Tips to Avoid Premature Bankruptcy for Young Business Owners

A great business mind is most often considered the best asset of a successful entrepreneur.

Being a business owner is always one of the seemingly more exciting ways to make a living. Considering the many opportunities in the market and the rise of consumer spending in the country, there is no surprise to why a handful of graduates choose to be young business owners.

Starting young in the world of business is always a good thing, but it can also be too risky especially if it’s a start-up and you’re doing everything by yourself. The primary concern when starting a business frequently revolves around finances. Do you have the money to start a business? Do you have all the requirements to apply for a business loan? These are the right questions to ask yourself, but remember that it’s not always about the money.

No matter how bright your ideas are, you won’t get anywhere if you don’t plan and execute a strategic approach toward entrepreneurship. Before you begin your venture, here are some ideas on how you can go about your business planning:

1. Outline your business goals. When setting your business goals, don’t focus on just making money. Not only does it sound greedy, it also does not give you the right kind of mindset as a business owner. Set goals for yourself and for your business so you can always be on target. Do you want to expand your business a few years from now, if it becomes successful? Do you want to get investors or franchisees?

2. Boost your knowledge on financial management. One of the downfalls of most businesses is the lack of knowledge about handling money. There are a lot of books on business and financial management that you can get from a bookstore. Otherwise, you can simply Google what you need to know. You can even find a lot of online videos and even business courses, free of charge.

3. Create a budget. If you are funding your own venture, you may have very limited resources. If not, it’s likely you don’t have enough cash flow. While it can be quite challenging, having a conservative stance towards spending will allow you to stretch your budget.

4. Prepare for a business credit card application. Even if you already have a credit card, never use your personal card for your business. Having a small business credit card to be used exclusively for business purposes is a much better idea. It will allow you to monitor and evaluate your business expenses. It will also give you enough financial flexibility in times of need.

5. Join business symposiums or conferences. Learn from the most reputable business speakers. It’s highly logical to learn about the experiences and hear words of wisdom from business professionals. You also need to consider these events as an opportunity to grow your network.

6. Be an expert in people-to-people and business-to-business relations. Don’t attempt to pull dirty tactics for your own gain. From clients and suppliers to business partners and competitors, never strain your relations with anyone. Being unethical will only backfire and hurt your business and your personal life in the long run.

7. Monitor your run rate. Every business owner knows the importance of monitoring how the business is actually doing. How is the ROI (return on investment)? Will you be able to continue with expansion or do you need to consider an abridgment? This allows you to identify the SWOTs (strengths, weaknesses, opportunities, and threats) of your business and to evaluate if the business is truly profitable.

As a young entrepreneur, you must not fear the many facets of business planning and execution that you will need to go through. Most of the time, people who take the biggest risks are the ones who get to enjoy a booming success.

 This article is exclusively written for PinoyCareerCenter.Blogspot.com by MoneyMax Philippines, the country's leading financial comparison portal which helps Filipino consumers make the right financial decisions as they settle on the best credit card, home loan, broadband plan, and more—fast, comprehensive, and free. Visit MoneyMax Blog for more financial tips and advice.

Growing a Small Business from Home

Many Filipinos today are considering going from being an average employee to becoming a small-time business owner. And this could be just one great move for them. Robert Kiyosaki once said in his book entitled “Rich Dad, Poor Dad” that financial freedom can be attained through establishing a business and investing.

Nevertheless, the country is undeniably booming with various business and investment opportunities. From manufacturing hand-crafted products to opening restaurants, the ideas are endless. They come up with innovative products and services that can stand even during tough economic times.

Starting a small business from home is usually the scenario here in the country. With a decent capital to get by, budding entrepreneurs are slowly climbing their way to the top through ingenious strategies. But just like any other venture, it doesn't come easy. Surely, challenges may come even if you're building your business at home. But with the right mindset and techniques, the journey towards financial freedom wouldn't be that much difficult.

A Conducive Work Environment
Regardless of what industry you're in, it is crucial to designate a workspace suited for you. There are lots of home office ideas swarming over the Net which you can take advantage of. Set aside some space in your house, preferably somewhere with minimal distractions. Moreover, investing in professional office equipment and furniture is a sound investment. Spending time in front of the computer means you need to be mindful about ergonomics. An ergonomic chair and keyboard saves you from repetitive stress injuries.

Keep a Strong Team
A home-based business isn't equivalent to a one-man show. The fact that it is business means you need experts to help you out. These are people who must be adept with aspects you are not familiar with. For instance, if you are not familiar with setting up an online presence, you may hire a web developer with an SEO and internet marketing experience. Aside from that, you may need the help of accountants, bookkeepers and even lawyers. Assess what your strengths are when it comes to running a business and focus on the parts which you are good at. Leave the rest to your competent team.

Branding Helps
Building your company also means building its identity in the market. Part of your business plan should be impressive yet feasible marketing strategies. Branding is all about establishing your business' credibility through delivering the message of your products and/or services clearly. Create ways to connect to your clients and customers emotionally.

Customer Service
No matter what size, businesses should always make their customers feel valued. When you come to think of it, your company wouldn't even suffice without them. Cultivating relationships with your target audience is extremely essential during the first stage of your business. Winning their loyalty is a matter of being grateful and respectful of them, be it through exceptionally answering to their queries and attending to their concerns.
Managing and growing your small business at home is definitely possible. Starting out while keeping in mind these concepts may even give you a bigger and brighter opportunity in the corporate scene.

AUTHOR BIO
Anna Garcia writes for Regus PH. Regus Philippines offers excellent serviced accommodation and business solutions in three of the largest metropolitans in the country: Manila, Makati and Cebu City.

How to use your income to be financially independent

There are many misconceptions about being wealthy or financially independent. People think that you are wealthy if you have millions of cash in your bank. Are you wealthy if you have 5 million pesos? What about 10 million pesos? Being wealthy depends on the person’s lifestyle. Even you have hundreds of millions in cash, but you have also millions of debt, then you would still be short of money.

“To be wealthy is a condition where your present financial resources can support your lifestyle over a long period of time, even if you do not work to generate income.”

If you are currently employed, or if you have business, then you have the capacity to become financially independent in the future. For the common Filipino, our personal income is our financial resources. There are two different kinds of income: one is active income and the other is passive income.

Active income comes from your job, talent, and skills that you have. There are 2 basic types of active income:

 primary income – this is the main source of our income. It comes from our salaries.

·         additional income – this comes from our sidelines or irregular incomes.

Active income should be only used to “fund your living expenses” and to “fund your savings and investments to generate future income for you.” It should be only spend for our needs not for our wants.

How about passive income? It “is the income that is generated by your earning assets and investments.” It is an income you earn even you do not work. It has two main purposes:

·         “to further increase your investments that will fund your future needs when you have to stop working.”

·         “to fund your periodic WANTS”. This is where you’ll get the money for the things you want like vacation, parties, fashionable clothes, etc.

Let me use the experience of PJ as a example written in Dr. Colayco’s book.

“At the age of 32, PJ became a very successful marketer since he was a very driven and hardworking man.”

“He was able to earn over fifteen million pesos in just 18 months. His dream, apparently, had finally come true. Emboldened by his instant wealth, PJ began to indulge in unnecessary luxuries. A brand new Pajero was his first purchase. Next came the extensive remodeling of his family’s rented apartment, expensive furniture, two more vehicles, millions “invested” in a pyramiding scam; a movie production that was never completed; and big loans to friends for projects that were not viable. “

“He spends a lot of money on things that were unnecessary and did not bring in any income at all.”

“Sadly, financial success is not the end of PJ’s story. In less than two years, he ended up losing most of the money he had earned.”

Now the question is this: “How did he end up losing all the money in a short time? PJ failed to understand what his needs are, and what his wants are. He shouldn’t use his active income to pay for his wants. 

According to Dr. Colayco, he should have:

·         “brought a cheaper but useful and reliable car first”

·         “saved the difference in cost and invested it to earn interest”

·         give himself some more time and let his investment accumulate earnings”

·         set fixed financial goals and once achieved, he could use this passive income to upgrade his car to a Pajero”

To achieve financial independence is possible if we will use our financial resources properly. We must always remember that active income should only be used for our NEEDS, and passive income is only for our WANTS.

You do not need to wait to be financially independent. You can achieve it “at any age.” But it’s your advantage if you will start to save while you are still young.

Lastly, “to be wealthy means we have the passive income that can support our chosen lifestyle until we die.”

Adapted from the book of Dr.Colayco’s Wealth Within Your Reach.

To learn more on how to be financially independent, kindly visit his website.

6 basic needs that we must have.

What is our need? Needs are man’s basic requirements to be able to live daily. Examples are food, shelter, and clothing. We need food so we can have energy to work and study. We need shelter where we can sleep. We need clothes to wear in school, in office, and at home. To live without these needs makes our life difficult.

If you have a job or have a source of income, then it is your advantage to meet your needs. But despite  of having a job, there are still many Filipinos who cannot save money, and usually run out of money.
Many of us live beyond the means because we sometimes do not know the difference between our needs and wants. Usually, we measure our needs based on the things we see around us, pressure from our friends and family, and being insecure or envious of others.

To solve this problem, we need to identify our real basic needs. Below are the real needs that will help us to live well.

1. Food.
Filipinos are known as food lovers. Everywhere you go, you can see many food shops like fast foods restaurants to fine dine-in restaurants. And usually, it is one of the reasons why we always run out of money. To eat a simple and nutritious food cooked at home is a need. But eating in an expensive restaurant is really a want. However, there are times that it is cheaper to buy food rather than to cook. Just choose which option will give you nutritious food at the lowest cost.

2. Clothes.
How many clothes do you really need? You need clothes that are clean, neat, and are suited for your daily activities. To buy expensive clothes which is out of budget is a want. Take the example of Jimmy.
“Jimmy is admired because he is always dressed well and neatly. Actually, he only has four pairs of pants and ten shirts, even if he can afford to buy more. He says that he is able to save by buying only when his pants and shirts are already worn out. He chooses high-quality clothes that will last long and will still look good, even if he has worn them many times.”

3. Housing and Utilities
A house which is enough for you and your family, with simple furniture, a basic cooking set, a TV set, simple cellphone or telephone are needs. However, a big house with expensive furniture, expensive home entertainment, and expensive cellphone are wants.

4. Transportation
Enough money for you to be able to work and return home is a need. Sometimes, it will cost you less to own a car than to take public vehicles. How about buying a car? There is nothing wrong in purchasing a car. It only becomes wrong when you buy it without carefully examining your financial capacity to pay.

5. Education
Many young people think that to study in a prestigious school will give them a good future. This idea is not true. You can be a successful student if you are diligent in your studies. If your parents cannot afford you to enroll in your chosen school, then you can help them by:
• applying for scholarships
• becoming a working student

You must also remember that choosing what course to take and what school you will study is an investment decision, so choose wisely.

6. Recreation
You need a simple recreation to help you relax and cope up with stress. There are many free things that you can enjoy without worrying any financial expenses.
• you can go to a public park
• you can read books and magazines
• you can spend quality time your family
• you can jog every Sunday morning
• etc.

Avoid travelling in different places and having big parties if you will use the money from your active income. Travel and big parties are only for those who already have passive income to spend.

To live a financial stress free life is possible. It only depends on the person’s lifestyle,and to live within your means is the best rule.
-Adapted from Wealth Within Your Reach book 2

7 Reasons Why Filipinos Are Always Poor

I was reading a financial book written by Dr. Francisco Colayco last night. The title of the book is “Wealth Within Your Reach, Pera Mo, Palaguin Mo.” It is an eye opener and very informative book. One of the topics that caught my attention is “Your Obstacles To Financial Freedom”. The author layout the seven fundamental obstacles in achieving financial independence, and he provide solutions too. Let me share what he had written. I will quote him, and at the same time I will give my personal opinion.
1. Procastination.

Filipinos are known procastinators. We have this manyana habit of putting off tomorrow what we can accomplish today. Do not procastinate. It will cost you dearly.

One example of  is saving money in investments like government bonds that offer high yielding interest. If you started saving money while you are still young, then for sure you will not have financial problems when you reach your retirement age.
2. Inflation.

The economic condition of sustained price increases. Money is an asset that continuously loses value. When prices of commodities go up, the value of the money decreases. In order to maintain or improve your personal wealth, you must find a way to beat inflation.

When I was a kid, I still remember that I can buy a candy that cost 25 cents. But this time, you cannot find a candy that cost 25 cents. Dr. Colayco estimated that inflation rate is increasing 4% every year. He also suggested the following solutions:

We must make sure that our incomes and our savings and investments must grow by at least 4% or better...It is therefore, not enough to just save. Where you put your savings will determine whether your earnings rate will beat inflation...As a rule, you should target an earnings rate, that is 4% higher than inflation.

3. Unreasonable Demands of Family and Friends.

Oftentimes, family and friends expect support to the point of unreasonableness...It is so familiar a picture in barangays all over the country where the family members of OFW spend their time doing nothing while waiting for the remittance of the OFW. Come remittance day, the barangay goes into mode. The money that was sent for education or for investment in a business is diverted to unnecessary recreation, drinking session,gambling and good time.

The above example happens to any Filipinos who work abroad. He suggested that there are ways to combat this problem:

• Be honest with your family members. Tell them that your hard earned money is not to be used in unnecessary things.
• If you are sending money for tuition fees, then it is better to send it directly to the school. This is to avoid of spending the money.
• Save money for yourself. Do not send all your money to your family.

4. Yourself.

Negative values can hinder us from achieving financial independence...Our fear of failure, laziness, negativism, bad spending habits,lack of emotional and financial intelligence can keep us from succeeding in life...Don’t be a loser. Be guided by winners. As they say: Losers criticize. Winners analyze.

Last week, one of the hottest news in our country is “investment scam” that happened in Pagadian. For those who were scammed, that experience is very painful. But “painful is a very powerful motivator tool to move you into action.

Walang nagtatagumpay na hindi dumadaan sa pagkabigo.

If you experienced of being fooled by investment scammers, or your business went down, do not give up. Learn from your mistakes, and move on.
5. Laziness.

Many of us have developed the habit of too much dependence on others. This has led to indolence and sheer laziness...This war for financial independence is a personal war.It has to be fought individually. We cannot let somebody else fight it for us.

His statement is really true. There are many instances that we always depends on someone else like our parents, siblings, relatives, etc. If you have the strength to work and the capability to earn money, then do not depend on others.
6. Poor spending habits.
There are two major reasons for this behavior:

Impulse buying. People, especially those who do “malling” for leisure, almost always end up buying more than what they intended to do.
Spending because of trends. So many of our young employees, agents and professionals spend their hard-earned salaries and commissions on truly unnecessary items.
Your spending habit is the final determinant of your financial success. What really count is not so much what you earn but what you get to keep.

To solve this problem and to control it is to list down all the things you need. Do not waste your money on things that you want. Live within your means.
7. Lack of Financial Literacy.

Financial literacy is all about common sense. It is knowing what real wealth means and what money is for...People must realize that this does not require formal college degrees.

So how can you become financial literate? There are lots of ways. Below are one of the things we can:

• Attend a seminar on how to be financial independent.
• Read books and magazines. There are lots of books that you can buy in National bookstore. Some of the books that I can recommend are written by our local writers like Dr. Francisco Colayco,Chinky Tan, etc. Magazines like entreprenuer magazines, Pinoy Business magazines, etc.
• Listen to radio program. I highly recommend that you listen to Chinkpositive by Chinky Tan every Sunday (6 am – 8 am) on RadyoBalita News FM.
• etc.

I hope this article gives you enlightenment on how to be financially independent. I know that there are lots of obstacles, but you can do it. Last words from Dr. Colayco

Do not delay. Take appropriate action right away. Be a winner. Be positive in all that you do. Do not be afraid to fail. Failure is an integral part of success.

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