3 lessons I learned launching a business

WE relaunched Rita’s Italian Ice, an American frozen treat brand, this year. It’s been a wild ride, full of unexpected turns with us seeking the right locations, hiring our team and struggling to set up the business from scratch. However, we did survive the essential part of getting our business off the ground, opening two branches this week with six more to come. Here are three essential lessons I wanted to share with you about our journey in starting up the business:

First, at least double your monetary estimates for the business. It’s easy to misvalue costs. When we first assessed the business, we looked at the historical data and modeled the business plan in Excel. We studied the numbers, felt the business was viable and imagined huge profits.

The reality was trickier. Regardless of how comprehensive our data was, we discovered a multitude of hidden charges once we got the business rolling. For example, while we budgeted for the usual suspects — rent, overhead, salaries, ingredients, shipment and brokerage fees, among many others, we didn’t count for red tape and delays.

We looked at shipping costs and budgeted a healthy markup, but never expected the Suez Canal crisis to happen, causing weeks of delay to our shipment. Delays can be expensive. If you delay, you’d still have to pay your rent and your employees. Until you’ve made your first sale, money was bleeding like water from a bucket’s hole.

The worst thing that can happen to any businessman is to run out of money. Fortunately, we had family members who offered us short-term loans to tide us over. Not everyone is lucky though. Woe to any entrepreneur who has limited access to cash. If you don’t pay your supplier, contractors and employees, nobody budges.

That’s why, to be safe, secure more-than-enough cash for any emergencies and other unexpected costs before making an investment.

Two, do business for the right reasons. Everyone thinks a business is a get-rich-quick scheme where everybody wins. That’s far from the truth: We are poorer now than when we first started. Because the money we have is mostly infused into the business.

The problem is, there are no guaranteed profits in business. If our business went under, all the money, time and effort we’ve poured into the business will disappear. Remember, merely setting up a business does not guarantee automatic success. Sometimes, even if you feel you’ve had the best products, the right elements and the right location, not enough people will buy.

However, we did this business for two things: Our people and to solidify our future. When we set up the company, many employees trusted me enough to quit their jobs to join our company. How can I let them and their families down? We also took the risk because we were trying to future-proof our income. We saw how rising costs were devaluing cash at a faster rate, and many competitors were entering the market. It’s harder to make money now than ever before. Hence, if we don’t work hard and make the effort today, it’ll be harder to do business later on due to nonstop inflation.

That’s why we invested in Rita’s — we were trying to future-proof our income. Despite being a tiring, expensive endeavor, we still invested in our business and put in an iron-willed effort because we optimistically hoped to solidify tomorrow’s income and secure our survival.

Lastly, stay committed even when things get tough. The mental stress of launching any business is unimaginable, especially when life throws unending curveballs. Because too many decisions need to be made, entrepreneurs are bound to make expensive mistakes or two. Because too many elements are at play, many things are truly beyond anybody’s control.

However, let’s never forget the power of compound interest the more you do, the better you get. I strongly believe that experience is the best teacher. And while no business venture is a sure-fire success, if you persist, dabbling in it would make you a better entrepreneur in the future, and experienced entrepreneurs make better business decisions. Good decisions lead to more profit.

You can’t learn unless you try it. That’s why it’s important to stay committed and to carry on. The learning you get when operating the business that makes you an even better entrepreneur tomorrow. If you stay committed, and persist and constantly improve yourself, you’re bound to hit gold because you’re always moving forward.

Tina Khoe Ang is a retail entrepreneur, managing 29 branches in Metro Manila, and a master franchisor of an American frozen treat brand. She is a moderator at the Philippines HR Group on Facebook, and a co-host at The HR Cafe: Usapang Trabaho, Buhay, Atbp. webshow every Sunday at 3 p.m. You can email her at tinakhoe@gmail.com and visit her blog at https://tinainmanila.com/.