Downside of franchise - owning a franchise can go south!

Looking forward to the future of business

Buying a franchise does not guarantee success.  The franchisor  exercise a great deal of control over the franchise.   You are obliged to follow their process, their menu.  

There is no substitute for doing the business plan yourself.

Business is hard work, hard work,  Hard work.   

Success from having a franchise is an illusion.  

All tasks all deals must have closure if possible, face to face

Looking forward to the future of business

A deal we had last May for a possible joint project lay in still waters because of displeasure from our side on the other side nasty remarks at the GC.   And informally some assumed the deal was off.

However I elected to travel to the location of the other side the principal, for formal closure.  We started this face to face, we will end this face to face.  So this post took a 7 hour journey to speak with courage to the other party that the project with us is over. 

Becoming more risk averse

Looking forward to the future of business

The site looks very nice.  It is accessible via a wide avenue and only 2.5 km to the main highway.   The site is fantastic - it is overlooking.  It is untitled though.

And when I asked the persons who control the purse string, they were leaning heavily on the risk:  What if  the supposed Estate owners run after the project and sue us?   Thats the big risk.  On Wednesday, we evaluate the risks some more.  If the fear is justified, what will happen?

Excellent management by the pilot of an aircraft to ensure comfort and safety of passenger

Looking forward to the future of business

This post loves to read stories about aviation and air tragedies - air crash investigation.   Most of the tragedies would have been avoided if the pilot practiced good communications with the first officer, ATC, observed company and good flying practices, followed the ATC, had good situational awareness:  fuel, condition of flaps, landing gear, of propellers pitch.

In one story, the plane crashed, a propeller driven airplane because the pilot mistakenly pulled the feather lever, when it was about to land, and had no power upon landing and crashed.  

One crashed because the captain disobeyed  the order for it to reduce altitude by observing the holding pattern.  Instead he disregarded the holding and went straight and was thus landing too steep an angle and too steep.   The pilot and the first officer were not communicating (which was the norm - always verifying)  The pilot had this habit of disregarding procedure and should not have been allowed to fly.  Thus insubordination is a dismissible offense

Be aware of supervisors and staff who do not observe procedures, and/or who fail to communicate

Be at the gemba, do it now!

Looking forward to the future of business

Despite being in dire situation now because of prolonged recession, Japan during its heyday, had some of excellent management ideas.  One of them is being at the GEMBA - at the workplace - at the shopfloor or selling area.  It is another term for MBWA -  Management by Walking Around   Some FMCG manufacturing companies hold their board meetings at the end of a manufacturing line where they examine the product do the taste test.  Probably, they do too at  supermarket shelves at point of sales.

This was a striking contrast to the lady head of  security service of govt office in US who was grilled by party mates of injured candidate in an assassination attempt.  She was  ridiculed  and bullied for:

1.  refusing to answer, 2.  that somehow she doesnt know yet,    3.  that the situation was still being investigated (after nine days)   4.  inconsistent with her statement before hand that buck stops at her office.

A pastor in same state where the assassination attempt took place went to the Gemba - at Butler to see for himself the rooftop where the gunman went up.  He saw:   the roof slope was not that steep -  it rose only probably a foot from the edge.  The distance of the roof was that close in actuality.  Probably much closer than 140 yards and potshots can be taken.  LACK OF SITUATIONAL AWARENESS for security personnel and officer the head who has the ultimate responsibility.  

Thus its accountability and responsibility for managerial and supervisory position that actually count, at the end  of the day.  

Be at the GEMBA.  Be aware.  

The one page memo

Looking forward to the future of business

The famous one page memo at P  & G

I used to have classmates and friends who worked before with P & G who were trained hard on these one page memo.   The classmate happened to be brand assistants, the core of brilliant hard working marketers who plan the launch, revival, or turn around of brands.  They are also called category assistants/officers/managers now.  The discipline is still the same  the channels have changed into variouus platforms.

In that one page, the assistant will summarize the situation - market, competition,  the brand SW, 

and recommend action to the President regarding the brand with summary of PNL, new sales, new %, and budget to carry out the task.   How could these fit into one page.  

That is the way it should be.  Business deals are closed on napkin or paper placemats of resto or fast food, and they are closed on a handshake.

If it is too long and complicated, it cant be done.    You should be able to explain what to do to your kid. If they cant get it, it cant be done.   Simplify, simplify.  That is the task of a manager, knowledge worker.

This post believe in one page memos

This post remembers an ex P n G, the last time I heard he is the head of  a household cleaning products, who riled vs the one page memo and he was on the nth draft (he graduated with Latin honors and cant be poor in his grammar) and was ready to resign.   It was lucky that his nth draft got accepted.   Perhaps the rewrites gave him a diP n G one page memoscipline to think clearly.   

I remember doing financial analysis on several pages of worksheet (and this was before excel) just to get a one page finance recommendation., deep into the night.   This enabled me to cut through financial mumbo jumbo.  

Did Taiwan take away US chip business? TSMC to invest $40 billion in Arizona USA plant

Looking forward to the future of business

Fmr President Donald Trump mistakenly accused Taiwan of taking away chip business from US.  While partially correct -  TSMC founder was a former executive of Texas Instrument who went to Taiwan to put up chip business at Taiwan's behest, its incorrect.  TSMC also plans to put up a plant in Arizona USA.  Trumps comment, including the threat that Taiwan should share in its defense cost with US send tremors to the stock market. TSMC continues to make record profits.

Do you agree with Donald Trump's comments.?

Philippines - a great place to do business

Looking forward to the future of business

Let us do business in the Philippines.  A great place to do business:

1.  Strategically located in South East Asia along sea routes.

2.  Excellent port facilities

3   Large growing population (Japan, Korea have aging population)  - easy sourcing of HR

4.  Meaning it has large domestic place

5.  Nice beaches and resorts

6.  Nice resorts and casino hotels

7.  Robust economic growth among Asean countries. (and even vs China)

8.  Plenty of arable land (80% still unutilized vs say Singapore only 1% available agrii land)

No longer sick man of Asia.  Just a growing economy.  Not a tiger or leopard

Steel Asia to invest P80 billion in 5 steel mills in the Philippines

Looking forward to the future of business Stee

Steel Asia which is celebrating its 50 years announced that it will invest P80 billion in five steel mills:

     two in Davao

     one in Lemery Batangas

     one in Concepcion Tarlac

     one in Candelaria  Quezon (saw their vehicles in Candelaria when I went there)   

This has huge impact on Philippine economy about jobs, steel supply chain.  It will save PHP and dollars in importation of steel for construction, manufacturing, machinery.  This is long in coming and finally after IISMI debacle we will finally be self sufficient in Steel

Thank you, Steel Asia,  Kudos for taking this bold move/investment   

Are casinos good/moral businesses? All Philippine tycoons have one.

Looking forward to the future of business

Early on, when a fellow professor consulted us on a board game, I objected to a lotto being a part of entrepreneur journey.   Being entrepreneur must not be at probability level, or a business should create value to customer or society

Gambling or lottery is a dignified Ponzi scam,  You get rich at the expense of others + some profit to the operator.  And just to think of social costs.   Suicides, gambling addiction.   Poverty to the family of the gambler.   Loss of productive time   Plus the attendant other vices:   alcoholism, prostitution, mugging, robbery and the like

Gambling cities in US become static after sometime and not enough progress is achieved.  Take Vegas or Atlantic city.  They do not have the dynamism and grown of say Silicon Valley, Texas, Boston, San Francisco .  

In the Philippines, casino resorts rake in billions for Pagcor, the government, and the owners.  Almost every tycoons:   Razon, SM, Robinson has one.    Most are either at MoA or at Clark.   Casinos haven

If you have billions, would you invest in casinos.  ?

Can the Phil govt pay back its P15 trillion debt?

Looking forward to the future of business

The video said there is nothing to worry about.  Its a lot of mumbo jumbo.  

The total debt is divided into:   P10 trillion local debt and P5 trillion foreign debt.  This is riskier.

because of limited FX and very low interest rate at 0.01 %.    And is therefore affordable

And also look at FX reserve of Philippines.  which stands at  $100 billion or P5.8 trillion.   

But its worrisome too.   At say  3% for foreign, and 6.5% domestic debt, debt service would be 

         P5 trillion   x 3%     =  P150 billion

         P10 trillion x 6.5%  =  P650 billion

         Total                              800 billion

How much of the BIR collection      How much did BIR  collect in 2023 - P2.5 trillion

Debt service would roughly be 30% of local revenues.    That is a lot.   

And our govt managers are borrowing like crazy to finance welfare and other non productive enterprises.   We should be aware