The business, marketing success secret revealed

Every generation needs a revolution - an entrepreneurial revolution

   

Rizal Philippines
May 17, 2017

What do you get from this story?   Having a lake full of Pesos:

The story is about prioritizing, when you fish:

1.   bait
2.   the fishing rod,
3.  fish processing
4.  lake?

I would like to think that this is marketing parable.  We often say that we are to be market oriented but most of the time we are not.  We are product or sales oriented.  This story says that we prioritize the lake, the market, where we can catch fish.  Thus a market research interview about the needs and wants of customer.



Of course the correct sequence would be:

1.  lake -  the market, where you can catch fish
2.  bait -   the product
3.   Fishing rod  -  your pitch, your promo
4.  processing -  the customer link bond to retain customers to get repeat sales

This is very consistent about my thesis for business success as gurus have all ready stressed:

1.  Peter Drucker -  a business is an entity that creates customer.  No customer no business.   Thus marketing and innovation are important function of a business

2.  Theodore Levitt -   Everything starts and ends with the customer.  The goal of business, all its functions are geared to satisfy the customer.

3.  Our belief - Customer service.  The customer is the king.     The customer is divine.  He pays our wages

This is the full story:

Business is about ROI, making seeds grow to bear fruits

Every generation needs a revolution - an entrepreneurial revolution

Rizal Philippines
April 9, 2017

1.  The basic equation for any investment in business is ROI - return on investments, return on capital. That is why we have the Dupont Formula

             GP/Sales   x   Sales/Total Assets   x     Total Assets/Stockholders Equity

              (Patong)               (Paikot)                         (Laway)

              Margin                  Turn over                     Leveraging

            When we cancel sales, and total assets, we are left with GP/SHE  which is the formula
            for ROI (we have to fail an MBA student in a panel defense, who cant have the correct
            formula for ROI)




               Our SEC requires Du Pont Analysis:

     1.1 To have ROI it is thus important to have sales, and asset turn over

          Margin (patong refers to efficiency) cost reduction.   You cant have  margin, if the basic business model is wrong, ie sales - cost = GP.  No matter how high your sales is, if your are selling less than your cost, you can never have patong.  It is the goal of every business thus to:

          Increase sales (through marketing and sales efforts)

          Reduce expenses, through efficiency, and canvassing lower cost of inputs

   1.2 Paikot

        Your working capital must be turned around.  It must produce sales several times over.  If it only turns one round, or less than that you cant expect ROI

       How do you increase turn over?

      1.  By having more cash sales  (how do you do this?  By offering cash discounts)

      2.  By having shorter collection period

      3.  By having dedicated collectors

    LEVERAGE (Laway)

  1.3  As much as possible, you cant spend 100% of your equity in your business.  You must employ OPM (other peoples money) or borrow.  Many top execs or industry leader, disdain using their own money.    May I call this the Meralco or Tony Garcia (of Philchem) formula.   Meralco was bought by the Lopez after the end of Laurel Langley agreement from GTU using the cash flow from operations to pay off the installment on the balance.  The cash flow from operations paid the equity.   the IPO paid off the loan for the D/P.   Tony Garcia showed me how to do it, when he bought a school using practically nothing of the money of the investor

    This is only possible if you recognize the risk, ie that the business would be profitable enough, generate the cash flow  to meet the agreed repayment period.  I had several deals early on when we had terms, and the cash flow from the business sales paid off the balance.  You must be decisive enough and bold to generate cash when the payment time comes.   During high interest regime, we cant have much of 1.3

The biblical stories and parables support ROI

Foreigners see a lot of opportunities in the Philippines, why dont we?

Every generation needs a revolution - an entrepreneurial revolution

Rizal Philippines
April 5, 2017

I met with a up and coming exporter of food products to Korea. He has partnered with Koreans, and they are selling many local products to Filipino community in Korea:   saging na saba, tilapia, bangus, boneless bangus, tocino etc.

One of their suppliers also a Korean, started five years ago with nothing.  Now he is a millionaire with a house in Alabang.  He started exporting through them Moringa, then tea from dried guyabano leaves.  (The Korean doctors discovered the the anti cancer properties of guyabano) and the coconut sap sugar.  For the latter they had a cooperative with the local mayor in Quezon, and they paid P150.00 per day for the coconut stalk cutter

Why does it take foreigners to see opportunities in the country.  I told long time ago to an acquaintance to start this business, ie developing suppliers in an island province like the coconut sugar, and other herbals.  We talk about so many herbals, but those who believe early seize the opportunity and make money from out of those ideas

One Korean I know has a vision of providing interment via crematorium.  He now has 14