A reader speaks: Put together OFW resources

Here’s an interesting piece by one of our readers, Rodel J. Ramos, which he so graciously shares. His focus is on the investments made by our overseas working countrymen on small business. He says: Why focus on small businesses when only 26 percent had succeeded? Read on.

Billions of dollars had been invested by OFWs and expatriates in small and medium size businesses in the Philippines. A large part of the monthly remittance goes into that, yet only 26 percent of them succeed. It means 74 percent of them fail.

And yet, there are business experts, educators, government agencies and promoters who keep on insisting that people go into small business. Imagine billions of dollars are wasted on these businesses. Yes, there are success stories, but there are also hundreds of thousands who fail in the process.

Even before the Marcos era, they promoted the NACIDA (National Cottage Industry Authority) and these small businesses were undercutting each other’s prices, their quality was poor, wastage was high and they were not reliable on delivery dates.

While the government was helping promote their products via NACIDA stores, they were not teaching them much about quality, pricing, management, marketing and promotions.

Why small businesses fail

There are many reasons why they fail. Lack of knowledge of the basics of business principles – marketing, management, finance, accounting, promotion, technology, IT, etc. and lack of expertise on the business itself is one.

Business is not an easy project and not everyone can go into it. Not enough financing, competition, lack of expertise, wastage, mismanagement. They are usually left to relatives and friends whom you can’t trust with money, lack the initiative and do not even know costing.

Many just go into businesses that are overcrowded and do not make money like going into the tricycle business or convenience store. In every town you pass through, you can see them competing for passengers.

They spend most of the time waiting and at the end of the day earn so little, not even enough for food. And the roads are overcrowded, noisy and polluted because of them. It is a waste of so much manpower, energy, gasoline and time.

Lack of trust

OFWs do not have trust on their fellow Filipinos when it comes to business and want to do it alone.

Having your own business is an ideal dream but there are so many limitations specially when you are overseas and have relatives who have no knowledge of the business you are going into. Some say “Mahirap ang may kasama,” yet they won’t admit that doing a business alone is much more risky and hard.

It seems our challenge is to trust partners and work together as a team or a group. The advantage of a big group is you have more capital to invest; and you can hire expert managers, marketing and financial people, accountants, IT and experts in the field, therefore reducing chances of failure.

The government and the business industry should gather trusted, reliable business experts together and encourage OFWs and expatriates to organize corporations, marketing cooperatives and credit unions. They should give those incentives, counterpart funds and even seed money to organize.

They should also help them research corporations that lack the funds, modern machineries and need productivity improvements or have the market potentials for take over and expansion. They can focus on businesses that cater to OFWs and expatriates and have a captive market.

Greater wealth

Observe that big corporations dominate the market because they have the people and structure in place. But think of it, the money of the OFWs is much greater than all the wealthy people in the country.

Imagine $23 billion every year getting into the country. If only five percent of this goes into joint ventures or business corporations which are well managed and placed into the right businesses. The government and industries should promote more and give incentives in these areas.

Instead of going into individual businesses, why not put their money, resources, talents and expertise together?  In a town where there are 1,000 or more OFWs, they can contribute $1,000 each, which is $1 million or P44 million.

They can set up a local supermarket or department store or just built a mall and have it rented and compete with the big corporations. This will market local products and services from their farms, fishing villages and small local manufacturers and producers.

The locals will have their fresh foods and encourage people to produce their products. They will have a captive market from their friends, relatives and kababayan. They can expand into a credit union, remittance and other industries and even export their products or sell in big cities and towns.

This will create jobs and business opportunities and the population do not have to go overseas away from their families and friends. They do not have to slave it out overseas working as caregivers or serving at Tim Horton and McDonalds. We can then compete with big corporations and the profits will go to us and employ our families.

Buy Filipino

If each town put up one like this, we will grow as a nation and not rely on the products of other countries. But we also have to practice nationalism and buy our own products and services. Promote buy Filipino first.

Since you have an outlet for our products, we can then expand in manufacturing and producing local products into finished goods to sell in cities and for export. A partnership of investors and workers will follow. Workers need not be in conflict with investors and management as we are doing but partners and teammates.

Workers will be stockholders and be given a share in the profit. They will be represented in the Board of Directors. There will be transparency and accountability. Workers will have all the incentives to work hard and can be promoted to management level if they qualify. They will share their ideas to make the company grow. Management and workers will have bonuses and incentives depending on profit.

They can buy into and control existing corporations which have the potential to improve productivity which only need more funding, new machineries and need more marketing and promotions ideas to grow.

Facebook and Twitter

We are actively using two social networking websites to reach out more often and even interact with and engage our readers, friends and colleagues in the various areas of interest that I tackle in my column. Please like us at www.facebook.com and follow us at www.twitter.com/ReyGamboa.

Should you wish to share any insights, write me at Link Edge, 25th Floor, 139 Corporate Center, Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at [email protected]. For a compilation of previous articles, visit www.BizlinksPhilippines.net.