THE Philippines is home to close to a million micro, small and medium enterprises (MSMEs) according to a report from the Department of Trade and Industry (DTI) in 2018. Prior to the pandemic, there is a steady rise in the number of Filipinos trying their luck in opening shops and as the joblessness in the country rose to a 16-year high, with 4 million Filipinos unemployed due to the Covid-19 (coronavirus disease 2019) pandemic, the number is seen to increase even more.
If you are one of those people envisioning a road to entrepreneurship or someone who’s company is in the initial stages of your business, consider these five common mistakes to avoid in the hopes of increasing your chances for business success:
STARTING THE BUSINESS WITH MISALIGNED GOALS. If your objective in opening a business is centered on ideas like getting enormously wealthy, being your own boss, and spending less hours at work, then you might want to consider holding your horses first and re-think your “WHY” in trying to start a business. Successful businesses have clear objectives and centered on the idea that they want to build a business that solves a problem. Here are some guide questions you can use while drafting your business idea and objective:
Is my idea a solution provider to a current problem or a pain point?
If my idea can solve a pain point, am I qualified to be part of that solution and more importantly, am I passionate enough in serving this market that I won’t easily give up when the business situation gets tougher?
Is there a current industry or market that is being poorly served by existing enterprises and that my idea can better fulfill the gap?
Whether your soon-to-be business is catering to a new market niche or a better version of an existing competitor, the idea remains the same. Focus on uncovering and helping solve someone else’s pain points and customers will pay for your value.
NO BUSINESS PLAN. Imagine getting in your car and driving away with no definite destination in mind. Isn’t that a futile, not to mention, an expensive activity? That’s exactly what you’ll be doing if you won’t craft a business plan. A business plan works like a roadmap that will guide you as you operate your business. It includes your vision and mission for the company, your target market, your financial projections, marketing strategies, etc. Your business plan should not be static rather dynamic in nature.
Calibration should be done as business landscapes change rapidly so should your roadmap.
LAUNCHING WITHOUT VALIDATING YOUR BUSINESS IDEA. Whether your business is online or offline, having a minimum viable product that you can immediately introduce to the market is one of the most cost-efficient manner to get your product/service out in the public and get real-time feedback. Oftentimes, startup businesses get tied up in pouring their energy and resources in the development stage of their product/service. They tend to focus on carefully developing the “best” product/service before launching it, failing to realize that the best way to really validate if your product/service is something that your market would buy is to create a small version of it and feed it to your market then real and useful information can be gathered, which in turn you could use to improve your idea.
CO-MINGLING OF FUNDS. Co-mingling is mixing or combining your personal and business funds together. Remember that your business is a separate and distinct entity different from you. In short, your business is not you and vice versa. You cannot dip your hands into your business’ pocket whenever you go to the grocery for your family’s dinner. Not only it becomes a nightmare to whoever handles your financial books, but will ruin your business’ growth prospect in the long run. At the onset, identify a reasonable salary as you take either a Chief Executive Officer, Chief Operating Officer or whatever role you’ll have in your company. You might receive a pay cut during the early stages of your business to allow your startup to have more leg room to maneuver. Stick to the agreed salary and open a business account separate from your personal one to avoid co-mingling of funds.
TRYING TO BE AN EXPERT ON EVERYTHING. As a business owner, you sometimes feel to be the expert in all the areas associated with your business, like accounting, operations, human resource, logistics and even administrative tasks. You feel the urge to be on top of everything and do everything by yourself. The thing is, as a business owner, your number one and most important role is to make money for the business and if a task is not directly contributing to that role, you’re better off delegating it to others. You don’t have to be an expert on everything. Hire experts and learn their language so you can effectively communicate to them your vision for the company. Remember your 100-percent effort dedicated in doing administrative task is just the same as the 10-percent effort of 10 people. Focus your energy in high value activities rather than spreading yourself so thinly.
The road to entrepreneurship involves a lot of hard work and sacrifices but at the same time very fulfilling as it will make you grow as an individual and with the right opportunity grow your bank accounts as well.
Lastly, I would like to invite you to check out and join SANDBOXPH, a virtual startup competition dedicated for the Filipino youth ages 16 to 24. The competition aims to help young entrepreneurs in launching their business ideas with the hope of positively transforming our nation one idea at a time. Visit the website https://www.sandboxph.org/ now for more details.
Cheers to nation building through entrepreneurship!
Jesi Bondoc is a registered financial planner of RFP Philippines. He is also an entrepreneur in the field of F&B, project management, fitness and tech. He is the Chief Executive Officer of Signopsys Inc., a print advertising company and co-founder of ODONTO PAY. You can send your money questions at [email protected] or [email protected] and they’ll be answered on his next article. For more info about Registered Financial Planner program, e-mail to [email protected] or text <name><e-mail> <RFP> at 0917-6248110.