Singapore Entrepreneur - Entrepreneurship Spirit in Singapore

Great that the entrepreneurship spirit is still burning in Singapore. Read the article.

Singapore Entrepreneur - Market Correction Finally?

Speak of the devil! Just when I posted yesterday about a possible market correction, the stock markets across the world plunged today. Could it be the long awaited correction? It could jolly well be. It is so dishearting to see the indices all in the sea of red. But looking beyond that, it looks like a healthy correction. At least prices are trying to align with fundamentals. Continue to monitor the situation before taking the plunge immediately. It could a small window of opportunity to dive in or it could be another bear trap.

Singapore Entrepreneur - Aspiring Entrepreneur's Forum

I have chanced on a forum website set up by some aspiring Singaporean Entrepreneurs. I posted a couple of messages there. It's rather heart-warming to see the spirit of Entrepreneurship in Singapore is still very much alive. Feel free to visit: http://www.ssuf.biz/

Singapore Entrepreneur - Is the World Economy Recovering?

The International Monetary Fund (IMF) has forecast the global economic growth at 3.1% for the year 2010, compared to a dismal -1.1% in the year 2009.

Asia, led by its growth engines China and India, is slated to outpace its US and Europe counterparts. This year, China alone is expected to emerge at 8.5% growth amidst a global recession. This feat is mainly attributed to its government stimulus package and continual strong domestic demand. Developing economies like ASEAN stands to benefit from these powerhouses.

On the other side of the globe in US where the epicentre of the financial tsunami is, growth has been laggard for this year. No clear signs of recovery has emerged. Same is felt in most European economies. High unemployment rate is still being faced in these countries. It will certainly take at least another year of two for the US and Europe climb back its their pre-crisis levels.

Although the decoupling effect theory has been in the talks for some years, the impact of the US economy on the rest of the world will, nevertheless, still be great.

In this year alone, we have witnessed the equity markets rising to as much as 80% from their lowest points. Asian markets have seen the most spectacular gains in anticipation of their quick recovery.

But are all these rises sustainable? Could we see another bubble or start of a W-shape recovery, as depicted by some analysts?

One argument point about the unprecedented recovery of the global market is that most governments' stimulus packages have taken effect. So whatever improvements we have witnessed are all artificial and may not be sustainable. How much more can governments continue to "feed" their economies until they can be back on their feet again?

Nonetheless, Asia is still slated to emerge strongly from this deepest recession in 70 years. Economists and analysts have unanimously agreed that any next bet would be on Asia. The spectacular rise over the last few months in Asia markets is mainly attributed to new investment monies entering from US and Europe.

In Singapore, many counters have risen from undervalue to fair or overvalue. In the short term, analysts are divided over which direction the Straits Times Index (STI) will head.

My analysis on the current trend is that most counters have been fully valued. All earnings have already been factored into the current price. Today's STI Price over Earnings (P/E) ratio stands at about 21x. It is no longer cheap as compared to the above chart (courtesy of Bloomberg), showing the historical STI P/E. The direction of the index will really depend on the earnings announcement for the last quarter and also any development in the US economy. A small correction may be eminent in the near future. It should be healthy for the market to cool off speculation. For long term investors, the current price is still reasonable for future growth. As for short term investors, be on your toes when looking into the suitable price to enter. Don't get caught up by a sudden correction.

Singapore Entrepreneur - What's My Strategy

In May, I wrote about my investment strategy which worked during the doldrums in the stock market for the past one year. My returns for the past one year is on par with the Straits Times Index which has since regained about 60% from its low in Oct 2008.

Today, we are seeing a relentless rally of of regional markets, including Singapore's. It seems the long anticipated correction is not ready to show itself anytime soon. Anyway, I have again tweaked my investment strategy since those counters I have been investing for the past year have been constantly on the uptrend which saw very small swings in recent months. I now stay on the sidelines and await a dip in the counter and grab them at current low price. I then hold them longer, between one and three months. With the current momentum, I believe the STI will continue to grow albeit a correction may be round the corner.

Singapore Entrepreneur - Some Corporate Tips

I have been preoccupied with my work that I have been unable to update my blog for the past 2 months. Usually, we are quite busy in the last quarter of the year as most corporates are clearing their budgets before their financial year closes. Existing projects must be completed and signed for clearing of invoices and new projects are quickly awarded to exhaust their remaining funds. If these finance departments do not finish up their funds for the year, the board of directors will start questioning on unfinished funds and will consider cutting budget for the next financial year. So, as a Division Director of an enterprise, who would want budget to be cut? This is a common practice amongst corporations. Vendors like us would certainly stand to benefit from such a culture.

Although it sounds like business is good at this time of the year, there are many internal issues that need to be sorted to face the surge in projects. It is a good problem to solve. But if things are not managed and planned properly, then disaster will befall. Sales people must keep the other departments informed of incoming or potential deals, technical people must prepare for logistics and resources and project budgets must be well-defined. When orders start pouring in, it is expected that things may get quite messy and people getting frustrated. Such unpleasant matters must be managed and contained. Regular meetings must be conducted to keep everyone updated and team leaders to keep tabs on members. Ultimately, with a proper system carried out, usually problems will be solved along the way. But most importantly, customers must not feel neglected and marginalized. If a problem cannot be fixed in time, it should be made known to the customer. It should be discussed and proposed to the customer on any alternative solution. This is called managing customer's expectation.

Singapore Entrepreneur - Venturing Out on Your Own Business

Any business venture needs some in-depth study on the risks and opportunities. Here are some topics which may provide you with some guidance to ponder about.


Capitalize on Your Strength


When you wish to embark a your own business, it is best to capitalize on your own strength and experience. Try not to explore into uncharted territories without any prior studies as the price to pay is usually very high. You will find yourself in best form when you do the things you are familiar and like. If you don't think if you are a qualify to be a gastronomist, you'd better not be in food business just because you think the money is lucrative.

Be Focused, Be Professional


Companies are usually identified by their respective products or services. When you think of Honda, you think of cars. When you think of HP, you think of computers and IT services. Start your business focused in a certain area so that your customers can identify your company to the services or products they want. Don't be too diversified in your services just because you want more revenue. It not only makes you lose your focus but also customers would not have assurance that you are putting enough attention in the particular field.


When you are focused in your area, you would inevitably become an expert in that area. That is called professionalism. For example, if you set up a business that focuses in repairing computers, you would be the best person for the job and no one can proclaim he is better than you. As such, customers would have faith in you and would respect your expertise in the field.


Look at the Demand Perspective, not just the Supply Perspective


I feel many people who yearn to start their own business tend to make a common mistake in analyzing the risks. For example, a friend of mine wanted to bring in some children's boutique from China and set up shop here. He has no prior experience in this line. He claims to know the direct manufacturer of these clothes and their exclusive customer is in Japan. The supplier has offered to provide at factory price and wants him to open a Singapore market. Clothes designs in Japan usually appeal to Asian market and it seems like a good deal. He decided to fly over to Shanghai to talk further with the supplier. Now, looking at this aspect, there are still many things to study and plan before you should decide to proceed further. The most common negligence people make is they tend to indulge in the supply perspective and never thinks of the demand perspective. In today's real world, it is always easy to buy things but the most difficult to sell things. Try googling for any item you think of buying. Chances is that you will usually find the things you want from many websites. The world is so connected that information is so easily available. If you can find a good price with this manufacturer, why can't another person find this supplier and bring in the same types of clothes to compete with you? Once there was an attendee asking me in a motivation class which I was conducting. She devised some recipe on cooking beef patties which tasted uniquely good. Her friends all agreed with her. She was sure it tasted better than MacDonald's and vowed her business will outbid any MacDonald's outlet. I can't agree more that any burger would taste better than MacDonald's. But I cannot agree that taste alone can outbid a competitor. MacDonald's spends millions of dollars in advertising campaigns in upkeeping its brand name. Branding is a very powerful tool in the business world and people are very much connected with brands. Unless she has a similar budget to that, she should just focus on a different target audience who may appreciate the taste of her burgers.

I had my fair share of mistakes when I first ventured out. I had the skills to do great computer programs and could create smart card programs which only big companies could do during then. Equipped with that alone, I decided to form partnerships with my friends and started a company. We started to realize how hard is to convince customers to use our cards even if we offered whole suite of customisations for them. During then, most of them were connected with more well-known industry suppliers. We paid heavily for our lessons.

So before deciding to bite the bullet, do put more emphasis in studying how to create a market for your product and how to protect and differentiate yourself from competitors. You have to understand how the industry works in the first place before making the plunge.

Identifying a Market Gap

In the world we are living in today, everything seems to be complete. Whatever humans can supply, we have it. Computers, cars, planes, telephones, etc. The world will continue to operate even without the existence of you. So, it appears that there is no room for you to create any business for the world. That is what most people think. If you are the odd one out, and choose to think otherwise, you have the making of an entrepreneur. Identify a market gap is not an easy task. It takes experience and vision to create a demand from a gap in the market.

Singapore Entrepreneur - Get Started in Investing Today

If the previous two blogs are what you want to achieve in your life, then get started into investment. There are many ways to grow your wealth. If you are not, by any chance, an heir of an inheritance, or not having any luck in striking a first prize lottery, then investing and starting a business would be the most pragmatic ways to bring you maxium returns.

Of course it's easier said than done. And we do not want to jump into any get-rich-quick business scheme which promises you the sky. What we want to do is to do some self-evaluation on what is your capability and aptitude in a particular area. The most comforting fact about growing rich is, you do not need to be clever ot have high IQ. You also do not need a Degree or Masters in MBA. In fact, many wealthy people who I know of, are simply businessmen who didn't even complete their school. The negative impact of receiving high in education, it makes you less risk averse in taking the plunge to start a business. Armed with a degree, you'd be more attracted to join big enterprises with promising career. This is actually a trap to most people into a rat race cycle. On the contrary, people who drop out of school usually have nothing to lose and have more opportunities to try on many things. They give themselves more exposure into starting up businesses. Of course, they need a little bit of luck and lots of planning to grow their business.

I shall talk about 2 areas of going into investments; starting out your own business and investing into equities in my following blogs.

Singapore Entrepreneur - It's All In The Books

Singapore Entrepreneur - The Power of Compounding Interest

My young Engineer once wondered aloud: "When will I ever earn my first Million dollar". He started using his salary and multiplying the number of years to reach one Million dollars. He told me he needs about 25 years. I told him that is only "revenue". He hasn't factored in his "cost" which is his expenses. Furthermore, inflation rate of about 4% per annum needs to be factored in. So, in reality, he will never be a Millionaire in his life. And even if he is, 25 years later, that amount is only worth half the amount today.

The scary reality about inflation which many people tend to neglect is that it is compounding. Your wealth is eroded by 4% every year and that is compounding at an exponential rate. There is a simple rule called Rule of 72 which could help you estimate how much long today's 1 Million Dollars is eroded by inflation to half its value. If you take "72" divide by the rate of annual return, it would give you the number of years it takes a value to become double or half. Take for example: "72/4%" = 18 years. This means it will take 18 years for $1M to be eroded to $500,000 (in today's value)in 18 years if the inflation rate is 4% per annum.

On the other hand, Rule of 72 helps you to estimate the number of years it takes to double your wealth based on your achievable annual return rate. Take for example, if you manage to find an annual return rate of 10%, it would take 72/10% = 7.2 years to double your investment. The power of compunding interest is that every dollar you earned from interest is re-invested into the capital. This simple technique gives a powerful exponential growth to your investment.

Singapore Entrepreneur - Financial Freedom

When we complete our studies in school, we look for a job which gives us a monthly salary. Each year, based on performance or gratuity, we get an increment to our salary. This trend carries on as we proceed to our mid-career life. We spend part of our pay on necessities, bills, some on personal entertainment and save the remainder of it. High salaried employees like bankers and lawyers may earn at least half a million dollars a year. Thus buying luxury items like sports cars or indulging in high life are no big deal to them. The more we earn, the more we would spend. But if we lose our job, we will lose all the capability in spending. It means to say, our lifestyle is very dependent on our income. Welcome to the Rat Race society.

What is to be financial free? Financial free is a lifestyle you have created such that your passive income is enough to cover your daily expenses and lifestyle. Passive income is an income that you do not have to actively work for it, like a job. To be financial free does not necessarily mean you have to be very rich. It is with respect to how much you have to spend to support your lifestyle. If you live a simple life in prairie house and live on some vegetables and chickens you plant and rear, you don't need any money to spend and you don't need income. Hence you are financially free. On the other hand, if you have a family to feed or a lifestlye to enjoy, you would then need a stable income to support your expenses. If this income is passively earned and is able to support your lifestyle, it means you are financially free. You are out of the rate race.

Examples of passive income are dividends payout from investments in equities, or owning a business which constantly brings in healthy profits.

Singapore Entrepreneur - Blowing Up Another New Bubble?

This May has seen one of the most spectacular run-ups in the stock market amidst an economic crisis. Most Asia markets have seen almost a 50% gain since March. From a low of 1600 in March, The Straits Timex increased to 2400 points in May. The Bull run is cooling off now in June after investors start feeling that they are not getting much fresh data to support a quick market recovery. Before we look out for any silver lining in the clouds and try to jump the gun again, let us take a backseat a little and recall slightly on the past few crises.

In 1999, the world was faced with an eminent danger of a huge collapse from what was known as the Y2K bug or Millennium bug. To combat this bug within a short timeline, then Fed chairman Alan Greenspan released huge credit line to allow corporates to tackle the problem. When the world ticked its way past 12 midnight into Year 2000, nothing of the worst anticipated happened. The world then turned its attention to the excess pool of liquid cash amongst banks and investors. This coincided with the internet craze in that era, which brought about a dotcom boom. The world started blowing a huge bubble which finally burst in 2001. Gullible investors were blindly led to invest into any internet startups which had even out-of-the-world ideas.

US went into recession after the dotcom bust in 2001. Then the 911 incident caused a double whammy to the world economy. Amid the recession, Alan Greenspan introduced stimulating measures like cutting the credit interest rates on several occasions to near zero percent. When the US economy past its bottom in year 2002, investors started to get restless again. At about 1% rate from banks, it bored most investors who were looking at much better returns. The US economy enjoyed its boom from 2003 to 2007. So much money was earned during this period that many types investment products were born, including investing into US housing market. The US started blowing a new bubble when investors started investing into toxic sub-prime products. Banks around the world was enticed into this lucrative market which eventually blew and brought about one of the history's worst financial crises today.

The uncanny resemblance of creating these 2 giant bubbles makes me wonder if the current recession in the US is nuturing another new possible bubble of the future. Although recent news are reporting data that shows evidence of "green shoots", many spendings around the world are still artificially created with government stimulus packages or government printing more money to buy up bonds, like what the Bank of England is doing.

The several events described look like a chicken-and-egg situation. If governments or authorities do not do anything, we are destined to stay for a long and dreadful downturn. Even if we jolly well know it is a new bubble being blown, we are going to pack off the idea that it will not blow up until at least a few years away. It is still better than being stuck in the mud, isn't it?

Perhaps, we have to just accept this is how the world economy works; a new bubble is being blown each time the economy goes bust. You could well say that the world is like a reality TV show actor, and the producer is the rich economies, who creates the storyline to stimulate viewership. Everything is artificial.

Nonetheless, who cares. As long as you earn real money, that is real. But the artificial economy poses many traps. Keep your guard each time when your asset grows. Bursting bubbles are usually easy to spot. The problem is people are always blinded by greed and they never seem to learn their lessons, as seen from previous events.

Singapore Entrepreneur - The Spirit of Innovation

When I started my company 8 years ago, we had nothing to sell. We literally gave customers a blank sheet of paper and let them fill their requirements and we wrote programs conforming to every single bit of them. While we were small, we were always willing to customise our applications and systems to suit customers' requirements. From such customised applications, we started modifiying them into our own versions and slowly built up our products over the years. The key to our success today is our spirit of innovation that is kept alive. As products matures with the company, we always leave a space for innovation and customisation. We have never rejected a customer just because we do not have the product. Instead, we listen to their needs and assess the feasibility. We always invest in the customer for future scability. Also, innovation on products can also help in building other verticals of industry.

Singapore Entrepreneur - What's My Strategy?

My simple strategy has so far been giving me good returns since the stock market crashed in Oct 2008.

Before the crisis, I had been practising value investment, the sort of strategy that Warren Buffett, the greatest investor, has been practising in his life time. I used to look for undervalued counters by doing financial analyses of the companies. Usually they were small caps. During the 4 years of rally from 2004 through 2007, the values of the counters I bought trebled or quadrupled which brought me a lot of paper gain. However, being a "value" investor, I decided to hold them for a long term. But the stock market crashed dragged all my counters beyond the cliff and their values plummeted like free fall. To add salt to the injury, many of the counters I held were S-shares which have been in the bad light from a series of accounting scandals.

The bad experience triggered me to tweak the strategy of my investment. Instead of brooding over the huge loss of investment from an unprecedented turn of the market, I thought to myself: If the market crash can cause many riches to rags, it is also an opportunity to turn rags to riches.

When the market bottomed out in Oct 2008, it provided a golden opportunity for me to do some financial analysis of various counters. I turned to blue chips and large cap stocks during then, since I got burnt by penny stocks previously. Many of them were offered at unbelievable bargain prices, some under their net asset prices. I started grabbing some counters. This time, I only focused on a couple of blue chip stocks. But because nobody had any idea where the bottom was, I was also afraid. Hence, I held lightly to the stocks. Each time the counters rose slightly, I sold them off for a small profit. The market turmoil created wild see-saw movement which allowed me to buy low and sell at profit each time for several months.

This strategy should only be applied if you have hard cash to standby in case you get stuck should the market turn really sour for a second time. My "long term" strategy is still in place because at each price I buy, I know it is still under-value compared with during good times. And I have to believe that market will eventually recover one day. On the other hand, since the market has been very sentimental, any gains will easily erode on any negative news in a market doldrums. So, I combine with some technical analysis of the counters and sell them off when there is some profit.

Each investor has his own style of investment. By my descriptions, I do not recommend any contra trading and my advice is to trade within your means. Institutional investors, hedge funds and other mutual funds dictate 90% of the share market and small retail investors like us cannot possibly outwit these people as they employ tons of brilliant brains to analyse stocks. So whatever strategy you adopt, do your sums carefully.

Singapore Entrepreneur - Start of Correction?

With the recent correction of the stock market brings about many speculations if we are finally bursting the bubble of the bear rally. Some analysts are commenting that this is a healthy correction in view that many counters have ramped over value since the May rally. This may bring an awakening call to some pundits who have been wanting to make a killing in the stock market. June's performance should see a flater curve as most investors have already fully valued the market since May. The momentum of the rally is unlikely to last as there is no new data to support any recovery of the world economy. On the other hand, it does not mean you can't dip your hands into the market during this period. For me, the last stock market crash in Oct 2008 had in fact brought me a small fortune from a simple and effective method of buying. Ever since then, I have adopted this strategy for as long as the economy is still seeing no sign of turnaround.

Singapore Entrepreneur - Is The Worst Over?

We are experiencing the greatest financial crisis ever in our lifetime. But recent several indications seem to suggest that we are out of the woods; stocks around the world have been rallying furiously, COE for cars have suddenly spiked indicating higher demand, and crowds have been snapping up newly launched private homes. So, is the worst over?

When the credit crisis unfolded in October 2008, Lehman Brothers, one of America's biggest lenders, was the first victim. Its collapse alone rippled through many big banks around the world which amassed losses more than US$1.6 Trillion. Following that, we saw big names like AIG, Merill Lynch and UBS at the brinks of collapse and needed desperate government fundings. Stocks around the globe saw their biggest plunge in 6 years. Even non-banking bigwigs like General Motors, Ford and Chrysler all went into deep financial difficulties. Iceland was the first country to declare bankrupt and had to be bailed out by IMF. Following all this mayhem, all sectors were affected with most 2008 annual reports revealing either losses or sharp drop in profit.

We have seen the worst unfolding before us. Whatever should happen has already happened. General Motors has just officially declared bankrupt after failed attempts in appealing for cash injection into the company. It beats me how many more job losses will follow after this. However, the market seems to shrug off these news and continue its rally. Even the H1N1 scare is not putting investors off. So effectively, we have come to a ground zero and whatever is going to happen, it won't be worse than what has happened. There may be more meaning to the term "Financial Tsunami". Tsunami are big waves that sweep everything on shore to destruction. The incident is momentary but the aftermath is catastrophic. It takes painful years to rebuild houses, for people to go back to their normal lives and overcome the grief over the loss of their love ones. You can liken this analogy to the financial tsunami. The collapse of the financial system in the US caused a tsunami to the global economy which all happened in one go. So you can actually take comfort that the worst is actually over and now we are on a long road to recover and we do not expect any more bad news.

On the other different camp of thought, you may want to consider that Obama's US$787B stimulus package is actually taking an effect to cushion the crisis. Governments around the world, including Singapore's have their own stimulus plans. So, in fact, whatever we are seeing today are just artificial. When people feel that things are not appearing as bad as they seem, they start coming back. The recent stock market rally may be a good indication that people are having a false sense of hope and are picking up bargain counters. Pessimists are saying this is a clear bear rally which has no ground to sustain. There are no good news in the US to report that could suggest the rally. It is just that news are not as bad as expected.

So how do you explain for private home sales being snapped up like in the heydays we saw in 2007? If you look at Asia during this crisis, it actually withstood much better compared to the Asian Financial crisis back in 1997. The banking system was beefed up ever since. It is also said that many people actually earned a lot of money during the heydays from 2004 to 2007. This gives them very much buffer to cushion themselves from the current crisis. Such people are out there today hunting for bargains like houses and cars. Private home prices saw their plunge up to 30% from its peak less than 2 years ago. The deferred payment scheme may have caused this aftermath effect. HDB home prices are closing in on mass market private condominiums which see many HDB folks grabbing the chance to upgrade. As a result, we see a spike in demand on mass market homes. But most are one-time buyers as they cannot afford more houses like other investors. So the demand may be unlikely to sustain. Once this batch of buyers are settled with their new homes, there will be left with no one out there to buy anymore.

In whichever camp of thought you are in, it is always wise to consider carefully before you jump onto the bandwagon. You may miss the boat if the market continues to rally, but at least you do not fall into a trap if all turn out to be a false rally. I have learnt my lessons. I'd rather watch from the sidelines if I have missed the boat. With money on hand, I still feel safer. There is always another time to invest again. However, if you are currently sitting on some gain from the recent rally, you must know when to exit. Warren Buffett had this saying: "You should be scared when everyone else is greedy. And you should be greedy when everyone is scared".

Singapore Entrepreneur - SWOT Analysis

Before venturing into any business, we must always do some sort of risk analysis and calculations. The most fundamental method which most people adopt is to use the SWOT analysis to determine the viability of the venture.

SWOT, which stands for Strengths, Weaknesses, Opportunities and Threats, helps us to audit the overall strength of a business in an industry.

Strength
You must identify the strengths of your company which can stand out above the rest. What makes you or your company different from other competitors and why customers would want to buy from you. For startups, one of the key strengths they can stand against well established competitors is to provide more customized services and exercise flexibility towards customers. After recognising the various strengths, you must fully capitalize on them.

Weaknesses
You must identify the weaknesses of your company which may be lose its competitive edge against others. Examples of weaknesses of new startups are the lack of products and quality control or the lack of customer references. No matter how small they are, steps must be taken to improve on the weaknesses and eventually turn them into strengths.

Opportunities
This usually refers more towards external influences. For example, change in lifestyle of people may create a new demand for certain products or services. Some businesses like retail are location influenced and people can pay high premiums on rental to create great business opportunities for themselves.

Threats
Threats are external factors which may cause negative impact on the business. Examples are like change of government rules or policies, competitors launching a new product, or behavioural change in consumer.

Analysis of Michael E.Porter's 5 Forces Model

Courtesy of Wikipedia

Michael E. Porter, the world's renowned financial guru from Harvard Business School, has devised The 5 Forces Model, as shown in the above figure. It describes the external effects on a business. This model can always be used anytime to gauge the strength of a business from external factors. Even before you start venturing into a new business, this model is useful in helping you to assess the risks and also other competitors in the industry.

Let's take my new childcare venture as an example and view its viability.

Force 1: The Bargaining Power of Customer
This defines the buying power of the customer. If my company is a small setup without a brand establishment, there is no pull factor for parents to send their kids to my centre. I have no bargaining power and parents/customers may demand to lower my fees or demand for certain things to suit their needs. As a result, I may succumb to their demands in order to keep them as customers. This may become a vicious cycle.


Force 2: The Bargaining Power of Supplier
But if I am part of an established brand like a franchisee, whose name has been established over the years and has the critical mass, is able to command certain premium in fees. Parents/customers have less power in influencing how fees are set or programmes are run. Because of its pull factor, parents may flock to sign up for their kids and waiting list may grow. In such cases, parents may even be nonchalant about fees hike.


Force 3: Competitive Rivalry within the Industry
In a saturated market, usually the customer is spoilt for choice with so many suppliers. Thus, your business may be forced to selling at low prices into order to sustain its market share. On the other hand, if your services are hard to find in the industry, it is most likely you have an upper hand in commanding prices.

Force 4: New Entrants
Lucrative markets may invite more new players to come in and compete. If the industry has high barrier of entry, it may discourage most new entrants. For example, in childcare business, there are many strict rules and regulations by various government agencies to safeguard kids' welfare. There is a long and costly process in getting these approved. This may deter many people without experience from entering the market. In a way, the market has rather a high barrier of entry.


Force 5: Threat of Substitute Products
Some parents have their kids' grandparents or maids to look after them. They may also send them to kindergarten's playschool. These are substitutes of putting children in a childcare.

Starting a New Business

It has been a month now since I last posted. I have been busy setting up a new business. It is an education business. I have been very passionate about education business and had never seriously been involved in this industry. Firstly, the love of knowledge sharing with others have always made me keen in the teaching industry. I always thought to myself, if I hadn't been in business, I would have been a teacher or something. Secondly, I always believe that learning is a lifelong thing and there is always demand regardless of the economy situation.

The business I have started is a childcare business. It may not sound very exciting to some skeptics. The start-up cost is high and the return-on-investment may not be attractive. Nonetheless, I view this business as a stable one in the long term. The government is encouraging its people to send their kids to pre-school education and MCYS has strict guidelines which make the entry barrier rather high. But above the rest, it is the passion put into the right place that will naturally bring the money in later.

Packaging is Paramount

In my last post, I was talking about the value-add of me when conducting business with the Caucasians and the Chinese. Since the product is from China, and the user is from US, why is there a need for me to be there? I possess the know-how of the system and understand the requirements of the customer. Although the Chinese can manufacture the thing we want, they lack the ability to provide the final touches. But I am able to deliver the product desirable to the customer. It is neither magic nor uphill tasks that I have to take. It is the simple knowledge and experience that I have gained from my work in Singapore. Packaging is so important in this modern world. You can make a very good product, but without a proper packaging, it loses its shine. I liken my service in this case as being a gift wrapper, giving the gift the final touch so appealing to the recipient. Of course the Chinese are smart and will learn the ropes very soon. So what do I do? It is the continuation of our innovation and improvement of services to the customer that keep us ahead of our suppliers or competitors.

Korean car manufacturer, Hyundai, can't make engines as good as the Japanese, but are able to keep their car sales on par with Japanese because they can continue to keep their car outlook so appealing that give their Japanese competitors a run for their money. HTC phone is considered a late comer in mobile phone market but it is making a big impact because its appealing look and feel, nevermind if it is really as good as the iPhone. The essence in making a product is not about making it so perfect. It is about making it desirable to the user. When profits start rolling in, it is when you take this money to invest in further development for the version 2, 3 onwards.

Coming back on the point about my experience and know-how that put me on the edge. As Singaporeans, we are considered the most westernized Asia. The cosmopolitan environment of Singapore gives us the exposure to the world. Also, as a first world country, our level of expertise is on par with the western world. It is not that we have to idolize the Americans or Europeans or try to be like them. As a small country like ours, we have to keep ourselves abreast with things. The only resource we have is our brains. We do not have deep oil wells like the Arabs have that can last them another 150 years. We have to capitalize on our strengths and continue to provide the services the world needs. The last thing we want to be, is to be complacent about ourselves.

MM Lee once said something which has set in my mind deeply. He said the world will continue to exist and operate even without the existence of Singapore. But the world will change if America or China ceases to exist. I would liken Singapore as a small puddle of water alongside a wide flowing river. If we do not do anything to this puddle of water, it will be stagnated and eventually be dried up by the sun. We have to deliberately create an inlet and outlet to divert some water in and flow out. Then the puddle water will not dry up and will always be kept alive by the flowing river.

Being Bilingual is Beautiful

I just came back from a business trip in China and Hong Kong. In China, I worked with the local people. Most of them could not speak or hear English, even the educated ones. Some could read simple English though. We dealt with Westerners, Indians and Filipinos there. In the many meetings, the Chinese, our partners, appeared clueless, because they couldn't understand a word in English. Suddenly, I felt myself so important and useful because I understood both languages. I became their interpreters and helped bridge the gaps between the customers and suppliers. Although, I must admit my standard of Mandarin is not polished, it is enough to converse with the local Chinese. I was held with high regard in the group, just for being bilingual. Furthermore, my strong ability to document all the work done by the Chinese and present to the Westerner counterparts, made my presence so important.

I felt fortunate that the education I was given in Singapore has geared me to posses such soft skills so important when conducting business at international level. In those days when I was a student, Mandarin was never held a high regard socially and when you spoke it with your friends, you were deemed as 2nd class. I even despised myself for knowing how to speak in the language. Today, I just regret that I didn't put enough effort in improving my Mandarin. I was brought up in an English speaking family and couldn't speak a word of Chinese when I started school. My parents couldn't speak well in the language either. I was like deemed to be the more "angmoh" type. I struggled with my Chinese subject all my years in school and had never done well in the subject.

Our MM Lee, recently reiterate the importance of nurturing Mandarin to our young today. He has relentless, all his life, stressed the importance of learning Mandarin. Today, as being a third generation of Chinese immigrants in Singapore, I am grateful to him for his long running initiative which still very much alive today. The only gripe I have though, is the ban in Cantonese language over TV in Singapore since the 70s, that has caused me the inability to speak Cantonese in Hong Kong. For that, I lose the edge to my Malaysian counterpart who possess the Cantonese speaking knack, picking up from the countless Hong Kong dramas they usually watch. One point that I don't quite agree with MM Lee is that dialect will interfere with learning Mandarin. Children has the ability to pick up several languages simultaneously.

Nonetheless, looking at the economic outlook for the next few decades, China is continuing to its quest as a big economy powerhouse. It has become the 3rd largest economy in the world today. Being a Singaporean, we are just a little sailboat which needs to sail with the wind. Possessing the skill of the 2 most important languages, it's like having a powerful engine and a powerful sail in the boat. In order to differentiate ourselves from Mainland Chinese, is to possess the ability to bridge between the East and West. In the very cosmopolitan nature that Singapore has, it is our very edge against the typical mainland Chinese. It takes a generation to learn a language. To those non-Chinese speaking Singaporeans, my advice is to go forward to pick up that language. You will learn to appreciate.

Related links:
1. Speech by MM Lee Kuan Yew
2. Yahoo News

What's that so called Sub-Prime Crisis?

The sub-prime crisis, started in 2007 in the US seemed to have nothing to do with us here in Singapore. But the debacle has taken its toll on us today. Everyone's livelihood in the world today is affected. So what on earth is Sub-Prime??

It looks like we can never get away with the saying: "When Uncle US sneezes, the world catches a cold".

Nonetheless, here is a good video clip which has made a complex story very simple to understand:

The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

We are Hiring! (2)

The reponse of our job ad was quite overwhelming. Two positions were open; one for Admin and another for a Technical position. From the trend, it looks like the job market may not sound as dire as what's reported. Most applicants are still holding onto their current jobs. Perhaps they are looking for a switch. However, there are quite a number of fresh graduates applying for senior positions. I am not sure if this is a sign of desperation or just trying their luck. There were also a handful of applicants who apply for position which they do not have relevant experience. Beats me on their intention. Anyway, that is all I can share with you. For the rest of the activities, they are confidential.

You Justify Your Own Existence

Many people envy what I do, running a business of my own. During the bad years in my business, I used to envy those who had proper jobs. I used to think the working in the company as an employee is always the wisest and safest choice, just like what old folks like to say: "Study hard and you find a good job". Recently, I read an article from the papers of what an expat's view of Singaporeans. She said, Singaporeans are like tropcal fishes in a nice aquarium. The job of the fishes is to look good and survive well in the tank. As long as the owner takes care of maintaining the tank and feed the fishes well, the fishes will lead a good life. Comparing the fishes in the wild lakes and oceans, they are exposed to the countless of dangers and enviroment change. They have to learn to survive and only the fittest survive.

Thinking of this analogy really makes me feel the same way about typical Singaporeans, even as a Singaporean. Some Singaporeans who are in their job, gripe about their jobs, about the unfair benefits their employers provide and about the environment they are in. They do their jobs well and think the rest will take care of itself. I do not envy employees anymore as I feel each person justifies his own existence.

A company evolves from its own nature and the market they are in. It justifies its own existence and positon in the market. If it doesn't justify itself, it would be closed down after all.

When you work for a company, you justify your own existence. You should treat your job as a monthly business transaction with the company. Your salary and benefits are returns of your service to the company. The company is not a charitable organisation and does not owe you a living. If you don't like your job and do not contribute, sales or productivity will drop. You will lose your job eventually. It is an organic cycle.

Technorati Profile

We are Hiring!

I am advertising for some positions for my company this weekend. I will see what response will be like and assess the types of people who will apply. I will then have a better uderstanding on the current job market status. I expect our email account flooded with CVs. I will give you some updates next week.

What I Look for in a Job Applicant

I have run my company for 8 years now and have seen it grow from a 3-person company to a 25-person company today. Over the years, I have screened through thousands of CVs and have employed different types of people, both inexperienced and experienced. So what do I look out for in an application and a candidate?

Just imagine, each time we post for a position in the job portal or papers, we get tons and tons of email applications. I would classify these applicants into 3 broad categories: The Just-try-their-market-value-only, the Sincere ones and the quite Hard-up ones.

The Just-try-their-market-value-only applicant

These category of applicants are the most insincere ones who just want to see if there is any opportunity to change from their current jobs. They can be spotted by submitting their CVs which may not be relevant to the position advertised. Their CVs are always all ready to be sent out. Sometimes, their cover letter may even spot their intention with the wrong position in the title. It simply shows they have been conveniently submitting CVs to many companies. This category of applicants appear mostly in good times, when everyone is looking for career advancement.

The Sincere applicant

This category is of course the ones that employers seek. It is not easy to pick such CVs out. But putting effort in writing a good cover letter and concise CVs do help to play a part in catching the employer's attention.

Usually fresh graduates fall into this category as they have no working experience and are genuinely looking to start their career.

The Hard-up one

This category comprises those who are out of job or whose current job is in jeopardy. They are usually in the mid-career age and are married with children. Foreigners with work permit passes easily fall into this category because their permit expires within one month upon quitting their current job. These applicants come in hordes during bad times.

Tips to Landing an Interview:

1. Include your photo. Many people neglect this. Your photo is the first impression that the employer will get. A picture paints a thousand words.

2. Write a good and sincere cover letter. Write briefly about yourself and how you may be sutiable for the position.

3. Organise your CV layout well. Lay out your work experience in point form for easier reading. For each company you have worked for, you may want to classify the different projects that you have involved. Do not be too wordy because the employer has many other CVs to read.

4. To show your sincerity, you may want to be kaisu. Besides sending your application online, you may like to send a physical copy via snail mail. Remember, you are competing with hundreds of applicants out there. By sending another hard copy may give yourself more chance. It leaves greater impression of you if the employer has seen your email application and also received hard copy later. It also helps to create the impression of sincerity of the applicant.

5. Make a phone call to the company if you do not hear from them about 1 week after the closing date. Although it may sound bashful, it creates an impression to the employer. He may try recalling your application if you make the call. But don't overdo it. You may sound more like desperate than sincere.

For Those Fresh Graduates Looking for Jobs (2)

I graduated from UK with an Electronic Engineering Honours degree. It was in 1998; in the midst of the Asian Financial Crisis. The economy was in the doldrums. There were retrenchments everywhere. The Recruit section in the papers got thinner by the day. I took it easy for the first 2 months after I came back to adjust myself back to the climate and lifestlye. When I got serious in hunting for a job, I began to realize the dire state of the economy. I went to job agencies, cutting out recruitment ads and sending countless CVs, and even perfecting my resumes. My pride of being a new university graduate faded by the day when no employer seemed to be interested in me. Either there were long queues at walk-in interviews or my sent-in CVs never seemed to bring any response. I started to adopt a new strategy after much thought. The mainstream job-seekers would go for the Recruit section in the Straits Times. Instead of following the crowds who aim to join MNCs and government agencies, I decided to look into the Classified section instead. I started to look for the smallest possible ad that I think hardly anyone noticed. True enough, after sending my CV to 2 companies, I was called for interviews. I was estatic. Both were local SME companies. One was in the M&E industry for a site Electrical Engineer and the other was for a System Development Engineer. After both interviews, thanks to my good presentations, I was called up again for 2nd interview by both companies. Eventually, I was offered a job by each company. I suddenly felt spoilt for choice. Nonetheless, after much consideration, I took up the 2nd offer. It was a humble setup with about 30 staff. From there on, I never looked back and started my career there. Although I didn't stay for long in the company, it was a great springboard in my career and I joined a big MNC after gaining some working experience.

Growing up from bad times have trained me not to take things for granted. It is always good to start from ground zero so that your fundamentals are well founded. When the times turn for the better, you will be the first to benefit. To the fresh graduates who are seeking jobs today; don't be discouraged. When there's a will, there's a way. Be humble and work your way hard to land a job. It's not a time to be fussy anymore.

For those Fresh Graduates Looking for Jobs

I had been invited for various talks in universities and polytechnics. I spoke to aspiring students and graduands who are ready to enter into the working world. I hear the woes from these young people and urge me to post some comments here. Looking at the outlook of the economy, landing on a job is really tough. Each job posted in the ads, has thousands of CVs pouring in, each screaming for attention. Even jobs which only require fresh graduates, applicants with many years of experience also come knocking. I just recall that I posted for a temporary IT position recently. Since it was just a position for 3 months, I put in the Straits Times Classified, as small as possible to save money, and it was a walk-in interview. Guess what? More than 30 people turned up at my office! Almost all of them armed themselves with beautiful CVs and university certificates. Although I was spoilt for choice, they were mostly foreigners, whom I can't hire for such short timespan. These people who are genuinely well equipped with knowledge and experience, and most importantly not asking for high pay. So for those aspiring job-seekers, you have to lower down your expectations. I can share with you my own experience as a new graduate 11 years ago, what I went through and the lessons I learnt. Also, as an employer today, what I expect and would look out for in an applicant.

Stay Sane Amidst the Gloom

This crisis came like a tsunami, in the midst when everyone was enjoying a prosperous time. It is unimaginable that just a year ago, stock market was still vibrant, people were enjoying their year end bonuses and retail shops enjoying their ringing sales. Everything seems to come to almost a standstill now. In the 5 stages of Grief; Denial, Anger, Bargaining, Depression and Acceptance. After last October's financial debacle and stock market going into a tailspin, most people were in the state of Denial and Anger. Whatever happened in the US seemed only distant news to many people who still hoped things would not overflow to Asia. The full impact of the financial fallout was not felt immediately because most of us were still not out of job. At the back of people's mind, they say to themselves "This won't happen here and won't happen to me". That's called Bargaining. Today, people are feeling the real impact of the economic crisis. People are losing jobs, stock market value has gone down more than 50% from its peak. People have come to terms that the crisis is real and present. I have known of some people who have slipped into depression because of the stress to keep their jobs or the financial burden in their lives. My advice is, to stay sane amidst this crisis. Only the right mind can help you manage things. The most powerful part of a person is the mind. There's a saying: "What the mind perceive is what you will conceive". It is only from a sane and clear mind, you will then be able to think and manage problems.

Winner of several accolades

A success story of Entrepreneurship

Top 15 Entrepreneur of the Year 2006

The global financial downturn has allowed me take a step back to ponder how much I have gone through in the years of my career and also look what lies ahead for me. I graduated in a year amid the Asian Financial Crisis in 1998, very much in the same predicament what today's graduates are facing. While I was building my career as an Engineer, I decided to take the plunge and started a business with 2 friends in early 2001, not knowing the following few economic crises would come tumbling down one after another. There was the Dotcom crash in 2001, 911 bombing, Iraq war and Sars in 2003. Weathering through so many economic crises in such a short span of 10 years is by no mean feat, especially when you are running a small-medium business. Today, I have emerged a better person and more importantly, financially comfortable despite the current worst ever global crisis. It seems like in each crisis, no one has a crystal ball or a magical idea to tell you when the world is going to emerge from it; not even the man heading the top post of the world or that top financial guru. For those like-minded friends out there or those people feeling the blues of the economic gloom, I hope my blog will bring you some comfort and encouragement, and help you look beyond the dark tunnel ahead.