Entrepreneurship through Franchising

Part 1: The process of getting into business

There have been many Franchise-related Exhibitions and Symposia.  In these various activities, the focus was on what business opportunities are available.  In fact, in many instances of people wanting to enter business, the focus is on the type of business and not in the process.

I like giving the example of an OFW in Hong Kong whose lifelong goal was to put up her own business. She invested all her life savings in a balloon making business and lost all her capital in six months.  She could not understand what had happened and wrote me for advice.

To help her, I asked her some questions.  When I asked her what her real interests were and why she went into balloon making, she told me that she was really into cooking but that her auntie had strongly recommended balloon making because she had enough money to start such a business.  Her auntie also told her that it is a good business because she has a friend that does well in that business.

The cause of failure was quite obvious.  First, she took the advice of one who was clearly not a capable business advisor.  Second, she decided based on the amount of capital she had readily available.  Third and the biggest mistake of all is that she went into a business which she did not know anything about and where she had no real personal interest in, and most likely, had no technical capability to contribute.  It was clearly a wrong decision for this lady entrepreneur “wannabee”. 

There are also those who want to know what their business options are.  One such enterprising lady had the opportunity to set aside PhP5,000 cash every month from the household and personal expense budget that her husband would give her.  She had an accounting background and some work experience with an appliance sales and service company.  In that company, she worked as part-time bookkeeper and customer service supervisor for more than three years.  She really enjoyed the customer relations part of her experience. Today, she is a full-time housewife and loves food-related activities. 

Given this personal background, she would probably do well in food and/or service type businesses.  The question is what type of business and will she have the necessary capital to do it? As much as possible, she also doesn’t want to bother her busy husband for frequent advice and she wants to experience setting up her own business. 

This is a situation where getting into a Franchise business may be a viable alternative.  Serious franchise businesses provide you tested business models along with market planning, technical support and logistics systems as well as personnel training, accounting procedures and financial controls.  This allows you to learn the business at the soonest possible time with the least number of mistakes which you would otherwise incur if you started on your own without experience.

Part 2:  How to choose a Franchisor and a Franchise Business:

There is a list of Filipino Franchisors and their broad range of small businesses available.  Some are new but quite a number have proven track records.  Let’s assume that you are the housewife who is competent in a food or service type of business and you choose a business that requires first year investments (including franchise fees) of around PhP200,000. Most good franchises demonstrate payback of about three (3) to five (5) years and impressive service support.  Your most logical starting point is to seriously consider a food-stall business, particularly one with an available franchise near your home. As my partner Entrepguru Andy always says, most opportunities can be found just around your neighborhood. Look around you and observe what is it that your community badly needs?  Don’t just follow what everybody is already doing.

Another good thing about Franchise businesses is the business training included in the package.  Usually, the training period is three months but you would need to pay 10% or PhP20,000 (subject to negotiation with the Franchisor) as soon as you sign the franchise agreement. This type of a Franchise business might project minimum net cash earnings of PhP3,500 and possibly up to PhP6,000 per month.

Here are some tips on how you can move forward:

1. After determining your preferred line of business, make sure that your chosen Franchise business has a sufficient and sustainable market in your location.  This is where successful and responsible Franchisors can provide you meaningful information and advice.
    
2. Validate the Franchisor’s legitimacy and claims through the Association of Filipino Franchisors, Inc., or through other Franchising Associations to which your chosen Franchisor may belong;
    
3. Validate the actual experience by directly interviewing the FIRST Franchisee and some other Franchisees to validate the truth or falsehood of the market and financial claims of the Franchisor.  I am personally aware of situations where franchisors do not live up to their claims. Do not allow a franchisor to keep you from talking directly to his existing franchises for any reason. If the franchisees are happy, it is for the Franchisor’s and your best interests to learn all about it.
4. Find out if the Franchisor has any pending legal cases with any of the Franchisees, and if there is any, find out why.
    
5. Secure serious legal advice on the merits and demerits of the Franchise Agreement. Make sure that you are satisfied with all the provisions of the Franchise Agreement, particularly on your option to terminate your Franchise Agreement for good reason, without any difficulty.
    
6. Be aware that anything not written in the agreement, even if promised by the Franchisor, may not be fulfilled. That being said, in the final analysis, aside from the technical know-how, the sincerity and good heart of a Franchisor will be the deciding factors on your success;
    
7. Make sure that all the sources for funding are in place, before you even start investing your first peso.

Will this lady succeed in a franchise business?  I always emphasize that in any business, there are no guarantees but there are ways to reduce the risks.  If she at least follows the advice already given above, she has a good chance of success.

Sidelines and Internet

Responsibilidad nating lahat na palawakin ang ating kaalaman at hasain ang ating karunungan. Ito lang ang paraan para magkaroon tayo ng oportunidad na kumita ng pera. Anu-ano nga ba ang mga oportunidad na ito at anong klaseng dunong at kaalaman ang kailangan para magamit sila?

Ilang beses na akong nakatatanggap ng sulat mula sa mga maybahay na gustung-gustong makatulong sa kanilang mga mister na tustusan ang pang-araw-araw nilang pangangailangan at paginhawahin ang kanilang mga pamilya. Gusto nilang kumita rin ng pera, pero di nila alam kung paano. Ang tanong nga ng isang 38 years old na maybahay, “Saan ba ako dapat magsimula? Wala pa naman akong sapat na pahahon dahil ang buong araw ko’y nauubos sa pag-aalaga sa aking mga anak. May paraan ba talaga para kumita ako ng pera?”

Maraming paraan para kumita at makatulong sa pag-iipon ang isang maybahay. Pwedeng bawasan mo na lang ang iyong gastusin, o pwede rin namang magtayo ka ng sarili mong negosyo. Ang una mong dapat gawin ay isipin kung saan ka magaling. Ano ba ang iyong mga natatanging husay o talento? At ano ang talagang gustong-gusto mong ginagawa?

Kapag nagkaroon ka ng libreng oras, mag-ikut-ikot ka sa inyong barangay o sa mga villages at subdivision sa kapaligiran ninyo, —baka sakaling may mahanap kang pwede mong pagkakitaan. Halimbawa, baka maraming bata o mga dayuhan sa inyong komunidad na nangangailangan ng tagaturo. Kung gayon, hindi kaya magandang magtayo ka ng tutorial services? Magsimula ka nang maghanap—magugulat ka na lang na nandiyan lang right under your nose ang mapagkukuhanan ng extra income. 

Marami rin sa mga serbisyong nakasanayan na natin noong ating kabataan ang wala na ngayon, gaya ng shoe shine. Dati-rati, ang mga batang shoe shine ay nag-iikot sa mga bahay-bahay upang linisin at pakintabin ang ating mga sapatos, pero ngayon wala na sila. Hindi mo ba naiisip na pwede mo itong buhayin at pagkakitaan muli? Kahit sa isang barangay o subdivision lang, o sa condominum, maaari ka nang magkaroon ng maraming parokyano na katumbas ng dalawang libong pares ng sapatos kada buwan. Kung sisingil ka ng P30 isang pares, kikita ka ng P60,000 buwan-buwan! Bakit nga ba walang gumagawa nito?

Ang isa pang magandang gawing negosyo ay ang laundry—napatunayan na na malaki ang kita dito. Tingnan mo na lang ang Lavandera Co. at iba pang katulad nila. Napakarami nang nagsulputan sa buong Metro Manila, at marami sa kanila ay kumikita. Ang ginagawa lang naman nila ay nagbibigay ng serbisyong kailangan ng lahat pero wala na halos napagkukuhanan. Ganyan din ang gawin mo. Tumingin ka sa paligid mo—marami pang iba diyan.

During these days, everybody should know how to use the Internet. Lahat kasi halos ng bagay ngayon ay matututunan o matatagpuan dito. Pwede kang mag-aral sa iba’t ibang institusyon; pwede kang kumuha ng mga babasahin tungkol sa halos lahat ng bagay; pwede ka pa humingi ng payo sa mga dalubhasa. At ang importante sa lahat— You can do business, invest and communicate with anyone in the world through the Internet.  Lahat ito pwede mong gawin sa napakaliit lang na halaga, kung alam mo kung paano. Buti na lang hindi naman mahirap matutunan ang paggamit ng Internet, lalo na kung desidido ka.

Naaalala ko nga noong 1994, labingapat na taon na ang nakalilipas, nang nagsimulang magkaroon ng texting ang Globe. Noong panahong iyon konektado ang asawa ko sa Globe kaya kami ng mga anak ko’y mayroon nang mga cell phone at nakakapag-text na sa isa’t isa. Wala pa halos nakaaalam tungkol sa texting noon at kahit nga ang Globe ay ilang libo pa lang ang subscriber. Walang nakakaintindi sa ginagawa namin at may mga nagsabi pa ngang pagsasayang lang ito ng oras. Lalo na ’yung mga medyo may edad na—ang sabi nila, hindi daw nila ito pag-aaksayahan ng panahon at hinding-hindi nila kakailanganin.

Pero ngayon, milyun-milyong tao na sa buong mundo ang nagte-text, at ang Pilipinas pa nga ang tinaguriang “Texting Capital of the World”! Ang pagte-text ay parte na ng pang-araw-araw na buhay nating mga Pinoy. Lahat tayo, bata man o matanda, dito man sa Pilipinas o sa ibang bansa, nagte-text. In fact, many meetings and events would not be possible without texting.

Ganito rin ang nangyayari ngayon sa Internet. Marami na naman sa atin, lalo na ’yung mga may edad, ang natatakot dito at nagsasabing kahit kailan ay di sila matututo. Hindi lang kasi nila alam na isang malawak na bagong mundo ang naghihintay sa kanila kung pag-aaralan lang nilang gumamit ng Internet.

Napakaraming maaaring magturo sa atin at napakarami ring pagkakataon para matutong mag-computer. ’Wag sana nating sayangin, dahil kung marunong tayong gumamit ng computer at Internet, madali tayong makahahanap ng paraan para kumita at umunlad. Marami rin tayong malalapitan upang hingan ng payo ukol dito. Pero dapat ding mag-ingat, dahil gaya ng sa totoong buhay, may mga manloloko rin sa Internet. Hindi lahat ay dapat paniwalaan agad. Dapat pa ring kumonsulta sa totoong dalubhasang kilala ninyo at gamitin ang sentido kumon.  It is always best to check with the authorities like the Securities & Exchange Commission, Bangko Sentral ng Pilipinas and the Department of Trade & Industry when in doubt.

Kaya’t ngayon pa lang, mag-aral nang gumamit ng Internet!