17 November 2011
There was obviously a determined effort, during the recently concluded convention, to expand the outlook of the members of the mechanical engineering profession with the inclusion of Technopreneurship as one of the plenary talk topics. As mentioned in my previous article, we had a very qualified speaker in the person of the “Society’s” immediate past national president, Engr. Renato Florencio. He has had 32 years of exceptional employment experience, capping it with being General Manager and President (during his last 13 years of employment) of Conell Brothers Philippines, Inc., an American multinational company. He has also been a successful entrepreneur since he retired from employment 15 years ago.
Engr. Florencio, who currently is into the jewelry manufacturing and distribution business, was able (just like the other speaker featured in my last article) to capture the continuous attention of the delegates, despite speaking in a time slot where the audience would be prone to drowsiness. He shared his experience, both the good and the bad things that happened to him, as well as the wrong things he did, so that the prospective entrepreneurs in the audience may be spared from repeating them. He also gave some tips on what concerns to address, to improve the mechanical engineer’s chances of succeeding once he goes into business.
According to him, anyone who wants to be a businessman should first do a self assessment because not everyone can be a businessman. Going into business means shifting one’s attitude and mentality from that of a safe (or employee) mode, to that of being resolute, and a risk taker. Unlike employment, where one has fixed work hours and assured of regular pay, going into business means that one has to take risks, and do what’s needed to sustain his business and generate income for himself as well as his employees. He has to therefore be prepared to depend on himself for generating not only his own sustenance, but also that of his dependents.
When one goes into business, one has to maximize his opportunities. It requires one’s mind to be always alert and active in considering opportunities or solutions to problems of his business. It’s a different mind-set that’s needed and one that would require effort to achieve; but there are rewards if one is willing to pay the price for being a businessman.
One requirement of business is capital. And for mechanical engineers this can come by way of not only money. Their training makes them a very systematic person, which in itself alone gives them an advantage. Given a situation, they practically can automatically identify the problem, establish the givens and formulate a solution, while others are still pondering on what to do. This is an asset that can be used as an advantage, and used as a means of convincing others with cash resources to provide the needed money for capital, or, even to be a partner.
Engr. Florencio believes that one should not go into business alone, and that one must talk to people who know about the business from the very beginning. He learned this lesson when he went into farming about 18 years ago. He made the mistake of planting mango trees mainly on the advice of a seedling supplier, only to find out that he had to chop down about 50 percent of them after 10 years for being too close to each other. The cost of getting a mango expert to advise him would have been a lot less than the losses he incurred.
It is also necessary to make an assessment of what are needed and what should be learned for a business. Mechanical engineers are already proficient in math, problem solving as well as processes, but most probably are not knowledgeable with accounting and financial management. How is product costed? How much profit can be made? What taxes are supposed to be paid? Deficiencies in information and knowledge such as these need to be filled and learned.
One goes into business to make money, no ifs and buts about it. It is therefore important that one understands what money is all about. This means that one should be knowledgeable of the reasonable source of loans needed for capital as well as the cost of money or interest rates. He explained that loans can currently be obtained for about 12-14 percent per year, and he related how shocked he was when a student in one of his earlier lectures approached him about a concern regarding the business of the student’s family. They were paying P30k per month on a loan of P500k, which is equivalent to an interest rate of 6% per month or 72% p.a. He referred the student to a source where he can avail of another loan at 12 % p.a. to pay off the current loan.
One has to protect credit reputation especially when going into business. Engr. Florencio related how shocked he was when a Chinese businessman friend told him that the best time to borrow for business is when one does not really need the money. In this manner one would be liquid enough to be in a position to meet his payment obligations regularly, and in the process boost his credibility as a borrower. This would improve his chances of getting the loan when the time comes that he really needs one. In relation to this, he advises everyone to develop truthful and friendly relationships with business people, as aside from being a source of valuable business advise, they could be a source of solid support if or when one finds his business in a tight fix.
You can not be an introvert when you go into business. Unfortunately mechanical engineers typically are silent and tend to be loners. This is brought about by their training and their work environment when already practising their profession. In school they have their heads down most of the time trying to solve math and engineering problems, and once out in the field already, they (more often than not) face machines that do not talk. These conditions deprive them of the opportunity to regularly interact with people and improve on their skills in communicating. It is not unusual for them ending up treating others (including their wives and children) like the machines and equipment they work with. So they usually end up staying in the background, or taking the seats farthest from the front in any gathering.
This detrimental characteristic should be recognized and corrected by the mechanical engineers, especially those that are intending to be entrepreneurs. As it is, it is already a deficiency for practitioners. In business it would be a fatal liability. Engr. Florencio encourages everyone to get out of their shell by being active in joining groups that will improve in their ability to talk and interact with people. He shared how he developed his social skill by joining various groups, among them the Jaycees, Toastmaster’s Club, Rotary Club, Free Masons of the Philippines, PCCI, MAP, and of course the PSME. In relation to this, he advised the practitioners to make it a point to always develop new acquaintances when attending meetings and other gatherings by always being ready to give out his calling card which should be properly encased in a decent card holder.
Mechanical engineers, especially those with already a certain amount of practice (in the huge and diverse areas of the profession) would probably have acquired sufficient special knowledge and skills to start them out in business. Engr. Florencio, in closing, reiterated his availability for consultation (pro bono, for the sake of PSME) to all of those who may be inclined to jump in. Any member of the profession interested with the offer may course their communication through this writer at sl3.mekaniko@gmail.com or through my blog at mekaniko-sl3.blogspot.com.
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