Wake Up, Philippines!

Crisis Strategies

Posted in Business, Global Financial Crisis, Strategies, Tips by Erineus on February 11, 2009

RECENT CHATS with family and friends based abroad revealed that one of the foremost things in the minds of most people these days is how the crisis is affecting us. My friend Sean based in Australia asked me if it is true that companies based here in the Philippines are laying off people. Another friend, Cheryl based in the US, wanted to know how the Philippine economy is doing.

On the other hand, we here in the Philippines are curious to know how life is abroad. My sister based in the US reported that home stores are closing, and car dealerships are not doing well. Publishing companies abroad are discontinuing titles. On the other hand, my friend Nenette said her brother-in-law in the US is not affected by the crisis—since he is in the auto repair business, business is booming with lesser people buying cars and more people just opting to have their old cars repaired. Health care is not as hit by other industries because, well, people get sick whether or not there is a crisis.

Entrepreneurs are coping with the global financial crisis in their own ways wherever they may be. Rossana Llenado, president Ahead Learning Systems, Inc., the company behind Ahead Tutorial and Review Center in the Philippines, reveals they are very much aware of what is happening, but are not quite as frazzled about the crisis as most. “We try to remain as optimistic as possible, always searching for the silver lining behind the dark clouds. I remind my staff that we had already been in this kind of situation during the Asian financial crisis so I am very confident that we will be able to weather this storm. We recall what we learned in the past and apply those lessons in the present situation. I’ll make sure as well that we all learn more from this experience,” she says.

Ahead employs precautionary measures to make sure that they don’t close shop or lay people off. Rossana’s prime consideration, after all, is their market—the students, who are greatly helped by the review center in preparing for college entrance exams and in getting better grades in school. To cope with the crisis, Rossana says, “I try to keep all our employees well-informed so that they have a better understanding of the decisions being made in the company. I advise them to work even harder and be more cost-efficient in order to maximize our resources.”

These are the specific ways Ahead has adopted to cope with the global financial crisis:

* OPERATIONS: Instead of cutting costs, resolve to perform even better than before.
a. Beef up customer service.
b. Involve all employees in the planning process so that they will be able to fully understand and assist in the implementation.
c. Have everyone be more proactive in sales and marketing activities to make people more aware of Ahead’s services and ultimately convince them to choose to be ‘ahead.’ “We have a lot of training lined up for this purpose,” says Rossana.

* RECRUITMENT: Don’t fire people; hire more to help in doing the job even better.
a. Maximize current workforce by placing people in other positions where they displayed greater efficiency and effectivity.
b. Give staff more paid vacations rather than provide increase in pay.

* SALES AND MARKETING: Be more aggressive.
a. Go to schools to promote services, not wait for people to line up at the doors.
b. Set specific quotas.
c. Maintain advertising budget to match last year’s.
d. Add below-the-line ‘zero budget’ activities to remind clients about Ahead without spending so much.
e. Develop new designs for marketing materials using students as models. “We have been doing this since we started almost 14 years ago. Since they are happy with our services, they are very willing to endorse our services and pose as models for our flyers, brochures, and ads,” says Rossana.

* BUSINESS DEVELOPMENT: Continue to prioritize.
a. Innovate offerings.
b. Develop products and services. Six books will be published this year following the success of Ahead’s books in previous years.
c. Forge partnerships with business allies. Ahead will host an event gathering the university presidents of UP, Ateneo, and UST in a conference to share their learnings and plans. They will also partner with Salt and Light Ventures to bring speaker Tony Buzan to talk about mind mapping for the academe.
d. Utilize developments in technology. The company now employs computer-assisted registration, enrollment and payment; text and e-mail blasting; use of bar codes and LCD projectors; and acceptance of credit card payments at zero percent interest for three months. They also improved their website. And they now offer online learning by partnering with IT company BC Net.

* ADMINISTRATIVE: Remain vigilant in implementing more systematic administrative processes in order to maximize efficiency.
To do this, they find ways to save on costs: get better suppliers, ask for more discounts, request for longer credit lines, buy in bulk and follow a budget. “Before, we never followed a budget. Now, it has become a necessity to stick to a set plan, with ours being to spend less than the previous year,” says Rossana. “One way we are cutting down costs is by buying a new copier in order to lower our expenses in material production.”

How about you? What are you doing to cope with the global financial crisis?

By Karen Galarpe
Source: http://blogs.inquirer.net/openforbusiness/2009/02/11/crisis-strategies/

12 rules for microenterprise success (part 1)

Posted in Business, Tips by Erineus on February 2, 2009

I picked up this little pamphlet in Cebu, City that can be easily put inside your wallet while on coverage last year. It has little snippets of wisdom that any microenterprise owner can use to improve his business.

Prepared by The Academy for Creating Enterprise, an organization that trains small business owners nationwide, the pamphlet is one of those little wonders that has helped thousands of individuals across the country develop the confidence to step into entrepreneurship.

So here are ACE’s 12 rules for microenterprise success:

1. Practice separate entities

Keep business cash and products that you sell separate from your personal money and family use. No family member or employee should ever take money or goods without paying for them. One good way to make this work is to regularly pay yourself a livable salary.

“Attitude determines altitude.”

2. Start small, think big

Some want to get really big, really fast. Too rapid growth, without experience or money in reserve, can kill a great business faster than almost all other mistakes. Learn from costly mistakes when the business is small, then grow at a sustainable pace.

“Anything the mind of man can conceive, it can achieve.”

3. Differentiate your business

Selling the same product as your neighbor is bad for business as it drives prices down which then hurts everyone. Make your business different by carrying unique products, displaying your products differently and not locating near your competitors.

The harder I work, the luckier I get.”

4. Buy low, sell high

To make money in business you must sell something for more than you paid for it. The difference between the price you pay and the price you charge for a product is the gross profit or margin. The bigger the difference, the more money you will make. Negotiate with suppliers for lower prices.

Winners speak in specifics, losers speak in generalities.

5. Buy on credit, sell for cash

Many owners have this backwards; they buy in cash and sell on credit. If you can get your supplies on credit and collect cash from your customers at the time of sale, you can carry a lot more inventory and possibly turn it faster. You must, however, pay suppliers on time.

Compete with someone, even if it’s yourself.”

6. Turn your inventory often

If you buy a product for P100 and sell it for P300 you earn P200. If you do this 10 times a week, you earn P2,000 that week. If you do this 10 times a day, you earn P2,000 that day. Small inventory turned everyday is best.

“If you can’t measure it, you can’t manage it.”

Source: http://blogs.inquirer.net/openforbusiness/2009/01/27/12-rules-for-microenterprise-success-part-1/