7 Tips in Starting a Business

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Armando Bartolome
Armando Bartolome

Micro, small and medium enterprises (MSME) are considered the backbone of the Philippine economy. Leaders of both government and private sectors recognize the role that entrepreneurs play in the economy.

According to an Asian Development Bank study, new and small firms generated 50 percent of innovations during the 20th century.

Every Filipino has a gift of selling and a dream of getting into business. If one were to make a survey, there are probably micro businesses occurring in every office. There are employees who conduct side businesses like electronic loading of cellphone credits, buy and sell of clothes which may be paid in "gives" (installment plans). Others even extend credit or "paluwagan."

I admire those entrepreneurs who dare transcend to another level. They want to explore different possibilities. Thus, an entrepreneur can be somebody who is fearless, an out-of- the-box thinker and open-minded. Remaining in their status quo is not in their vocabulary.

The growth of many businesses in the country can be attributed to the desire of an entrepreneur to expand and maximize the potential of the concept. It is a fact that majority of businesses belong to MSMEs. According to the Department of Trade and Industry, the following are the MSME classifications based on assets:

  • Micro: Up to P3,000,000
  • Small: P3,000,001 – P15,000,000
  • Medium: P15,000,001 – P100,000,000

On Number of Employees:

  • Micro: 1-9
  • Small: 10-99
  • Medium: 100-199

One sure way of achieving business independence is taking the franchise route.

How did the word "franchise" come about? According to the Wikitionary.org, it is from middle English franchisen, fraunchisen, from Old French franchir (stem franchiss-, “to set free”), from franc (“free”). From this definition, franchising is defined as being in business for yourself but not by yourself. For an entrepreneur, there is liberation in thinking how, where and when to build branches.

There are other people called franchisees who, with great interest, invest and manage the branches.

There are also franchisees who manage the business under the guidance of the franchisor. The relationship of the two parties is and should be synergistic. There must be a win-win basis.

However, there are areas which need to be reinforced.

First is the awareness and education level of franchising among entrepreneurs. Certainly there is no doubt the brand is catapulted to greater heights and eventually, the value of the business increases with expansion via franchising. Doing the right way of franchising a business begins with a proper mindset.

If the motive of the person is to immediately fast track the franchise program for the purpose of getting the money of people interested, well, I do not think such a business is worth getting into.

The other day, I was talking with a young man who narrated how he and his wife felt betrayed by the franchisor. They both believed in the concept and potential of the business. They did sign up and invested somewhere to the tune of P3 million. That money was hard earned and great portion came from both parents borrowed at “zero” interest or pay when able. What is sad is as the months passed by, the couple felt the waning support of the franchisor as well the head office.

Stocks were not consistent, and they were left to fend for themselves.

Asked if they tried to meet the franchisor? The secretary of the franchisor just ran out of excuses to give. With a bitter pill, the couple had to swallow the fact that nothing positive was happening.

They even had to contact the other franchisees to ask if they also experienced such problems?

They were never given an occasion to meet all together. The couple cut further loses and threw in the towel. However, as the saying “when one door closes, the Almighty opens another." True! Today their new-found business is on its fourth year with six strong branches and has carved a niche in the market. The couple will soon be franchising. What happened to their former franchise? Unfortunately, the word “karma” has caught up with the owner. Only one branch remains standing.

Finally, here are my valuable tips, especially now that many are planning of going into business:

  1. Conduct your business as if it were a Mission of Goodwill.
  2. Remember and apply the Golden Rule.
  3. Impossible is always “It is Possible."
  4. If you believe in your business concept, pursue to a higher level.
  5. Expanding a business depends on the passion and confidence of the entrepreneur.
  6. If you have a dream, pursue step by step; a business given the proper care grows.
  7. Franchising is still the best route; tried and tested based on a prototype.
  8. When one door closes, remember, the Almighty opens another.

(Armando Bartolome is a business mentor to numerous micro entrepreneurs who are now themselves big names in the industry. This article was previously published on the author’s The Business Mentor column. For questions and more information, you may contact Armando "Butz" Bartolome by email:philfranchiseguru@gmail.com or on Twitter @philfranguru. His website is www.gmb.com.ph)

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