(Caption: Entrepreneurship book officially endorsed by DTI and Go Negosyo. Shown to the left of Josiah Go are Presidential Adviser on Entrepreneurship Joey Concepcion, DTI Secretary Ramon Lopez and co-author and Chair of Women Business Council of the Philippines Chiqui Escareal-Go)
Small and medium scale enterprises (SMEs) comprise 99% of all companies in the Philippines. Over half of new businesses won’t make it in four years, and statistics for those making it over four years are far from rosy, with an indicator as low as only one in ten becoming successful.
Starting an enterprise entails four ‘gates’ to reach the ‘House of Prosperity’. Each gate has its unique requirements. Like a race, entering one gate and finishing that stage is not an assurance the next one will readily be open. It is only when all tasks in the four gates are successfully accomplished that prosperity and success can be attained.
These four gates to the ‘House of Prosperity’ can be found in the recently launched book ‘Entrepreneurship: Starting an Enterprise, Having an Innovative Mindset’ (by Josiah Go and Chiqui Escareal-Go) available at National Book Store and Power Books nationwide.
The first gate in the entrepreneurship journey is the preparation gate. Here, the entrepreneur looks into money, model (business model) and mentorship. The wealth conversion principle states that wealth is created by converting money or cash (or its equivalent) into inventories, and back to cash when sold at a profit. If credit terms have been granted, it should be collected. Having the right business model is indispensable in order to maximize revenue while pursuing cost efficiency. Mentors can give the appropriate pieces of advise for the entrepreneurs to avoid mistakes, accelerate the learning curve or even open windows of opportunities. The entrepreneur also needs ample knowledge /intelligence or IQ, while building an ecosystem appropriate for his/her business during the preparation stage.
The second gate is the marketing gate, composed of mindset, market, and message. Here, opportunity seeking, screening, and seizing, are formulated. Having an innovative mindset gives the entrepreneur an edge, as formulation of offers are purposely differentiated and distinctive, avoiding the commodity trap that may lead to costly price or promo wars. Here, entrepreneurs identify a profitable target market as well as understand how the market makes purchase decisions. Messages are then drafted in order to resonate with the buying goals of the target markets. The entrepreneur needs creativity or CQ to keep growing the business during the marketing stage.
The third gate is the execution gate, composed of machinery, methods, and management skills. Value is actually created when strategies formulated are executed. Machinery is having an organization that can deliver its intended value. Methods, on the other hand, are processes that routinize what needs to be done efficiently and effectively, while management skills entail knowledge of people handling and reward handling, and having leadership skills. The entrepreneur needs emotional quotient or EQ to build the right culture to get things done.
The fourth and final gate is the self-leadership gate, which includes having the tenacity to keep moving forward, having a compelling mission, and aspiring to have self mastery. Entrepreneurs will encounter challenges in business and he or she must possess adaptability and grit in order to pivot and keep moving forward. Having clarity with the firm’s mission helps unify the team as well as customers, while mastery entails knowing what the entrepreneur wants to be, with thinking and sensemaking skills, as well as mastering influencing, discovering and executing skills. The entrepreneur needs high adversity quotient or AQ not just to survive but make a difference with the business.
Entering all four gates allows the entrepreneur to experience the two benefits of the House of Prosperity. The first is about having accomplished the 5 critical tasks: having 1) a good and compelling value proposition, 2) cashflow, 3) profit, 4) manageable execution and 5) vision/mission. The second involves the 5 treasures: having 1) a beloved family standing beside you in your success, 2) a meaningful self 3) good health, 4) a network of friends as well as 5) a relationship with God. Having tasks without treasures and vice versa would not be enough.
(Josiah Go is the chairman of the marketing training firm Mansmith and Fielders Inc.)