Development of business plans crucial to starting a company

Published November 16, 2019, 12:00 AM

by manilabulletin_admin

By Madelaine B. Miraflor

The development of a comprehensive business plan is crucial to starting a company, but even the existing micro, small and medium enterprise (MSMEs) are lacking this.

That could be because the owners forgot to develop one, they didn’t know how to come up with one, or they thought they didn’t need it.

Either way, Paulo Tibig, a mentor at Go Negosyo, said building a company should always start with the creation of a business plan.

“Your business won’t survive by just having guts,” Tibig said in Filipino. “Have a business plan.”

That business plan, he said, should include basic information like the specifications of the products and services to be offered by your prospective company, pricing, positioning strategy (how do you intend to sell your products), what is your differentiator, processes, and who are the people who will help you put up the business.

The good thing is that with technology, aspiring entrepreneurs can now find a template for a good business plan on the Internet, he said.

But, that is just the start. “You have to really, really know what kind of business you’re getting into,” said Tibig, who also happens to be the president of VCargo Worlwide, one of the fastest growing express and logistics players in the Philippines.

Another thing about starting a business, according to Go Negosyo Mentor Jenny Wieneke, is it’s also about having “the right entrepreneurial mindset.”

“Are you doing this just for bragging rights? Or are you doing it to leave a legacy to your children, to feed your family, etc.?” Wieneke, who is also the chief finance officer of Tokyo Tempura, said in a separate interview.

“The bigger and deeper the purpose, the more likely it will succeed because you will work harder for it,” she added.

She also said that when starting a business, it is always best to find a product or service that addressed a need “because a business has to be relevant in order to succeed.”

For example, passenger transport and curb-side delivery service app Angkas, she said, addressed the need of having alternative, affordable transportation, especially during traffic. “Look where it is now,” she said.

No loan, no problem

When one puts up a business, they have to make use of what they have first.
That’s according to Tibig, who said financing problems should only happen to those who are expanding.

“On financing, for most of the businesses, we encourage to start small. I always think that if you already have existing funds, work around it first,” Tibig said. “It doesn’t matter how small or big, start with your own money.”

That will be for one’s peace of mind, he added. “If you are a start-up, no one will lend you money. There are some fintech [financial technology] companies that lend money but they will ask for collateral. Would you want to sleep at night knowing you owe someone a lot of money?”

Wieneke, for her part, said there are now several funding options, but then again, these are for the existing small businesses that are looking to expand.
She said the government, through the Department of Trade and Industry (DTI), has already made financial loans for MSMEs accessible.

“There is the Pondo sa Pagbabago at Pagasenso Program of the administration which aims to eliminate the 5-6 habit of lending. Through the SB Corporation, the government has guaranteed 1 billion loanable funds annually servicing 40,000 MSMEs nationwide. The DOST [Department of Science and Technology] also gives financial grants to worthy MSMEs,” Wieneke said.

Meanwhile, Tibig said that other challenges that aspiring entrepreneurs will have to face upon starting a business would be “numbers and accounting” and “HR [Human Resources] related issues, including familiarizing yourself about the labor laws.”

The good thing is that there are groups like the Philippine Center for Entrepreneurship (PCE) – the non-stock, non-profit organization behind the Go Negosyo brand – who help small businesses and aspiring entrepreneurs be on track with their goals.

“Go Negosyo has been in this advocacy about 14 years ago. Before that time, we do a lot of caravans all around the Philippines to speak about negosyo [entrepreneurship]. Now, leading to that, it evolves into the program of mentoring. The problem with caravans is we can’t measure the results of them. So with the partnership with DTI, we launched the Kapatid Mentor Me Program,” Tibig said.

Where to invest

Wieneke said that ideal industries to invest in now are food as well as health and wellness.

“Food is always an easy business to go into. People are always on the lookout for new food concepts to try. Health and wellness, too, is a growing industry. Gyms, training centers, vegan, vegetarian, keto, yoga, crossfit, Jiujitsu, etc. are very relevant in this age of health awareness,” Wieneke said.

In terms of getting business and all the other permits, Tibig said it’s pretty easy now.

“The government is working on the measures to make it easy for MSMEs to start a business,” Tibig said. “There has been a lot of improvements now.”