Happy Chinese New Year

Nation building via learning and being the best in business

More success to our partners in progress and entrepreneurship

My missive to protege on a start up

Nation building via learning and being the best in business

You have at your fingertips two important projects, so huge, affecting the lives of many people.

You have estimated revenues and income equivalent to 40 years of work

1.  You will be mostly on your own to decide the results and your destiny.

2   Two laws:

    Kidlins law -  on problem solving.  Defining and writing down the problem solves

    50% of the probleem.

   Therefore:   clarity is needed and write down your action plans on regular periodic

                      basis

    Walsons law-  intelligence and knowledge precedes alll system and then money

                           follows

3.  Entrepreneurship

     You do not have all resources you need now.   Entrepreneurship comes into

     play

     1.  Act, don't be imprisoned by your past beliefs and past action

     2.  Don't wait for permission.   Act but do this in a concerted collegial fashion

     3.  Zero to One (by Peter Thiel Pay Pal)

         1.  All things come from your thinking

         2.  Entrepreneurs create one from 0

      4.  Your capital (capito - head) is your mind -  the endless source of ideas

           innovation and solution.  Use it constantly

      5.  Be present at all times.  The eye of the master solves many issues

       6.  Courage, audacity determination count

   

Semirara stocks fall - P30B on news that govt is no longer renewing its mining contract at Semirara

Nation building via learning and being the best in business

Semirara stocks took a nosedive losing as much as P30 billion in market value, after news that govt is no longer renewing its contract to mine Semirara which it has done for the last 50 years.  Thats what the mining laws say and DOJ affirmed it.  DOE under Garin says the mine is up for bid

Well coal is still impt for PHL power gen.    (Despite the move towards clean energy)

Thats the power of the govt.  It can kill your business.  Thats not he problem with Razon, Aboitiz who know how to to play their business games.  (That the bitter pill for the young billionaire Leviste)

Its better to do business where the govt power over your business is minimal  (But there isnt any)  In the recent case, we have to cough out P100/sm for an LGU ordinance   

Smart thinking in a nego bags multi million deal

Nation building via learning and being the best in business

This post was inspired by a post regarding a multi millionaire who saw an old building but did not focus on the property deal but what he can do with this.    There was this $50 million property and he had no $ to buy this on usual deal of making a down payment, going to bank and borrowing the balance.    He made a $200,000 option up front which would be  a rental, if after 3 months he does not have a deal.   So he sold the idea of a membership to prestigious club with the house a palatial one for $6,000 each to only 1,000 members.  That is $50M for the deal, and $10M for him to pocket 

So we got two deals both worth 9 numbers controlling the property, with but P400,000.   We yet to make the whole works work   But its the same.  The team should work hard and organize to generate the 9 numbers become a reality.   We got P400,000 forfeiture if things dont work out 

Why are so many flocking to retail business despite high closure rate in US, and very thin margins

Nation building via learning and being the best in business

This post is wondering why in the Phl so many entrants are in the retail business despite record closures in the US.  Even Walmart the largest, Costco are experiencing decline (mainly in California due to very high inventory shrinkage due to the change in the treatment of the law of shoplifting

We see many entrants, Save, Dali, Family Mart, and so many more in the provinces. 

We have seen this as our retail firm closed due to the same reasons.  Thin margins shoplifting electricity cost, and high rental

We understand that one of the late entrants funded by ADB is in the red by billions.    Dali loses P3.26 billion in the last 3 years

It is not rational, it does not jibe with the math?

The successful businesses are those that are engaged in getting recurring business

Nation building via learning and being the best in business

Recurring revenue model

We are engaged in real estate development.  To stay in business you have to continue buying raw land (engage in land banking) and develop.  After you run out of inventory you repeat the process and it cant happen forever  because land is finite and their costs get higher.  Sometimes your revenue cant keep up with increases in prices of raw land and sometimes raw land supply dwindle or become zero.

Selling residential lots, appliances, gadgets are one shot deal.  After the sales, no furhter revenues are expected.   But maintenance agreements, insurances,  apps, program updates are those that enhance the Monthly Recurring Revenues

But the real profitable businesses are those that have recurring income:

1.  Express ways where vehicles pay toll fees;

2.   Health care;

3.  Medicines

4.  Food

5   Rentals

6. TV rentals

We see that MVP is engaged in massive recurring income:    expressway, telephone load, water supply

Thus if you are selling real estate what could be the source of recurring income"

    1  Water supply 

    2.  Home maintenance

    3.   Commercial propery rental

A real estate company makes recurring income from:

     1   Water supply

     2  Parking lots

     3.  Commercial leases

Real estate companies, like us, get lost when there are no more available raw lands for sale  No more inventories to sell

We see that Apple try to get recurring income from music, movies etc.

What could be recurring income in your business?