Profits in Summer
Written by Major Tom
Filed under: Personal and Family
March 31, 2007
It’s summertime finally as the kids stay home away from school and I get to have some extra time for myself; like watching wide-winged birds navigate the sky– which at times can be muddled these recent days—while sipping coffee near our front porch. I don’t know if it’s climate change that should be blamed for this queer weather behavior but even others I have spoken to had wondered why despite the onset of what is supposed to be a season of warm sunny days and windy afternoons, the rain and cloudy skies have found its way into our part of town.
Yet to think, our area hasn’t had experienced any sizable rainfall for a number of months already and it is so ironic that it would be at this particular time that they’d have to come. Maybe we’ll need the rain now more than the expected summer days since the farmlands in our vicinity need them for ideal food productivity; otherwise prices of vegetables and fruits in the market would go haywire soon. Perhaps now, we need to do away for the meantime the innate joys that can be had when flying kites on wide grassy area or playing ball under a rainless sky—on supposedly warm sunny days.
My mom came visiting the other day and had brought a basketful of goodies to the kids. In the afternoon, I asked my eldest son Sef-Sef what had happened to the candies their grandmother had brought them since I didn’t noticed any traces of them while warning them about their teeth and how it will rot for eating too much sugary food. He told me that he had put it in a jar and tried to sell them to the kids outside. Well, I said that was a good idea and asked him eventually about how much he had profited so far. He didn’t answer that and with a sly smile on his face, he just went by with what he was doing outside together with his brothers and sister, along with a couple of kids from the other apartment unit in our compound.
The following day, Sef-Sef asked me to accompany him to buy the goodies they need to sell. I asked if he had the money, the ones he had gained selling the candies his Lola Dol had brought them. He said that he had it in his hands but he wanted me to buy the new inventory using my own money. Now I said, that’s a very cunning way to enter the business of selling; you keep all the money while your Papa buys the goods. I said I’ll buy the stocks this time but the next time, he had to show some money from the sales he had made or otherwise it’s just a thoughtless activity. I demanded that he make a profit this time around. He promised but the sly smile is still stuck in his face.
The next day, Sef-Sef wanted to buy more goods since he told me that the kids playing outside have already consumed most of the stocks I’ve bought the night before. I asked him about the revenues he had made so far and he showed me that, holding a jar full of coins and some orange-colored bills. I got to have them I said so that we can buy new stocks for his makeshift store but he fretted demanding once again that I use my own money once again. I told him that in business, one got to use his own capital and recycle them and that his idea of a business enterprise is not sound at all and it is not the way it is in real stores. But he really had wanted to keep all his earnings. I said to him that his Mom will buy the new stocks this time and she will have to explain how this thing really works. He just smiled and walked away.
My seven year-old eldest son knows how to sell alright but there’s just one thing he needs to learn and that’s accountability and financial forthrightness; like not spending his revenues in a way that he had bought more than what he had sold for the day and that he must be ultimately be aware of establishing trends for profits as against the cost of goods sold. It is clear that for now he—together with his siblings and friends—are just doing it for amusement but I see in him a natural entrepreneurial skill that could be inherent in most successful enterprisers. He would sit there near our front gate for just a couple of hours and I can see how the goods are consumed so easily. The last stock I bought him was worth approximately 85 pesos all in all and he told me that he already had about 115 pesos in hand while there are still some candies left on his tray. I calculated in my mind that his business is earning at more-or-less twenty percent (20%) profit margin, which is not already bad at all.
In my college days, I’ve learned from my accounting subjects that the usual profit margin goes around 25% and anything less than that could mean an unsound business practice since a lot of supplemental expenses goes with the basic cost of goods, like fares going to the grocery store to buy the stocks and in real business, there would also entail other cost like those for plastic packaging and in big businesses, that would mean overhead expenses for salaries of storekeepers, electricity, fuel for delivery, water, rent of stalls or business area, and so on and so forth.
In my last business endeavor, that is buying dried fish products from farther down south and selling them to volume buyers here in the city and as well as in cities up north, the profit margin did go as high as 100% where we can get the much sought after product at 45 pesos per kilo and if we were lucky, at 40 pesos at that and then we can sell them at 90 pesos per kilo in this city and possibly about 115 pesos if we sell it on credit to individual buyers. A friend in Davao had informed me that it could even get to 120 pesos in there in their area only if we can find a way to ship him the goods.
At that profit margin, we have overhead expenses like 5 pesos for each kilo transported by ship and about 3 pesos more for each kilo for laborers and carters who would transfer them from ship to dock and towards a waiting transportation. The dried fish business was so viable in hindsight but it was so short-lived since in business, I have learned that it was not merely as convenient as buying them from one station and selling them to another. It was more intricate than that and even problematic than what could initially be expected. Apparently, we were in competition with big players from capitalists from cities like Pagadian up north and even from Davao and they can afford to release huge advances to fishermen who processes the dried fish products, that what those fishermen produces becomes exclusively set aside for those buyers up north and new players like us couldn’t gain the much needed volume in order to profit handsomely per trip made and even if we have to cajole the fishermen there to sell us their products, they would decline the offer, even at a much higher price than the usual. At that time, we just couldn’t match what those big players were advancing the fishermen there, which did go as high as 200,000 pesos each.
My uncle had advised me that in order to make good in the dried fish business, I might need to stay about a month in the islands at a time but I found that to be extremely not ideal considering the responsibilities I have here in the city and besides, I just couldn’t see myself living without regular electricity and water for that stretch of time.
But the dried fish business was to me a very viable enterprise if only one has enough patience and persistence. Now that I was able to size it up and learn about its intricacies and idiosyncrasies, I might make another attempt at it and make a reasonable fortune and then consider myself not to be always unlucky in every endeavor I find myself in.
But for now, I try to see how my son Sef-Sef do with his candy store business and see if it becomes viable in the long run.
In my opinion, entrepreneurship is one of the best ways for our country to succeed. I think I read that too in Francisco Colayco’s book. It’s good that you’re starting Sef-Sef very young on learning good business practices. Haha… he’s smart alright… making his Papa buy his stocks.
Wow, you might have the biggest candy store in Davao. 
Comment by Toe — March 31, 2007 @ 5:49 pm
Oops… Zamboanga pala.
Comment by Toe — March 31, 2007 @ 5:51 pm
like your son, i started with business too at a very young age of 7. i was already selling ice drop and getting bets on horse races during those times. and i tell u, it molds one’s self to be good in finacial handlings.
Comment by curacha — March 31, 2007 @ 10:29 pm
Your son Sef-sef reminds me of how our politicians handle our money - we put the capital and they reap the profits. LOL !
Good insight Major Tom and as usual, business savvy is always learned the hard way sometimes burning us badly but most very successful businessmen can tell you that it’s not always a joy ride out there. Lessons learned only make you smarter
Comment by bw — April 1, 2007 @ 12:14 am
To Toe: I am a fan of Mr. Colayco too and the way he ministers about entrepreneurship, like a messiah. Once, the father of a friend—who is so succesful in insurance business–told me that there’s nothing like the budiness of selling because the room for growth is limitless and one can control his/her time and resources without any restrictions, like that for example of employers or owners. I am certain that Mr. Colayco’s views is so right for our country where in entrepreneurship, our growth as a nation can be limitless and so wide-open. Just look at China now, where it seems they sell everything, from hairpins to satellites.
To curacha: Horseracing bets? ha..ha… now that’s a cool way to earn money. I wonder if ever there’d be atime I can see a live horse race myself, just like in Seabiscuit movie. I reckoned that early training have contributed greatly to your success now.
To BW: Or my son could be a cunning politician someday and make us a fortune beyond our wildest dreams..ha..ha..
Kidding aside, it’s so true what my businessmen uncles have told me time and time again that entering business is easy to think but once you go there, it becomes a struggle. But with persistence, and luck of course, business becomes a very satisfying way of earning and gaining wealth that one could not have usually.
Comment by Major Tom — April 1, 2007 @ 2:49 pm
I have a cousin in Iloilo who was a very successful businessman and every venture he gets into seems to turn into gold. And in his huge house, there is a room that is off limit to most, but rumours persist that there is a little mole of hill “nuno”daw nang kama-kama, (probably his communication room) that’s not a termite colony and some attribute it to his success, and he just grin whenever it is mentioned. When they were still younger (wife is my first cousin)they used to visit their few children in the U.S. often And he told me that some are born businessman’s, some are working man as only 3 of his 7 boys into business..
Comment by vic — April 1, 2007 @ 3:18 pm
To vic: That’s what I also believe about business vic; some are just born into it, like some guys have all the luck. But I really wish that this is not true as a going dogma for we need more and more of our people to be in it and be successful in it that in whole, we as a nation could gain sizable economic gains.
BTW, that was one unique and mystic story about your uncle and the lucky ‘nuno’; it’s a story surely made for fiction, like a mysterious and magical novel or movie. It was interesting to say the least.
Comment by Major Tom — April 1, 2007 @ 8:26 pm
You have one enterprising young man there. That’s a good training.
Comment by ipanema — April 1, 2007 @ 10:14 pm
Hehehe, it looks like you have a future Henry Sy or Lucio Tan in the making, among your kids…
Comment by snglguy — April 1, 2007 @ 11:15 pm
To ipanema: I always thought that if ever they’d learn something significant while they’ll young, it would be entrepreneurship since I felt that my attempt at sales was somehow a luckluster one due to lack of sizable previous experience at that and now that I know that business ain’t that easy to partake, I bet my kids should learn the basics as early as now, like having fiscal strictness, personableness, sales talking and the such and such thing.
To sngl: Possibly since they have chinese blood running in them since their mom comes from a storied chinese family too–the Tiangcos that traces their bloodline to Macau. My wife’s clan even have a book just about family roots and ancestry.
Comment by Major Tom — April 2, 2007 @ 11:25 pm
wow…Sef-Sef, the young entrepreneur! lolz
He reminds me of my younger days too. I used to sell lots of candies and other goodies when I was in elementary. Maybe that’s why I ended up being in Sales and Marketing.
I agree with Toe. In college, our Marketing Prof always tells us to go entrepreneurial. Don’t just be an employee. You’ll never earn daw talaga kung empleyado ka lang unless of course super taas ng posisyon mo. Oh well…who knows Sef will be the future Henry Sy or Lance Gokongwei? Di ba
Comment by verns — April 3, 2007 @ 1:41 pm
To verns: That seems to be always the case verns; the wise thing to do as many say is to enter business and I fully subscribe to this idea since in sales, the potential for growth is limitless…
Comment by Major Tom — April 3, 2007 @ 6:40 pm
Out of topic: I like this template.
Comment by ipanema — April 4, 2007 @ 9:29 pm
I think it is the fun that Sef-Sef and his buddies are having which makes their enterprise a big success. But you are right, he needs to develop the more responsible way of rolling-over his revenues so as to grow his business.
This reminds me of the time my two cousins had a similar enterprise when we were kids. My sister and I ended up to be their biggest “suki,” especially since we both love Choc-Nut. But my cousins’ business lasted only two weeks. They’d rather be playing instead of minding their store.
Comment by eric — April 5, 2007 @ 3:48 pm
you are one supportive parent. but sef-sef.. hmm.. a cunning little enterpreneur. ha ha
Comment by bing — April 5, 2007 @ 5:09 pm
Oh, Sef-Sef, the young entrepreneur! But he’s got to learn that money doesn’t grow on trees! Haha! He probably cannot grasp yet the concept of capital and gain, as he is still very young.
,
When I was a kid, I would make ice candies and would sell them to my relatives. One time, my father took one and refused to pay for it. He was just testing me, of course. But I did not let it pass. I bugged him till he paid.
Comment by rhodora — April 6, 2007 @ 12:24 am
na encourage naman ako bigla sa anak mo, para gusto ko na rin mag business… sana meron mabiay din sa akin ng puhunan
Comment by iskoo — April 6, 2007 @ 1:09 pm
To ipanema: It’s one of the default Blogsome template and in fact used by many wordpress users in the past. Very popular I shall say. Although I am planning to install another one since my creative juices is craving once again. Again, I hope you all can bear with this little inconvenience since as I have said before, porting templates every now and then is one of my most favorite activity, especially in moments that I want my mind to be rid of everyday things; and focus on something…
To eric:That’s actually what had happend to Sef-Sef and the kids, like your cousins, he just kept his earnings and then went biking and playing all afternoon and have not shown the interest to sell anymore. However, I think it was a good start for him and his siblings for at least now, he can appreciate that he has money in savings because of a week of selling…Maybe after this Holy Week, he can try once again.
To bing: And with that sly smile at that; maybe he has an inkling how a little naughty he had been and maybe learn from it and not be as cunning as before…
To rhodora: Ha..ha..maybe he owes you know a lot of interest for that one peso debt. Ice candies is a good sell too. I remember that my mother had a good ice candy business and someone always seem to be at the gate, banging or knocking, buying ice candy. It could be a little stressful as I had observed. But they sell well, especially on hot summer days.
To iskoo: Ako nga rin pare, sana may business na viable na dumating. It’s not merely the presence or absence of capital that becomes the initial difficulty, but the right business scheme and right place and right location.
Comment by Major Tom — April 6, 2007 @ 9:36 pm
You’ve got one smart kid there, major tom.
I think you are right in teaching him the right way to do business. 
Comment by niceheart — April 7, 2007 @ 7:58 am
To niceheart: He must be and I am so proud of him actually since he was an honor student as a first grader last school year and he was promoted to the first section for having had good performance…I wish really that he maintain this level of performance in school.
Comment by Major Tom — April 7, 2007 @ 8:54 pm
I have a feeling Sefsef is going to become very rich someday. Do remember me to have said this on your blog and tell him to spare me some cash, okay? Hehe.
Comment by Abaniko — April 11, 2007 @ 8:03 pm