by Anton Padua, Negosentro.com |
I was invited to talk about “Setting Up a New Business” two years ago for singles and young professionals during a time when Edna and I were running on its first year, the coffee shop named “Bake and Brew”. I was overjoyed by the warm reception and feedback of people who attended the workshop though I am not certain whether the positive feedback was because of the interesting topic or because I was, well, appeared to be comic…
This year, I was again invited to talk about the same topic and was so excited to share with these young people and soon to be businessmen our own personal experience after the coffee shop has been in operations for almost two years now. Unfortunately, I missed giving out the talk because of wrong assumption on talk schedule..Talking about attention to details…Hahaha!
So I thought about sharing with you guys what I was supposed to discuss during the workshop. I don’t want to hear some people saying, “I have heard that talk last year” so I made the topic fresh and interesting focusing more on “How to Sustain a Viable Business” making sure first time listeners will also capture the basic and critical points discussed in the first talk. So, I decided to divide the topics into three parts:
“To Go or Not To Go”
In my talk two years ago, I emphasized the need to be in a business where you have great interest. Edna and I never thought about venturing into a business having been in the corporate world for more than twenty (25) years now. (Please don’t count how old we are now, I can tell you, Edna and I are still in our teens!! Hahaha!) In our younger years, Edna loved feeding me and the two sons, Miggy now 19 and Gabby now 11 years old. We used to host dinners during household meetings in our community named Couples For Christ Foundation for Family and Life. With Edna’s passion for baking, she would research for the best carrot cake in the internet and with some modifications here and there, would serve them to our visitors and they would normally quip, “this carrot cake tastes very good, why don’t you guys sell this, sure this will be a hit!”
Edna and I have a share of our own personal struggles in the corporate world. Have you had a boss who would shout at you for just a minor imperfection in the report you submitted or have you been frustrated with the ever change in management directions? We know that in due time, we have to retire from work and have to be busy with something else.
So Edna thought about being in the cake business. Cake would usually go with coffee so the idea of putting up a coffee shop business was borne. Edna attended a seminar on coffee business and started consolidating all the cake recipes that she had kept for years.
Edna is always on “high” every time she bakes especially when exploring new recipes. She would stay up late just to finish a recipe even after a very long day in the office. For normal people who may not have love for it, they may find baking physically draining. Doing things that you love the most help you provide a better quality of your output despite struggles. I know when Edna is not in the mood in the way the finished product of cake would look like in the end. So I have arrived at the conclusion that the passion for what you do, the interest and desire you put in to your work reflects in your output.
First consideration therefore, when putting up a business is that you must have a sincere heart and a great interest for it. This should be considered more than the financial reasons. Some who may have the financial capability may think about being in a business that they think provide good returns. However, we should realize that a business with high financial returns will never be sustained if you do not have a heart for it…
Other than the heart and the desire, other factor that will make things easy even during difficult times in operating a business is competence in the chosen field of business. It is difficult to maintain a business that you are not familiar with. Learn, learn and learn and be an expert in your chosen field of business.
Do not hesitate to hire an expert on areas that are necessary in your operations but you do not have the expertise. Bake & Brew decided to hire a consultant expert in coffee business because we need to know the “ins & outs” of the business. While we want to provide quality cake products, we would also want to have quality coffee to go with it. Now we can say that we were right to hire a consultant who helped us harness the skills in coffee making not only of ourselves but of our staff as well. We now have regular clients who come to our shop because we have one of the best and most authentic coffees available in the neighbourhood!
So “to go or not to go? Have a heart and be competent in the field you want to pursue.
Setting Up Your Business
In setting up your business, you should first define your mission and vision…sounds very corporate right? But it is important to know who you are and who your market is so you know what to serve. In this way, you do not lose your identity and so you will remain focused on what you want to do for the shop.
In the case of Bake and Brew, we have always wanted to offer homemade quality products of cakes and other food items. We noticed that our area in Better Living lacked a coffee shop that is decent and fresh. So we invested on a very practical good ambiance by pooling young talented people to design the shop for us.
We realized people in the neighbourhood are looking for quality but value for money products so that is exactly what we have in the shop.
The other consideration in setting up a business is your financial capability. Do not venture in a business if you do not have the financial capability to support your business. It is also not wise to pursue loans with huge interests and even putting all your assets as collaterals.
Edna and I are just so blessed to be able to divest on our real estate in Pampanga with an amount just enough to support the financial needs of Bake and Brew. (Talking about divine intervention, right? Just so grateful for all the guidance, support and the love from up above..) We also made sure that if something not nice happens, we do not end up having nothing for us and for our kids.
Sustaining a Business
Once business is set up, the next challenge is how to sustain and make the business viable. It is normal for a business to lose money at first given capitalization and investment on shop renovation, machine acquisition among others but this should not take too long else, the business will die a natural death. There are just two major things you need to do to make your business viable. Those are:
(1) to grow your sales
(2) to contain your cost
These may sound easy but actually they require a lot of hard work and perseverance.
In growing your sales, it is important that you have a quality product in the first place. Bake & Brew is just so blessed for the positive feedback on our carrot cake, among others. Our product became our walking advertisement. From a first time customer passing on the positive feedback to their friends of the good food experience they have, we now have products that are best sellers in the shop.
It is also important that you make your target consumers be aware of your shop. It is sad to have a good product but no one is aware there is a good product available in the shop. In this age of facebook evolution, make yourself visible in group pages. Or have a page of your own where you can feature products available in the shop. Maximize also your presence in other social media such as tweeter, instagram and the likes.
Because of Edna’s continuous effort to learn, we were able to find a niche market of our own. We now create personalized themed full fondant cakes for occasions such as birthdays, engagements, baptism, anniversaries, weddings and all other personal celebration of clients. If someone asks as to who creates one of the best personalized cakes in the neighbourhood, there will be at least two or more neighbours who will put us on top of their list. Mind you, Edna did not have formal baking lessons. She just did it by herself researching in the internet. Youtube is a school for her where there are no tuition fees and exams! No amount of formal schooling can replace great interest and heart for what you love the most and in order to succeed in your chosen business! Don’t get me wrong, education is of prime importance but coupled with learnings, DESIRE is the key!
When a business becomes successful in some areas, an owner may sometimes get too excited to venture on other things depriving himself of focusing to what they do best and consequently spending on things that are nice to have but are not essentials to the business. Even successful businesses with good sales fail when they do not manage their costs. So manage your costs and spend wisely! Do not invest on very expensive espresso machines, expensive POS, high tech CCTVs, and other nice to have gadgets. It is enough to invest on a hardware that has basic features and specifications.
It is also exciting to offer as many variants as possible but rationalize on products that are not doing very well in the shop. In this way you minimize cost of inventories and spoilage.
Another advice is to have a heart for the people working for you. They are your great asset! Trust them and they will trust you back. Have sympathy with them and they will sympathize with you in return.
Lastly, always seek for guidance from up above. He is our source of strength and orchestrates things for us so always trust the Lord for his mercy! In our case, we felt that He has always been on our side from the time we thought about being in business, in the planning and execution of the plan. He provided us the financial resources we need at the right time when someone from nowhere got interest of buying our lot in Pampanga in cold cash of a value of investment we need in putting up the shop! We did not have to resort to reconfigure some of the humble investments that we have nor secure loans that may put pressure on our financials if the shop does not turn out well as expected.
With the desire and heart for your business, with your competence & having the right products and the right exposure to your market and with enough competence, with your costs rationalized and contained, and with guidance from up above, there is no way for your business but to go up!!!
Good luck and as the saying goes, “may the force be with you always!”
* * *
Anton Padua is a Manila-based entrepreneur who manages a successful community coffee shop south of the metro named Bake and Brew. His day job as Supply Chain Manager for a diversified conglomerate helps him get more on-ground entrepreneurial insights from SMEs.
For weekly tips and insights on entrepreneurship, follow Anton on this page.
You can also email him at: firstname.lastname@example.org.
* * *
BONUS VIDEO: Richard Branson on Starting a Business
[embedplusvideo height=”400″ width=”600″ editlink=”http://bit.ly/1yeEIms” standard=”http://www.youtube.com/v/SlPd1i5cGHE?fs=1″ vars=”ytid=SlPd1i5cGHE&width=600&height=400&start=&stop=&rs=w&hd=0&autoplay=0&react=1&chapters=¬es=” id=”ep2096″ /]