Suds Calamba opened on Jan. 8, 2010. It was a good blessing to start the new year. Darwin Paderes with his highly supportive spouse, Ethel, owns and manages the branch. Darwin actually decided to end his employment with a multinational company as an engineer to start his own business.
The main challenge we encountered at Calamba was finding a good location. There were a lot of potential locations but there were challenges relating to the set back of the buildings that prevented them from being leased. We have never faced this type of problem before.
Persistence and prayer was what solved the day, as the building in Hectan, which we overlooked, has been right under our noses. Darwin discovered it since his daughter studies in Kumon, which is nearby. It was a good thing too as the size of the space enabled us to combine his reception and operations.
In his first week operating the business, Darwin says his confidence has built up. The Suds start up team will stay with them for at least 1 more week to make sure everything's operating smoothly.
Wednesday, January 13, 2010
Thursday, November 5, 2009
First Look at Suds Ad in Franchise Today
This Suds ad will appear in Franchise Today, a free, monthly publication you can get at any Figaro's, Bo's Coffee, Kitaro, Jessie Mendez Salons.The ad was finalized after a few tests we made on the pic, headline and copy.
I was surprised by what came out on top of most people's choices. It wasn't my first personal choice but this was the concept most people responded to.
The November issue of Franchise Today will be available by November 15 in the outlets mentioned above.
Thursday, October 29, 2009
Suds Marketing - Let's Go Guerilla!
This is a picture of the tarpaulin banner hanging at the Robinsons Place Imus footbridge. Imus was the first of our branches to find a suitable spot for marketing, kudos to Daniel (naunahan pa kami). At Suds Dasma, we're working with the local government to rent a space at the footbridge to display a backlit sign with a similar theme.
John and I are also exploring Tagaytay for some areas where we can do guerilla marketing (effective but cheap). Hopefully, we'll get everything set up by November.
Our thanks to Bing of Visual Fusion for a great job capturing the design we wanted.
Thursday, October 8, 2009
Laundry Franchising - The Problem with Royalties
On the extreme end of royalty fees, franchisors don't collect them. At the other end, well, there could be a problem too.
Suds started in 2003. By 2005, we have had franchise inquiries but we never took them seriously because of one thing: some of our friends who franchised popular laundry franchises were unhappy with their businesses. And it had a lot to do with royalty collection.
The problem? Royalties are too high. There were instances when they had to give almost ALL net income to the franchisor. In any business, that could be a problem.
Before we understood franchise structuring, we thought that royalty payments were arbitrary. But Jojo showed us that there could be a way for a franchisee-franchisor win-win program. We thought long and hard and came with a ground breaking royalty system - a system that adapts to the gross sales level of the franchisee.
Here's what's good about it:
1. We don't collect for the first 6 months. That's the franchise customer build up stage and it's very critical for them to survive this stage.
2. We start at 3% which is way lower than what our competitors charge.
3. As the franchise's sales grow, we set up trigger points where we increase our royalties to 4% then to 5%.
4. At a certain point, when sales continue to grow, we actually LOWER our royalty percentage as an incentive for good-performing franchises.
All these took a little number-crunching. We had to base it on the projected Profit and Loss of the franchisee taking into account all the expenses first. It's not arbitrary and its main aim is to keep our franchisee happy even if they contribute royalties.
So the next time, the issue of royalties come up, prospective franchisees should not automatically label it a bad thing. Royalties should help both franchisors and franchisees if properly structured.
God Bless!
Suds started in 2003. By 2005, we have had franchise inquiries but we never took them seriously because of one thing: some of our friends who franchised popular laundry franchises were unhappy with their businesses. And it had a lot to do with royalty collection.
The problem? Royalties are too high. There were instances when they had to give almost ALL net income to the franchisor. In any business, that could be a problem.
Before we understood franchise structuring, we thought that royalty payments were arbitrary. But Jojo showed us that there could be a way for a franchisee-franchisor win-win program. We thought long and hard and came with a ground breaking royalty system - a system that adapts to the gross sales level of the franchisee.
Here's what's good about it:
1. We don't collect for the first 6 months. That's the franchise customer build up stage and it's very critical for them to survive this stage.
2. We start at 3% which is way lower than what our competitors charge.
3. As the franchise's sales grow, we set up trigger points where we increase our royalties to 4% then to 5%.
4. At a certain point, when sales continue to grow, we actually LOWER our royalty percentage as an incentive for good-performing franchises.
All these took a little number-crunching. We had to base it on the projected Profit and Loss of the franchisee taking into account all the expenses first. It's not arbitrary and its main aim is to keep our franchisee happy even if they contribute royalties.
So the next time, the issue of royalties come up, prospective franchisees should not automatically label it a bad thing. Royalties should help both franchisors and franchisees if properly structured.
God Bless!
Monday, September 7, 2009
Starting a Business
I remember starting our business 6 years ago. I was inspired by Robert Kiyosaki's book Rich Dad, Poor Dad. I thought to myself, this is it, my way out of the rat race!
Fast forward 6 years and multiple bloopers, I'm still alive but man, that Rich Dad book really understated it (hahaha!). Not to take anything from that book but really, Rich Dad just tells you why, not the how. My wife and I had numerous challenges in starting a business the past 6 years. And though we experienced a lot of hard times, we would still choose the way we chose: business over employment. Our why's are all in Rich Dad. But for quick hows, especially to many of my friends looking to cross over soon, here's what I can share:
1. Build Inner Strength - Related to my blog about Giving Up is mental toughness. I don't think you can survive owning a business without developing mental toughness. And it's not about the petty problems either. It's about problems that are matters of life and death - of your business that is. Problems make you strong, there is no substitute for challenges to make you grow.
If faced with a huge problem, a technique I learned is: Don't think about the problem. That's right. Instead, think about the solution. For example, you have a money problem. Instead of thinking about what will happen to you when you don't have the money, focus your efforts on how much money you need and how you will get it. I try to visualize the exact amount I need and sooner or later, my mind gives out suggestions.
Focus on the solution.Focusing on your problems will inevitably cause anxiety. Focusing on the solution gives you a puncher's chance. Use your thoughts wisely.
You will be tested many times in your business life. If you fall, just get up and play some more. Also, you will need a good assist from above.
2. Pray like Jacob - There have been a lot of small miracles in our business life. Loans that get granted just in time, timely rebates and stuff like that. I know that no matter how hard I try, if I don't have the blessing from my God, I'd be doomed. But I also learned to pray like Jacob sometimes. That is, to knock, pound and shout to God to bless me. And to keep on knocking until He 'gives in'. I don't know if you can ever force God to give in but I do know that Jacob wrestled with an angel and did not let go until he was blessed. That sort of tenacity is needed in prayer sometimes. We are all children of God, and He blesses us. It won't hurt to be persistent as long as we know how to submit if the answer is No.
3. Choose a business with multiple markets - You are never helpless in a business. If business is slow, make sure you have a market you can woo. For example, in our laundry business, we serve mostly retail. But that didn't stop us from courting commercial accounts. Both of these markets are actually 'woo-able' but I like having the option to go out there and talk person to person to purchasing managers and get their big accounts.
Some markets are too focused on retail and walk-in customers. It would be good if your business gives you the chance to sharpen your man to man sales skills too. Which brings me to #4.
4. Learn to Sell - Most of us who came from the world of employment do not know how to sell. But selling in your store or when you are courting customers is a very important skill. And it's not hard to learn. The key is PRACTICE. Selling skills do not sprout overnight. And it is not dependent on how many books you have read. You have to go out there and sell. Be ready to be rejected, but be happy because it means you have room to improve.
The best way (and cheapest too) to practice selling in the Philippines is to join a direct-selling company. Yup. Those dreaded direct-selling companies and networking companies are actually great boot camps to get you in shape. You also get good trainings and get to watch good salesmen exhibit their skills. Join a company you believe in and stay out of 'hyping' which is actually just a form of lying. Sell softly until you get the hang of it. Build your confidence. And be sure that the sales process is successful for both ends. You have to be able to collect payment for you part. Selling is different from giving, you know.
You can also practice selling in your store. Make sure you are the receptionist on some days so you can get to know your customers.
5. Conserve Cash - One of my biggest mistakes when I started out was when I spent too much to beautify parts of my store my customer wont even see! Looking back, I wish I conserved the cash because I definitely had better use for it when we opened for business.
6. Look for the Market BEFORE you build your business - Most people look for customers after the store has been built and after the cash has been spent. Look for a business that has ready made customers waiting. If you are still looking for a business to start, take a look around. What do all these people need that you can provide for? Do you have competitors? Can your competitors copy your idea? Can you get people to be loyal to you?
7. Stick to One - In his great book: Growing a Business, Paul Hawken reminds his readers to not start multiple business at once. Just one. And put all your efforts into making that business successful. Robert Kiyosaki also advises us to put our eggs in one basket and watch that basket. I subscribe to this way of thinking and I find it better advise compared to diversification. Diversification is good advice for those who have a lot of money. If you have only 100T or even 1M, diversification will only divide your investments into mediocre parts, without real substance or promise for growth.
8. Know You are Capable - Never discount yourself. Instead, take stock at what you are good at and think of that always. Everyone can learn to be entrepreneurs. I often smile at people's comments that this person or that person is 'business-minded'. I have been introduced to 'business-minded' people who are only good at one facet and that is looking for the next opportunity. They have no focus and no sense of persistence at all.I should know, I have that streak myself!
While some of the most quiet people I know, though they don't know how to sell yet, have many ingredients that make them ready to own their businesses - they are tenacious, numbers-oriented and have enough willpower to carry the business through.
9. Choose Your Own Adventure - Businesses are as diverse as the people that own them. My experience in service and in distribution tells me I have much to learn. These two business types have different challenges and rewards (not all rewards are monetary). I think I would love to try out trading or import-export someday. Some comments:
Service - small capital needed.You meet a lot of people. Business could be prone to complaints.
Distribution - not much hassle but could need big capital to corner a market.
Trading - you can start small. Competitors can be a problem if they smell your success. You need to be innovative often.
Manufacturing - big capital needed. Marketing arm needs to be strong.
Choose a business compatible to your character. But be open to challenges of adding some skills too, especially selling. If you are contemplating going into business, don't keep a plan B when you start. Plan it well then burn the bridge. Make it your only option. I know it's scary but positive tension can do wonderful things.
Dedicated to my friends who are looking to start their own business. You can do it!
God be with you!
Recommended Books:
1. Rich Dad, Poor Dad
2. The E-Myth Revisited
Fast forward 6 years and multiple bloopers, I'm still alive but man, that Rich Dad book really understated it (hahaha!). Not to take anything from that book but really, Rich Dad just tells you why, not the how. My wife and I had numerous challenges in starting a business the past 6 years. And though we experienced a lot of hard times, we would still choose the way we chose: business over employment. Our why's are all in Rich Dad. But for quick hows, especially to many of my friends looking to cross over soon, here's what I can share:
1. Build Inner Strength - Related to my blog about Giving Up is mental toughness. I don't think you can survive owning a business without developing mental toughness. And it's not about the petty problems either. It's about problems that are matters of life and death - of your business that is. Problems make you strong, there is no substitute for challenges to make you grow.
If faced with a huge problem, a technique I learned is: Don't think about the problem. That's right. Instead, think about the solution. For example, you have a money problem. Instead of thinking about what will happen to you when you don't have the money, focus your efforts on how much money you need and how you will get it. I try to visualize the exact amount I need and sooner or later, my mind gives out suggestions.
Focus on the solution.Focusing on your problems will inevitably cause anxiety. Focusing on the solution gives you a puncher's chance. Use your thoughts wisely.
You will be tested many times in your business life. If you fall, just get up and play some more. Also, you will need a good assist from above.
2. Pray like Jacob - There have been a lot of small miracles in our business life. Loans that get granted just in time, timely rebates and stuff like that. I know that no matter how hard I try, if I don't have the blessing from my God, I'd be doomed. But I also learned to pray like Jacob sometimes. That is, to knock, pound and shout to God to bless me. And to keep on knocking until He 'gives in'. I don't know if you can ever force God to give in but I do know that Jacob wrestled with an angel and did not let go until he was blessed. That sort of tenacity is needed in prayer sometimes. We are all children of God, and He blesses us. It won't hurt to be persistent as long as we know how to submit if the answer is No.
3. Choose a business with multiple markets - You are never helpless in a business. If business is slow, make sure you have a market you can woo. For example, in our laundry business, we serve mostly retail. But that didn't stop us from courting commercial accounts. Both of these markets are actually 'woo-able' but I like having the option to go out there and talk person to person to purchasing managers and get their big accounts.
Some markets are too focused on retail and walk-in customers. It would be good if your business gives you the chance to sharpen your man to man sales skills too. Which brings me to #4.
4. Learn to Sell - Most of us who came from the world of employment do not know how to sell. But selling in your store or when you are courting customers is a very important skill. And it's not hard to learn. The key is PRACTICE. Selling skills do not sprout overnight. And it is not dependent on how many books you have read. You have to go out there and sell. Be ready to be rejected, but be happy because it means you have room to improve.
The best way (and cheapest too) to practice selling in the Philippines is to join a direct-selling company. Yup. Those dreaded direct-selling companies and networking companies are actually great boot camps to get you in shape. You also get good trainings and get to watch good salesmen exhibit their skills. Join a company you believe in and stay out of 'hyping' which is actually just a form of lying. Sell softly until you get the hang of it. Build your confidence. And be sure that the sales process is successful for both ends. You have to be able to collect payment for you part. Selling is different from giving, you know.
You can also practice selling in your store. Make sure you are the receptionist on some days so you can get to know your customers.
5. Conserve Cash - One of my biggest mistakes when I started out was when I spent too much to beautify parts of my store my customer wont even see! Looking back, I wish I conserved the cash because I definitely had better use for it when we opened for business.
6. Look for the Market BEFORE you build your business - Most people look for customers after the store has been built and after the cash has been spent. Look for a business that has ready made customers waiting. If you are still looking for a business to start, take a look around. What do all these people need that you can provide for? Do you have competitors? Can your competitors copy your idea? Can you get people to be loyal to you?
7. Stick to One - In his great book: Growing a Business, Paul Hawken reminds his readers to not start multiple business at once. Just one. And put all your efforts into making that business successful. Robert Kiyosaki also advises us to put our eggs in one basket and watch that basket. I subscribe to this way of thinking and I find it better advise compared to diversification. Diversification is good advice for those who have a lot of money. If you have only 100T or even 1M, diversification will only divide your investments into mediocre parts, without real substance or promise for growth.
8. Know You are Capable - Never discount yourself. Instead, take stock at what you are good at and think of that always. Everyone can learn to be entrepreneurs. I often smile at people's comments that this person or that person is 'business-minded'. I have been introduced to 'business-minded' people who are only good at one facet and that is looking for the next opportunity. They have no focus and no sense of persistence at all.I should know, I have that streak myself!
While some of the most quiet people I know, though they don't know how to sell yet, have many ingredients that make them ready to own their businesses - they are tenacious, numbers-oriented and have enough willpower to carry the business through.
9. Choose Your Own Adventure - Businesses are as diverse as the people that own them. My experience in service and in distribution tells me I have much to learn. These two business types have different challenges and rewards (not all rewards are monetary). I think I would love to try out trading or import-export someday. Some comments:
Service - small capital needed.You meet a lot of people. Business could be prone to complaints.
Distribution - not much hassle but could need big capital to corner a market.
Trading - you can start small. Competitors can be a problem if they smell your success. You need to be innovative often.
Manufacturing - big capital needed. Marketing arm needs to be strong.
Choose a business compatible to your character. But be open to challenges of adding some skills too, especially selling. If you are contemplating going into business, don't keep a plan B when you start. Plan it well then burn the bridge. Make it your only option. I know it's scary but positive tension can do wonderful things.
Dedicated to my friends who are looking to start their own business. You can do it!
God be with you!
Recommended Books:
1. Rich Dad, Poor Dad
2. The E-Myth Revisited
Wednesday, August 19, 2009
10,000 Hours
10,000 hours. If you are looking to be not just good, but elite, in what you do, this is a key.
I first saw this figure in Bo Sanchez's article about fulfilling your purpose. I thought it was just some random big number until yesterday. I was browsing the Phil Star when I saw Bill Velasco's column titled: Secret of success: 10,000 hours. In that column, he outlined the study that showed how elite athletes, musicians, even criminals logged more than 10,000 hours in order to become world-class in their field.
One thing that stood out for me:
GOOD = 8,000 hours
ELITE = 10,000 hours or more.
You can read Bill Velasco's article here.
I've always wondered what makes great men great. I knew it wasn't just luck or sheer talent that pushes them. I've read stuff about how Michael Jordan used to practice hours and hours everyday to be that great. Kobe too.
But 10,000 hours...That's a big price to pay. That's like practicing 3 hours per day for 3,333 days (9.1 years). Consistently. Even on Sundays. Wow, no wonder I never got close to good at playing the guitar.
This was really a big answer for me. It tells me, there's a price to pay to shine. And that price is TIME. Time you put into whatever you do. And it tells me, I got to have a 10 year plan (or a 9.1 year plan) to be elite and if I want to be world-class at anything, I have to start now.
Putting it together, Bo says you have to:
1. Do What You Like
2. Do What You're Good At (or Excel In).
And do it for 10,000 hours.
Time to go to work!
I first saw this figure in Bo Sanchez's article about fulfilling your purpose. I thought it was just some random big number until yesterday. I was browsing the Phil Star when I saw Bill Velasco's column titled: Secret of success: 10,000 hours. In that column, he outlined the study that showed how elite athletes, musicians, even criminals logged more than 10,000 hours in order to become world-class in their field.
One thing that stood out for me:
GOOD = 8,000 hours
ELITE = 10,000 hours or more.
You can read Bill Velasco's article here.
I've always wondered what makes great men great. I knew it wasn't just luck or sheer talent that pushes them. I've read stuff about how Michael Jordan used to practice hours and hours everyday to be that great. Kobe too.
But 10,000 hours...That's a big price to pay. That's like practicing 3 hours per day for 3,333 days (9.1 years). Consistently. Even on Sundays. Wow, no wonder I never got close to good at playing the guitar.
This was really a big answer for me. It tells me, there's a price to pay to shine. And that price is TIME. Time you put into whatever you do. And it tells me, I got to have a 10 year plan (or a 9.1 year plan) to be elite and if I want to be world-class at anything, I have to start now.
Putting it together, Bo says you have to:
1. Do What You Like
2. Do What You're Good At (or Excel In).
And do it for 10,000 hours.
Time to go to work!
Sunday, August 9, 2009
The Strength of Franchising
Franchising is considered to be one of the best business inventions of the century. I have to agree. This year alone, Suds grew by leaps and bounds not by our effort but because of the efforts of many capable minds.
During the franchise system development, we were forced to stare at our systems and to project it so that both franchisor and franchisees will win. After all, starting up a business with hard-earned money is no laughing matter. Our consultants, especially Jojo, made sure that we understood what we were doing. I made a joke to Charm that with the work Jojo made us do, he ought to have been the one paying us! (just kidding bro, you were invaluable). Jojo made us work hard but in the end, we were happy with what we got... which was just the beginning of our job with Dee.
We asked Dee to help us clean and streamline our training materials and manuals. We never realized just how much work it takes to make a training manual. Kung wala si Dee, pupulitin kami sa kangkungan, literally. She had the ability to put the process into paper. Dee, her husband Richard and myself used to work with Intel. Looking at the body of work someone like Dee can generate, I now know how big time companies stay on top.
That's not to mention our franchisees John and Daniel who wasted no time in making Suds their own. It was touching but only up to the point where they see where we need improvement and that's when we go to work again. Thanks to them, we see how we can really make Suds grow. Their ideas are sometimes like ours, other times so far out I start to wonder how it would be if we have more than 10 franchisees?
But that's why I am so thankful. We could never have grown up so fast if these guys weren't there. If this continues, I think Suds will grow even more by next year.
All in all, I have to agree that the strength of franchising is in the relationships we form. I definitely feel that now that more capable people care about this business, God's blessings are pouring out. Though there may be more work ahead for all of us, it feels much lighter now that the load is shared.
During the franchise system development, we were forced to stare at our systems and to project it so that both franchisor and franchisees will win. After all, starting up a business with hard-earned money is no laughing matter. Our consultants, especially Jojo, made sure that we understood what we were doing. I made a joke to Charm that with the work Jojo made us do, he ought to have been the one paying us! (just kidding bro, you were invaluable). Jojo made us work hard but in the end, we were happy with what we got... which was just the beginning of our job with Dee.
We asked Dee to help us clean and streamline our training materials and manuals. We never realized just how much work it takes to make a training manual. Kung wala si Dee, pupulitin kami sa kangkungan, literally. She had the ability to put the process into paper. Dee, her husband Richard and myself used to work with Intel. Looking at the body of work someone like Dee can generate, I now know how big time companies stay on top.
That's not to mention our franchisees John and Daniel who wasted no time in making Suds their own. It was touching but only up to the point where they see where we need improvement and that's when we go to work again. Thanks to them, we see how we can really make Suds grow. Their ideas are sometimes like ours, other times so far out I start to wonder how it would be if we have more than 10 franchisees?
But that's why I am so thankful. We could never have grown up so fast if these guys weren't there. If this continues, I think Suds will grow even more by next year.
All in all, I have to agree that the strength of franchising is in the relationships we form. I definitely feel that now that more capable people care about this business, God's blessings are pouring out. Though there may be more work ahead for all of us, it feels much lighter now that the load is shared.
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