-born, US-based industrialist Loida Nicholas-Lewis, Citibank Countery Business Manager Nina Aguas, PNB chairperson Flor Tarriela, Universal Motor’s Lee, Sun Microsystems Cynthia Mamon, ABS-CBN’s Maria Ressa and many more. See you!

This article is too important to miss for those who are planning on starting a business or thinking of expanding an existing one. But don't forget, this is still in the works:

MANILA, Philippines -- President Gloria Macapagal-Arroyo has ordered a study on the feasibility of cutting interest rates on government loans to micro, small and medium-scale enterprises (MSMEs), an official said Thursday. Presidential Management Staff Cerge Remonde said that he had asked officials involved in lending to MSMEs to do the study after the President issued the directive. “Only last week I was telling them to find ways and means to bring down further the interest rates that we can charge so that really this can be more attractive to people,” Remonde told reporters at a news briefing. Remonde, who is the oversight official for MSME development, said President Arroyo issued the directive because of “her desire to have the program reach and help more people.” Government financial institutions in a program called SME Unified Lending Opportunities for National Growth charge interest of 9.0 to 12.0 percent per annum, said Benel Lagua, president of the government’s Small Business Guarantee and Finance Corp. Loans to micro-enterprises carry 10-12 percent, said Edgar Genoroso, president of the government’s People’s Credit and Finance Corp. Micro-enterprises usually borrow P5,000 to P10,000 but can go as high as P50,000. Small and medium-scale enterprises (SMEs) borrow P200,000 to P5 million. Lagua said his office was trying to negotiate with the Department of Finance to cut its cost of money. “Once we are able to do that, we will pass it on to our SME borrowers,” he said. Genoroso said his office had to consider “our cost of funds.” Edited by INQUIRER.net

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!

What’s the best way to find out how to nail that loan that you need to expand your business or develop your product? Ask the bank of course! BPI Foundation, which is turning 30 next year, helps small to medium-scale enterprises through seminars and mentoring sessions on how to get loan applications approved. Banking is, after all, a business. Banks can’t just lend to you because they want to help. The loan officer you will be talking to will have to justify their decision to lend money to you. What does he have to show for his decision? He will need your books, your cash flow statements, your business plans, your business projections, and your product designs. In short, documents that not a lot of you small businesses have at the tip of your fingers. It doesn’t have to feel like crossing EDSA in the middle of the night without the help of the pink overpass, BPI Foundation is saying. A program called “Show Me, Teach Me” has BPI Family Savings Bank employees reaching out to communities near their branches to teach them such things as basic accounting. This project is also in partnership with the Department of Trade and Industry. I checked with the BPI Foundation office here in Manila if this is done on a scale that can make a real difference. I am all too aware that this can look good in an annual report, but not much on the ground. Officials said they themselves go down to ground level and teach accounting in Filipino. It makes sense at the business level because this activity also helps the branches find small entrepreneurs that can turn into big depositors in the long-term. How I wish, however, that BPI Foundation has a list of contact persons in the provinces on their website so that people can look them up and find out how to join these seminars. The Internet nowadays is a great resource, and you don’t need to be a rocket scientist to come up with ways to use it more effectively! Sigh. So those interested will have to make do with their Contact Us website. Here is the link: http://www.ayalasocialinitiatives.com/getinvolved.asp. If you think you need this kind of help, join those seminars. After all, they’re free. Oh, and another interesting tidbit. BPI Foundation has announced that it is developing a trainor’s kit that will help families of overseas Filipino workers cope with the escalating social cost of migration, gain financial literacy, and engage in entrepreneurial endeavors. The trainor’s kit is in partnership with the non-profit Atikha Overseas Workers and Communities Initiatives, Inc. This kit will be unveiled during its 30th anniversary celebration next year. Read more about BPI Foundation in this article and in this website.