The real test of success

It has been six months since the third batch of master entrepreneurs graduated from the Asian Center for Entrepreneurship. In casual feedback sessions with them, conversation always drifts towards the ME program and how it has impacted on their lives. Most claim a transformation. However, this has not been confined to the business – it has extended to their personal lives.

Where they used to spend 80% of their time on day to day operational activities and 20% on strategic and business development activities, upon becoming MEs, the situation was reversed. Nowadays, they spend 80% of their time in growing the business and 20% of the time is spent on operating the business. This transformation would not have happened if the end goals of the ME program or the three Ps – profitability, productivity and professionalism – were not in place.

One such graduate implemented the business development component of her five-year plan and proudly invited me to witness the launching of the expansion program of her food business. Ironically, she found out that the best time to start a business was during bad times. She used her mastery of the game and further applied creativity and innovation to change the rules of the game. Although she initially doubted her moves, she eventually found the answers to her own questions. A beaming master entrepreneur these days, she was eager to share the mastery process for others to learn from her wise ways.

Q. Should I start up this new concept as planned?

A. I have realized that it is I who determine how far I want to go. I love what I’m doing. I’m passionate about my business (next to painting). I’d rather keep on striving and trying to do something that is exceptional than get comfortable. I must keep on assessing my competitors in Banawe and figure out what is necessary to out-perform them. My passion for the business will separate me from the average and good business people and will make me the excellent one. My knowledge of the market, the game in the area plus my desire to change the rules of the game tell me to go ahead with the plan codenamed "Zong".

Q. How do I change the rules of the Chinese food business?

A. I will differentiate myself from the rest by focusing on a particular market segment that is currently undefined. These are Chinese food lovers who do not want the panciteria or the traditional Chinese restaurant ambience. I will offer the look and feel of eating authentic Chinese food in a five-star hotel’s coffee shop setting. It will not only be busy during lunch and dinner, it will be busy all the time. It will differentiate itself from the rest of the food places in the area. It will not look Chinese. It will not feel Chinese. But it will taste Chinese.

Q. How do I make it taste real Chinese?

A. It starts with the ingredients used. It must be original Chinese. No substitutes. I will have Chinese chefs from Hong Kong. I will have the chefs provide popular food items but provide a distinct differentiation that the market is looking for and will appreciate. I will not allow the use of MSG (monosodium glutamate or vetsin) or extenders. We must have the quality desired by the market with no compromises or short cuts. I remember my QDP (quality, delivery and productivity) lessons. Quality is managing both process and inputs. One cannot make up for poor inputs with a superior process. Superior inputs cannot mask inferior process. One must manage both process and inputs. That is why I have opted for HK chefs and superior ingredients.

Q. How do I differentiate it from my current food place which is located right beside it? This new business must not cannibalize my current market.

A. My current food place serves the residents in the area. It provides value meals for the people living and working in the immediate community. It also provides value meals for people who transact business in the area. The original food store was the place where pares was invented and first sold. The current food store provided original value meals with a non-turo-turo environment.

This new store will cater primarily to people living in the community just outside the immediate neighborhood. This community is composed of Chinese-Filipino families who wanted to live in the "stomach of the dragon". It is believed there is a dragon in Metro Manila and that this is where the stomach of the dragon is found. To differentiate, the price points of the new store will be higher than the original store. The people living in the stomach of the dragon are willing to regularly spend more for their food. People in the immediate community may also patronize the new place for special occasions like birthdays and baptisms.

Q. Will I allow franchising? Since opening day, people have asked me if I will franchise my food store.

A. The key to the new business is its good food. People come and visit a food store for the first time for its ambiance but come back for the good food. It is easy to replicate the ambiance of the new store but the replication of the good food is something else. Some of the items in the menu taste great because the current store is right beside the main kitchen where not only equipment but the HK chefs who process the food are found. Some of the items cannot be delegated. Furthermore, some menu items must be prepared fresh and served right away. To do otherwise will affect quality. There are menu items where the process cannot be stopped and then continued in some later time and/or place. To replicate the performance of the current store, one must replicate the set up. A franchisee must be willing to invest in the set up. No less!

Q. Since the cost of setting up an equivalent store will be costly, are there any other opportunities for me aside from franchising?

A. The main kitchen is already there. The equipment, the chefs and the systems are in place. I have identified some menu items that will not deteriorate in quality even if these are not served and consumed right away. There are also some menu items whose process can be stopped and resumed in some other place and time. These are opportunities for the current store to have a take out and/or home delivery. In addition, I can treat my main kitchen as a production area where I can be the factory for other food stores. Some other Chinese food stores can outsource some of their menu items from me (but only for those food items whose process can be stopped and resumed). But I must not sell them the same formulation of the food found in my store. I can provide them with different and distinct formulations. There must be a differentiation between what I serve and what is outsourced to me.

Q. How will I measure my performance?

A. My guru always told me that if it cannot be measure, it cannot be managed. I shall measure my performance on the basis of a performance indicator. I must monitor this performance indicator on a daily basis and see if I have to do some tactical moves along the way.

Listening to a master entrepreneur display her three masteries – self mastery, situation mastery and enterprise mastery – makes a guru’s day. If the test of the pudding is in the eating, the test of the learning is in the successful application sans the happy guru.

(Alejandrino Ferreria is the associate dean of the Asian Center for Entrepreneurship of the Asian Institute of Management. For further comments and inquiries, you may contact him at: [email protected]. Published "Entrepreneur’s Helpline" columns can be viewed on the AIM website at http//: www.aim.edu.ph)