My Take on Empowering the Malay Economy, part 1

The PM has spoken. He has an agenda to empower the Malay and Bumiputera's economic power. The agenda focuses on five main thrusts:

• Empowering bumiputra human capital;
• Strengthening bumiputra equity ownership in the corporate sector;
• Strengthening bumiputra non-financial asset ownership;
• Improving bumiputra entrepreneurship and business; and
• Strengthening the services delivery ecosystem. 

I don't have a bone with the thrusters; they seem to make sense - common sense.

But I have some issues with the plans for the thrusters. They seem rushed. I don't believe they would bring a quantum leap in the Malay's economic power; I believe the think-tank could think and come up with something better from their tank.

Before we go on, there is something that we must be clear in our head. I am talking about the Malay economic power (in saying Malay, I am including the Bumiputeras as well) AS A SOCIETY, rather than individual or a segment, a caste. When a policy benefits a few individuals and they get extremely rich from it, it does not translate into Malay Economic power unless they give back much more to the Malay community. We must look at the society as a whole, from the poorest to the richest.

In that regard, we must also understand the demographic of the Malay society that while it is true that past policies have created a larger pool of middle class Malays, the society is still dominated by largely the poor, both in terms of financial education as well as the financial itself. This society is by and large, poor and heavily subsidized.

Lets start with the ASB2; RM10 billion of it. And here are my issues:

• ASB is attractive only because it is a superhigh-return savings scheme. The guarantee of the capital makes it risk free (better than bank deposit (?), maybe, because PIDM has a limit on the guaranteed savings amount) and it gives an equity-based return (way higher than the deposit rate of around 3% per annum).
• That would just make people switch their long term fixed deposit into ASB (those poorer ones who needs to withdraw cash regularly cannot benefit because you need to lock the amount in ASB to fully enjoy the yearly dividend). Who has one year long term deposits? Certainly not the poorer Malays nor even the middle class Malays. It will definitely benefit the richer Malays, those who have maxed out their ASB1. 
• So it looked like this plan would benefit the already rich Malays first. But their number is not that big.
• In my opinion, this ASB  does nothing to promote active economic management of the Malays. Instead it is training the Malays to be passive owners of equity. The term "reign but does not rule" comes to mind. I don't believe that passive ownership of equity would make the society any better at creating and managing economic power - that one comes from owning and operating businesses.
• ASB does not directly and significantly help the Malay society in owning and operating businesses. The moneys in ASB would have to be placed in secure investments so that the managers could manage the risk and give the expected return. Amongst others, they would be invested in companies owned by non-Malays (because they still dominate the real economy, they own the businesses) and when this happens, the capital flows to enhance the economic power of the original owner. They would use the much needed cash to build more businesses and when it has grown big enough, they would then go for listing again - and the cycle continues.
• So, I ask myself, does the Malay businesses really benefit from the ASB? Does the Malay society as a whole benefits from ASB? Do Malay entrepreneurs benefit from ASB? I have great difficulty to say a resounding yes. Menang sorak, kampung tergadai.

ASB1 was relevant back then, to tilt some Malays into middle income class and some middle income Malays into rich ones. It was a quick fix to create purchasing power within the society. But now we need something different. We need production power. We need Malay businesses flourishing in a competitive and sustainable manner. I will share my issues on this segment next time. In the mean time, Selamat Hari Malaysia.

Salam.

Cash or Profit?

In one of the recent workshops we discussed about how could a profitable company goes bankrupt.

Weird, but it is true.

For all entrepreneurs, it is important to remember that cash is king. While profit, as calculated by the accountant based on accounting principles is important, cash is vital. Accounting allows you to record profits when you don't actually have any cash. Take for example, a RM1,000,000 sales of cokodok that you made to Mr A on credit. Mr A has 90 days to settle the bill.

Accounting wise, you would have recorded a revenue of RM1 million ringgit and if the cost was RM300,000 you would have recorded a profit of RM700,000. This is called accrual based accounting.

The problem is, when the supplier comes to collect his RM150,000 cost or your staff wants their salary at the end of the month, you cannot pay with profit! You need cash. You need cash to pay everyone their dues.

So, while you would be happy with your profitable business, please take a closer look at your cashflow.

Selamat berniaga :-)

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Dilema Usahawan Melayu, Bahagian 2

Salam to all.

It has been many many moons since I last typed down my ramblings on this blog. I have so much to say, I don't know where to start.

Well, I guess lets start with the person and his comments that inspired and poked me off my fat hind and start typing again. It was a comment to an old (but relevant) rantings of mine: Dilemma Usahawan Melayu. Encik Ramlan Ahmad made a very valid, accurate and critical comment, which went like this
"Assalamu alaikum M, Yazdi,
It is not that there is a acute shortage of Malay entrepreneurs or wannabes but the government machinery/mechanism put in place has been more stifling, exploiting rather than enabling.
As an 28 years experienced and global professional who has had 4 commercial viable ideas presented hijacked by unethical private & government officials who pass it on to their connections for their own vested interest, the current Malay entrepreneurs are faced with a need for "who you know rather than what you know" to become a successful entrepreneur. 
Malays/Muslims in approving positions have forgotten to adhere to Allah SWT's "halal/haram" in carrying out their duties which have led to qualified and capable entrepreneurs not getting the funding opportunities and unqualified pretenders getting it. These funds are then lost as the unqualified entrepreneurs are not able to sustain the business they did not think of in the first place. The modus operandi currently is therefore how to siphon the funds rather than how to develop successful entrepreneurs.
This situation has contributed to the decadence of the Malay and Islamic society and community as "Duit Haram yang berleluasa sekarang diberi kepada anak dan bini untuk makan bersama dan menjadi darah daging mereka" as they are eating "hak orang lain". 
Kalau orang Melayu sudah tak takut Allah SWT dengan memakan duit haram sebab nak kaya cepat then we as a race are destined to follow the footsteps of the once mighty Islamic Ottoman Empire which collapsed due to greed, lust and lack of conformance to the religion of Islamic. Nauzubillah, but it will happen if we don't wake up and repent! "

I agree, it is true. Orang Melayu ni ada idea tapi tak ada duit, mintak duit kena idea kena curi. Sudah jatuh ditimpa tangga lagi...haih..nasib badan...

But if I may, I think we can solve this.  How? We go back to the teachings of our religion, Islam.

But in order for this solution to work, we must employ the teachings that apply to us, our own self, diri kita sendiri, as an entrepreneur. This is because preaching to others is an exercise in futility... most of the time if not all the time. Kalau kita nak harapkan semua orang lain yang memegang amanah untuk mengikut amanat masing masing ataupun orang Islam lain mengikut sunnah dan membantu anda, seorang usahawan Muslim, saya rasa itu kerja yang amat meletihkan. Lets focus more on what we have to do and much less on what we think others need to do.

1. Rezeki itu milik Allah.

Giving up effort is the last thing that you should draw from this statement. Yes, Allah determines who gets what, how much and when. But this is not to say that you should abandon all effort because Allah finally decides despite all your efforts.

Remember, Allah knows best what is good and what is bad for you. No getting the project you have been chasing is not necessarily bad for you. We know much  much less than what Allah knows so if Allah decides that the million dollar project and the money will not be yours, Allah would have done it for your own good.

Allah gave the example in the Quran when the story of Khaidir and Prophet Musa was narrated. Allah bestowed Khaidir knowledge that was not given to Prophet Musa, hence when the former damaged a boat belonging to a poor fisherman (thus in a way taken away his rezeki) the latter thought that an injustice has been done. Prophet Musa DID NOT KNOW that a tyrant was going around confiscating seaworthy boats. And if you put yourself in the shoe of the fisherman, you probably thought that your rezeki is being taken away when someone damaged your boat, not knowing that someone more knowledgeable than you had done something for your own good. Imagine that someone is Allah, the Most Knowing the Most Benevolent, the Most Intelligent, the Most Wise.

So when you have worked hard for something and you did not get what you want, THANK Allah for he has most certainly decided a better decision for you. But it does not mean that you should give up hope. Just like the poor fisherman earlier, he would have fixed his boat just as you should fix or improve your situation to get your share of Allah's bounty.

If your situation / project needs improvement, improve it. If one source has caused your project to be stolen or hijacked  use alternative source, even it is the government. Like the saying goes, "Cheat on me once, shame on you; cheat on me twice, shame on me". Learn from the past and improve your situation for your next project; if you can lose it, that means there are loopholes, either in terms of people, resources or system. Plug it and try again.

If improving would not solve it, move to another platform. Maybe Allah shuts down one path so that you would be forced to use another path which is better for you. Your skills and your experiences do not disappear when people take away your ideas or projects. Use your imagination, vision and diligence for another business.

2. Get creative to get your capital

We Malays always lament that we have not enough capital to start a business. Or that the government of foundation with the capital is not doing enough to help us Muslim entrepreneurs.

I have my opinion on capital where in one of my previous articles, I wrote that

"Lesson 7: It is not the resources, but resourcefulness. You money that is with you is not going to help much in your business and if you just focus on your money, you are limiting your potential. Yes they will help to put food on the table while waiting for your venture to take off and roll in the big dough, but that is about that. As an entrepreneur, you must not be limited by resources. You must be resourceful, able to leverage and use other people's money, resources and ideas. Open your mind, be creative and the sky will definitely be your limit."

We must realise that while we still do apply for the government aid and fund, getting rejected should not be the end of the world. If cash fund is absolutely necessary for your start-up, there are alternatives to getting the grants
a. Scale down the projects
b. Get a job to get the cash - no shame in working for your start-up fund (or running business). But make sure your do your job well
c. Getting partners (Mudharabbah)
d. Family and friends - but be very very careful and honest with these group of people. They are very valuable.

Well, that's all for now. Till next time, feel free to post your comments :-)

Going back on the payroll....

Well, it has been a while since I really blogged. Much have happened since then.

For the past one year and a half, this entrepreneur had taken up employment with two fund management companies, assuming the role of  the head of business development ( I told myself that it actually reads "intrapreneur"). My businesses (Elixir Synergy Venture & DYAZ Associates) still runs as usual either by my own intraprenuer or my partners. Some plans (training) had to be put on hold to accommodate some changes and some had to be shelved altogether. There is actually some order to this chaos... and you know what? I kinda like i!

Moving from full time entreprenuer to employment was not an easy thing, primarily due to ego and the fear that I will forgo the entrepreneurship roller-coaster once I am back on the payroll. There were demons that I had to really wrestle to the ground. Voices in my head said I need to stay on the path of full time entrepreneurship no matter what. Pain is the only way to go. No pain no gain. Risk is entrepreneurship.

Then I told myself, who the fish (expletive) am I to say no to money! I have to start looking at things objectively and make the decisions based on sound reasons; just what an entrepreneur supposed to do.

Firstly, does taking up employment changes myself and removes my entrepreneurship attributes or skills?  Entrepreneurship is about making money, creating wealth. Being paid for your time and skill is the same. If I managed to generate more wealth per hour then I am being enterprising with my time.

Am I then now no longer an entrepreneur because I take lower risk as I am assured of a pay every month? Firstly, let me correct a misconception. Yes, entrepreneurship is about taking risk, but is supposed to be calculated and managed risk. Taking un-calculated and un-managed risk is not entrepreneurship, it is stupid(ship). What happened in my case was that I found myself able to take on more opportunities (and risks) with the cushion of the pay. The extra dough enabled me to invest more in my businesses without having to leverage on outside parties. I was able to give more staying power to my businesses.

Would my businesses and aspirations suffer because now I have a job? Well, part of being a true passive income earner is to have your businesses run without you having to run it yourself. My situation proved as a perfect opportunity for that, for me to build my management team. But before I leave, I have had to set in place systems to monitor (not cctv) the progress of the business on a daily basis. The procedures were in place to make sure the business runs in a way that I wanted it to be run. All I needed was then the people to manage the business and key in the progress into the system (don't spend money, use google drive documents to create your own monitoring spreadsheet. Plus it is real time). The businesses have been growing for the past one year and a half, so the system must be right...at least most of the time.

As for the training business, I will let the brochure at the end of this blog 'tell' you the story.

So remember, entrepreneurship is not about a business, it is about you.

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Role model for entrepreneurs

I am reposting this article from Arab-News lest it goes missing in history. All rights belong to Arab-News:

Muhammad Al-Harbi

Tuesday 29 May 2012

Saudi Arabia’s rags-to-riches billionaire Sulaiman Al-Rajhi is also a world-renowned philanthropist. He is the founder of Al-Rajhi Bank, the largest Islamic bank in the world, and one of the largest companies in Saudi Arabia. As of 2011, his wealth was estimated by Forbes to be $7.7 billion, making him the 120th richest person in the world. His flagship SAAR Foundation is a leading charity organization in the Kingdom. The Al-Rajhi family is considered as one of the Kingdom’s wealthiest non-royals, and among the world’s leading philanthropists.
Al-Rajhi is a billionaire who chose last year to become a poor man at his own will without having any cash or real estates or stocks that he owned earlier. He became penniless after transferring all his assets among his children and set aside the rest for endowments. In recognition of his outstanding work to serve Islam, including his role in establishing the world’s largest Islamic bank and his regular contribution toward humanitarian efforts to fight poverty, Al-Rajhi was chosen for this year’s prestigious King Faisal International Prize for Service to Islam.
In an interview with Muhammad Al-Harbi of Al-Eqtisadiah business daily, Al-Rajhi speaks about how he was able to succeed in convincing chiefs of the leading central banks in the world, including that of the Bank of England, nearly 30 years ago that interest is forbidden in both Islam and Christianity, and that the Islamic banking is the most effective solution to activate Islamic financing in the world and make it a real boost to the global economy.
The story of Al-Rajhi is that of a man who made his fortunes from scratch, relying on grit and determination. Al-Rajhi threw away his huge wealth through two windows — distributed a major part of his inheritance among his children and transferred another portion to endowments, which are regarded as the largest endowment in the history of the Islamic world. He had to fight poverty and suffering during his childhood before becoming a billionaire through hard work and relentless efforts, and then leaving all his fortunes to become penniless again.
Al-Rajhi is still very active and hardworking even in his 80s with youthful spirits. He begins his work daily after morning prayers and is active until Isha prayers before going to bed early. He is now fully concentrated on running the endowment project under his SAAR Foundation, and traveling various regions of the Kingdom managing activities related with it. He always carries a pocket diary containing his daily programs and activities and he is accustomed to stick on to the schedule he had prepared well in advance.
Al-Rajhi scored excellent performance results in almost all businesses in which he carved out a niche for himself. In addition to establishing the world’s largest Islamic bank, he founded the largest poultry farm in the Middle East. The credit of activating the organic farming experiment in the Kingdom mainly goes to him through launching a number of farming projects, including Al-Laith shrimp farming. He also established real estate and other investment projects.
Excerpts:
Sheikh Suleiman, have you become a poor man again?
Yes. Now I own only my dresses. I distributed my wealth among my children and set aside a portion for endowment to run charity projects. As far as I am concerned, this situation was not a strange one. My financial condition reached zero point two times in my life, and therefore I have had the feeling and understanding (about poverty) well. But now the feeling is accompanied by happiness, relaxation and the peace of mind. The zero phase in life this time is purely because of my own decision and choice.
Why did you choose this path?
All wealth belongs to Allah, and we are only those who are entrusted (by God) to take care of them. There were several reasons that prompted me to distribute the wealth and that resulted in performing this virtue. Most important among them is to foster brotherhood and love among my children and safeguard their harmonious relationship. This is more significant than any wealth in this life. I was also keen not to be instrumental in wasting the precious time of courts in case of any differences of opinion among them with regard to partition of inheritance. There are several examples that everybody could see when children entered in dispute over wealth and that led to the collapse of companies. Nation has lost many large companies and their wealth that we could have been saved if we tackled the matter in a right manner. Apart from this, every Muslim should work on some endowments that could benefit him in the life after death. Likewise, I prefer my children to work on developing wealth, which they inherit after my death, during my lifetime itself rather than I continue working to increase them.
Are you getting enough free time after the distribution of wealth?
As earlier I am still working on developing endowments. I will donate and give alms from it until Allah takes over this trusted deposit. I have worked out a meticulous scheme for this endowment and developed it with the support of specialist consultants and agencies. This idea struck me long before. Usually people in the Islamic world set aside one-third or one-fourth of their wealth for endowment and that will be effective only after their death. But in my case, I decided to implement this decision in my lifetime itself. So I invited my children to Makkah during the end of Ramadan and presented the idea in front of them. They readily agreed it and then I distributed my wealth among my children in addition to setting aside a part of it for endowment. I sought the help of consultants to facilitate the procedures for the distribution of all my assets including properties, real estates and stocks, and that was completed in a cordial atmosphere. All my children are now fully satisfied with my initiative and they are now working on these properties in my lifetime.
How much wealth you distributed among children and set aside for endowment?
He laughed without giving an answer.
How do you feel now about your projects?
I would like to point out that there were some factors that prompted me to make investments in certain specific areas. My experiment in money exchange was the temptation to set up a bank. The absence of any Islamic banking was also another factor in establishing Al-Rajhi Bank, which is now the world's biggest Islamic lender by market value. I began the experiment with opening an office in Britain where we introduced Islamic banking system at a greater level. The experiment was a success and it had received total backing of the Saudi Islamic scholars at that time. I still recall the application made for getting license for the bank was turned down in the beginning. This was because the concerned British officials did not have any idea about Islamic banking. Therefore, I went to London and met with the manager of the Bank of England and two of his deputies. I told them that Muslims and Christians see interest as forbidden (haram), and the Muslim and Christian religious people are unwilling to make transactions with banks based on interest and instead prefer to keep their cash and other valuables in boxes at their homes. I tried to convince them that (if we establish Islamic banks) this money would be helpful to strengthen the world economy. These talks were helpful in convincing them and they agreed to open Islamic banks. Then I traveled widely throughout the world in the West and East, and met with the chiefs of central banks in various countries and explained to them about the salient features of the Islamic economy. We started working and achieved success through launching it in the Kingdom and implementing it in London. When I returned to the Kingdom from London, I met the late Grand Mufti Sheikh Abdul Aziz bin Baz and Sheikh Abdullah bin Humaid, and informed them about the plan saying: 'We would reach, by the grace of Allah, the Islamic banking within a stipulated period of time.' They praised me for the initiative. We started aggressively implementing the project and that is in the form of Al-Rajhi Bank as you see now. Regarding Al-Watania Poultry, the idea of establishing such a venture struck me after my visit to a poultry project abroad. I saw that the way of slaughtering chicken was not proper. Then I decided to make investments in the field of poultry after considering it as a duty to my religion and nation. I started the project even though making investments in poultry involved high risks in those days. Now Al-Watania has become a mega Saudi project that is instrumental in achieving food security in many respects. The company enjoys a 40 percent market share in the Kingdom, and Al-Watania chickens are naturally fed and halal slaughtered in accordance with the Shariah principles.
What about your insistence on introducing organic farming through Al-Watania agricultural projects?
As you see, now I am 85 and still enjoy good health. If we pursue organic farming as our healthy food style, we can bring down cost of treatment to a great extent. We made several experiments in the field of organic farming. Our numerous experiments met with setbacks in the beginning. This prompted many engineers and workers to reach a conclusion that it is impossible to have organic farming and profit together. In the beginning, they were firm in their view that this would not at all be successful. But I insisted that it would work and continued compelling them to proceed with the venture. At one time, I took a firm position and told them either to do organic farming or quit. Now we are reaping the fruits of this lucrative business in line with my vision to provide only the healthiest, safest and most trustworthy food to consumers. Al-Watania Agricultural Company stopped using chemicals and artificial fertilizers and focused exclusively on organic methods such as the use of pest insect repellants and animal manure.
Your austerity and thriftiness on spending are well known. Please comment?
I am not a miser. But I am always vigilant against extravagance. I always try to impart this lesson to all those working with me whether it is in banking or poultry or other projects, and I am more concerned about it when it is coming to the case of my children. In the past, I never gave money to my children when they were young in return for nothing. When any one of them approached me to give them cash, I asked them to do some work in exchange for it. In our life, we practice some extravagance without being aware of it. But it affects our whole life, exhausting us and putting a burden on our country. For example, there is no logic in putting heavy curtain on our windows and then lighting lamps in daytime when we get sunlight free of cost while electric lamps are costly.
Despite all your wealth, why don't you still have a private aircraft?
Let me tell you that I have many planes but they belong to various airlines. I have ownership in all of them to the tune of the ticket fare that I pay for each travel. I always travel in economy class with the conviction that Allah bestowed us wealth not for showing arrogance or spend extravagantly but to deal with wealth as a trusted property.
What about the recreation and hobbies of Sheikh Al-Rajhi? How do you spend free time?
I have not any special recreations. However, I find happiness and enjoyment while making a trip to the desert. I never went out of the Kingdom on a tourism trip.
What about your will? What are its salient features?
Regarding my will related with wealth, I have already implemented it in my lifetime. As for the remaining aspect of my will, it is a public matter and also involves certain private matters, besides encouraging my children to maintain their kinship and always reminding them about the life after death.
How do you see your children's private investments? Are there any directives to them?
A number of them are doing an excellent work in accordance with their knowledge and experience. Most often, I try to guide them when I noticed anything undesirable even if it is in their private investments. Regarding my younger children, I always guide them, especially in the case of their investments. This is purely out of my keenness that they should be honest in their work as well as in spending wealth given by God as a trusted property. I am also eager to hear about my children that they are interacting with the society in the best possible manner, and that they are serving their religion and nation.
In what way you like to spend your time? What are the places that you like most?
I used to travel between Riyadh, Qassim, Al-Jouf, and Al-Laith to oversee my projects there. I always prefer to visit the farms in Qassim and Al-Jouf.
How could you preserve many old and precious things and antiques at Suleiman Al-Rajhi Museum?
A long time ago when I was in Jeddah, I was keen on preserving heritage pieces and gathered them together, especially those related with money exchange. There would be a history with every human being. The museum tells the story of money exchange. I particularly kept registers and cash boxes that were used when I started the money exchange business. The first cash box was made of wood, and there was a huge treasure box in which we kept our gold and silver. The artifacts kept at the museum tells the evolution of currency in the Kingdom through issuance of bank notes, as well as some currencies and coins that were in circulation among the Haj pilgrims. A major factor that prompted me to set up the museum was the visits made by a large number of officials from various countries to know more about these old coins and currencies. We have had to exhibit these rare collections in front of them to explain about our history and heritage, especially those related with money. I was keen to furnish the museum with historic and heritage pieces, especially with the same materials used for construction in the past. Hence, the roof of the museum was made of palm branches, and that was the case with the seating arrangements at the museum.
Al-Rajhi's punctuality
The interview also sheds light on many qualities of Al-Rajhi, including his punctuality. "In the beginning of my business career, I had appointments with several top European company executives and officials. I still remember that I reached late for such an appointment due to an unavoidable reason. My delay was only a few minutes but the official excused himself for the interview. Later, after expansion of the projects, the same official came late for an interview with me so I excused myself for the interview. I always carry a paper to note down the schedule of meetings and stick to the schedule at any cost."
Al-Rajhi continued: I am always keen to strictly adhere to the Islamic principles throughout my life. Once I received an invitation from an Arab government to attend an investment conference there. On the sidelines of the conference, I was invited to take part in a dinner reception. When I reached there, I found a recreational program, which is contrary to our religious customs and traditions, taking place. So I quit the place immediately and, Abdul Aziz Al-Ghorair from the UAE also joined me. Soon minister plenipotentiary rushed to us, and we explained to him that the function is against our Islamic tradition. So he informed us that the recreational party would be cancelled. When they canceled that party, we participated in the dinner.
Tackling crises
Al-Rajhi said: There was a huge fire that gutted down one of my factories managed by my son. When he came to inform me about it, I told him: Say praise be to God. I asked him not to submit any report about the losses to the authorities seeking compensation. In fact, the compensation is from Allah and it is essential for us to be satisfied with What Allah destined for us. Assam Al-Hodaithy, financial director of Al-Watania Poultry, said: "When the fire broke out at the factory, we decided not to hurt Sheikh Al-Rajhi by informing about it at that moment. Later, when we met him next morning, he told us to shift the factory to another place and remove the debris until completion of reconstruction." There was a similar fire at Al-Watania Poultry project in Egypt. The company incurred losses worth SR 10 million Egyptian pounds. When the concerned factory official contacted Al-Rajhi to inform about the fire, he was surprised to hear an instant reply from him: "AlHamdulillah."

http://www.arabnews.com/sulaiman-al-rajhi%E2%80%99s-life-rags-riches-story

Distractions in business

When we start or have a business, one of our biggest enemy is distractions. Distractions is bad as it derails us from our original and true intention; making us lose focus on what matters, normally leading to wasted money, time and resources.

Distractions come in many forms and guises. For those who are making progress, distractions could be in the form of lifestyle and fun; the women, men, frolicking and all the sweet things on earth. These kinds of distractions would come to those who started making money from their business. We see and hear these kinds of stories all the time; someone falling off his fortune because of a mistress, excessive travelling and lavish lifestyles.  These types of distractions are tests for those who has made it and wishes to either stay on top or go higher.

But those who just started business and have not made it yet are not spared from distractions. For those who just started a business, distractions can come in forms of new ideas and perceived opportunities. In the beginning, you business will have to go the 'budding' phase; it is a phase where the growth is not visible and it could be frustrating at time. During this phase, your impatience may invite you to be distracted with new ideas and perceived opportunities. These distractions are very dangerous as they would cause you to abandon your original plan, leaving it half-baked. Be careful of this distraction of perceived opportunities as it is very intoxicating. Why? Because it is filled with hope and hope drives an entrepreneur high; only that getting 'high' on hope is not going to get you anywhere.

Therefore, my advise is to always check if you are on the right track. I mean have a systematic method to check if you are on the same track and persistently moving along the track. The first thing is to write it down on paper - do not trust your brain with the plan. You need your brain for the execution of your plan; storing the plan itself should be on a piece of paper. make it a point to spare 1/2 an our each monday to go back and read that piece of paper to remind yourself of your goals and plans. Sit down and write what are the things that you are planning to do for the rest of the week and compare that list with your original plan. You would be able to spot clearly, once it is on paper, what are necessary actions and what are the distractions. Cross out the distractions and reclaim back the time and effort that your are planning for that distractions; the very least, you could use the time to be with your family.

Please do not mistake this with the adjustments that you need to make on your track due to reasonable and valid reasons. That adjustments is vital. You must know the difference between adjustment and distractions.



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Start a business to sell goods or services, not to get grants

Recently it was reported that PUNB has approved for an allocation of RM200 million to help bumiputera entrepreneurs. Great. But if you want to start a business, assume that your name is NOT in the list.

Many Malay entrepreneurs assume that a government grant is almost automatic for them if they have a business. Many went on to build an operation and make commitments based on the assumption that PUNB or some agencies would give them a grant/loan/assistance for their business. WRONG

One thing that you would need to realize, no matter how great you think your product is, how ingenious is your idea, how original your concept is, there will be a thousand others who thinks the same about their products/services. Therefore, there is no guarantee that your business will get the grant.

Build your business assuming that you will not get a grant; your business must be able to stand on its own. Ironically, once your business is proven to be able to stand on its own, he grants and loans will come pouring in. The rationale is simple, the grant officer wants to deliver success stories and proven business are less likely to fail.

But it does not mean that you should not apply for such grant. You should and must apply, but do not assume you will get it. And if you want to prepare your pitch, the following might  help (I do not own the copyright to the photo, it is reproduced under the Fair Use law, for educational purpose only)

Do what you have to do so you can do what you want to do, later

Hello readers,

Sorry for the long silence. I have been caught up with a myraid of things to sort and obstacles to jump over. Anyway, today I read an article which I cannot delay passing on to you through this blog. Read it if you have the time and please do comment if you share the views  in the article, here.

http://www.entrepreneur.com/blog/222831

See you again soon

Yazdi

If you like the article above, please like us here. :-)The Author is the principal of ElixirEducate - a training house for Smart Entrepreneur Program Series. If you would like what you read above, we would be grateful if you could 'like' us at our page here. If you would like to to find out or learn more about the the article above, you can email the author directly at yazdi@theelixirstore.com or be his facebook friend here.
 
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ElixirEducate

Developing your business

Hello friends,

I am sure most of us have growth as one of the top priority, if not the highest. No, I do not mean the waistline (although mine has a mind of its own) but your business. Simply put, most of us equate business development / growth as increasing profit and wealth.

Well, if you are going to do it yourself (as most entrepreneurs would), these are some simple steps that you could follow:

1. Where are you now? You need to know, precisely, what is your present business model, how much business is it generating and its corresponding size. Brainstorming together with your employees would be a great idea. Do you have strong strategy but weak operations? Or weak strategy but strong operations? What is lacking?

2. Where do you want to go? You need to be clear as to what you want to GROW. Remember, it is sustainable profits that you would want to grow, not simply size. The target should be 'Realistic" but multiplied by two, at least. Set high standards. Do not be afraid that you might fail.

3. How are you going to achieve it? Organic growth VS in-organic growth? Product development? Market development? Diversification? Market penetration?

4. How much it is going to cost? You need to be very clear as to how much is this going to hit your pocket. Find out any hidden cost.

5. How are you going to fund the cost? Own money? Borrowing? New investors? Equity? Hybrid? Convertibles? What is the art of getting funded?

6. Is it going to be worth it? Is the benefit going to outweigh the cost?

Lastly, keep it simple and doable. Do not make your growth plan complicated. Take action.


Related reads:

1. Growing successfully for small businesses
2. Growing to business failure
3. The Art of Getting Funded



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If you like the article above, please like us here. :-)

The Author is the principal of ElixirEducate - a training house for Smart Entrepreneur Program Series. If you would like what you read above, we would be grateful if you could 'like' us at our page here. If you would like to to find out or learn more about the the article above, you can email the author directly at yazdi@theelixirstore.com or be his facebook friend here.
 
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ElixirEducate

Women in Business, now on air!

Many moons ago, I wrote about the rise of ladies entrepreneur in Malaysia, and today we see another milestone. The sign are so clear, we cannot disregard it. The Star Newspaper reported:

Capital FM 88.9 - Malaysia's first women's radio station to go on air Thursday

By JADE CHAN

PETALING JAYA: Malaysia's first women's radio station Capital FM 88.9 is all set to sizzle the airwaves as it begins its broadcast from 6am Thursday.
Joining the stable of radio stations under Star Radio Group, the all-new Capital FM is the only radio station that provides women a voice and a hub to exchange thoughts and opinions.
Capital FM 88.9 features a handpicked line-up of celebrity presenters, namely Asha Gill, Joanne Kam, Xandria Ooi, Patricia K, Sheela Haran, April Kuan, Joey G and Liang, who will each bring their own flavour to offer different dimensions to the radio station.
Targeted at urban women in the Klang Valley aged between 25-35, the station aims to be a platform for women's issues.
"Capital FM has been tailored to meet the needs of women. To be a friend and confidante. Women empowering women in their daily lives,” said Star Radio Group deputy chief broadcasting officer C.K. Tan.
"Our driving goal is to connect with women by addressing their emotional and intellectual needs, to enhance the quality of their lives and their communities."
Star Radio Group chairman and Star Publications (M) Bhd group managing director/CEO Ho Kay Tat credited Capital FM's unique tagline Women - The New Capital - to Star Publications (M) Bhd executive deputy chairman Datuk Vincent Lee, who coined it as a tribute to and in recognition of the value and importance of women.

The success of this radio station will depend on the kind of values they instill in the womenfolks in Malaysia. I hope that it serves to eliminate the prejudice that existed in both men and women, letting people focus more on living better, peaceful and prosperous.

The only thing I don'd like is the tagline " Women - The New Capital". As I see it, women has always, always been a very significant capital since the beginning of mankind, since the beginning of trade. I was merely hidden away, not prominent. In Islam, Prophet Muhammad's wife, the love of his life, Khadijah was a WEALTHY businesswomen who had employed the greatest man that ever lived. And you don't call that capital? Women should give more credit to women.

Work Smart Everyone.

Related reading
1. Rise of Women entrepreneur
2. More on women entrepreneurs in Malaysia


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If you like the article above, please like us here. :-)

The Author is the principal of ElixirEducate - a training house for Smart Entrepreneur Program Series. If you would like what you read above, we would be grateful if you could 'like' us at our page here. If you would like to to find out or learn more about the the article above, you can email the author directly at yazdi@theelixirstore.com or be his facebook friend here.
 
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You have got what it takes to be a successful entrepreneur

Dear friends

I am dedicating this post to all my friends in direct selling and multi level marketing. And I wish that all those who has shunned away from direct selling friends to read this letter too so that we can all be friends again.

Direct selling comes in many form and provides different products, from insurance, unit trust, herbal products, vitamins, containers, household, shampoo and the works. I am not talking about the pyramid scam or get rich quick scam, but I am talking about the genuine multi-level sales channel. And direct selling has garnered a very bad name, such that people shuts down by the mere mention of the subject. It seems that someone would have a bad experience with a direct selling, with the way they are being pushed to buy or sign up. Direct selling entrepreneurs are being shunned, pushed away into a society of their own.

I say, what a waste of talents. MLM entrepreneurs can be successful and instead of shunning them away, I want to embrace them that with the right method, they can be the millionaire they wanted.

1. You have what it takes to be successful. The fact that you are taking action, meeting people and overcoming your shyness and fear is already a magnificent start. It is the quality that is required in all entrepreneurs. You are brave.  Not many people have this, but you do. This alone can ensure success. You are taking action to achieve your goal, making changes in your life, sacrificing your time and energy to achieve what you wanted. Unfortunately, people has taught you wrongly and you ended up sacrificing your friends too. But you can fix this easily. Just email me and I will tell you how.

2. You have a dream and you dream big. That is another essential quality to become a millionaire. You are not happy with the status quo, you present situation. So you sell. You sell to achieve your dream. But you must not limit your dream to merely profits. You must dream bigger than a car, a bungalow and a holiday. You must dream to be a better person with a better life. To help other people in need.

3. You are building relationship. Whatever product you are selling now in MLM is just one product, but what you are building is a relationship between a product and a consumer. And that relationship is very valuable. If you build the relationship properly, you can use the relationship to sell other products and make more money. A happy customer who had bought vitamins from you would also be happy to buy some health  equipment too, right? But build relationship the right way, build on trust.

4. You have a plan. Every MLM entrepreneur will start with a plan on how to reach the millions. But the plan is only regarding one product. MLM entrepreneurs must have a bigger plan, their own plan on how they want to achieve thier goal, not juston one product and not just on MLM alone. MLM entrepreneurs must have a plan to eventually become a true entrepreneurs if they really want to earn the passive income. Get an mentor, a coach or anyone who can help you get your entrepreneurship plan drawn out for you.

Finally dear friends, you can get there. You can buy your dream car, your expensive houses and your love boat. But you may need to make some minor adjustments to get there. Old tactics in a new world, a world of social networking and fast dissemination of information as well as disinformation, would not work. People are getting smarter and have more choices. You can be different, if you choose to do so.

And to all those who has lost friends in MLM, share this with them so that we can all be friends again.

Work smart everyone.

Related reads:

1. Marketing formula

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If you like the article above, please like us here. :-)

The Author is the principal of ElixirEducate - a training house for Smart Entrepreneur Program Series. If you would like what you read above, we would be grateful if you could 'like' us at our page here. If you would like to to find out or learn more about the the article above, you can email the author directly at yazdi@theelixirstore.com or be his facebook friend here.
 
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ElixirEducate

Smart Marketing: Sales = f(Reach,Response,Conversion)

Hello there, we meet again. Thanks for reading and remember, if you like what you read, share it please.

Now I am sure all of us have been approached by various marketing 'guru' offering a multitude of ways to boost your sales, make a million in two weeks, become a billionaire in two months. There is the 'Guerrilla' marketing method, the pyramid method, the relationship method, the direct selling method, the multi-level method, the blast method, the brand-centric method, the push sales,the pull sales, the customer relationship method.

And the study and books? I have learned them in school, in university and then when working. There were marketing books for dummies, morons and the insane. There were books on everything: branding, advertising, more advertising, budget marketing, some more branding; for experts, layman, and like I said earlier morons.

uh! uh! Don't forget that the Web 2.0 and the Social Media have opened a whole new can of marketing books and studies.

But wait. Hold on a second. Is it really that complicated?

Well, not really.

What I found was that after all these mumbo jumbo, sales must conform to the following formula:

Sales = f (Reach, Response, Conversion)

Sales is a function of reach, the response to the reach (also known as leads), and finally the conversion of those leads. All small business must know this by heart because if not, you could be wasting your marketing budget  and your energy away. I hate to use the acronym ROI (because I have overused it in my days as an investment banker, trying to get best valuations), but this is how you maximise your marketing ROI.

Reach is your visibility and contact with the customers. Most people call this advertising, promotion or marketing. You have to maximise your reach with your marketing/advertising activities.

Response is the positive feedback that you get from your advertising. It is the percentage of those whom you reached decided to take an interest in your product. This rate is very important as it will determine your leads. Some would also immediately buy your products - that is when they are converted.

Conversion from being an interested party to buying party (customer) can happen on the spot, when you are reaching to them for the first time. Some customers take longer, they need to be 'touched' again the second and third time before that make their purchase. This rate is also very important as it determines your sales rate.

Many small businesses make the mistake of focusing too much on the reach, and ignoring the response and conversion rates. In this case, the entrepreneurs will find themselves working very hard to market their product, but coming home with little results to show. It would be very frustrating.

But there are ways to maximise your sales, now that you have the formula. One way is to create an ultimate customer, then create a brand (on a budget). The only way to make big sales with little money is to be creative and resourceful.

Work Smart Everyone

Other suggested reading
1. Start-ups advice
2. Building a business model
3. Entrepreneurs in distress

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If you like the article above, please like us here. :-)

The Author is the principal of ElixirEducate - a training house for Smart Entrepreneur Program Series. If you would like what you read above or want to know more about our training, we would be grateful if you could 'like' us at our page here. If you would like to to find out or learn more about the the article above, you can email the author directly at yazdi@theelixirstore.com or be his facebook friend here.
 
Lastly, if there is anyone that you know who may benefit from reading this article / post please forward and share this posting by clicking the button "Share" below. Have a great day ahead.

How to be a succesfull at MLM and keep your friends

Multi-level-marketing business is the epitome of relationship-based business. Well, think about it, you have absolutely no control over what you can do with the product. If the customer does not like the taste, you cannot change it. If the customer does not like the formula, you cannot change it. If the producer stopped making your best selling item, you cannot do anything about it. 

Therefore, the sale, the business of multi-level-marketing or direct selling is purely based on relationship. Therefore, it makes every sense that a multi-level-marketing entrepreneur must follow the path meant for building relationship, rather than sales. By focusing on sales from the onset, you are indirectly forcing a relationship. You will not build a relationship and eventually run out of friends; but that is what everyone seemed to be doing (or at least that is how the industry is perceived). 

Multi-level-marketing entrepreneurs can be very successful, can be rich and can be happy. But the business must be carried out in its natural form; that is building relationships. And relationships can only be built the way relationships are built, beginning with trust.

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If you like the article above or would like to learn more, please like us here. :-)

The Author is the principal of ElixirEducate - a training house for Smart Entrepreneur Program Series. If you would like what you read above, we would be grateful if you could 'like' us at our page here. If you would like to to find out or learn more about the the article above, you can email the author directly at yazdi@theelixirstore.com or be his facebook friend here.
 
Lastly, if there is anyone that you know who may benefit from reading this article / post please forward and share this posting by clicking the button "Share" below. Have a great day ahead.

ElixirEducate

A letter to aspiring entrepreneurs, Part 3

Helloo there,

How are things going with your new venture? I hope you are getting along fine. I am good too, despite having to work this weekend. Well, you know what they say about us entrepreneurs, "weekends are weekdays but our weekdays can be our weekends too, anytime".

To recap, in my last letter to you, I briefly mentioned about the need to follow your passion, to have the endurance, to be resourceful and to have an 'entrepreneurship plan'. We left off at how your business plan would fail you. Therefore, without further ado, I present to you lesson number 9.

Lesson 9. You Business Plan will fail you. What do they have in business plans? The important ones would be product description, target market, financial projection, swot analysis, competitor analysis, industry analysis, business model and marketing plan. And some people would produce 100 pages of this surefire plan and set off to build a business based on his plan. And one thing are 100% sure to happen: things would not go as planned. And even if you rigidly follow your plan, there is 90% chance your business will fail.  No. It is not because you are not a smart planner, it is certainly not about your capabilities at all.

It is simply because the nature of the business plan. They are all a bunch of guesses and assumptions. Some might argue that it is an educated guess, but it is a guess nonetheless. And most of the assumptions are bound to go wrong. It could be overstated or understated.

But  don't get me wrong. You must have a plan. But you must accept and be ready for the plan to fail and needing adjustments. That is the nature of a plan. It is its natural order of life. Have a plan and keep an eye out for feedbacks and be ready to make changes to your plan. Like the saying "roll with the punches", find ways to find the right plan; the plan that makes money.

And even when you have found the right way and are making money, do not take things for granted. Keep your ears to the ground, listen to the heartbeat of your business and competitors. Modify your plan if you have too.

My last piece of advice on this business plan thing is, keep it simple. 100 pages of business plan are for investors and bank. As for you, you must fit in on a piece of A4 paper. It must be easily understood by you, clearly and visibly. Making money, based on our plan, must not be complicated.

Well, that is all for now, I will write to you again soon, about Overcoming Your Fear of Failure. In the meanwhile, send my love to the family and make smart decisions.

Yours sincerely

Yaz

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If you like the article above, please like us here. :-)

The Author is the principal of ElixirEducate - a training house for Smart Entrepreneur Program Series. If you would like what you read above, we would be grateful if you could 'like' us at our page here. If you would like to to find out or learn more about the the article above, you can email the author directly at yazdi@theelixirstore.com or be his facebook friend here.
 
Lastly, if there is anyone that you know who may benefit from reading this article / post please forward and share this posting by clicking the button "Share" below. Have a great day ahead.

ElixirEducate

What's up with your BAG?

Dear Friends

Yesterday a group of us got together and made MyBAG's first networking event happen. It did not just happen, it was brilliant. I could not begin to thank to all those who came and supported the event.I know that there are more out there that wanted to participate but was unfortunately held up by pressing matter. I say, do not worry, we will keep you in the loop and at the same time you can join us next time. We welcome you with arms open wide.

Back to the event. The event itself was simplicity at its best. Just tables and chairs, a little food, no projectors no fancy gadget. But we had great people who turned up, beautiful people. The atmosphere was electric. And everyone chipped in to make it fun and exciting.

But it was not all fun and games, as it turned out many new businesses were conceptualized and alliances forged at the very meeting itself. Entrepreneurs at their best, taking actions and capturing opportunities. It is indeed progressive.

And everyone was respectful of each other, keeping tract to their own time when making thier short presentation about their partner, allowing other the chance to do theirs. A lot of laughter but a lot more serious businesses.

Seasoned networking people like Zamara, Haslina, and Rica were there too to lend their expertise in handling the group. Lil, Camellia, Noni and other seasoned entrepreneurs and networkers helped out too, especially with the newer ones.

The guys, like Syam Edymart and Kamal the mushroom man, also contributed a lot to the success of the event.

The next event is coming up and the group will post the date soon, so please do check on us from time to time to get the info.

Thanks and work smart everyone!


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If you like the article above, please like us here. :-)

The Author is the principal of ElixirEducate - a training house for Smart Entrepreneur Program Series. If you would like what you read above, we would be grateful if you could 'like' us at our page here. If you would like to to find out or learn more about the the article above, you can email the author directly at yazdi@theelixirstore.com or be his facebook friend here.
 
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ElixirEducate

VSS: Bane or Blessing? (Buang Kerja: Bala atau Rahmat?)

I read this in the newspaper today (The Star):

Hong Leong Bank: No Bank Negara approval needed for VSS

KUALA LUMPUR: Hong Leong Bank group has clarified that the offer of the voluntary separation scheme (VSS) launched early this month does not need the approval of Bank Negara but will be undertaken in accordance with labour laws.
Hong Leong Bank Bhd group managing director Yvonne Chia told a briefing to introduce Hong Leong Islamic Bank Bhd’s newly-appointed managing director-cum-chief executive officer Raja Teh Maimunah Raja Abdul Aziz, that the central bank did not need to approve the VSS.
“I want to clarify that this VSS is a move to make the bank more efficient in a changing landscape. Being in a regulated industry and as a matter of courtesy, we informed Bank Negara of the VSS but we do not need to have the central bank’s approval nor the approval of the Labour Department,” she said.

VSS (or Voluntary Separation Scheme) is basically when they think they have too many staff and they don't need the staff anymore.  The company thinks they can do without these people, stop paying them salaries and they will get to keep more as profits.

Well, accounting wise it makes sense, or at least in theory. But to those who will be opting and getting VSS, they are definitely going to have mixed feelings.

Being offered VSS means it is a signal they you are not wanted, but you can exit with compensation. Some of you would be worried about how the family is going to get fed, especially if you are a clerk with five kids in tow. The compensation amount is not going to last forever. My heart goes to them.

Undoubtedly, some you will opt to be an entrepreneur; and  I, on behalf of New Entrepreneurs Malaysia, welcome you all with open arms and wish you luck and BEG you to be careful with your plan and your compensation amount. NEVER spend more than 10% of our compensation amount on starting a business. And you can read some FREE advice on new entrepreneurs in distress (here) and starting up advice for new entrepreneurs (here).

And I welcome volunteers to translate this into Malay because it is a known fact that the the clerks and lowly paids job in banks are dominated by them. And pls share this with them (or their kids on facebook)

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If you like the article above, please like us here. :-)

The Author is the principal of ElixirEducate - a training house for Smart Entrepreneur Program Series. If you would like what you read above, we would be grateful if you could 'like' us at our page here. If you would like to to find out or learn more about the the article above, you can email the author directly at yazdi@theelixirstore.com or be his facebook friend here.
 
Lastly, if there is anyone that you know who may benefit from reading this article / post please forward and share this posting by clicking the button "Share" below. Have a great day ahead.

ElixirEducate