10 tips to thrive in a competitive market
Sunday, November 27, 2011
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Four entrepreneurs interviewed for this report— Brian Quebengco of the industrial design firm Inovent Inc., Dondon Atayde of the events company Wishcraft, Richard Cruz of the real-estate consulting company INSPIRE, and Jonathan Dee of Alliance Tuna International Inc.—all agree that instead of yielding to the stress caused by economic instability, SME owners and operators should see the situation as a challenge for their businesses to do even better under great pressure.
1. Know your strengths
Quebengco: “A strength is an activity or talent that makes you feel good while you are doing it, and leaves you energized after,” he explains. “A weakness, on the other hand, leaves you stressed out and tired. Instead of trying to DIY [do it yourself], you need to get partners who are strong where you are weak. You need to build a strong team.”
Cruz: “Instead of spreading the resources of the company thinly, go back to your strengths as a company and focus your resources there,” he explains.
2. Share the load
Quebengco: “Know something about accounting, but if numbers leave you drained, hire an accountant,” he suggests.
Dee: “When my company (it was then called the First Dominion Group) collapsed during the 1997 Asian financial crisis, I found great relief from stress by being with a supportive group of friends and by spending downtime with his family,” he said.
3. Respect the boss
Atayde: “Even if my partners and I have an equal interest in the company and we sometimes clash in the boardroom, we always respect the chain of command. At the end of the day, we are five partners, but there is only one boss.”
4. Stay debt-free
Atayde: “We resisted being greedy and splitting the profits right away when we started,” he says. “We grew the business slowly, a process that allowed us to learn the business better.” The result, he says, is a debt-free company with a very sizable capital base.
5. Protect your capital
Cruz: “Capital is essential in starting a business and protecting that capital is vital especially with the practice of many clients today of paying three to six months after service is rendered to them.”
6. Spend wisely
Atayde on how they grew Wishcraft: “The capital we had put back into our business helped us expand from being simply an events company into a holding company, with businesses in manpower promo activations, staging, rigging and displays, and logistics and vehicle rentals. We are able to keep our costs down because when you own related businesses, you can share resources. In any case, we are cautious about sharing the dividends even until now and would rather invest our capital in new businesses.”
7. Go beyond cost-cutting and strengthen the brand
Atayde: “The old adage, ‘Cut costs to maximize profits,’ still holds true,” he says, “Every year, therefore, we always make it a point to examine where we can cut costs.”
Cruz :“Instead of simply cutting down on advertising, it may be good to study your brand and find a way to make your clients or your customers feel that you care about their situation. In this manner, you can market or advertise your product more effectively to your customers.”
8. Don’t dwell on negatives
Quebengco: “What holds you back or propels you forward is your belief,” he says.
Atayde : “Business is all about opportunity,” he says. “When you’re on the lookout for opportunities, they will present themselves. Dwelling on the negatives will blind you to the good things coming your way.”
9. Look within and make the hard decisions
Cruz: “An internal failure can be a character flaw like laziness or greed, a loss of drive or passion, depression, or simply doing too much too soon. The ability to honestly assess one’s self at all times can alert one to an internal failure before it becomes detrimental to the business.”
For his part, Dee shares his experience as a once floundering entrepreneur: His First Dominion Group had borrowed heavily in US dollars so it could expand and acquire other companies. This exposed the company to a foreign exchange loss of up to P1 billion when the currency exchange rate went up from P26 to P43 to the dollar, and then to over P50 to the dollar.
When interest rates then rose to 30 percent, Dee’s company—at the time considered the second largest exporter of canned tuna in Asia—got starved of badly needed working capital. He says there were no shortcuts to surviving the crisis, which lasted about six years. “We had to make hard decisions and swallow our pride,” he says. “From a work force of 6,000 in 1996, we shrank to 600 in 2002. From five operating factories, we retained only one.”
10. Pick yourself up
Dee: “If you know your business and are committed to it, you will no doubt find a way to bounce back,” says Dee. “You need to pick yourself up every time you hit the pavement.”
Indeed, in 2003, Dee re-established his tuna canning and export business as Alliance Tuna. Today, the company has a strong balance sheet, zero long-term debt, and is listed as the most profitable tuna packer in the country, with plans to expand operations not only in the Philippines buy also to Indonesia and New Zealand.
source: entrepreneur.com.ph
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