3 Why Your Concept of a Business is Wrong


Open Your Own Business
That's it! I quit! I'm done with this!

Have you heard that line? Or should I ask, have you said that line? I bet you do. I'm an employee myself, and I know how it felt to be humiliated, infuriated and embarrassed by the bosses and feeling-bosses, only to wake up yet another day realizing you'll still be dealing with the same people. Is quitting the solution?

 
Resignation has always been the easier option for most people.

Or so they thought.

Suddenly, you blame your parents for not being the Ayalas' and the Cojuancos' of our time. You're poor so you need, must and should work! Then you blame the government for all other reasons you forgot to blame with your family. So you take a pill to instantly alleviate the oppression of being an employee. 

The pill?

A dream to find a way out. 
A Way OutSuddenly, you dream of becoming your own good, damn boss. You start thinking of the what ifs side of you. You even dream of becoming the Caguioa or Pingris of PBA, the Coco Martin of ABS, the Marian of GMA, the leader of a famous band and the wild list goes on. But then reality strikes you. So you instead dream of opening a resto, or a gym, or a bar, or the more famous of them all: 'magtanim ng camote sa probinsya'. 

Suddenly, you're a person of high hopes! 

Suddenly, you wanted your own business.

Good thing we belong to a genuine race.

What's good about us, Pinoys, is that we never run short of determination and the drive that is needed in having our own business. Be it a bakery, a salon or a repair shop, we never fail to justify the spirit of a champion entrepreneur that lives within us.

The sad part, though, is that many business owners, especially those on the start-up phase, has that wrong concept of what a real business is. That's why we often meet a person who declares I have a business! and along the conversation, you'll learn it's not a business as he proudly know it, but actually his job.

What does it mean?
Let's say you have a fish ball cart. And you're the one who gets up early to buy the needed ingredients from a nearby market and does all from preparation to selling of kwek-kwek on the streets. Do you have a business? No. Rather, this becomes your job. And just like a typical 8-5 job, if you don't go to work, you'll have no salary. Well, if you're employed on a regular job, at least you're eligible for a number of paid leaves, but not on this type of job. So it's not a business, it's a job. Hence, you are self-employed.

The worse part, like what a friend of mine did, is when you leave your regular job in hopes that your month-old business will thrive. That's too soon!

What my friend Jun did, was open a..uhm, I'm not sure if you've already heard this kind of business because it's..uhm..very new and fresh (if I'm writing this on 1990): a computer shop. Little did he know, like most Filipinos, that any small business will not be able to withstand the financial needs of the family by itself. Even if your business is doing well, you can't take all the profits. Your business should have its own reserved funds, which is to be used only for either capital expansion, such as when acquiring new assets or when unexpected expenses occur, such as repairs.

The problem with this setup is that, when you are self-employed, you do not have another source of income which you and your family needs for your living expenses, which all boils down to getting money from the business which in a matter of months, will kill it. 


When is the right time to leave your regular job then?
Resign from Job
While the idea of not having to work for someone else and just be your own boss is very enticing, this might be a little too risky and requires a very serious planning that neither do I have an idea of what it takes to.

But if I were to be asked, I'll say I'll go full-time to my business if its net earnings (that's sales less all expenses) is more than enough to cover our daily expenses.

It would be ideally cool if it's earning more than what my current payslip says. But that would be a little harder to achieve, at least in our current business set-up. So I'll take the realistic one:

Let's say our monthly household expenses is at 10,000 pesos, including electricity and water bills. So my business should be able to generate at least 15,000 Pesos on a monthly basis. So that any excess can be diverted to emergency funds and other investments or savings. So unless the business gives me such figure, I'm not going anywhere yet.

But what if you have a regular job, and on weekends you manage to run a small canteen? This is then called a sideline. And that's great because you earn some additional income on your free time! But again, it's not a business, just a sideline.


So what's a business?  
Be the BossA business, is only a business, when it runs with little to no supervision needed from you that it runs smoothly as if you're there and would just occasionally need you to decide on big, mostly financial,  decisions moving forward.

And this is where most Filipino entrepreneurs are stuck. We're afraid to delegate tasks to another person, to hire people. We're afraid to entrust the business to someone else. That's why most small businesses remain small. 


How could they possibly run an empire if they can't learn to trust someone just for their small business?

This is a normal mindset. I was like most start-up owners on the early months of our business (I have co-owners). I was the one doing the errands, doing the audits, talking to suppliers, dealing with customers and everything else.

Until I realize the business is already taking so much energy and time from me. Which I was not yet amenable to at the time since my job was still my bread and butter.

So little by little, I started delegating tasks I do best to someone from the family and started hiring people. Each week, I'll add tasks to them. Until I finally hand-over the duties of talking to our suppliers.

Today, I just check on the Excel and see the reports and decide on big financial decisions such as when acquiring assets or running promos and the like.   


Was it easy?
No, it never was. I believe there are at least 2 factors you need to consider before you can successfully hand-over the business to someone else: money and emotion 


Money
Of course, delegating a task means spending money. That's why most of us opt not to hire, since it'll cost us more money. Besides, you can do the job better than anyone else, for FREE! So why hire? This is what most start-ups have to deal with, and few were able to come up with the right answer. Because they don't think long term. If you wanted a small sari-sari store, fine. But if you want your business to grow bigger, then you should change your mindset.

Emotional Attachment
This is probably the hardest, at least from a businessman-still-a-human stand point. You started it, and you believe in the success of your own business.  So it would be certainly hard for you to find someone who shares that same vision. I guess a business is like your own child. Can you imagine how hard it would be for you to have someone else grow your child?

You have to start investing in people to do tasks you can no longer do. That's why when I started having a hard time balancing the time between what my job demands and the time I need to do all the things for the business, I knew I needed to invest in people.

Remember, one person can only do so much.

You need to grow your business. So it's a misnomer to think that people will only cost you money. In fact, lack of production and failure to grow your business will cost you far more!


PisoandBeyond


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3 comments :

  1. interesting. your posts are pretty bold and brave to go against the conventional. keep going

    ReplyDelete
  2. that's why it's better to co-own a company than own/run it. passive income at its best

    ReplyDelete
  3. Cool stuff

    ReplyDelete

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