Pinoy Business Coach

Financial Management is a tough term, here is a more concise definition, click this.  Your 10,000 peso business will need to grow into a much bigger entity. For a preview of other skills that you may need to develop in business, this article may provide more information, read this. Managing your business money is a real skill and this site also has great ideas.


In my years of trying to help small business owners and from my own experience on the need for start-up capital, I have encountered a few resources that may help give a ray of hope for those who want to start or grow their own businesses.  These are all learned from the street so may be rather informal.


Here are some sources that you may want to check as part of your due diligence in sourcing capital:
1. From your own savings
2. From friends, relatives, loved ones
3. From Government Institutions (SSS, DOLE, GSIS)
4. From private commercial banks

If you are a first time business person, I recommend that you think through the amount that you would like to borrow as relating to your business. Always project this amount as something that you can repay back without killing yourself or your family in the process.  Some individuals borrow money as first time business people and do not take this into consideration and when their business operations turn sour, they are caught up in too much debt up to their necks that their families suffer as a consequence of trying to pay back the loans.  Being new in business, mistakes can come easily no matter how hard you have planned to mitigate risks.  Accept this fact and you will be better off planning out those loans.

When starting your business by using your own savings,  again the counsel is to START SMALL.  Do it  at phases so that you do not hurt your family's needs.  For example, if you can manage to start a business at 5,000 pesos then do so until you are able to roll the capital until it makes a profit and you are able to retrieve the original investment.  If you can roll and make a profit out of 5,000, then there is no reason that you cannot do it with 15,000, 50,000 or 500,000 (catch the drift?)

The mastery of this simple yet effective rule of thumb may save you a lot of misfortunes later on.  Do not gamble all your savings (especially lifetime savings) into a single business pursuit that you do not have a track record of.  Business people are creatures of logic and not gamblers.  They take calculated risks.

So, if you are missing a business track record, create one, but in increments!

Raising capital for your business can be a tough job and you may experience disappointments and may get turned down many times.  But this is a necessary skill if you want a thriving enterprise.  To raise start-up capital takes time and is more of a process (especially here in the Philippines).  It is composed of steps that are garnered through time, as one's credibility increases.

Whether if you are just starting a business or  have a business that has been thriving for years, the first thing that you need to do is to keep good financial records. It does not have to be something that is complicated or technical, you can start with the daily revenue and the expenses then move on have weekly and monthly records.  If you happen to have a venture that is not operational yet, you may want to go for projecting an income statement for your business plan for investors to read.  This is a necessary first step to getting the needed capital.

You may ask, "but what does keeping financial records have anything to do with having capital?"  The answer lies in a document called a Financial Statement. To have a financial statement that is audited and presented to banks and other entities can actually be a source of capital,  Banks may not actually lend you the money then and there as you show them an audited financial statement, but it presents to them a case that you are a serious business owner and they will perceive you as different.

In our next few articles, we will touch on how to think through financial statements.