A maligned tycoon is a visionary par excellence

Every generation needs a revolution - an entrepreneurial

Rizal Philippines
August 1, 2017

The return of a visionary

I attended a meeting today with one of the captains of the industry.  He used to head a large commercial bank, was the head of a govt bank, headed the bases conversion, was president of a govt north rail. project.  He celebrated his 76th birthday a month ago.  I regaled at this vision statements for the bank in his office, as we were dining in his office for a CK treat.    And he said nothing could beat a former govt official, a Harvard  grad for being a visionary, at the age of 82.   He said that the enthusiasm of the said person is infectious and the way he visualizes his project, he would seem to be only  22 years old.

Some of his outstanding achievements include:   the exclusive members only Golf residential project:  Highlands, then the Balesin in Quezon, an island project  At Balesin, he built a resort with several themes located in 40 hectare site leaving the rest of island, 92 % as virgin forest, with 40,000 coconut trees.  The themes are Bali, Phuket, St. Tropez, Costa del Sol, Toscana and native Balesin. He built the resort at a cost of P7 billion and one of the most sought after exclusive members only resort in the region:    Membership sell for Gold P2.2 million 7 nights free,  Diamond   P4 million 14 nights,  and Corporate 6 million 28 nights

There is a companion Balesin at Patnungan island.  He will build 500 homes and villa, 400 room hotel, and a runway to accommodate jet planes.  It will cost him P5 billion to build

There is  a plan for 783 hectares members exclusive members only Alpha land Baguio where cabin homes cost P50 million each.  All ready he is in Europe to buy the logs.  Can you beat the guy for his visioning and entrepreneurship  There will be 300 cabin log houses and 50 mountain lodges.

Alphaland Baguio Mountain Lodges

Hearing these stories makes one realize how little we dream or make our vision.

D R E A M      BIG

Alphaland Baguio Mountain Lodges from IMC Collateral on Vimeo.

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