What Can Harm Your Business?

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Call me crazy.

But someone who is starting his first business shouldn’t have a lot of cash.

I believe a lot of cash can harm you more than help you.

So if you’re starting your first business now and you have very little cash—thank God!

It’s one of His sweet blessings to you.

Why?

You’ll learn to “make do”.

• You’ll learn to work from home. (Don’t rent office space yet!) 
• You’ll learn to use what you have. (Don’t buy new stuff yet!) 

Besides, it will be a fantastic story to tell 20 years from now.

You’ll be able to tell your kids, “I started this giant company 20 years ago in my living room. I started with only P15,000…”

Here’s another reason why having a lot of money at the start of your first business is bad for you… 

First Businesses Usually Fail 

When you start your first business, you’ll fail.

Sorry to be the one to bring the bad news.

But if you really think about it, it isn’t really bad news.

Because failure isn’t God’s Rejection. Failure is God’s Redirection.

No, not ALL first businesses will vanish into thin air. Some will survive.

But these will be revised, rehashed, redesigned, rebuilt… 

My Story of Failure 

Once upon a time, I had P600,000 in savings.

I was bent on starting my business.

Feeling confident because I had P600,000 in my hands, I looked for a business.

There’s the mistake.

Your money isn’t the reason why you go into business.

You go into a business because you have a GIFT you want to give to the world. Not your money.

It’s your gift that people need!

Anyway, back to my story.

Someone told me about a hotdog stand in a brand new mall.

Since I had my cash, I bought the franchise for P250,000.

Monthly rental was P18,000. I still had money left! What should I do with it? 

The mall offered me another stall, right beside it.

Since I had money left, I bought another franchise for another P250,000.

This time, it was an ice cream scooping station.

That required another monthly rental of P18,000.

I figured: What could go wrong? It was such a simple business.

But everything went wrong.

Looking back, I did no research.

I never studied who the main shoppers were, and thus, whether they would like hotdogs or ice cream.

I also didn’t know anything about the business.

I didn’t even look for a mentor who could guide me.

It was all a leap in the dark. I literally “jumped” into it blind.

What happened?

The moment I opened it, the business began to bleed.

My monthly expenses were much more than my profits.

Instead of earning, I was losing P20,000 a month!

After five months, I closed the stores. I lost P600,000 on that business.

Yes, I lost everything I had. 

Focus on Your Gift, Not on Your Cash 

Having big cash and little business sense is a dangerous mix.

Because you’ll be in a hurry to “plunk” it into your first business, not understanding that first businesses usually fail.

My suggestion? If you stick to your core gift, you’ll be able to find a business that doesn’t need much cash. 

My first successful business

My first successful business needed Only P100,000 My husband and I never sent our kids to school.

Instead, we’ve been nuts enough to “homeschool” them.

And we loved it. When friends learned about it, they wanted us to help them homeschool their kids too.

Because it was our passion, we said yes.

So I created Homeschool Pangasinan.

How much capital did I need to set it up?

Around P100,000.

To buy one computer and one desk.

Plus advance payments for a bunch of writers who made our teachers manuals.

That was it. We started with 36 kids on our first year.

Around eight kids were the kids of the staff—so they were free.

We really had only 28 paying students.

That was five years ago. Today, we have 200 kids enrolled.

We aim to keep growing every year. 

My Point? Start Your Business without Much Cash 

I could go on and on, telling you one story after another.

I’m allergic to wannabe entrepreneurs with lots of cash.

From experience, they lose it!

What’s the winning combination of entrepreneurial success?

A lot of passion and very little cash!

Why?

Because “very little cash” will force you to be more creative, more imaginative, more persevering, more sacrificial… Stuff necessary for a great entrepreneur.

Believe me, I’ve heard of horror stories of kids of very wealthy parents who started businesses with the help of Daddy’s money and then lost millions.

Because money is too easy for them. Money isn’t valued. So they’re careless with it.

When You Have Much Wisdom, That’s the Time to Get Cash 

Later on, as you grow in your business skills—and you begin to taste small successes—that’s the time to borrow money to expand your business. 

For example: As I entered into new businesses and real estate ventures, I borrowed money.

But when I did this, I already had some business skills under my belt.

At one point, my total debt was P10M.

Thankfully, all these were loans not to banks but small loans given to me by Kamag-anak Incorporated: My mother, my sister, my mother-in-law, my uncle-in-law, etc. I paid them a monthly interest on their money—all postdated checks.

These people knew I was trustworthy. (This is essential. Business is about relationships.)

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