Doing well in the middle of crisis

Yesterday, Dec. 9, was G-day for AIM’s third batch of master entrepreneurs. In the past 18 months, they were in and out of our case rooms and in and out of their offices, shops and factories, doggedly perfecting their entrepreneurial skills in self-mastery, situation-mastery and enterprise-mastery.

The good news on graduation day is not that they passed but that they are doing well in spite of the crisis. Let us look at before and after statistics to check how well is well.

At the end of the ME program, we usually ask our student-entrepreneurs to rate themselves in terms of their performance during the course period relative to the three Ps–profitability, productivity and professionalism. Since professionalism is a qualitative judgement that is more difficult to illustrate (because it involves systems and processes that have been installed in the company), our primary focus in this column will be on measurable profitability and productivity indicators. Their score cards speak for themselves.

* A master entrepreneur in the ladies’ wear industry reported tremendous improvements: a 57% increase in sales, a 75% increase in the number of concession outlets, a 27% increase in the number of outright buyers, and a 44% increase in overall profitability.

* Despite a very bad year for the electronics sector, a master entrepreneur (whose business involves trading raw materials and servicing electronics and semiconductor firms) registered an 8% increase in sales, expanded his reach to three branches, and increased his customer base by a whopping 67%. Profitability increased by six percentage points. He was able to improve delivery time to as short as one day where it used to take two to four weeks to deliver orders.

* A master entrepreneur, whose business primarily focuses on industrial automation services, nearly doubled gross profit, improved return on sales and return on assets by 10 times and, more importantly, reduced the collection period by half.

* Another master entrepreneur, who owns a rural bank, was able to increase the number of accounts by almost 60%. His return on assets increased by seven percentage points and his return on equity increased by four percentage points.

* A book publishing master entrepreneur improved agents’ productivity. Revenue per agent rose by 65%. At the same time, he was able to bring down inventory levels from eight times sales volume to only 0.6 times.

* A master entrepreneur in the fast-food restaurant industry reduced the number of products in the product line by more than half, from 66 to 30. In addition, the seat turnover of the restaurant increased from 12 times to more than 15 times per day.

* The master entrepreneur, who is into the printing of labels, experienced a moderate 4% increase in sales and, more importantly, reported a substantial 50% reduction in the rejection rate.

* A master entrepreneur, who distributes professional hair-care products to beauty parlors, experienced a 150% increase in net income.

* A master entrepreneur, whose primary business is in the publishing of books, registered a 28.7% increase in sales from a 28% increase in volume. Better profit margins were experienced, from 4.7% to 5.3%,

* The master entrepreneur, whose main business is the distribution of feeder bottles and other infant accessories, registered a 12.9% increase in sales. His distribution network increased by four branches and his product line increased by four items. Profitability, as measured by return on sales, increased from 17% to 25%.

* A master entrepreneur, who is an engineer by profession and who owns a laboratory testing facility for concrete products, reported that his enterprise registered an increase in sales of 57% and an increase in overall profitability by seven percentage points. Revenues per employee in the company increased by 8% during the period.

Why are they doing well despite the crisis?

Master entrepreneurs with a firm grasp of self-mastery, situation-mastery and enterprise-mastery view crisis as opportunities. The bigger the crisis, the bigger the opportunity. In bad times, windows of opportunity are less guarded. The big boys are too busy trying to survive and spend their time looking inwards rather than outwards.

For 18 months since they signed up for the ME program in June 2000, these student-entrepreneurs were mentored by their gurus and drillmasters to be the best they can be and to make their businesses the best they can be.

Their stint not only transformed their business, it also transformed them. With a firm resolve to continue to be always the best they can ever be, they now have perfected the art of balancing the mind of a business person, the heart of a development manager and the spirit of an entrepreneur.

All their gurus–Professors Maya B. Herrera, Danny A. Antonio and myself– plus their drillmasters (Luis Cruz, Jr., Gully Go and Lito Domingo) were the collective "Entrepreneur’s Helpline: Live". We proved to all and sundry that these master entrepreneurs now have what it takes to live up to their campus batch tag names as the Spinks, and Explorers for a long, long time.

(Alejandrino Ferreria is the associate dean of the Asian Center for Entrepreneurship of the Asian Institute of Management. For further information/comments, you may mail him at: [email protected]. Published "Enterpreneur’s Helpline" columns can be viewed at www//:aim.edu.ph)