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WE all know what it takes to nurture a baby. It is both a pleasant and difficult experience. We are exhilarated as we see the smile and antics of a baby in the family. On the other hand, it is difficult taking care of the requirements of a baby, including putting the baby to sleep, providing milk, food, vitamins, and being alert on the hygienic needs of the baby. As the baby grows, more care and attention have to be provided as the baby learns how to talk, walk and play.
Start-up businesses also require the same degree of nurturing. I have been involved in providing assistance to people trying to put up businesses—from the biggest to those newly formed, or contemplating to start. From the days when I was a partner in two of the biggest accounting firms, and until now that I am dean of the University of the Philippines Virata School of Business (UP Business School), I find fulfillment in mentoring people and organizations that are just starting up their business operations. I see the enthusiasm and vision on how to grow their business and, certainly, what they hope will be successful business ventures. However, a large number of studies indicate that only a small percentage of start-up businesses can sustain their operations during the initial years.
My advice to the aspiring entrepreneur is to get the fundamentals right from day one. These include a lot of things. Being passionate on the business venture to pursue is paramount . Nowadays, a lot of people are interested and competent to engage in innovative and technology-based businesses. In a recent pitching session of budding business owners in an event organized by an incubator in UP, 90 percent of them presented projects that are for the digital and e-commerce economy. I am sure that the passion and knowledge presented by the pitchers during that event will provide the momentum for them to do good in their business.
Having able mentorship during the start-up phase will also greatly benefit the business venture proponent. The entrepreneur can approach mentors coming from his communities. A relative, friend, former teacher, or neighbor involved in business can readily provide business advise. One can also approach the various Negosyo Centers throughout the Philippines. These centers were created pursuant to Republic Act 10644, otherwise known as the “Go Negosyo Act.” The Negosyo Centers are responsible for promoting ease of doing business, and facilitating access to services for micro, small, and medium enterprises.
There are also organizations called incubators or accelerators that provide various support to start-ups. These provide various support, including technical, legal, business mentorship, and sometimes even financial, to the incubatees. These assistance will be extended for about two years during the “growth pain” years of the start-ups before these are left on their own to advance their business ventures.
It is good that two measures were signed into law in 2019 that promote ventures in the innovation arena. One of these is RA 1137, or the “Innovative Startup Act” that aims to strengthen, promote and develop an innovative and entrepreneurial ecosystem, and culture in the Philippines. The other law was RA 11293, or the “Philippine Innovation Act,” which is intended to formulate a “broader view in developing its innovation goals and strategies covering all potential types, and sources of innovation.” Some of the implementing rules have been released. The operational guidelines and budgetary support are forthcoming. It is good to follow developments on these two laws.
I also advocate that all businesses should be able to put up a responsive tool or system to have the essentials of business of accounting, financial management, purchasing, production, inventory control, accounts management, marketing, customer relations, personnel or human relations, research and development, regulatory compliance, governance, and data analytics and security. There are automated applications or software that provide these functionalities, and are available in the market. However, the cost to acquire these can be quite prohibitive for a start-up business.
But would it not be nice if a government agency can provide this support for free for the aspiring start-up?
Joel L. Tan-Torres is the dean of the University of the Philippines Virata School of Business. He was the former Commissioner of the Bureau of Internal Revenue , the chairman of the Professional Regulatory Board of Accountancy and partner of Reyes Tacandong & Co., and the SyCip Gorres and Velayo & Co. He is a certified public accountant who garnered No. 1 in the CPA Board Examination of May 1979.
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