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SMEpinoy MBAlite

To help businesses succeed in the New Normal, we are dedicating this webpage through tips on how MSMEs can manage using MBA principles.

CH 1 : How my sanity survived the New Normal? – 2021

I am revitalizing my 2020 article into a video.

Below is my article in 2020:

CH 1 : How my sanity survived the New Normal? – 2020

Before the ECQ I have some routine breaks that revitalized me, like early morning walks in the beautiful campus of the Ateneo (felt like Baguio even in summer), weekend beer with friends and office mates, church community activities and a sideline business that quenches my thirst to share. My routine breaks are nature and community, then came the Covid-19 pandemic where I was forced to stay home for months and close my sideline business. I was privileged that even during the ECQ I was still able to work from home and have a family to take care of as a routine. I could not imagine the otherwise of being alone and doing nothing. Having got used with routine breaks, I tried new activities such as gardening, delivery disinfection, home repairs and insect extermination. I also kept myself updated with news and pretended to be a back-seat IATF, but my sanity was still breaking while trying to be normal in the New Normal. The intensity increased when it became clear that the New Normal will last for around two years. I felt like the boy in the video, I was becoming grey.

After a few weeks, I shifted my mindset from being inward to outward focused, my thirst to share was awoken once more. It started with a free webinar on how to manage your business on the Post-ECQ using the knowledge I have gained as a back-seat IATF and hours of reading on the internet. The message was simple, to survive in the Post-ECQ MSMEs needs to go digital and Reset-Realign-Restart(a). To Reset, I re-assessed my SWOT(b), Strengths and Weaknesses during the ECQ and looked at the Opportunities and Threats then started strategizing for the New Normal. I saw that my Strengths matches with the Threat the MSMEs will face on how to operate in the New Normal and made this as an Opportunity to help MSMEs succeed in the New Normal. This will be my re-mission, a rehashed mission to re-focus to support MSMEs. I took the SMEpinoy.com brand out of the “baul”, and planned to use this as a vehicle for my re-mission. I created a BHAG and created an initial plan using the Business Model Canvass(c) framework. To Realign, I fired up again my sleeping partners in Servus and asked for a re-commitment, to continue working with those who are still willing. To get new blood, instead of finding partners or start a new company, which is unwise knowing how hard it is to close a corporation, I instead looked for new alliances with existing businesses. People who like me are just waiting for the starting gun of the lifting of the ECQ and start sprinting to do business in the new Normal.

But this was not the case, we were just brought down from ECQ to GCQ and still finding it hard to Restart. More businesses are forced to close or slow down which cause a lot of people to lose their job. Digital Commerce was booming even though the government said they will tax them. DTI said the online sellers should register their business so the online buyers can run after suppliers of defective product. I see the value of DTI’s reminder to protect the online buyers, but I also see the risks of registering your business. A business is not simply finding a product or service, branding it and selling it. The department you see at large corporations, HR, Operations, Finance, etc. must be present in any business big or micro. Although for big businesses it can be a division for a micro enterprise it will just be a function done by the sole owner of the business. Not doing this other functions is one of the major reasons why less than 0.7% of businesses in the Philippines survive more than 5 years, it is even much less during the Covid-19 pandemic. As it is hard to register a new business, it is much harder to close a business. During the GCQ, I am receiving at least five FB page group invites a day for new online businesses. Based on the statistics, from the 25 new FB page invites I receive per week only 1 or 2 will still be there 5 years from now.

Thus, I saw a new segment of society that needs the support of my MBA and more than 23 years of experience as an Entrepreneur, people who lost their old source of income and trying a new one. I took out again my trustee Business Model Canvass Template to create SMEpinoy Business Sanctuary whose mission is to guide startups from the dream stage to the expansion stage. The GCQ, as a blessing in disguise has given me time to Realign before Restarting a better planned and equipped SMEpinoy.com.

To answer the question, SMEpinoy.com and the weekly “e-numan” is how my sanity is surviving in the New Normal.

References:

  1. Reset-realign-restart : https://www2.deloitte.com/us/en/insights/economy/covid-19/guide-to-organizational-recovery-for-senior-executives-heart-of-resilient-leadership.html
  2. SWOT Analysis : https://en.wikipedia.org/wiki/SWOT_analysis
  3. Business Model Canvass : https://en.wikipedia.org/wiki/Business_Model_Canvas

CH 2a : The struggles of an Entrepreneur – 2021

I am revitalizing my 2020 article into a video.

Below is my article in 2020:

CH 2a : The struggles of an Entrepreneur – 2020

I have learned to make it a habit to do an external analysis of the macro-environment to anticipate the different forces that might affect my business. The Macro-Environment Analysis, or some call it the PESTLE Analysis(a), is one of the MBA frameworks in Strategic Management. One method to do external analysis is by keeping up to date with the news, much more in the New Normal. Recently one news that came out will have a big impact on businesses in the Philippines. There is a sharp drop in the Philippine economy, much worse than the 1984-85 economic crisis during the Marcos-era.

This is a Threat in the Economic Factor to all businesses in the Philippines.  During the ECQ I was optimistic, once the Quarantine is lifted people had the SAP to still spend in the New Normal. But the prolonged quarantine is depleting the savings of most Filipinos. OFW’s are going home, people are losing their jobs and businesses are closing. I am wondering how much cash will be left circulating in the Philippines after the quarantine. I am feeling sad, this has also brought back memories of how hard it was in 1984-85, our family had a major setback in our lifestyle during the 1984-85 recession which gave me bad memories that built my character. From this experience, I learned to live a simple lifestyle.

Filipinos and businesses struggled during this period, we had the Smokey Mountain (not the band) and Negros (including the Escalante Massacre(b)) which was our very own Ethiopian Famine (Band AID(c) and USA for Africa).

Before the Pandemic, a Philippine statistic was less than 0.7% of businesses survive more than 5 years. I could imagine that in this pandemic it will be much less. To show it in a different lens, I receive around 5 new Facebook Page invites for new businesses per day, that is around 35 per week or 140 new businesses per month. If we follow the pre-pandemic statistics, only 1 of this 140 new businesses will survive more than 5 years. During the Pandemic where businesses are closing, the Philippines would be lucky if 1 of around 200 business would survive more than 5 years.

If you are a neophyte entrepreneur during the pandemic or even have an existing business, you need to ask yourself, how can I be the lucky 1 to survive more than 5 years. Follow this up with the following questions:

  • What is the difference of my product or service with the others existing in the market?
  • Aside from a product/service and an FB page, how can this difference make me capture a chunk of the pie (market share) to make it feasible to maintain this business?
  • If I were lucky enough to capture a significant pie of the market, how can I protect this competitive advantage to make me survive more than five years.

The struggle of an entrepreneur is on how to develop a product or service that can capture a significant market share that will make it financially feasible to survive in the now and after I captured this market share, how do I protect my competitive advantage to expand in the tomorrow. This struggle is greater during the New Normal where the pie being shared has decreased and the number of new players increased.     

A lot of people dream to be an Entrepreneur by necessity, having lost their jobs, or were enticed by the thousands of rag to riches stories. There are exceptional entrepreneurs who started their business during the recession. One of the business cases we analyzed when I was earning my MBA was Chowking Food Corporation, its founder Robert Kuan started his business in 1985 and even expanded during the recession. His strategy was to build his company when it was cheap to setup a business and be in position as the economy grows.

The silver lining, if the forecast below will be accurate, we have the same scenario as 25 years ago.

The economy is expected to recover after two years, there is hope. There are also people like Robert Kuan who believes that now is a good time to start your business. Actually it is not the business you need to start, its your product or service. Capital is cheap and the best time to test your product/service.

But still we have to beat another statistic and be The 1 of the around 200 new businesses to survive more than 5 years. People do not just enter into something to fail and maintaining a business with only a product and an FB page is a sure way to fail. We enter a battle prepared, just like a general you need to spy on your enemy, know the terrain, assess your soldiers and then create a battle plan based on all this factors. I will discuss in the future chapters of SMEpinoy MBAlite how to prepare yourself for battle so years after you can call a little part of your life Happyness…

https://www.youtube.com/watch?v=x8-7mHT9edg

References:

  1. Pestle Analysis :  https://pestleanalysis.com/what-is-macro-environment-analysis/
  2. Escalante Massacre : https://en.wikipedia.org/wiki/Escalante_massacre
  3. Band Aid : https://en.wikipedia.org/wiki/Band_Aid_(band)