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2013 Entrep Class

Spentrep and Mentrep Guest Entrepreneurs

Thursday, October 6, 2016

Who is afraid of OPM/leveraging - using UOPM (Using Other Peoples Money) to the max!

Every generation needs a revolution - an entrepreneurial revolution

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The advice of my late mother in business is to avoid debt as much as possible.  It is like the Dutch philosophy in business - to grow business like a tree slowly but surely.  Avoid the path of mushrooms which grow overnight and be gone the following the day.  Dont be like a meteor that burns itself out.

She even hid from me a Title to large commercial building at the heart of the town because she was afraid I will hock it to the max (despite the fact that I helped her build her little fortune by my strategies.)

Lately, I came across captains of the industry in chemicals, education, and  finance.  The strategy is all about leveraging.  Borrow borrow to grow.

1.   A school purchase I witnessed involves the hocking of the property to be bought using their own real estate holding company.  The monthly amortization for ten years will exceed the monthly cash flow of the loan.

2.  They are to pay off a personal loan of a principal.  Strategy involves transferring the TCT to the corporation, borrowing against the property P100 which is worth P200 million .  The P100 million will be used to pay off the loan which could be settled at P70 million and P30 million to start the development of the property.

3,  To clean the credit of a principal, they will do the same.

And so

Facilitating a strategic planning conference for a food processing company

Every generation needs a revolution - an entrepreneurial revolution

Rizal Philippines
October 6, 2016

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I was invited to be a facilitator for strategic planning conference of large food processing company based in Central Luzon.  It is a two day conference and there will be 30+ participants that include the top management and stockholders and department heads.

They will do it in Baguio, and yesterday we talked about some details of the conference:  agenda, the assignments, the objectives (what is what is not) the fees etc.

Why me?  They say they know me (they were my students in Entrep at Clark:   one chief CFO and the other is chief marketing and that I am not only an academician, but also a professional (a practicing businessman and entrepreneur)  Probably I will do better than the other one.

I explained the exclusion:   I cant cover family dynamics (since this is a family owned business) execution and leadership since they are different issues all together.  Together, we may be able to come out with a plan, a strategy that will make them the Philippines best in their niche

Belated greetings to fellow teachers and professors

Every generation needs a revolution - an entrepreneurial revolution

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