Money and Entrepreneurship


I bet most of you realize that we are now approaching the end of July, the seventh month in the year 2009. Indeed, we have entered second half of 2009. The biggest issue are of course about recession, economics problem, financial crisis; all these scared most of us. Economists even give their pessimist and somber outlook on 2009 projected economy situation and everyone thinks that their life will be difficult this year.

Is it true? Moreover, some of my lecturers even scared my friends who are expected to graduate this semester that they will face a tough time in securing jobs! Hah, I thought lecturer should motivate the students, not killing their enthusiasms.

If you asked me, I do not think so. Possibilities and opportunities are everywhere, even during the very extremely tough time. If you embedded yourself with negative thinking and mindset, it will bring you nowhere. Yes, in fact that many corporations are trimming their workforce, reducing overtime pays, and even freezing new hire. Everywhere, everyone is talking about cost cutting, cost saving, and effective budgeting.

Nah, again it sounds like Cost and Management Accounting, or Decision Making and Control, or Intermediate Microeconomics chapters inside the textbook. But exactly that is what most of corporations do right now, even in our beloved Malaysia. Every possible nooks and crooks, they will try to cut the costs (just ask any financial controller or accountants inside a company). Do not dream of getting bonuses this year, or fancy dividend payments. Even the executives in most corporations found that their perks and allowances are being shaved off.

Negative prospect eh? Then what to do? Try entrepreneurship!

Ha, before you bashing me with all sorts of comments and critics, yup, I know, entrepreneurship has been touted many, many, many times as one of the solutions for unemployment or as an alternative to salary-based jobs. We heard about agro-entrepreneurship, franchising, mentoring program, government-assisted business, etc. I do not say that all these are not good; in fact, I really support and agree with all the initiatives shown by both government and non-government agencies to spur business venture in Malaysia.

Business is one of the catalysts to grow and generate economy as a whole, as we produce product and services locally, our Gross Domestic Production (GDP) will be higher, create jobs for others, and in return, circulation and outflow of our currency abroad can be cut off and make our Ringgit stronger. The chain effect will benefit everyone inside the economy system, the household, the businesses, and the government. The issue here is most of the business venture failed, especially those which are initiated and headed by Bumiputra. Then, everyone started blaming each other; accusing the systems are not right, practicing cronyism, bribery, even to the stage, I laughed when some of them commented that the bomoh’s ‘pelaris’ was not effective in attracting customers thus made their business venture collapsed.

Well, old disease among Bumiputras, remember, if you use ‘black’ method, do not expect your balance sheet will show ‘black’ (positive) entries, eventually it will turns ‘red’ (negative). Running business with the help of shaman or bomoh to gain short term profit and popularity will not last long, as it will get no blessing from Allah swt. Perform a corporation with Satan as the shareholders, is a disastrous decision.

Then, you might argue, how about to those who opted the clean way of doing business, perform obligatory Solat 5 times a day without missing, never cheated, but still unsuccessful in business?

As I mentioned in one of my earlier post, everything that we do has risk, has trade-off. We cannot escape from risk, so eliminating risk is of course out of question (Then, ask yourself, why most of companies has Risk Management systems/procedures?). The same law governs business venture. We cannot eliminate risk of getting none of profit, but we can reduce the risk of getting loss. You ask me how to do it? Well, good question!

The essential and most important point in POLC maxim as being taught in principal of management course/class is PLANNING! Any rational entrepreneur before starting new business must have clear outline and proper outlook of what to do, how to do, and when to do the said business. From this planning process, we can learn about feasibility analysis (product feasibility, market feasibility, etc.) But the sad part is, most of the Bumiputras entrepreneurs fail during this very first stage.

I observed, and in fact I already stressed in my previous post as well as in the forum that I attended, the primary problem among Bumiputras (well, it seems all Malaysian are subjected too) is they love to do things in the very last minutes. Everyone loves it, and indeed this is not a very good habit to practice. Remember the fiasco happened during the Inland Revenue Board (LHDN) last day of filing the tax payment not a long time ago? Not to mention the endless habit of renewing road tax and driving license when those things expire on the next day! Doing things at eleventh hour will not churn out the best result, as often the resources, implementation, and processes are done in a rush, ad-hoc style, and all parties worked in stressed and ‘terpaksa’. Well, I experienced it almost every semester in IIUM when it comes to start a group dissertation/project paper.

In business venture, the planning stage must be treated seriously, as we are dealing with large amount of money and assets (capital investment). Therefore, as a coherent entrepreneur, we should understand that there are many parameters and variables need to be examined and analyze before we jump into  the market. If you think that a business can be executed just by one day planning and enough by just having a basic idea and concept, well, you are surely to fail. Planning takes a long time, yes, sometimes about one or two years, as you need to calculate all the possibilities, the market conditions, the environment, etc. etc. (PEST, Porter’s Five Forces Model all sort of things), and ensure that there is window of opportunity lies upon us.

In our case, the reason why most Bumiputra entrepreneurs end up in one night stand type of business is they do not have a comprehensive planning, or often the planning horizon is too short. Compared to other established business that often has planning horizon up to 20 years, Bumiputra ventures mostly prefer to have one or at most, five years of planning horizon. This is somehow inadequate. As the results, the venture suffer myriad of problems such as cash flow shortage, inefficient supplies and inventories, lost of customers, and many more. That is why most commercial banks refuse or somehow resist to grant even a small loan for Bumiputra entrepreneurs to start their business, as opposed to non-Bumiputra counterparts.

Business is no joke. Let me remind you! But once it runs properly, it is fun (both in monetary and emotional terms!)

After all, during this challenging period of economy downturn, do not rely too much for government support. We should try to survive ourselves and strive for the best in our life. Try entrepreneurship, and you will learn more about life. I promote entrepreneurship not because I had taken the subject (well, theories are useless if you do not apply it), but rather the fact that our ancestors were mostly entrepreneurs. During the early age of human race, almost 90% of the human populations were entrepreneurs (they barter trade right? Exchange goods for goods). When industrial Age emerged, more people worked in factories, office cubicles, air-conditioned room (freezing like chicken in the supermarket), and we eventually loss our entrepreneurial skills!

Think about it.

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