Showing posts with label Business Operations. Show all posts
Showing posts with label Business Operations. Show all posts
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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Coffee Shop Management and Operations
Posted On Monday, April 6, 2009 at by Sun JunThe Technology Resource Center is offering a Coffee Shop Management and Operations Livelihood seminar on April 20-22, 2009.
The seminar will include lectures on personnel administration, organization, site selection, marketing, materials and equipment. It will also include a hands-on workshop on making different coffee concoctions / preparations.
Registration fee is at PhP 3,729. A minimum of 5 participants is needed in order for the program to push through.
Registration (Contact)
Mr. Raul Durante
Technology Resource Center
(02)727-6205 local 208 or 209
Technology Resource Center is a government corporation attached to the Department of Science and Technology who serves the public through the acquisition and promotion of technology and livelihood skills providing information to Filipinos worldwide.
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Starting a Restaurant
Posted On Sunday, February 8, 2009 at by Sun JunIn this article, Hannah Muralla of EntrepreNEWS, shares the tips in Starting your own Restaurant Business given by Pam Obieta, chair of the De La Salle-College of St. Benilde's School of Hotel, Restaurant and Institution Management.
1. Learn the essentials.
Before investing in your own restaurant, you might want to gain industry experience first and apprentice with a mentor or a known establishment.
2. Create a name and build on trust.
Work from the bottom up. Leave your mark in the industry and establish a good track record. Mall operators usually lease out prime locations to those who have a strong customer base.
3. Location, location, location.
Location is very important. Study the area from the weather to the economic conditions.
4. Streamline Operations.
Concentrate on your core products and competencies. Identify areas where you can reduce costs. Consider outsourcing if it proves to be more cost-effective.
5. Consolidate functions.
If you have several branches, consider building a commissary to free up space in your branches and to consolidate the kitchen functions.
6. Focus on health and safety.
7. Use technology.
Invest in a good POS system to track inventory and customer information. Use it as a marketing tool.
8. Treat your employees well.
9. Be one step ahead of competitors.
10. Have a Corporate Social Responsibility program.
Show that you are sincere about helping out. Consider going "green" and help out the environment.
Read the full article here.
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Marketing Research Tools (Market Research Part 2)
Posted On Monday, December 15, 2008 at by Sun JunThis is part of the continuing series on How to Start your own Business. Information are based on the book The Ultimate Guide to Starting Your Own Business by Entrepreneur Philippines.
Have you done your market research? Getting to know your target market is Step 3 of the process. If you are a bit lost on how to do this, here are a few approaches that might help you gather information.
- Surveys - Surveys makes use of structured questionnaire that is distributed to a group of respondents. In conducting surveys your objective must be clear and the questions must be well constructed in order to point to that objective.
- Focus Group Discussions - These discussion groups usually last for one to two hours. It is led by a facilitator and participated by around 6 to 8 persons. The facilitator must know what he is doing and must ask the right questions to generate discussion among the group. This methodology is good if you want to go deep into the reasons behind why people regard a product a certain way. After the discussion, an analysis of the insights gained must be presented.
- In-depth Interviews - Interact with one or two respondents and uncover what they think about the product. Get their opinions, values, and personal preferences.
- Ethnography - With this approach, the researcher will have to live temporarily in the same place as his respondents. The researcher uses this time to observe and record the respondents' behavior.
- Product Testing - Find out how your product fares against competition before officially launching it. You can go house to house or find areas where there is a high concentration of your target market. This tool is very useful to find ways to differentiate your product from competition.
- Concept Testing - Test your product or service's acceptability. Ask your makert if they would buy a product or avail of your service if it's available. This test will tell you how different your concept is compared to existing products.
- Mystery Shopping - Go to a competitor's place of business and try their products or service. Take note of the kind of customers they attract, the times they come in, how long they stay and the products or services they pay for. This is a good way to study your competitors and to see the business' potential.
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. |
Inventory Turnover Rate: Managing Your Inventory
Posted On Friday, August 29, 2008 at by Sun JunIt is important to identify the factors that affect your inventory demands. Overstocking can lead to shortages in cash and on the other hand, if you have a shortage in stock, in can mean potential lost of clients. A mathematical way to manage your inventory is to get the average turnover rate. This rate will tell you how fast your stocks are being sold. You will then be able to anticipate how much stock to buy for a particular month or season.
The average turnover rate is equal to your cost of sales divided by the average inventory. In equation form that is:
For example, assume that your sales for the month was P100,000 and that your cost of sales was about, P40,000. If the balance of your inventory at the start of that month was 10,000 and the balance at the end of the month was 7,500, then your average inventory for the month would be 8,750 ((10,000 + 7,500) / 2). Computing for the average turnover rate would then give us 4.57 times (40,000 / 8,750). This means that you sold more than 4 times your average inventory during the month.
The average turnover rate is equal to your cost of sales divided by the average inventory. In equation form that is:
- turnover rate = Cost of sales / Average Inventory
For example, assume that your sales for the month was P100,000 and that your cost of sales was about, P40,000. If the balance of your inventory at the start of that month was 10,000 and the balance at the end of the month was 7,500, then your average inventory for the month would be 8,750 ((10,000 + 7,500) / 2). Computing for the average turnover rate would then give us 4.57 times (40,000 / 8,750). This means that you sold more than 4 times your average inventory during the month.
This value can then be used to compute for the turnover rate in days. Simply divide 30 days by your turnover rate of 4.57. This gives us a turnaround time of 6 days. This means that in 6 days time, on the average, your supplies would more likely be sold already so it's time to replenish them before that time comes.
