WBW 44: No More Excuses! The Best Time to Start-up is Now! part 1 of 2 with Rudy Ang

“Kung gusto may paraan. Kung ayaw may dahilan.” This saying perfectly depicts how people tend to make excuses and look for the perfect scenario before undertaking an entrepreneurial opportunity. If one really wishes to make it happen, he or she really could make it happen and find ways to augment his or her weaknesses or shortcomings. In this part one of two, Rudy Ang shares with us his entrepreneurial researches, insights and tips on how and when to start a business, and teaches us these through different stories of startups - that it is mostly up to us to make our own opportunities and future.

Who is Rudy Ang?

Professor Rodolfo "Rudy" Ang has been a faculty member of the Ateneo de Manila University since 1991, holding a variety of adminstrative and teaching positions over the years. He is currently Dean of the John Gokongwei School of Management, a post he has held since 2003. Professor Ang is not only a teacher, but an active business practitioner as well, with entrepreneurial interests in the fast-food industry and small-scale commercial real estate development. His professional and research interests are in the area of business franchising and entrepreneurship.

Professor Ang is currently enrolled in the doctoral program of the University of the Philippins' College of Business Administration. He completed his Master of Business Administration at the Carroll Graduate School of Management of Boston College in 1988, graduating Class Valedictorian. He holds two undergraduate degrees, AB Communications, and BS Management (Honors program) from the Ateneo de Manila University, graduating with Magna Cum Laude honors.

He is a past President of the Jollibee Franchisees' Association (2007) as well as of the Alumni Association of Xavier School (2001-2003). He is currently a member of the Technical Panel for Business and Management Education of the Commission on Higher Education, or CHED, and a member of the Board of Trustees of Xavier School.

Show notes:

“Someday, but not today”

• He conducted a survey among 21 year olds, asking them how many of them wanted to become entrepreneurs. Half to two thirds of the class raised their hands. And he asks them when do they plan to become an entrepreneur and most of their responses are “Someday, but not today”
• What do you think will stop you?  What will stop you from being an entrepreneur today?
• First – lack of capital
• Second – lack of experience
• Third – lack of contacts

Why have older people who have wanted to setup their businesses not push through with it?

• When he talked with his classmates approaching middle age at their 25th year reunion since graduation, when he asked them what they were doing these days, people were working for IBM, Citibank, etc.
• During their 15th year reunion, they said they wanted to setup their business. Also in their 20th year reunion, they said they also wanted to setup their business.  It’s now their 25th year reunion and they haven’t setup their own business.
• When he talked with classmates who wanted to setup their own business but eventually did not, the top two reasons why they did not setup their own business. By now, the answers are different because by now, they already have savings and they have enough experience, being 25 years out of college
• First – Fear of Failure. Fear of failure is twofold. First is “I’m already a successful corporate person. It would be humiliating if I opened a business that does not succeed.” The other one is “I have to pay my mortgage. I have to pay my card installments. I have to pay my kid’s tuition. I have to pay the maids salary. I can’t afford to setup my own business. What if it fails? I have too many things at risk.”
• Second – Lack of Ideas

"Should you let these obstacles stop you?”

• Issues about capital. Issues about experience. Issues about contacts. Should I let these issues stop me from being an entrepreneur?
• First thing to do - Make a personal inventory of your assets and liabilities.
• Assets and liabilities not meaning how much money you have, but more of what is at your disposal – what are the things you can bring into the equation when setting up your own business.
• For instance, having an ancestral home that used to be in a residential area. It is not a highly commercialized area. Or perhaps I have acquired a skill that I am very good at that other people aren’t very good at. I have contacts and relatives who are important in certain ways.
• Examples of liabilities would be having a hard time taking instruction, or waking up late in the morning or corporate attire making me feel ill.
• You look at your assets and your liabilities. Know your weaknesses and strengths. Take the long term view, not just today, but the long term view. And then you say “If I want to be an entrepreneur and this is what I can bring to the table, what is right business for me?” Because there is always a right business, whatever your limitations are.

Many people will not start a business because of lack of capital.

Should this really stop you?

Where can I raise capital?

• What about family? Friends? An industrial partnership?
• His students from Ateneo are mostly upper middle class / upper class. His students say that don’t have enough capital, but he sees his students get into their cars and drive home.
• Then he asks them how he came to get the car in college. It was given to him by his parents so that he could travel to school. A second hand car costs around five hundred thousand pesos. If your parents could give you five hundred thousand pesos worth of car, meaning a depreciating asset that will never generate any return to them, if you can to them with a business plan, why shouldn’t they spend five hundred thousand for you?
• In fact, just sell the car and use the money from that for business. That’s part of taking the long term view, right? Because you may not have a car now, but next time you can buy ten cars.
• Family and friends are a good way to use money.
• Industrial partnership is another way. If you have the idea or concept, it is not unusual to find investors who have money but no concept or no skill, and partner with you. You provide the expertise and opportunity, and they provide the capital.

Can I start a business without much capital?

• A good example would one of the faculty members in Ateneo. When he graduated from college, he setup a contract growing business. He is raising chicks for Vitarich. Contract growing means you setup a farm, you get chicks from Vitarich, you grow them, then you sell the chickens back to Vitarich. He borrowed money from his parents to setup this business. However, he was unlucky and his farm got struck by a disease and all the chickens died, and there goes all of his capital. He went back to his parents still with the intent to become an entrepreneur, but his parents were not willing to lend him money anymore and told him to work outside to earn his own money.
• At that time, Subic had just been converted into a free port back in the 80’s. He went to the Subic Metropolitan Authority and proposed whether people there would like to have maps for free. What was the catch? The only request he had was that no one else be allowed to give away maps inside Subic, so exclusivity.
• If you were the manager of Subic, you would say yes. At that time, there is not enough money, and here is this guy offering you something for free, something the consumers would want. You go to Subic, with Subic being new, you don’t know where anything is, you don’t know what is in there. A map is really helpful. How do you make a business where your product is free? All he had at that time was an Apple desktop that was good for desktop publishing.
• He went around Subic and went to every shop inside Subic. And asked them whether they would like to be on his map. Of course the answer is they would want to be on the map. He charged them to be on his map. And anyone who would not pay is not on the map.
• So money up front, he makes these maps, on his map, if you pay, everyone paid! How will your consumers find you if you are not on that map. That was his first business venture. He made money on that. He went on to produce the largest Philippine Direct Marketing company which he a few years ago sold to Ogilvy to become Ogilvy One.
• His assets in the beginning were his creativity, a computer that he would use for desktop publishing, and a lot of guts. He did not have capital.
• So yes, it is possible to start a business without much capital. Many businesses are like this. You just have to find the right one for yourself.

Can I start small?

• An example here would be Nutrilicious. If you talk to the founder of Nutrilicious, he will tell you that he started his business with five thousand pesos. He was working in a bank and not even top management he would say. In the canteen of the bank, he setup a blender and he was selling crushed ice and juice. He was selling shakes. Five thousand pesos. Two blenders in their company canteen.
• Eventually he became a company that is now known as Nutrilicious, one of the largest Filipino juice companies.  They have around 350-400 employees today.

Lack of experience

• If there any students here, you should go out and get experience while you are still in school.
• Get a job in the industry where you see the greatest potential
• If you talk to Steve Benitez who setup Bo’s Coffee, or talk to Jay Aldeguer who setup Island Souvenirs, one thing notable about their stories and the stories of many entrepreneurs, is that even when they were in college or high school, they were already doing entrepreneurial activities
• Steve Benitez is from Cebu.  He was in a dorm in Ateneo. He would visit his aunt who had a shoe factory. On weekends, when he visited his Tita, he thought about bringing some shoes back and selling it to his other dormers.  He would buy shoes on credit from his tita, and sell shoes to the dormers on installment. When he graduated, he setup Bo’s Coffee and a lot of stuff.
• Jay Aldeguer has a similar story. He has stories about all the things he used to do in college to get extra income.
• Not a lot of people know that Yellow Cab Pizza is a local company. Most people think it’s a franchise from a foreign chain. The three young men who setup it up, they started at Chow King. They were franchisees of Chow King, learned the food business as franchisees of Chow King, and then went out and setup Yellow Cab Pizza.
• You can start your business part time while you are still working. Nutrilicious is like that. 
• Get a partner who has experience
• Buy an existing business or franchise
• There are many ways of overcoming the problem of lack of experience. If you have money, but no experience, franchising would be a good option. If you do not have money or experience, you have to look for something else.
• But after you have done your personal inventory of assets and liabilities, then you can look for a business that fits your peculiar wits of experience and capital

Click here for WBW 44: No More Excuses! The Best Time to Start-up is Now! part 2 of 2 with Rudy Ang