How to lick poverty
ADAM, 39 and Vilma, 33 are husband and wife who led a hand-to-mouth existence at the early stage of their married life. Herself unemployed, Vilma always had a hard time budgeting the commissions Adam earned as an agent of a pre-need company. An added burden came with the birth of Dwight Gabriel now 10- their first-born son. Seventy percent bottle fed, the baby's sustenance had to be shouldered by their in-laws. Three years later after Dwight- a pretty little girl- Sheena April- now 7, was born. The sustenance for the family was doubled. Alarmed, the couple waked up to realize that they were in a sorry state of financial condition.
Plan of action
Having known their business acumen, the couple finalized their plan of action. Adam with Vilma's approval decided:
- to quit working as agent of St. Peter Life Plan. He reasoned out he'll not grow tall financially if he'll be working under a boss. An employee- he said- receives a fixed salary while increases- if there are- are far in between. So without much ado, Adam filed his resignation to say goodbye to his job.
- Swearing to forget his dark days, Adam decided to rekindle "Inadlao" back to life with him at the helm as boss. He was ably assisted by his beloved wife. Inadlao is the name of the marketing business that is mentioned in the preceding paragraph. It is the same marketing business where Adam once served as collector. It was conceptualized and founded by no less than Adam's elder brother- Rene.
Inadlao during its heydays was once a by-word in the local circle. Inadlao literally means daily or the sun shines. In business language, Inadlao connotes lending cash in lump sum and requiring borrowers to pay the same in 28 daily amortizations with percentage added to the capital. Inadlao started with very little capitalizations borrowed from relatives.
Inadlao needs safeguards to protect the fledgling business. So Adam and Vilma established Golden Keys;.
- Golden Key No. 1 is never to work again under a boss or employer. So by quitting his job as an agent, Adam had satisfied Golden Key No. 1. Indeed, working under an employer will get him nowhere financially because the salary has a limited amount and the increases- if there are- are far in coming.
- Golden Key No. 2 and last of the key is never spend a centavo of the capital whether owned or borrowed. This step is vital. This is the most sensitive part of the business. The main goal here is to increase capitalization.
So to achieve Golden Key No. 2:
- Adam's family lives, eats and subsists the most economical way. They tighten their belts so to speak. This way their business capital increases at a faster rate.
- They never let their capital stay idle. During collection time, Vilma doubled her purpose by scouting good borrowers, One salient point in business that Adam and Vilma try to maintain is an optimistic point of view. Realizing that Inadlao is more of a gamble; that borrowers were granted loans with no collateral save their character and public refutation, they did everything possible to establish sound relationship with their clients.
- So as to expand their business as early as possible, they have to limit their expenses. They never spend a part of their capital. They count well every centavo of their profit and budget it well. They kept tab of their expenses and charged it against the profit and not from their capital.
- Spending money cautiously, they deposit in the bank whatever money is left of the profit. Bank conscious, they believe that money kept in the house within easy reach is not safe.
Proven tips for starting small business
Here are proven pointers for small business entrepreneurs with limited capital who are planning to engage in this so-called INADLAO MONEY MARKETING BUSINESS:
- Release loan in cash in the amount of 1000 to 3000 pesos. Borrowers find it easier to amortize lesser amount of loan.
- Select borrowers. First priority are small-time businesses like selling fruits, bananas, camote, cassava, fish, sea shells, ice-cream vendors, ice-candy vendors, sari-sari stores, food chain, restaurants, etc. and other enterprises where there are 50% or more daily disposal of their products The faster the rate of disposal of their products, the oftener they'll come to you for reloan. And that means a rapid return of your investment.
- In agreement with client-borrowers, allow at least 2-day grace period prior to collection. Do yourself daily collection of payments or amortizations. Never entrust this task to anybody.
- Always keep a record of all transactions. A record is a picture of your business. It will show its strengths as well as its weaknesses.
- Establish and maintain a good rapport with clienteles. Study the individual peculiarities of clients. Don't quarrel with them. When their failure to pay is reasonable, accept the reasons with a smiling face. When all possible measures proved futile to address the wrongdoings of a client, drop him but be tactful.
Golden Key No. 2 is what Adam and Vilma did to increase their starting capital:
- They add and add their savings to it through the bank.
- In time their capital grow and grow.
- In time- with growing capital- they expand and expand their business, selecting good borrowers in the process and culling bad ones.
- In time- because of controlled spending, they were able to repay all their indebtedness. Now Inadlao can afford to lend medium-level businessmen from 50 to 100 thousand pesos.
At this point in time, all that Vilma can say is that they have so many clients day in day out who came to their house to borrow money or pay amortizations. And- daily- Adam and she would visit their clients business establishments to collect their amortizations. Whatever extra amount, if there are after loaning time, are deposited by Vilma in the bank.
Analization of problems and attributes
Adam had had sleepless nights thinking of ways to solve their problem. He confided his problem to his wife and the two talked about it at length. Then they made an in-depth analysis of their personal attributes. A Bachelor of Science in Commerce graduate, Adam had no other expertise but his experience for quite a number of years as a collector while working under his elder brother's money-marketing business. When the business shut down, Adam carried the same business on his own but with capital subsidized by his parents.
Adam's business failed because he entertained vices. He indulged:
- in cockfighting,
- joined liquor-drinking spree and
- visited red-light houses
For her part, Vilma, likewise, had experienced the same line of marketing business while she was living with her aunt in Manila. She would go round the market stalls to collect daily amortizations for her aunt's dry goods that were paid daily by installments. These were the couple acquired expertise while both were still single
The last and most fortunate of Adam's 3 kids came in time with the flowering and fruiting period of their business. So everything necessary for his total growth and development are provided to Geoff Hans, the name of the boy now 4 years old.
In summary, the two most important Golden Keys are:
- [1} Look for a livelihood where you can be your own boss and no other. Whatever profits you realized through your efforts and sacrifices are all yours with nobody to share with.
-  At the start of your business, never spend a single centavo of your capital. It's easier said than done. Yes- so control everything, your emotions, your likes, your wants and even your hunger and cravings. Anyway- when you are already wealthy you can have them any time you want.
This is a true account of Adam's outlook in life as well as those of his family members. Adam's family struggle for a decent living is a classic example which ought to be copied. While his neighbors are still sound asleep in the early morning hours, his family is already up on their feet, getting ready for the family business. It is no wonder why at this very moment Adam's family can now afford to eat three square meals a day, drives in their Toyota Car, sleep in air-conditioned room, etc. Adam's residential house which is estimated to cost four million Philippine-peso is now under way. He likewise owns a 3-storey house which is now offered for sale.
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