Throwback - Graduation skills - preparing a Business Plan

Every generation needs a revolution - an entrepreneurial revolution

When I started new business, I relied on books on entrepreneurship which I took under Prof Davila who then was working at BOI.  I felt that my training was lacking in something

Hence when I had the opportunity to teach I saw the need for students in the subject to learn how to prepare  a full blown business plan:  complete with Marketing Plan, Operation Plan,  Financial Plan, exit strategy and contingency planning not to mention compliance with govt regulations

Hence I saw the need for an extended period for the students to prepare the  business plan.  Which I did for several terms

However then came the new head of the GSB who saw efficiency ie submission of grades within 7 calendar days after the end of the semester to be submitted.  Our chair insisted on doing that sacrificing the submission of the only proof of graduation skills.  ie bp preparation

Thus ended my career in teaching.  

Innovation drives growth - innovate or die

Every generation needs a revolution - an entrepreneurial revolution

In Billions, traders are encouraged to constantly think of 3 innovations in their job.  Requiring from those who buy and sell securities.   And to be constantly to search for opportunities and how to seize them. ie to act as entrepreneurs and to see their jobs as owners of business.

But we are secure with tried and true.  It is better to be on autopilot   It takes a lot of effort to think of and start a new one and face obstacles like inertia from stakeholders, risks, possible loss.

But that is the way to go.   Innovate or die

Entrepreneurs create something from nothing

Every generation needs a revolution - an entrepreneurial revolution

A businessman wanting to go into business into his own wanting advice and consultancy needs x millions for his venture and thinks this is easy going with me lending that money.  Not knowing much the proponent and having not so proud record in his business dealing, the possibility would not be very positive.

I said we could device ways how to obtain financing like firming up deal with the land owner, having plans, having x deal with contractor. or even ML money.  It seemed he took the advice because  he has not

returned and taken my ideas without compensation 

It reminded me of my experience and others too:

1.  We borrowed P500k from a rural bank to start an SLA.  In a year we were able to repay the loan and

      make some profit too.

2.  We started a real estate project with merely P15K between me and the chairman.   We bought the lot

      on terms from a fmr ambassador was able to sell 97 plots total inventory in 6 mos, paid for the

      development and landowner.  We sold lots from Php 18K to P35K only including those fronting

      the highway.  But the beauty in the story is that we started the project business without much

      money.

     Thus capital does not refer to money capital but your head.  Capita  Head.  How you use it to build

     something from nothing

3.  In another business, we presented plans, borrowed against them with promise of 100% return (of

     course they were private equity and we kept our word.  We were able to finish the project

     sell them and repay the lenders

On a similar note, I heard a story from a famous Makati businessman who got a big parcel of land

a former army camp.  He had no money.  But the mandate from the President was to make the land

generate cash.  Thus he bidded out the land which later was developed into a CBC, and a huge

cemetery.  

They were something great from nothing

True entrepreneurship.

Or we are into Lance Gokongwei paradigm that to produce millions, you have to invest billions.

What do we say to inherited wealth, to ML equity, spin offs, hedge fund investments?

Global job cuts, what can be done

Every generation needs a revolution - an entrepreneurial revolution

Nearly 200,000 jobs were cut in 2022;   about 100,000+ were announced by global companies like Meta, Amazon Accenture Paypal, etc.   Name the cause    cost cutting, P n L revenue decline, problem in Ukraine.

It is certainly a cause for worry for many.  Certainly this is a cure for inflation.  Fed and Central Banks efforts have been paying  off.

But this is a great difficulty for families for those who lost jobs   No food on the table, no more shelter (as we see among slum dwellers in Europe) and in streets of LA even at Philadelphia.

It could trickle down to BPO companies in the  Phil.  The cost cutting can cut into the outsourcing by Western companies  It means lesser jobs too for our OFWs.   The 6 - 7% GDP growth forecast for Phil could be overly optimistic

Its not an event that will force despair or suicide.  We need to think like entrepreneurs.  We can pose solution to this negative event.    We can think of new business, on how to cope up.

We need an entrepreneurial revolution to counter this global crisis

Health care will continue to be a driver of entrepreneurship, business, and Philippine economy

Every generation needs a revolution - an entrepreneurial revolution

Metro Pacific Hospitals - target 40 hospitals

A famous surgeon in working with a billionaire businessman owning strings of hospital across the country,  mentioned while doing a surgery on my elbow that a hospital where he has invested in now valued at P60m  That was the bid of the billionaire.   And that was from an investment of only P1 million 4 years ago.  Tnat is a lot  of ROI

I mentioned that health care will continue to be source of growth in the economy  Everybody gets sick (and for the memorial park, everybody dies;  it cant be avoided)   Health care will continue to flourish despite all negative predictions about global economy

The good surgeon was former student at GSB, and he must have learned a couple of great things about business while under my tutelage  This post was also engaged to conduct an organizational and strategic planning for the said hospital during the formative stage

Entrepreneurship should be taught to farmers - FAO expert

Every generation needs a revolution - an entrepreneurial revolution

This was said by the late Dr. Tito Contado, a from UP Los Banos and an expert who worked for FAO for a long time  He said  that what the agency promoted was subsistence farming.  Coupled with land reform that decreased the farmholdings of farmers, this posed serious obstacle in progress of agriculture. 

Instead he said, the agency should have taught farmers to be entrepreneurs, ie to be self sufficient.  With a single crop planted the  farmers are idle while waiting for the harvest.  If the farmer produces just a single crop, where does he get his other needs?  To buy these he needs to borrow even at usurious rates for his consumption

Thus farmers on their own must think for themselves at their own initiative, other businesses and exploit opportunities

Thus excess production of crops leading to waste leading to losses of capital need not happen  It is always govt govt fault.  Take note that govt can only initiate.   The rest is up to the farmers  He must solve his problems and find solutions.  Thus problem of storage:   organize cooperative for cold storage.  Excess production of vegies:   say tomato bottling, tomator paste making    Or cabbage -  make kimchi   Or poultry:    or pork ----> processed meat.

We have many schools and agencies teaching entrepreneurship or entreprenueria mindset   Let us do this

We need more entrepreneurship in the agriculture sector

Every generation needs a revolution - an entrepreneurial revolution

We hear news of waste like tomatoes being thrown away due to lack of transport and over ripening.  What a waste.

The late Prof Dr Tito Cantado who used to be a FAO worker said that entrepreneurship is the  answer to the farmer woes, and not the perpetuity of subsistence agricultural process:   land tilling, planting, harvesting and selling to traders.  It should go beyond so that the farmers are not idle after planting.   Farmers cant just plant one crop;   they must produce other things he she need like other foodstuff, handicraft for sale their own energy needs etc  

Thus the answer to some of the problems of farmers:

1   High cost of inputs -   join coops, many coops are integrated and have their own feed mills and abattoirs  Do DA neglect this or do not know this and oftern generally accept these alibis as reason for high prices

2.  Marketing -   ever heard of farmers market where farmers group sell directly to customer, bypassing profit raking traders

3  Food processing -  excess produce can be processed into:

    1.  Cacao -  choco by products

    2.  Tomatoes -  tomato paste, ketchup

    3.  Pork beef chicken  -  dried meat products, processed meat -  canned or botted  

Let us encourage farmers, educate them on entrepreneuruship and do not make them dependent on DA which most of the time is perceived to be not doing much for farmers, or at times even anti farmers

Tons of tomatoes being thrown away daily

Entrepreneurship is alive and well in the provinces during the pandemic

Every generation needs a revolution - an entrepreneurial revolution

This post got in touch with a local entrepreneur who operates in MM but had to return to the province during the pandemic.   While there there had offer of raw land sales  which they took via pdc.   Now they are developers.

During the pre development stage they were able to sell out the project (subdivsion plots)  They were mostly flipping deals:   hinuhulugan pa lang raw land sold out na ang iba ng collecting millions.  They have modest properties,  4 vehicles one L300, one dump truck, 2 pick ups and 2 MTB.

Now we are discussing jv for a memorial park.   

They must be wealthy now   Now I notice some weaknesses:   legalities, financial control and system, and continuity.  

Review of entrepreneurship - a Slideshare Presentation

Every generation needs a revolution - an entrepreneurial revolution

Rial Philippines

4.20.2021

It looks to me that I and our staff are sinking into routine.  Its time to dig some old files and presentation on the topic at Slideshare.

Entrepreneurship, introduction to entrepreneurship, definition of entrepreneurship from Jorge Saguinsin

China's strategy to jump start economy

Every generation needs a revolution - an entrepreneurial revolution

Rizal Philippines

January 23, 2017

From Bloomberg - rebalancing Chinas economy

NHK recently featured China's strategy to jump start economy.  It is moving development to 3rd tier cities relocating many migrant farmers from 2nd tier cities.  It is called hukou.  I t will help soak the excess housing in the 3rd and fourth tier cities, and create more consumer driven economy
How we wish we could do that as we legislate in creating cities, we should invite give incentives  to industries and developers to move to this cities.  Thus decongesting MM and evenly spreading  progress at the country side.  Some cities like Sto Tomas, Tanauan  Bacoor fall into this mold;  but others do not. (natural ;progression because of MM spill over?)

China has finally encouraged labor mobility following years of restrictions

But the documentary says that such move, sound as they may from macro economic point of view has dire consequences in the lives of the farmers.   Many simply can not adopt to the changes. The farmers former businesses are demolished and they are forcibly forced to move out.   There is lack of consultation with the those affected parties and lack of safety net to those affected. It would have been perfect.

We lack the thoroughness in the country to plan this way, and to give the same support to spread development and entrepreneurship across the nation

An invitation from the municipal councilor to lecture and mentor on entrepreneurship

Every generation needs a revolution - an entrepreneurial revolution

Angono, Rizal  Philippines
September 20, 2016

I was invited this morning by a new councilor of this town. He used to be the tourism officer and now chairs committee on human rights. He said the meeting was about a project.

It turned out that the project was about the subject that I used to love teaching about - entrepreneurship.

The school where he teaches history and Rizal (ESA) wants to invite more students graduating from high school.  He plans to generate interest on entrepreneurship and ESA by having lectures and mentoring on the said subject.   He got me there and said I was willing to do (pro bono as usual)  Because I wanted to leave a legacy

When do we start?  January 2017.   Just let me know

It is good to be your own boss

Every generation needs a revolution - an entrepreneurial revolution

Ateneo Professional  Schools
Makati City

I came across two students who are now entrepreneurs. One used to be a supervisor at a call center and was even assigned abroad. She earned in the high 5 figures.   Now she stopped the graveyard shift, she being sick and her mother too all alone in the house.   She is now into catering business, events.

One used to be COO of fastfood. He left the business all ready and is now looking how it works out to be your own boss.  He is into few real estate projects, consultancy and distribution business.

I am happy to note that they were former students at Entrepreneurship

How come Japan is into negative territory?

Rizal Philippines
April 24, 2016

Japan has again fallen intor recession

Japan has been into recession (contracting economy) for several years now.  The President IMF, LaGarde is worried not so much with less developing countries but with Japan. Japans public debt is 237% of its GDP, the highest among developed countries - WSJ  Although yen is now the darling of world currency, she was worried about too much debt of Japan, although mostly yen denominated (US has plenty of debt too - almost trillion dollars)

And its giants like Nissan, Toshiba, and Sharp have been taken over by foreign partners.  Of late, Mitsubishi is in trouble because of its alleged cheating on emission tests (like VW)  Because of the recent earthquake at Kyushu, giant car makers Toyota and Honda have ceased production because of disruption of supply chain.

From Japan Times - Sharp and Toshiba face dire prospects

The combination of  natural calamities, (earthquakes) aging population plus mistakes in fiscal and monetary policies have brought Japan into this challenges.  Let us add management complacency and smugness.  The Japan tiger of yore has become slow, and probably unmindful of world developments which included China.  The Japanese management and technological prowess on Kaizen, QFD, Gemba, TPM 5s was overcome by cheap and mass produced products from China. Everybody was caught unprepared.

Some say that loss of entrepreneurship fueled by conservative Japanese banks who favored large and and ongoing concerns, contributed to loss of innovation and change in Japan.  The likes of Akio Morita of Sony and Konosuke Matsushita who were for sound management and innovation was gone.

Challenges to the Entrepreneurship Elective Course

Angesono Rizal Philippines   |  Black Saturday

I took the chance of grading and correcting the papers of an entrep course this office handled early December to February.  There are  only a few of them and I am sure the school lost on the class because their number did not reach the break even.

The class was a great class they were lively and very dynamic and mostly middle to senior execs in their organization.  May be the rigors of teaching ie the assessment and grading makes the idea of teaching challenging.  If we could only be like Plato or Aristotle or the Chinese master whose only test is life/or a boxing match itself.... And if only students would not be grade conscious.  (It reminds me of a conversation from an MBA student I conversed in the elevator, who said she would enroll in entrep if it were an easy 4...)

 The comments I earlier made on BP early on may not have reached them

Comments on earlier business plans submitted

From Smartblog - Why some BP do not succeed

Pranav New York Case Analysis by: Rophele Ocampo

Prof Jorge,

Please see my assigment on the Pranav New York case analysis SPADA.

SPADA Case Analysis: Pranav New York

Situation:

Karlo Nisce and Mark Orbos, MBA students at AIM opened a first male spa business (inspired in New York) in the Philippines last quarter of 2004 at Robinsons Galleria as part of their course requirement for graduation.

Problem:

The business incurred immense losses after its 3 months of operations due to the following:

A. Wrong Location

·         The spa's stall is located in the body senses section at the 3^rd floor where mostly females' market concept stores are open and is not an easy access.

·         The body senses section is located at the opposite of the foot traffic.

·         The mall's demographic mix is dominated by the female segment.

B. Poor Quality of Service

·         Employees are all females where needs of men are not properly delivered such as shaving and strength/pressure for massage.  

·         Chairs used are not barber's chairs which the effect is that simultaneous service process is suffered.

·         Spacing of chairs is too narrow and not conducive for working.

·         Air conditioning of the spa is too cold which customers might not like the experience of shivering while having a massage.

C. Poor Marketing

·         Due to net loss, marketing was taken for granted and was removed from their solutions since it they have considered it as an additional expense.

D. Business was not systematically studied

·         The partners rushed in opening the business due to their considerations of rent expense, season's demand, excitement of their venture concept, and requirement for their graduation without carefully studying it.

Alternatives:

A.  Close the Shop

·         Since the business is not profitable and to further not incur additional losses and waste money.

B.  Re-locate

·         Since the location is a mistake, better find another location to which the business is more suitable. Location preferably on the Fort area or Makati CBD area since these area is also a good marketplace. Place should be of easy access preferably not a stall in the mall but in a standalone commercial establishment which is dominated by their primary target market.

C. Re-position

·         Remove the spa services since this is the service that occupies a lot of space and has the lowest revenue and focus on the strength of the business which is their salon services.

D. Improve Quality of Service/Re-branding

·         Undergo employees with an intensive training to produce quality service. With quality service brings word of mouth advertising which is the most powerful promotional marketing.

·         Consider male crew to create additional market and address other needs of the customers which also understands the male segment needs.

·         If to maintain the all female crew strategy, make sure to train and delight the service that the men segment needs.

·         Chairs to be changed to the appropriate barber's chair.

·         Temperature of the spa room should be suitable for massage.

·         Interior of the spa and spacing should be conducive to working and favourable for their primary target market.

E. Re-positioning

·         Changing the concept from an all male spa to a unisex spa to widen the market and generate more income. Revenues over anything else.

F. Marketing

·         Strengthen the Marketing of the business, Pranav has remove its marketing since the business

Decision:

With the alternatives mentioned, alternative B and D will be the most recommended in my opinion. Maintaining the concept of an all male spa is a very appropriate move since this concept creates originality and uniqueness. This is actually one of the strengths of the business but the wrong location and quality of service is the reason why the outcome of revenues is not what is expected.

A good Location is a very important consideration when opening a business because it is where the need and demand is being conceptualized. Improving the quality of service on the other hand also plays an important role in generating customers, maintaining their loyalty and loyal customers to help you market new customers.

Action:

The business is really feasible. As indicated in the study and as mentioned by the professors at AIM, the concept is actually a good business venture.  Applying the recommended alternative decisions with an excellent marketing strategy will help the business eradicate its losses and incur profit; the business will eventually have its place in the market. Marketing has always been an essential tool in having the business become profitable.  As Marketing major, you see to it that in every business you always analyse the SWOT (Strength, Weakness, Opportunities, Threat) of the company, turn the Weakness and Threat to Strength and Opportunities.

Submitted By:

Rophele Louie C. Ocampo

AGSB – Clark Campus

Pranav case analysis by Roman Cruz AGSB Clark Entrep

Good evening Sir!

Sending you my case analysis on the PRANAV CASE

ROMS

PRANAV CASE STUDY

by: Roman M. Cruz

SITUATION

Pranav New York was envisioned as the first male spa in the Philippines and the fulfillment of the need of the Filipino market for an integrated grooming and wellness services for men. It is situated at the third level, west wing of Robinsons Galleria. Something that is uniquely different from its direct competitor, Roberto’s barbershop who is located at the ground floor of the mall.

The business was a product of Mark Orbos and Karlo Nisce inspiration of their own experiences as patrons of barber shops, salons and spas, to which they are convinced that there should be one stop shop that will cater all these needs of the male population for grooming and wellness services. In starting the business concept, they had made their homework in conducting different market study to test the potentiality and success rate of their new venture. However, some data gathered were left unstudied and or unfinished, even their professor has noted disparaging comments on  their ventured idea. In effect, after the third month of operation, the business is losing money.

PROBLEMS AND ANALYSIS

Identifying these data that were left unstudied by the two budding entrepreneurs are the following:

1.     Demographics- though their conviction ofestablishing the first all male one stop shop that provides grooming services and wellness to the male populace is good, it has been noted that for theirselected location, the Robinsons Galleria, the foot traffic are skewed towards female segment which comprised about 60% of the mall goers. More so, this was further highlighted when they had found out thru the gender composition andmarket share, there was a dominant incidence of the female market in Robinson’s unisex salon, while only an average of 13.28 % of females was observed at Pranav. This should had been greatly considered during the initial stages of the business concept to which the wrong market reading as created a spiral effect on the output and structure of the business. In essence, there is lack of critical mass ( male segments ) that will be crucial in sustaining the business in which taking into consideration their Mission and Vision which is concentrated as the first all male one stop shop in the Philippines.

2.     Location- the selection of the location of Pranav was a result of eagerness and without proper planning and study. Initially, Robinsons Galleria itself has a great potential in terms of having a big chunk on the catchment rate considering its high foot traffic characteristic. But locating Pranav at the 3^rd level of the west wing of the mall is totally slashing its business potential because from the study itself by the leasing department, most male traffic are coming in from the east wing and on the center floor of the mall. Infact, its main competitor, Roberto’s barbershop is located at the ground level. Male segments will not exert a lot of effort on going in the third level only for Pranav especially if they are with their female partners, wives or girlfriends.

3.     Price sensitivity- basing on the results of their further study, it has been revealed the leaders in the industry are those with a fairly affordable and competitive pricing. On the other hand, those high-end position brands are lagging behind. Pranav pricing is categorized in this set of high-end positioned brand.

4.     Dominance of the female segment and higher spending level- on their study, female spent on the average, 91% more than the males. Thus females were certainly a market that was too profitable to exclude and overlook in the micro market of Robinson’s Galleria. Consequently, these female markets are often seen on unisex salons.

5.     Structure and processes failure- as noted by their professors, there are all female crew that were to attend and appeal to the “macho” psychographic target customer of Pranav. Training was also an issue. Example of which is that the owners had failed to realize that these all female crew were not taught on shaving men. The choice of chairs were confined on immovable black lounge chairs rather than a barber’s chair which limits the potentiality to offer other services to its clients because, customers would always feel uncomfortable on hopping in to different chairs/area while availing of the services. The spaces between chairs are too narrow. The Spa was too cold. Air conditioning units could not be adjusted to a higher temperature. The office space block some of the frontal window which can contribute a negatively in the store visibility.

RECCOMENDATIONS AND ACTION PLANS

After identifying the problems, it has highlighted that the problem of the business was largely concentrated on the failure of proper strategic study before conducting the business.In effect, a weaker top line has been achieved that has causing the bleeding in the bottom line of the business PnL. The thought of being the first in the country in their offerings overshadowed the science of market study and interpretation, which is so much critical in putting up a business. However, in order to solve the problem and trouble shoot Pranav and realign it to make it a profitable business, here are the following recommendations:

1.     Revision of its business objectives and realigning it to accommodate the female market in which it has a promising great potential for sales and market share growth just like of the industryleaders, which are commonly unisex salons.

2.     Rationalize service offerings by removing services that are not contributing much but covers a bigger space in the salon. Instead, focus on its core services that are driving sales and attracting customers.

3.     In relation to the rationalizing of service offerings, realigning of the structure of the salon is needed to accommodate the entry of the new market segment, which are female. This means also leveraging on their strength of having a large floor area that could handlelarge capacity or volume of customers in a given period of time.

4.     Relocate the business into high traffic areas if its possible catering to both male and female market.