Showing posts with label Business. Show all posts
Showing posts with label Business. Show all posts
Lance Gokongwei - Commandments on Family Business
Posted On Saturday, March 24, 2012 at by Sun Jun
Running a family business isn't easy. In fact, in business circles, many people talk about how the 1st generation start the business, while the 2nd generation makes it grow, only to be brought down by the 3rd generation. Here are a few tips from Lance Gokongwei, president of the JG Summit Group, one of the successfully-ran family businesses in the Philippines. Great lessons to follow for those who are looking on to build their business empire as well.
In summary, the unwritten commandments of the Gokongwei family are as follows:
Lance Gokongwei - Commandments on Family Business
Posted On at by Sun JunRunning a family business isn't easy. In fact, in business circles, many people talk about how the 1st generation start the business, while the 2nd generation makes it grow, only to be brought down by the 3rd generation. Here are a few tips from Lance Gokongwei, president of the JG Summit Group, one of the successfully-ran family businesses in the Philippines. Great lessons to follow for those who are looking on to build their business empire as well.
In summary, the unwritten commandments of the Gokongwei family are as follows:
Business Success Tip: Pricing and Quality
Posted On Friday, September 24, 2010 at by Sun JunFrancis Kong is definitely among the best inspirational and motivational speakers in the country. If you haven't seen his blog yet, you should visit it and subscribe. I'll provide the link in this post.
In a recent post entitled "A Lesson From A Tea Business" he illustrated the importance of charging accordingly and delivering quality to help sustain a business. A friend and I have been agreeing on this matter for quite some time now. Both of us are from Davao City but we occasionally come to visit Manila. We noticed that prices in restaurants are way more expensive in Manila compared to Davao. On the average it is 3 to 4 times more expensive. This however, does not discourage us from splurging occasionally and trying out the sumptuous meals. And the only reason we give is because of the quality. The quality of the food and the ingredients, albeit being very expensive, are definitely much better here in Manila. We reasoned out that if only Davao restaurants provided the same type of quality then we wouldn't hesitate to spend as much in Davao as well. I'm not saying that all Davao restaurants serve food of poor quality, it's just that restaurants should charge accordingly with the quality that they deliver.
The anecdote comes with a punch line at the end of the story which is ingenious. Go ahead and read the entry after the jump.
A Lesson from a TEA Business
by: Francis Kong
There’s a sign on a small-time lemonade stand:
"Lemonade 25 cents a glass. Special offer: 10 cents a glass only if you bring it back fast enough so I can use the ice again." Well it looks like this boy knows how to do cost cutting at his young and tender age.
Let me share with you another story.
Benny had told all his friends about the delicious steak he'd eaten in the newly opened restaurant the day before. So they decided to go down there and see if it was really as large and delicious as he said. But much to their disappointment, the waiter brought them the tiniest steak they'd ever seen.
"Hey waiter!" Benny barked. "I was in this restaurant yesterday and you served me a big juicy steak, and now today, when I've organized a party, you serve such a small one." Why is your business so inconsistent?
"Yes, sir," replied the waiter. "It is true that yesterday we gave you a large and juicy piece of steak. But you see sir, yesterday; you were sitting by the window. And today you’re not!”
Many eating-places would love to bring you to their window seats because they want people passing to see that their business is always full. But here’s the problem. This technique could augment business but the one principle they need to understand is that they can have all the marketing techniques they want and employ it but if their products are not good and their services not excellent, they may as well kiss their business goodbye. In all things, especially in business, you and I need to be honest all the time.
Driving home from her office one summer day, a woman noted that there were four places within two blocks of her home where she could stop and buy a five-cent glass of iced tea. Each little stand had two or three youngsters behind it, all eager to serve any customer who came their way. During the next two weeks, the woman managed to stop at each of the stands to encourage the kids. In each case the tea was very good. Small talk revealed that all the youngsters were selling tea made by their mothers, who used tea leaves and real lemons in making the tea.
One day the woman discovered that only one stand was operating. Behind it was the new kid on the block. She stopped and ordered a glass of tea. It was served in a paper cup and it cost 10 cents. Some conversation brought out the fact that the young man's father was a lawyer who specialized in charging, which had inspired the boy to buy out his competitors, bartering with baseball cards, marbles, and stuff he had laying around in his garage.
His first act, he explained, was to raise the price of the iced tea, and cut costs. He was using a powdered tea mix from the supermarket, he said, which eliminated buying real lemons as well as the bother of squeezing them or putting them in the charges.
He didn't have to charge real tea either, he pointed out. He had plans to cut costs further, he said, and with his competitors out of the market, he expected sales to grow.
Intrigued, the woman made a half dozen more stops at the stand and became aware that the tea was getting weaker and weaker. One day the young man confessed that sales were dropping and he attributed this to the fact that he was using less and less of the chariot mix.
Then one day he went out of business, as attempts to turn things around failed. The moral of this story is: HONEST TEA IS THE BEST POLICY.[1]
Charge accordingly but deliver quality. This is being honest. Even if you cut on prices but deliver sub-standard quality, your business will not be sustainable. Respect your customers. Be honest and serve them well.
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Choosing the Best Structure for Your Enterprise
Posted On Friday, May 22, 2009 at by Sun JunAnother thing to consider when starting up a business is to choose which business structure to use for your enterprise. This is important because depending on the business structure that you choose, the registration procedures are different and the structure also determines the extent of your personal liability.
There are 4 business structures to choose from namely: Sole Proprietorship, Partnership, Corporation, and Cooperative.
Sole Proprietorship
A Sole Proprietorship is the simplest and least costly structure to organize. You only need to register your business name with the Department of Trade and Industry (DTI) and get a Business or Mayor's Permit from your local government.
In this structure, you are your own boss. You don't have to worry about partners and board of directors. However, your business is not considered as a separate entity. This means that dissatisfied individuals or entities who have a claim against your business can run after your personal assets. In short, you get to keep all profits but you also assume all the risks and losses.
Partnerships
Partnerships, as the name suggests, involves taking in a partner or partners to start up a business. It involves two or more persons. First and foremost, a partnership agreement is created which is a binding contract among the partners. This contract is referred to as the Articles of Partnership contract. All details in the partnership from the name to the extent of liability of each partner are written on this contract. As this is an agreement among partners, you and your partners are free to insert provisions that you may feel are important.
In a general partnership, the decision of one partner is binding to all. If it turns out to be a poor decision, all of the partners suffer the consequences.
Like in a sole proprietorship, the liability for debts is also personal. However, this will only be up to the extent of your agreed proportionate share in the partnership as stated in the contract. The same principle is applied for profits.
In a partnership, you can choose to become a limited partner. A limited partner can limit the extent of liability one will take. This is good if you don't want to risk all your personal assets. However, not everyone in a partnership can be a limited partner. The law requires that at least one must be a general partner, someone willing to risk all his personal assets for the business.
Corporations
A corporation has a legal entity of its own which is separate from its stockholders. This is its most attractive feature. It is responsible for its own liabilities and in general, this liability cannot be transferred to its stockholders. A stockholder, therefore, only risks the amount of investments he has invested in the corporation.
The corporation code requires a minimum of five individual incorporators to form a corporation. This is also the minimum number of directors a corporation must have.
A downside to setting up a corporation is tediousness of filing numerous documents with the Securities and Exchange Commission (SEC). It is also more expensive to organize than a sole proprietorship or a partnership. In terms of Taxes, the Tax Code levies a 32% income tax rate on corporate net incomes. There is also an additional 10% tax on dividends given to individual stockholders.
Cooperative
A cooperative is like an association of persons with a common bond. To organize one, there must be at least 15 members who are Filipinos of legal age. The primary objective of your cooperative must be to proved maximum economic benefits to each member.
A cooperative, like a corporation, also has limited liability feature. However, unlike a corporation, no one group can dominate the organization. Major decisions have to be cleared by holding a General Assembly. Profits are also shared equitably.
The requirements for setting up a cooperative is the same as those for corporations. However, instead of filing these with the SEC, these are filed with the Cooperative Development Authority (CDA).
Changing Business Structure
As a last note, bear in mind that you can still change from one business form to another. Most small businesses usually start out as sole proprietorships. Later on, when the business has experience considerable growth, they change into a partnership or a corporation.
This is the first part of Chapter 5 of "The Ultimate Guide to Starting Your Own Business."
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Need Cash?
Posted On Saturday, April 25, 2009 at by Sun JunAre you in need of cash to start up your own business? The Philippine Youth Business Foundation might just be able to help you.
The Philippine Youth Business Foundation is a non-profit organization which aims to lessen unemployment through entrepreneurship. If you have a viable business plan, but don't have enough cash to start up the business, why not try applying for a cash loan from the foundation. If your application is approved, the foundation will not only grant you a loan from 15,000 to 100,000 pesos but also assign someone to be your business mentor. They'll give you all the support you need in order for your start up business to be successful.
Visit their site here for more information.
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Business Registration Guide - Where else to register?
Posted On Sunday, September 14, 2008 at by Sun JunSome enterprises, by nature of their operations, are required to secure a special clearance, license, or permit from some other government agencies. The following table will guide you about some of the types of businesses that require a special certificate or permit and the agencies that issue them.
| TYPE OF BUSINESS | WHAT AND WHERE |
| Animals and animal products, registration of veterinary drugs and animal facilities | Registration certificate - Bureau of Animal Industry |
| Aquatic animals, importation, Fishpond lease agreement | Permit - Bureau of Fisheries and Aquatic Resources (DA-BFAR) |
| Fertilizer products and registration of pesticide products | Registration certificate - Fertilizer and Pesticide Authority (DA-FPA) |
| Fiber and fiber products processing and trading | Registration certificate; commodity clearance - Fiber Development Authority, (DA-FIDA) |
| Film and television production, export and import, booking, etc. | Registration certificate - Movie & Television Review and Classification Board (MTRCB) |
| Food, chemicals, health related business | Registration certificate – Bureau of Food and Drugs, Dept. of Health (DoH-BFAD) |
| Flour processing, Grains wholesaling & retailing, milling, warehousing, exporting, importing, indenting, packaging, threshing, corn shelling, mechanical drying | License – National Food Authority (DA-NFA) |
| Meat plant accreditation for meat & meat products, slaughterhouse operations | Accreditation certificate, Registration certificate – National Meat Inspection Commission (DA-NMIC) |
| Pawnshop & lending investor | Registration certificate – Bangko Sentral ng Pilipinas, Dept. of Finance (DoF-BSP) |
| Plants & plant products: nursery accreditation Seed certification and phytosanitary certificate | Permit - Bureau of Plant Industry (DA-BPI) Registration certificate – DA-BPI |
| Recruitment or placement agency for foreign employment | Registration certificate - Phil. Overseas; Employment Administration, Dept. of Labor (DOLE-POEA); |
| Recruitment or placement agency for local employment | Registration certificate – Bureau of Local Employment (DOLE-BLE) |
| Schools & educational institutions: Educational institution (nursery, primary, elementary, secondary levels); Tertiary level; Technical-vocational education, training program registration and accreditation | Permit - Dept. of Education (DepEd); Commission on Higher Education (CHEd); Registration and accreditation certificate - Technical Education Skills Development Authority (DOLE-TESDA) |
| Security agency business | Permit – Philippine National Police, Dept. of Interior & Local Government (DILG-PNP) |
| Service and repair shops for: Motor vehicles; automotive & heavy equipment; engine & engineering works, & machine shops; electronics, electrical, air conditioning & refrigeration; office & data processing equipment; medical & industrial equipment; appliances or devices; and private emission centers | Accreditation license: Bureau of Trade Regulation and Consumer Protection, (DTI-BTRCP); DTI regional offices |
| Sugar trading, muscovado converting & trading, processing or manufacturing sugar-based products for export | Registration certificate – Sugar Regulatory Administration (DA-SRA) |
| Telecom business | License – National Telecommunication Commission, Dept. of Transportation & Communication, (DOTC-NTC) |
| Tourism-related projects | Registration and accreditation certificate – Dept. of Tourism (DOT) |
| Transportation: Land transport service; Sea transport service | Land Transport Franchise & Regulatory Board (DOTC-LTFRB); Maritime Industry Authority (DOTC-MARINA) |
| Video production, sales and rental | Optical Media Board (formerly Videogram Regulatory Board), Office of the President (OPOMB) |
Source: http://www.business.gov.ph (Philippine Business Registry)
Business Registration Guide
Posted On Friday, September 12, 2008 at by Sun JunThe following are the government agencies that a start up business needs to register with as provided by the Philippines Business Registry website.
| AGENCY | WHAT |
| Department of Trade and Industry (DTI) | This is where you register if your enterprise is a single proprietorship. The agency will issue a certificate of registration of business name. |
| Securities and Exchange Commission (SEC) | If your enterprise is a partnership or a corporation, this is where you will register. It will issue a certificate of registration. |
| Cooperative Development Authority (CDA) | If your set-up is a cooperative, register with this body. The agency will issue the certificate of registration. |
| Local Government Unit (LGU) | You register with the municipality or city where you will set up your business. This office will issue the business permit. |
| Barangay Hall | You register with the specific barangay in the municipality or city where you will operate your business. This office will issue the barangay clearance. |
| Bureau of Internal Revenue (BIR) | You register your business with this office and apply for your business’s taxpayer identification number (TIN), registration of books of accounts, authority to print |
| Social Security System (SSS) | You register your business as an employer, yourself as a self-employed or as employee, and your workers as employees. This office will issue an SSS number for your business, for yourself, as well as for your workers. |
| Department of Labor and Employment (DOLE) | If you employ five workers or more, register your business with this agency. The DOLE is asked to promote gainful employment opportunities, protect workers and promote their welfare, develop human resources, and maintain industrial peace. |
| Home Development Mutual Fund (HDMF) | RA 7742 requires all SSS members earning at least P4,000 a month to register with this agency. HDMF administers the Pag-Ibig Fund. |
| Philippine Health Insurance Corp. (PhilHealth) | The New National Health Insurance Act (RA 7875) as amended by RA 9241 requires all employers of the government and private sectors and their employees to register with this agency. PhilHealth manages and administers the government health care system. |
SMEs : Small Medium Enterprises
Posted On Tuesday, September 9, 2008 at by Sun JunHere are some interesting facts about SMEs here in the Philippines.
- Small and Medium Enterprises are businesses with a maximum of P100 million in assets and employing 200 employees, regardless of industry or ownership type.
- 99.6% of all businesses registered with the Department of Trade and Industry are SMEs.
- 97.1% of these are Micro enterprises, 8% are Small enterprises, 1% are Medium enterprises
- Micro enterprises are businesses with assets of P1 million and below
- SMEs are the biggest job creators in the country employing 67.9% of the country's labor force or 3,877,369 people.
- Top 5 job creating sectors: Wholesale and Retail, Manufacturing, Hotel and Restaurant, Real Estate, and Intermediation
Observation fact: Small and medium business owners are known to shy away from research and development and information technology, finding these either to be too costly or don't serve their companies' needs. For instance, SMEs are averse to developing product standards because it means having to share their "trade secrets." This renders many enterprise operations to be labor-intensive, resulting in low productivity and product quality, inefficient operations, and sluggish growth rates.
Source: I'ts About Time by Katrina Tan from The Ultimate Guide to Starting Your Own Business
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Tourism Businesses You Can Get Into
Posted On Tuesday, September 2, 2008 at by Sun JunThe tourism business actually covers more than your regular souvenir shop. Here are businesses you can pursue to target tourist and travellers in the country.
- Souvenir Shops (Food, T-Shirts, trinkets, etc.)
- Hotel, Resorts, and Spas
- Tourist related activities like adventure sports (SCUBA Diving) and amusement parks and rides.
- Travel Agencies and Tour guide services
- Translation Services
- Medical Tourism
- Foreign Retirement Housing
Mom's Advice on Starting a Clothing Business
Posted On Monday, September 1, 2008 at by Sun JunGoNegosyo Big Time!
Aquamundo: An interview with Ralph Espino, owner of Aquamundo, the first Philippine brand providing SCUBA gear and equipment.
Mom's advice to Chal, the show's host, on starting a clothing business:
- Make your brand, make your name, extend your line to include not just clothes but bags, shoes, and other accessories as well.
- Make your brand popular and people will buy your product.
- Don't just keep buying and selling other people's brand. Develop your own brand.
- When getting a partner, like your friend, consider the reasons for getting one. This could either be for capitalization, for manpower, for intelligence (source of ideas), or a combination of these factors.
- If no clear reason as to why you're getting a partner, it's better to do it alone.
- Advantages of doing it alone: Nobody will interrupt your decisions. If you fail, you will be the first one to learn. If you succeed, you will be the first one to get it.
- If you don't have money for capital, get a loan from the bank.
- Setting up a store is not required at the start. Mom prefers advertising in magazine first or actually creating your own fashion magazine to serve as advertisement and popularize the brand.
- Never be afraid to start a business.
- If you want to borrow capital from me, come up with a proposal first on how you are gonna pay me back. (^O^)/ (Her mom is just lovely.)
Pros and Cons of Starting your own Business
Posted On Wednesday, August 27, 2008 at by Sun Jun
Factors | Employment | Business Ownership | ||
Risk | Pros: Stable income; often includes benefits; standard career progression Cons: Layoffs a constant possibility, as long-term employment is less of a given today | Pros: Offers more career control and opportunity for advancement Cons: If business fails, you have more to lose financially; can require significant initial investment of time and money | ||
Rewards | Pros: Well- defined with potential for incremental increases Cons: Little chance for major increase in the short term | Pros: Financial reward significantly greater in the long term Cons: Short-term financial rewards—even salary—may be nonexistent | ||
Intellectual stimulation/professional challenge | Pros: Established businesses often have a training budget to keep your skills well-honed Cons: Some jobs offer little mental stimulation or challenge | Pros: Business owners are constantly learning on the job Cons: Sometimes difficult to carve out time to receive official training and development | ||
Time and effort required | Pros: Typically well-established pattern of hours; opportunity for additional compensation or recognition spelled out Cons: Extra effort may not yield any kind of reward | Pros: Time spent on business is often within your control—you create a schedule that meets your needs Cons: Near- constant commitment required during startup; greater than average time investment required thereafter | ||
Control over schedule | Pros: Schedule is well-defined, and expectations are communicated at outset Cons: Schedule is defined entirely by employer | Pros: When and where you work is frequently within your control Cons: Your business may require more time than you’d anticipated or wanted to invest | ||
Vacation | Pros: Well- defined and available Cons: Limited to a certain number of days per year | Pros: Available anytime Cons: Sometimes hard to schedule due to business commitments or workload | ||
Taxes | Pros: Withholding covered in part by employer Cons: Employees are generally not entitled to all the tax deductions that businesses are afforded | Pros: With your accountant’s help, it may be possible to reduce your total tax obligation Cons: All taxes—company’s portion and yours—are paid by business, making proportion higher |
source: http://quamut.com/quamut/starting_a_business |
Economic Factors to Consider When Starting a Business
Posted On at by Sun JunHere are some financial questions you should ask yourself before starting your own business:
- Do you have six months of living expenses set aside to live on during the startup period?
- How long will it take for your salary from your new business to equal or exceed what you make at your current job? Can you afford to wait that long?
- How much money do you need to open your business? Where will you get the money?
- Is the current state of the economy likely to impact your business?
Personal Factors to Consider when Starting a Business
Posted On Tuesday, August 26, 2008 at by Sun JunSome people are born natural entrepreneurs while some are contented with being an employee. Here are some personal factors that you need to assess before starting your own business:
- Risk Tolerance: Starting your own business entails a higher degree of risk than keeping a comfortable job. These risks include financial hardship, the prospect of bankruptcy and going out of business, and personal risks like not having enough time for the family. Before starting your own business, be sure you are prepared to accept these risks.
- Family Support: Ask your family whether they are willing to support you in your decision to start a business. Your chances of succeeding can greatly improve if you have your family's support behind you. Also, a non-supportive family can be very demoralizing and bring you more troubles and headaches.
- Health Insurance: Quitting your day job could also mean losing access to affordable health insurance. Be prepared to get your own or share it with your wife's policy. Having insurance is crucial for your physical and financial well-being. Simply said, if you are sick, no one will be there to run the business for you.
- Self-motivation: Being on your own, without having a boss give you orders, means that you have to keep yourself motivated. Plus, having no other employees or colleagues around can make for a lonely work environment. You must be prepared to look for that drive within you and not rely from others. On the other hand, lack of distractions may help you accomplish more in a shorter amount of time.
- Experience: The more firsthand experience and training you've had in your business field, the better your chances for success. You might consider working for a company in the the field you've chosen for a while or hire someone who has experience in the field.
- Weaknesses: You can't be a master of everything. Everyone has weaknesses. Learn to solicit the help of others, through skilled employees or personal advisors to complement your skill set.
