Starting and Managing a Business for Profits and Wealth Part 26: The 10-Fold Path to Becoming Rich and Wealthy

STARTING AND MANAGING A BUSINESS FOR PROFITS AND WEALTH
Part 26: The 10-Fold Path to Becoming Rich and Wealthy

By K.C. See

My business partner Patrick Liew came up with an interesting study, which I find intriguing. There are many reasons why I would pay attention to him and his ideas: being an accomplished entrepreneur, having listed three companies and building numerous successful businesses. Aside from that he was the Chairman of HSR Global, a listed property agency in Singapore as well as the co-founder of Success Resources, a global seminar company. He gave me the go-ahead to share this.

Patrick believes that every rich and wealthy person has developed his own unique path to success. He discovered that there are generally ten major pathways, called the 10-Fold Path to becoming rich and wealthy. These pathways can be correlated to psychological models such as the Five Factor Model (FFM). The FFM covers the big five personality traits of openness, conscientiousness, extraversion, agreeableness, and neuroticism (OCEAN).

If one studies Greek mythology one will realise that the ten different pathways have been depicted in the lives of the mythological gods and goddesses. It goes to prove that discoveries of the modern age have been in existence since the beginning of time. We have merely affirmed truths of age-old wisdom. This is Patrick’s 10-Fold Path to becoming rich and wealthy.

1. OPENNESS
1.1 Game-changer (“Aphrodite”) The Game-changer becomes rich by identifying problems, finding gaps, and developing disruptive solutions. Eg. Michael Bloomberg, Jeff Bezos
1.2 Inventor (“Hephaestus”) The Inventor becomes rich by creating and innovating new models, products and services. Eg. Steve Jobs, Richard Branson

2. CONSCIENTIOUSNESS
2.1 Governor (“Athena”) The Governor becomes rich through leading people and managing limited resources. He develops structures, systems and processes to make things work. Eg. Steve Ballmer, Jack Welch
2.2 Guardian (“Demeter”) The Guardian becomes rich through acquiring, value-adding, leveraging on, and growing assets. Eg. Warren Buffet, Amancio Ortega, Sheldon Adelson, Lakshmi Mittal, Paul Allen

3. EXTRAVERSION
3.1 Power Broker (“Hermes”) The Power Broker becomes rich by selling, trading and brokering deals. Eg. Carl Icahn, George Soros, Rupert Murdoch, Donald Trump
3.2 Ruler (“Zeus”) The Ruler becomes rich by targeting a market segment or niche and developing dominance over it. Eg. Harry Triguboff, Eike Fuhrken Batista, Li Ka-shing, Larry Ellison, Mark Zuckerberg, Sam Walton, Aliko Dangote

4. AGREEABLENESS
4.1 Hero (“Apollo”) The Hero becomes rich through making people like, trust and respect him. Eg. Oprah Winfey, Michael Jackson, David Beckham
4.2 Master (“Hades/Poseidon”) The Master becomes rich by being the leading expert in a significant domain. Eg. George Lucas, Giorgio Armani, Ralph Lauren, J. K. Rowling,

5. NEUROTICISM
5.1 Problem-Solver (“Artemis”) The Problem-solver becomes rich by resolving problems that can cause major gains or losses to the customers. Eg. Charles Schwab, Michael Dell
5.2 Politician (“Ares”) The Politician becomes rich by developing schemes and maneuvers to influence organisations, communities, and society. This could be for his personal or partisan advantage. Eg. Silvia Berlusconi, Prince Al Waleed bin Talal bin Abdulaziz al Saud, Thaksin Shinawatra, Vladimir Vladimirovich Putin.

It would therefore be interesting to determine which path may be yours and thus set you on a more guided journey. Patrick suggested that you can do three things to make this happen.

1. LEVERAGE ON YOUR STRENGTHS
There is no absolute path to being rich and wealthy. As a start, you need to choose the path that is most appropriate to you, one that will optimise your edge, advantage and growth. The choice of the path depends on the following 5 “P”s:
1.1 Purpose. It serves your purpose in starting a business.
1.2 Personality. It leverages on the strengths of your personality.
1.3 Passion. It should invoke meaning, fun and excitement.
1.4 Performance. It should be a path that can help you perform well and better than your targeted competitors.
1.5 Priority. It should be a path that is relevant and significant at this time and in your current situation.

2. COVER YOUR WEAKNESSES
You need to retain different talents to cover your weaknesses. In addition, you need to build organisations, systems and processes to support you and enhance your business model and operation.

3. WORK TOWARDS A HOLISTIC MODEL OF GROWTH
As you work on your path, learn to develop a targeted, holistic and balanced set of competences so that you can choose different paths and have more options to grow your business. In that way, you can survive any turbulence and exploit the silver lining in every storm.

Starting and Managing a Business for Profits and Wealth Part 25: Starting It Right

STARTING AND MANAGING A BUSINESS FOR PROFITS AND WEALTH
Part 25: Starting It Right

By K.C. See

The initial starting point for any business is typically the most challenging phase. A new entrepreneur has to grapple with numerous issues and particularly if you are working all by yourself. You ended as the CEO, the CFO and the CMO all rolled into one.If you are smart entrepreneur, you would have done extensive research and craft out a plan backed with a Plan B and may be even a Plan C. Even then business is dynamic and the real world will not always follow in accordance with your plan. You will need to change directions and strategies, as the market changes.The less experienced entrepreneur may crumple under the pressures and make decisions that might only further deepen the initial crisis. I have seen that happen too often and while the business idea might be a good one but the implementation falls short. Not only the market might not to react to your product or services as you expected ; you might also get internal problems ranging from partners disagreements to staff retention issues to  suppliers non-delivery to cash flow problems. They seems to come all at the same time.
After you read this paragraph you begin to wonder it is a good idea to quit that job and “do your own thing”. May be I went too much in one direction; the pessimistic outlook. On the other hand if you get it right, starting a business is exciting and especially if you are doing what you love. It gives you a high and its a lot better than going to work every day to a job that you have no passion for or that  you find is not meaningful and you dread going to work every day. You will enjoy the freedom and the ability to put your creativity into play. You  become your own boss and that is the ultimate dream of many young enterprising person.But you have to start it right.
There are a number of things you need to do to start it right and here are three of the many suggestions I can give you;

Get an experienced mentor or a partner into your business.
You need one if you have little or no experience. However how to go about getting the right person to guide you is another issue. It is essential that you take time to list down what you want and the quality of the person you are looking for. Once you know what you want you need to go out to the business world, explore, network and connect with people to enlarge your options. You are not likely to find that person in your present circle of friends if you are a new entrepreneur and you don’t mix around with business people much.
Of course the next question is how to get the person to be interested to want to into a business with you or to mentor you. As I have always share with my students; nobody will do anything for you unless doing it meet their own needs. Don’t get me wrong; I am not talking about materialistic needs. I know a number of experienced business people who are willing to help young entrepreneurs just to fulfill their need to contribute to the betterment of others.
What you need to work on is how to get the person to want to work with you. I believe you must have a compelling vision that would excite him, and enthusiasm that would infect him, a personality that would he would be comfortable with and a willingness to learn and that requires humility.

You need to do sufficient research and have a plan.
It may not be necessary that you write up an extensive detailed business plan, unless you are vying for funding or an award. I am more inclined toward  business modelling as a must-do for any new business.
What kind of research do we need to do, you may ask? I am not suggesting that you engage a research company to do that although that would be nice if you have the funds. It could be the basic “go-out-there-and-talk-to-people” type of research. However you need to talk to the ‘right’ people and you must word your questions correctly. You should talk to the people who are your potential target market. Recently I was working with one of my mentee who wanted to start a confinement home. I help him craft out a simple research questionnaire and he got 65 respondents who has either themselves or their spouse given birth or about to; to give him feedback. The information he got is invaluable to crafting his business model and plan.
Talking about research; a good friend of mine, Teoh Poh Yew shared this joke with me; ”Copy one thing is call copy. Not a good thing. Copy many things is called research and that might be good.” Steve Jobs do a lot of “research” in the early years of Apple.

Build the right team of people around you.
The key word is “leverage” and that means “finding people who have what you don’t have”. I got my students to use my R.I.C.E formula; Resources which refers to Time and Money, Ideas, Contacts and Expertise. You need all these five components to increase the chances of success. It does not mean that you have to have all them become your business partners. Some of these contributors can be your outsource “partners”. Some you can employ and some of these components could possibly be provided by your mentor. Once again; it is unlikely that your present circle of friends would be able to cover all that. The solution is obvious; network and make more friends.

This three ideas are just something to start with and it is by no means complete. However it would be food for thought before you jump in.

Starting and Managing a Business for Profits and Wealth Part 24: Top Ten Business Opportunities in 2014

STARTING AND MANAGING A BUSINESS FOR PROFITS AND WEALTH
Part 24: Top Ten Business Opportunities in 2014

by K.C. See

This is the time of the year where I would be asked by my students and members of the Money Mastery community, what the top 10 business opportunities for 2014, would be. I used the same process I used before called Opportunity Search designed by my guru Alan Weiss. The process is based on the concept that opportunities come from change and from the opportunity; we derive the possible business idea. So the three words are Change – Opportunities – Ideas. So lets start by identifying some possible changes in the market place.

  • Higher cost of living and running a business.
  • Crime rate perceived to be growing.
  • Urbanization of population.
  • Health consciousness continually increasing.
  • Work life balance as younger generation wants different life style.
  • Aging population who higher propensity to spend compared with the previous aged.
  • Younger generation willing to spend more.

You would note that these are strictly my opinion and you may not agree with it and further more, the business ideas are primarily for smaller operations. Some of the opportunities I mentioned last year remain so, as I believe the opportunities still hold for 2014. So they are not entirely new ideas.

1) Area of Opportunity: Business Improvements for SME
Business Idea 1: SAAS ( Software as a service) / PAAS ( Platform as a service) / cloud computing for niche areas
Small and Medium size operations in the past are owned and run by baby boomers and Gen X and although investment in information technology has been emphasized, their resistance to change and the cost barrier to entry makes actual adoption slow and in some cases non-existent. Time has changed, with the younger people taking charge and with cloud computing making initial investment lower creates significant opportunities.
Business Idea 2: Business Consulting/ coaching
For the same reasons above and coupled with the fact that organizations are pressured by rising costs, the need to get external help for new ideas and to improve efficiency provides opportunities for consulting and coaching.

2) Area of Opportunity: Mobile Marketing
Business idea 1: Mobile apps for business
I have a vested interest in this being part owner of the largest mobile app developer in this region. The signs are obvious ; the shift is from computers to mobile devices and every business would need to have their own mobile app. The list of reasons is too long to explore in this article.
Business Idea 2: Wechat / Whatsapp marketing
Wechat has grown at such a tremendous pace ( 600 million and counting) that it is simply amazing and from the perspective of Facebook and the other social media platforms; threatening . So as Facebook marketing is the hot area now; wechat or whatsapp marketing will be the future and it would not be faraway.

3) Area of Opportunity:  Organic & Healthy Food
I repeated this from 2013 list. However the idea of opening up cafes and restaurants are increasingly restrictive as retail rental continues to go higher . I suggest the alternatives.
Business Idea 1: Food delivery
Food delivery is common and big in other countries such as China and in a place where going out to eat for lunch is a hassle, food delivery will be an idea to consider
Business Idea 2: Food trucks
For similar reasons food trucks make this opportunity more doable and viable.

4) Area of Opportunity: Health Empowerment
Business Idea 1: Health analysis & information
As health consciousness increases more and more people wants to take charge of their own health and to follow a preventive regime rather then to look for help only when they face health problems. To empower themselves they need three things; Diagnosis, Information and Solutions. They will look for methodologies, systems and devices to diagnose and analyse. They need more information on health issues and better understanding of causes and possible solutions.
Business Idea 2: Anti aging and weight management
These are two areas that will continue to be big and are million-dollars industries.

5) Area of Opportunity:  Marketing Services
Business needs help and will continue to be challenging as they look for new avenues to market their products or services.
Business Idea 1: Online marketing
Online marketing are capabilities that most small and medium size operations may not have but would require in order to remain successful and to be more global. They need to go beyond the traditional ways on how they do business and would now be more receptive. Providing such capabilities as a service especially in a holistic form would be a big area.
Business Idea 2: Lead generation services
With the implementation of the Data Protection Act( different names in different countries); organizations can no longer do random SMS or email marketing. However getting leads is still an important part of the business process and organization that can provide this as a service, would be of value.

6) Area of Opportunity: Contracting and Outsourcing
Business Idea 1: Online market place for services
By market place I mean providing a platform where potential customers can find and choose their suppliers or vendors all in one place. This could primarily be an online opportunity but have existed as a brick and mortar option as seen in wholesales markets, which are thriving in certain sector e.g. fashion. One example would be an online platform for people to find renovators e.g. www.renoqueen.com
Business Idea 2: Niche outsourcing
There are some niche areas of services that organizations are looking for and would require to outsource or to engage people who specialized in these areas. One example would be property management company which would want to outsource their house maintenance service whether it is plumbing, electrical services or minor repairs. Another niche area is home inspection services required by home buyers who need to inspect their newly bought homes and has no idea how to do that well before they sign off on that piece of paper which absolve the developers from future responsibilities.

7) Area of Opportunity: Human Resource Management
Business Idea 1: Free-lancing providers or sites
Free-lancing will continue to be an opportunity as organization finds it challenging to recruit and employ permanent staff in some job areas. They will have to shift to using free-lancers or similar forms such as contract staffing. Whilst there are online sites that would be a market place for this, niche areas freelancing could be an opportunity.
Business Idea 2: Human Resource and performance monitoring systems
There will be more and more employees working from home and as many organizations and managers are not equipped to manage and monitor this category of staffing; technology and performance management system to do that would be required.

8) Area of Opportunity:  Recreational and lifestyle
Business Idea 1: Specialized sports and niche hobbies
As work life balance is treasured more people would embark on personal pursuits and especially niche and cool areas  such as mountain biking, marathon running or even belly-dancing.
Business Idea 2: Home-based entertainment systems
People spending more time at home will need to find home based entertainments, be it in exotic games and or home based equipments
Business Area 3: Pets Services
Pets are big businesses. Most things that relate to pets cost more than for normal human beings; such as pet grooming, pet hotels and toys for pets.

9) Area of Opportunity: Services for Seniors
Business Idea 1: Tours for seniors
Seniors’ holidays are different from the normal. They can’t do the 6-countries-in-6 days tour, typical Asian style. They need more time and specialized care.
Business idea 2: Retirement planning & homes
This opportunity has often been talked about but more can be done. The elderly today wants to live in a more holiday type resort for their retirement and the market that can afford this is increasing.

10) Area of Opportunity:  Smart Devices
Smart devices go beyond smart phones and Ipads or the like. Technology advances to include wearable technology and over the next few years, no homes would be without some form of these ‘smart’ devices.
Business Idea 1: Repair services
Obviously there is a need for people who will look after these areas as reliance become more. Try to be without your smart phone for a week.
Business Idea 2: Accessories
Especially for the younger generation, personalizing your ‘toys’ is a self expression of who you are, they want to ‘customize’ their ‘toys’ and accessories for these becomes their fashion statements.

You are welcome to write to me at kcsee@masteryasia to discuss these suggestions.
“KC See is the Founder of MasteryAsia an organization dedicated to coaching people for multiple sources of income. He is a serial entrepreneur with businesses ranging from health to mobile technology and runs the renown Money Mastery Mentorship Programme since 1997.”

Starting and Managing a Business for Profits and Wealth Part 22: Deciding on Your Niche Area; The RIM Process

STARTING AND MANAGING A BUSINESS FOR PROFITS AND WEALTH
Part 22: Deciding on your Niche Area; The RIM Process.

Helping people find their niche is one area that I work with when it comes to training entrepreneurs. It is also one of the ways I use when I help trainers whom I coach to make decisions on which area of expertise they want to choose as their niche area and especially if they have more than one option.

I get my students to use a decision matrix which involves evaluating each option base on the following criteria; Readiness, Interest and Marketability/Viability. I call this the RIM process. They first go through a process of listing down their experiences and expertise. The next step is to list down their interest and areas that they are passionate about. From these two lists they then list down their possible subject/areas of training (when it come to trainers) or list the business options they have. Then they evaluate each of these options against the three criteria.

Part22_RIM Process

Readiness:
This criterion matches their possible options against their present capability, competencies or experience. If the option is some thing they can start doing tomorrow then they could give themselves high points for readiness. If they are not ready and it would take some time then they would need to put a lower score for this. Low score does not necessarily mean that this option will be eliminated. It just means that more work, research and thoughts need to put on to this idea.

It is therefore possible that we might want to do something that we are not ready for but we are very interested in. In which case we need to put efforts to develop the area. We will need to talk to people in that field or study existing successful models.

Interest:
When we choose areas we want to work on, interest and passion is definitely an important consideration. The exception is if you are ‘hungry’ and you need to make it work fast or if income is a concern. In which case you may choose to do what you are not interested as a temporary endeavor. However some people might tell you that they don’t really know what their passion is. Not surprising although if you are in that situation, it would be quite ‘tragic’. I would suggest that you would require to go through self-discovery process and you may need help from a coach. Evaluating interest level would help us determine future possibilities.

Marketability/ Viability:
This criterion would best be evaluated with help from experts or coach. I always tell my students that when you are hooked on to an idea it would always be a good idea. Simply because it is YOUR idea. Must be good. Getting a second opinion from the RIGHT person is necessary. I emphasis- the RIGHT person. Some of us may choose to consult our friends. Nothing wrong with that except that some people have this ability to talk as if they know some thing when they actually don’t.

Once the evaluation is done; putting points on each of this criteria saying 5 point for high level and 1 for lower, it is can be assumed that the one with the highest score would then be the best choice. However this is an indicative exercise not conclusive. The other point to note is the assumption that all criteria are equally important. Of course this is not necessarily the case. If there is no weightage given that the assumption is as such. However if it is not the case e.g. if Readiness is more important than Interest because you are hungry then we should assign more weightage to Readiness by putting a multiplier.

This RIM process is at its best help to provide directions and guidance It is certainly not a magic answer to entrepreneurs with too many options to choose from or a trainer looking to find niche area.

 

Starting and Managing a Business for Profits and Wealth Part 23: Critical Success Factors: The Retail Business

STARTING AND MANAGING A BUSINESS FOR PROFITS AND WEALTH
Part 22: Critical Success Factors: The Retail Business

Starting your own retail business can be really exciting and rewarding. Retail business with the right strategies and concept, could take you a height of success not just locally but may even be a global possibility, as long as you dare to dream.

We heard of giant retail names such as Apple, Nike, IKEA, The Body Shop, Giordano and dozens of others where its presence are recognized all across the globe. What is it that they have that makes them so distinctive and wildly successful through the years where their competitors struggles to overtake them?

Is it possible for you to build your retail business in such a way where you can be as unique and successful as those big names that attracts an extremely loyal customer base? Nothing is impossible when your passion is on fire, your determination is unbreakable, and you are ready to do what it takes. You may just be at the stage of thinking to start your own retail business. Or you are waiting to bring current business to another level. Whatever stage you are, you want to do it right.

We talk to JASON TEH, a business coach specializing in retail management with a solid portfolio of retail success stories, both from personal experiences as well as from aiding others in achieving their successes.

Q: Tell us a little bit about yourself on how you started into the retail business.
A: I started my working life in my teens being a promoter. I was promoted to a supervisor, to a leader, then a manager, being in charge of both sales and the operations aspect of a retail business for an international brand name. With 18 years of experience building a retail business and creating the fastest growing retail outlet which won itself several awards in retail business category for my company, I was offered an opportunity in 2008 to become a consultant in retail management. It was a turning point for me as I realized I can continue my practices and even contribute more into building up the retail business industry in the region.

Q: What do you currently do now?
A: I now run a retail business with over 30 outlets across Malaysia as well as manage a human resource business. Being a retail business coach for the MasteryAsia Group at the same time, I’m glad to be able to help others build and grow their business too.

Q: As a retail business coach, what do you have to say about our current retail industry?
A: There is much growing space in our local retail culture and I hope to show a different but better example to the market on how our retail industry can grow and evolve to a more professional and sophisticated level especially in the SME sector.
The current retail business is very tough with the global recession subsequently affecting us. Compare to 5-10 years ago, the operating cost has sky-rocket including rental, electrical bill, transportation and etc. This operating expenditure will continue to increase 5-10% every year.
Rental of retail space is going up and this has increase capital requirements for new retail businesses. Thus to stay ahead in the retail world, any business will need to invest in research and development to be able to evolve and revise its business model to maintain or push for bigger profits.

Q: How do you describe a successful retail business?
A: I define a successful retail business as one that is commercial, enterprising, profitable and able to commit to social responsibility. Having a loyal customer base would say a lot about your business too.

Q: What are the success factors in starting a retail business?
A: To be successful in starting a business, you would need two key factors – a brilliant idea and be very clear on your business purpose. When you find a brilliant idea where it fulfills a need, you can easily sell your idea and joint venture with someone who has the funding. This is perfect leveraging. You need to be self-driven and have that passion and motivation to work hard even in tough times. When you know the reason and purpose on why you’re running a retail business, you will always be willing to sacrifice and do whatever it takes to make your business successful.

Q: Is there a key attitude that one must have to run a successful business?
A: I believe it would be ‘discipline’. No matter what business you’re in, discipline is the key to success.

Q: What are some common pitfalls to avoid when one venture into retail business?
A: There are many people who start a business just to get out of the rat race, thinking it would be easy. However, without knowing the true purpose of your business and not having passion in what you do, it would be the recipe for failure in business. Another common pitfall for business starters is getting the wrong business partner. Most people team up with their best friend but end up as enemies because of the business. When choosing business partners, you need to understand the law of leveraging. The elements to look out for in finding your business partners should leverage on resources, ideas, contacts and expertise.

Q: Why do some retail business fail?
A: I have TEN reasons. All of them are vital for a successful retail business.
1.    No Business Plan
2.    No Merchandising Plan
3.    No Marketing Plan
4.    No Social Presence
5.    No Cash Reserve
6.    No Financial Indicators
7.    No Customer Relationship Management
8.    Not Having a WOW Item
9.    Not Consistently Scouting your Competition
10.  No Add-On Sale Opportunities

Q: Any final advice for retail business wannabes?
A: If you want to grow your business to last for decades, you need to start to think like a new generation consumer and employee. Learn and understand what they want. Once you take care of them, they will take care of your business. For new retail start-ups, you need to equip yourself with knowledge and be flexible to make changes according to circumstances. Always carry out surveys and researches before you venture into the business.

 

Starting and Managing a Business for Profits and Wealth Part 21: Critical Success Factors: The F&B Business

STARTING AND MANAGING A BUSINESS FOR PROFITS AND WEALTH Part 21: Critical Success Factors: The F&B Business

From breakfast, morning tea break, lunch, afternoon tea break, dinner and another supper late at night, these are the common five meals of the day where Asians indulge themselves in. The people in Asia really live to eat! To cater to ever growing population, the Food & Beverages industry (F&B for short), is scrambling to satisfy even the most gastronomical appetite! Seeing such great demands, many people jump into the F&B business, hoping to make large profits from this food fad. We see restaurants and cafes mushrooming. Some got really successful with full house customers at every meal times, but most we see them closing their shutters quietly after frail attempts of a short struggling business.

The question is, what made some F&B business so successful while some didn’t make it? Here, we get to have a chat with Mr. HENG ZEE SOON, who has been with the F & B industry for over 18 years having open up all kinds of outlets from cafés to Chinese restaurants to specialty eateries from Malaysia to China and now forthcoming author of his own book on the F & B industry in Asia. Mr. Heng hails from a Hainanese Chinese family who runs a successful restaurant business for fifty years. Prior to him taking over the family business, he was the Head of Country Manager based in China for a company with multiple F&B and restaurant brands.

Q: Tell us a little bit about your background in the F&B industry.
A: I was born into a traditional Hainanese family where we run “Kopitiams” in every generation since my grandfather’s time. I grew up helping out in the family-run restaurant. However, I’ve never wanted to work in the F&B industry seeing how hard my family has to work. So I graduated with a Human Resource Management degree and went into HR instead. The amusing thing is, I was recruited into a F&B company as the HR manager in 1995. My experiences with this company lead me to learn everything about being an operational manager to being promoted to the Head of Country Manager in charged of new setups in F&B. I’ve opened up to 30 new outlets under the same company with multiple restaurant branding in the span of 4 years. Seeing how F&B businesses can make profits and now knowing the technical aspects of running a F&B business, my grandfather retired and I took over the reign of the family restaurant business. My partners and I took over a year to upgrade and revamp the whole business model and the restaurant business is now doing even better than before. I now oversee the operations, management and every business areas of the restaurant. I’ve never looked back since and enjoyed my work tremendously being in this F&B industry.

Q: What is the crucial success factor in starting a F&B business?
A: In any successful F&B businesses, the most crucial part is to first have a solid business plan and products. In the F&B industry, it is a business where you must commit to it and be willing to see through it with persistency. This is not one business where you just invest your money and stand aside and watch it grow by itself. There are also many experienced chefs who left the hotel line and started up their own restaurants when investors came in to partner with them. The investors have no experience in the F&B industry while the good chefs may not necessarily have the knowledge to manage and operate a business. These kinds of restaurants may have very good food but with the wrong business plan. If the business plan does not match the food products, it most likely will have a very low success rate. Good food products must come hand in hand with a solid business plan for a successful F&B. To formulate a successful business plan for your food products, one has to know the targeted audience, the theme of the restaurant right down to how and where you’re going to serve your customers. The success of a F&B business does not just rely on good food alone but must come with its business strategy.

Q: What are the three biggest pitfalls in starting an F&B business?
A: The No. 1 pitfall that most F&B business starters make is jumping into the business without knowing their business model and numbers. At any time, a F&B investment is a big investment. Even with a very conservative business model, we are often looking at nothing less than USD40,000. Without the knowledge and plan to handle both the food and business operation areas, we can see many F&B startups getting into trouble within the first six months of their operations. F&B business starters not only must have the food and recipes, they must also know all the numbers that includes everything about the business operations.
The No. 2 pitfall happens to investors who buy and take over existing restaurant business without having a long term plan. Often there are existing restaurants, which have been struggling, and the owners just wanted to cut their loss by selling their business at a low price. Many would consider this a great opportunity to jump right in and become a restaurant owner. However, there need to be a long term plan knowing if they will be using the same menu, business model, same chefs and staff, or else the business will fail just like before.
The No. 3 pitfall occurs to business starters who just want to invest but not manage the business. They just want to hire other people to run it for them. This is one particular business that simply does not work this way. The F&B business is a food and service industry where customers want to have contact with the restaurant owner to build a relationship to improve the quality of the business for long run. Successful restaurants are ones with loyal customers who come back again and again. So people who want to start a F&B business need to put in the heart and soul in order for the business to be successful, or at the least have a partner who will do that.

Q: If I were to go into F&B, what are the key knowledge that I need to know?
A: For anyone who wants to start an F&B business, your key knowledge should cover two areas: Food Production Management and Business Management. Food management refers to setting the menu, the food preparation process and every other matters that go on in the kitchen. Always start small with a menu with a few really outstanding product items. This will allow you better control and focus in keeping the quality of your products. Other than that, learning the Business Management of the restaurants is vital to ensure the whole operation of the restaurant runs smoothly. This includes the finance and accounts, purchasing, the service control and marketing and promotions.

Q: Are there any critical advices to follow to ensure better success for the business?
A: In Asia’s diverse culture, it is important to cater your food products for all major races. Imagine if your products are high in demand just for one race, when you can produce the food for all three races, you will capture a bigger market share, thus increasing the success rate of your business. With Asians’ all-day eating habit, it is also important to devise a business model that caters to providing multiple meals a day, not just only lunch and dinner. With longer running daily business hours, your business will attract a wider customer base, ensuring a good continuous customer flow for your business success.

Q: Any golden words for F&B business starters?
A: Always keep your customers happy and satisfied!

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Starting and Managing a Business for Profits and Wealth Part 20: Why Giving Customers Personal Experiences Can Gain Market Share

STARTING AND MANAGING A BUSINESS FOR PROFITS AND WEALTH
Part 20: Why giving Customers Personal Experiences can gain Market Share

Consumers today are skeptical lots unlike 20 years ago when they would believe your marketing messages and your claims of what your product or services promises. As Doug Hall Doug Hall in his book “Jump Start you Business Brain” puts it; you need to give them a “real reason to believe”. It is therefore not enough for you to tell your potential market how good your products or services are and how much better you are than your competitors. In a very ‘noisy‘ world where we are bombarded with endless advertising and promotions, we become partially deaf. Not unless you can show me that you can indeed deliver what you promise. However the consumer‘s reality is often a perception rather than a fact. So if we can get the market to ‘perceive’ that we can deliver as we promises, we can win the battle of the mind or at least part of it. Eventually the promise has to be delivered in order to gain long-term customer’s loyalty.

One of the strategies to gain ‘beliefs’ is  “personal experience”. This involves providing the potential customers with an opportunity to see, feel and experience what your products or services can do and what benefits can be derived. This calls for an engagement of some sort.

Perhaps the most common way to do that is sampling. Sampling is done in different industry in different forms. Sampling can be seen from consumer products been tested and in some cases, ‘tasted’ in supermarkets to free ‘previews’ in the seminar business. Even in the online business; you get a certain amount of free usage up to appoint where you will have to pay money for it…once you are ‘hooked’.

So when you tried that ‘new’ juice that they let you taste at the supermarket does it taste better than the one you had before. You walk away carrying a perception and the likelihood that you will probably pick up a bottle when you leave.

The other way to gain your personal experience is using demonstration. This is meant to give product or services a visual impact and enables the vendor to show off what they can do. I am sure; most of us have seen demonstrations in the shopping malls of various kinds. From the ‘ wonder’ knife that cuts everything to the ‘wok’ that does not stick and fries without oil. How about that ‘before and after‘ look when you sat down at the cosmetic counter to get a ‘free’ makeover? All designed to get you to believe. Demonstrations are powerful ways to move products. Designing a ‘killer’ demonstration could be the corner stone of success for some companies.

One other way to gain consumer’s confidence through personal experience is sensory feedback. This involves providing potential customers with inputs that reinforce effectiveness of your product or services. Touching their senses through what they can see, feel, smell, taste or touch enhances the experiences.

My favorite example is the doughnut business. The first doughnut brand that came into Asia in a big way is Dunkin’ Donuts. Over the last few years there are a couple of brands that can successfully gain market share, namely Big Apple and J Co; both very similar to the U. S giant; Krispy Kremes. So what is the difference with these newer entrants? The big difference is that these new brands have their outlets designed whereby you can ‘see’ their people making the doughnuts right in front of you and therefore giving you the perception of freshness. Does it mean that Dunkin Donuts are not as fresh? Well probably not but the perception is different.

Similarly how do you know that a Famous Amos outlet is nearby when you walk into a shopping mall? Well you can ‘smell’ them before you can see them. Impacting the senses creates perceptions of reality. So why do you think that the clever sale assistant in the department store prompts you to ‘touch’ the soft leather of that expensive bag that she trying to get you to buy.