Beware of bad business practices

The other day, I attended a local business forum where I got insights on how local entrepreneurs, the SMEs operate. Not generalizing, but I feel that if all business mentors think the way the forum facilitator does, our industry will just be one coliseum for rat race, and espousing a rabid dog eats dog structure.

First of all, I am for ethical business practices. That is the way to go if you want people to remain working for and with you, and dealing with you. Honesty and integrity are also important for long-term success. Stepping on somebody’s tail may enable you to move up the ladder, but it is just a matter of time that your misdemeanor will haunt you and bite your tail.

Based on the presentation I heard at the business forum, here are a few of my take on what a good worker or entrepreneur ought to keep in mind and practice by heart.

1. Take advantage of free trades. The model startup being promoted by the organization produced locally-sourced products. There are pros as well as cons to that. Of course, locally sourced materials should be cheaper and by principle would help local producers. Nevertheless, with a plethora of free trades in place, it is likely local materials are competing in terms of quality and price with imported materials (which are mostly cheaper). Moreover, finished goods (coming from China and other countries in Asia) are also cheaper and sometimes of better design. The technologies used locally, in many occasions, pale in comparison with technologies used in other countries, which the Philippines has free trade agreements with. Some of these countries like India, Thailand, Indonesia and Malaysia employ European and US technologies, whereas locally, most of the producers use China-made machines and technologies.

2. Be conscientious when sourcing from local producers. So you want to buy from local weavers or hire local subcontractors for your products. Good for you as you are helping the economy and providing livelihood. But do you pay them well for their services or do you take advantage of their lack? I remember an organization that engages a group of women weavers of plant fiber cloth in Southern Philippines. The process is done by hand. Per meter of a regular fiber was sold at about US$25 (at Php50 per US$1)- more than double the price when bought from the weaver.

3. Find out the latest trends in design, materials, and products. Some SMEs stay stuck with tried and tested designs. Thinking out of the box is the secret to making a dent in the highly competitive global marketplace. Doing the same things other people do just because they are successful in it does not mean you will be successful too. Originality is king.

4. Be mindful of customer service and after-sales service. Teach your personnel to be courteous either in person, on the phone or in emails; to be attentive to the client’s needs, to be familiar with the products and services your business offers. As an owner, you need to be that too. Treat every customer with respect and do not make them feel that some are treated less than others.

5. Competition is healthy. While it is ideal to venture in products or services that are unique, and with less competition (in bid to secure a larger share of the market), tight competition should not scare you to dive into a venture that you are truly passionate about. A large number of providers of a certain product or service just means that there is demand for them.

6. Think like a boss. For people who are thinking of venturing into business, start thinking like you already own a business or a company, even when you are not. Psychologically and emotionally putting yourself into a situation of a business manager can allay unnecessary worries at pre-startup.

7. Be ethical as a worker. If you think like a boss, you would know by heart what actions are proper or improper; or what can hurt businesses. For example, the facilitator at the forum mentioned about a mentee being pirated into a higher position (and better pay) by another company. For them, it meant success. I saw it differently though. In my opinion, while it may not be illegal (unless the worker has breached a contract), being pirated is being disloyal to the previous company who has invested in you to acquire and hone the knowledge and skills the pirating company hired you for. Filing proper resignation and talking with your boss of your intent to leave the company say a lot about your integrity. And please DO NOT BRAG that you are pirated. As they say, nobody is indispensable in any organization. If the company pirated you, it is not impossible that someday, they will pirate a better, more skilled worker to replace you.

8. Don’t play dirty games The facilitator related how he, as a mentor, helped a group of student-entrepreneurs “circumvent” the rules by not disclosing their identity as the sellers at an exclusive inter-college fair. Worse, the mentor devised a plan of splitting the earnings and donating half of it to the scholarship program of the said college that hosted the fair. So when the rector of that college learned about the “violation”, the mentor handed him the managers check as donation to the scholarship program. The mentor called it smart strategy, I call it corruption.

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