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Archive for March, 2013

It’s easy when accountants like myself preach JIT. JIT means just-in-time where you only buy raw materials as needed. You don’t accumulate stocks.

You see, the problems with many startup entrepreneurs start when they get involved in an industry which is related to inventory.

Services don’t need inventory, but for a big business, inventory is a must, if not what to sell la?

A business grows and revenue grows, so does your cost buying the inventory to convert into products to sell.

Everyone is happy and you are happy.

Until you realise the net profits suddenly diminishes and you are faced with a cashflow problem.

You ask your partner or your staff, why do you ask for so much?

Without proper recording, an enterprise might die.

When a business operates in a country where the supply chain is not effective, you cannot do JIT.

You have to keep stocks as the suppliers can’t provide stocks on time and sometimes they don’t have stocks.

You have to resort to inventory buildup or train your supplier.

As the business grows, so does the inventory and cash tied up to it.

Growing is painful, being an entrepreneur, you need to ask yourself, how much is enough?

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Sun Tzu is a great strategist but he is even greater when you practice his principles.

Appear weak when the enemy is strong and attack the weak points.

Know thy enemy and in a hundred battles you will never be in peril.

It is interesting when you change your mindset in the state of war.

Some people ask me, are you not afraid of new competitors coming into your market?

I see so many burger bakar nowadays.

Some mistaken my expansionist policies and aggressiveness as competing without mercy.

I respect, compete and track my competitors. I never underestimate any of them, be it small or large.

Some people is mistaken when they think business is just a career path. Business is war.

In our company, business is a matter of life and death. That’s how serious we are in our errands.

But I am saddened by underperforming rivals.

We may have differences but without strong rivals, the market could not sustain a larger, higher growth.

Rivals are what makes an economy grow and subsequently everyone reaps the benefit.

Some old Malays dislike when competitors enter their market.

Little do they know, it is their competitors which uplifts the overall demand for everyone.

If you want to do it alone, make sure you have the resources.

Imagine a pasar tani with only one tradesman, which one would get the better sale, the one with many tradesman or only one?

Think.

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What goes up, must come down. What goes down, must be pushed up again.

And this is true as all men ain’t perfect. We tend to forget when things are easy and we tend to panic when things are difficult.

A business is very much like an empire or a country.

What is the growth engine for that particular business?

For an MLM company, if it is selling plans, then the growth is by selling plans. When the selling stops, the decline starts.

For an MLM company which is focused on products, it is selling products, then the growth is by selling products. The decline starts when it couldn’t sell products.

Much can be learnt from history.

The Ottomans growth engine were acquiring new lands for wealth and taxes. The growth stops when they couldn’t acquire new lands to charge taxes. Hence the decline which lead to the republic.

And how about the modern world, like United States? It’s growth engine would be capitalism. It is a nation built by entrepreneurs and innovators. The engine might decline if the world starts to lose momentum on international trade.

And it is true for businesses. And it’s worst in a globalized world when information is too fast that consumers react immediately. Unlike our forefathers, businesses can be complacent as it takes time for consumers to know something new.

An entrepreneur must be mindful when the growth engine shows signs of stopping, he/she is in trouble.

One must be mindful to keep the engine running or shift into other growth engines.

Business is a matter of life and death.

The teams / individual running the engine should be competitive, flexible, resilient and able to adopt changes quickly.

Individuals with high 4.0 flat seen as geniuses couldn’t steer the company from decline without the qualities above.

One may argue MNCs like Petronas are doing the right thing hiring the best of talents, that’s the reason they are growing. 

I must admit they do now.

But let’s see if they possess the qualities like General Electric when their current growth engine comes to a halt in years to come.

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