The Newsletter of the www.TrulyRichClub.

com DECEMBER Volume 25, Number 1

Q: What Can Harm Your Business? A: A Lot of Available Cash

Call me crazy. But someone who is starting his first business shouldnt have a lot of cash. I believe a lot of cash can harm you more than help you. So if youre starting your first business now and you have very little cashthank God! Its one of His sweet blessings to you. Why? Youll learn to make do. Youll learn to work from home. (Dont rent office space yet!) Youll learn to use what you have. (Dont buy new stuff yet!) Besides, it will be a fantastic story to tell 20 years from now. Youll be able to tell your kids, I started this giant company 20 years ago in my living room. I started with only P15,000 Heres another reason why having a lot of money at the start of your first business is bad for you First Businesses Usually Fail When you start your first business, youll fail. Sorry to be the one to bring the bad news. But if you really think about it, it isnt really bad news. Because failure isnt Gods Rejection. Failure is Gods Redirection. No, not ALL first businesses will vanish into thin air. Some will survive. But these will be revised, rehashed, redesigned, rebuilt My Story of Failure Once upon a time, I had P600,000 in savings. I was bent on starting my business. Feeling confident because I had P600,000 in my hands, I looked for a business. Theres the mistake. Your money isnt the reason why you go into business. You go into a business because you have a GIFT you want to give to the world. Not your money. Its your gift that people need! Anyway, back to my story. Someone told me about a hotdog stand in a brand new mall. Since I had my cash, I bought the franchise for P250,000. Monthly rental was P18,000. I still had money left! What should I do with it? (You see, when you have money, your hands itch.)
Page 1 of 5

The mall offered me another stall, right beside it. Since I had money left, I bought another franchise for another P250,000. This time, it was an ice cream scooping station. That required another monthly rental of P18,000. I figured: What could go wrong? It was such a simple business. But everything went wrong. Looking back, I did no research. (Crazy!) I never studied who the main shoppers were, and thus, whether they would like hotdogs or ice cream. (They didnt.) I also didnt know anything about the business. I didnt even look for a mentor who could guide me. It was all a leap in the dark. I literally jumped into it blind. What happened? The moment I opened it, the business began to bleed. My monthly expenses were much more than my profits. Instead of earning, I was losing P20,000 a month! After five months, I closed the stores. I lost P600,000 on that business. Yes, I lost everything I had. Focus on Your Gift, Not on Your Cash Having big cash and little business sense is a dangerous mix. Because youll be in a hurry to plunk it into your first business, not understanding that first businesses usually

fail.

My suggestion? If you stick to your core gift, youll be able to find a business that doesnt need much cash. My first successful business was corporate seminars. Why? Communication is my core gift. I spoke well. I was doing it for decades. Sure, they were in religious settingswhere speaking fees were tiny or non-existent. But some companies were already inviting me to speak. Could I really charge speaking fees like other corporate speakers? I decided to tryand KABOOMmy first successful business took off. How much capital did I need for this business? Nothing. Zero! (Note: Today, I earn enough from my other businesses, I now donate my speaking fees to my ministry.) My Second Business Needed Only P100,000 My wife and I never sent our kids to school. Instead, weve been nuts enough to homeschool them. And we loved it. When friends learned about it, they wanted us to help them homeschool their kids too. Because it was our passion, we said yes. So I created Catholic Filipino Academy. How much capital did I need to set it up? Around P100,000. To buy one computer and one desk. (That was our entire office.) Plus advance payments for a bunch of writers who made our teachers manuals. That was it. We started with 36 kids on our first year. Around eight kids were the kids of the staffso they were free. We really had only 28 paying students.
Volume 25 Number 1 December 2010 Page 2 of 5

That was five years ago. Today, we have 200 kids enrolled. We aim to keep growing every year. My Point? Start Your Business without Much Cash I could go on and on, telling you one story after another. Im allergic to wannabe entrepreneurs with lots of cash. From experience, they lose it! Whats the winning combination of entrepreneurial success? A lot of passion and very little cash! Why? Because very little cash will force you to be more creative, more imaginative, more persevering, more sacrificial Stuff necessary for a great entrepreneur. Believe me, Ive heard of horror stories of kids of very wealthy parents who started businesses with the help of Daddys money and then lost millions. Because money is too easy for them. Money isnt valued. So theyre careless with it. When You Have Much Wisdom, Thats the Time to Get Cash Later on, as you grow in your business skillsand you begin to taste small successesthats the time to borrow money to expand your business. For example: As I entered into new businesses and real estate ventures, I borrowed money. But when I did this, I already had some business skills under my belt. At one point, my total debt was P10M. Thankfully, all these were loans not to banks but small loans given to me by Kamag-anak Incorporated: My mother, my sister, my mother-in-law, my uncle-in-law, etc. I paid them a monthly interest on their moneyall postdated checks. These people knew I was trustworthy. (This is essential. Business is about relationships.) New Entrepreneurs Workshop in January I want to help you start your own business. Im organizing an Entrepreneurs Workshop in January 8 and 15 here in Manila. It will be very unique (and very effective) because participants will be bringing with them three business ideas which they can test while taking the workshop. I cant tell you much about it yet. But youll receive an email from me next Monday, describing it. But even now, block off these dates in your calendar. May your dreams come true,

Bo Sanchez

PS. Only 45 participants will be accepted in the workshop. So if you really want to join it, watch for my email on Monday.
Volume 25 Number 1 December 2010 Page 3 of 5

QuestionsandAnswers
Note: Names have been changed to protect the privacy of the letter-senders.
Is ATR Kim Eng Okay? Hello Bo, Just want to know if you are familiar with The Mutual Fund Management Company of the Philippines, Inc. (MFMCP). I am investing on their ATR Kim Eng Equity Opportunity Fund. Is it a good mutual fund company? Thanks, Jane Dear Jane, Yes, ATR Kim Eng is a good mutual fund company. Theyre one of the mutual fund companies Id recommend. The others are Philam, Sunlife, Philequity, and First Metro Blessings, Bo

Where Can I Invest My P100T? Dear Bo, I am considering a sum of P100,000 to invest in stocks in a big company in Manila, if viable for me, if not then in Davao City. Where and how should I invest this money? Please help me with your advice. I need additional income, together with my monthly state pension from UK. Im still paying a big amount for a piece of property in Davao City. Its really my dream place, hoping andpraying that I can build my modest dream house, and plant different variety of flowers, fruittrees andvegetables. More power and blessings to you! Carmen Hi Carmen, You can invest P100,000 in the stock market or the mutual fund. For the stock market, you can invest via Citiseconline.com from anywhere in the world. For mutual funds, you can check out these companies: Philam, Philequity, Sunlife, First Metro, etc... But if your goal is to earn extra monthly income, these paper assets investments wont fulfill that goal. The stock market and mutual funds are for your long-term investments for your future. To earn a monthly income from your P100,000, you would need to invest it in a business. Obviously, the risk is higher. I strongly suggest you study the business youll get into, stick to your core gift, and look for a business mentor in that particular business.Join seminars and workshops.Even better, work first in an existing business that you want to build. Blessings, Bo
Should I Leave My Job? Dear Bo, A million thanks to you for sharing your talents and inspiring messages. Because of you, Istarted a baby investment in the stock market. My question is about my present job.I started a photocopyingand school supply business with my wife. Our plan is to expand to two more copy centers by end of 2011. But Im also a sales supervisor in a company that sells photocopier products. Is it a conflict of interest with my present job, because Im sellingphotocopier products? What would you advice formy current situation? Should Ileave my job to focus on my business or stay for a while making our business grow? Whatshall I do? Sincerely, Rogelio
Volume 25 Number 1 December 2010 Page 4 of 5

Hi Rogelio, Congratulations on starting your new stocks investment! About your business: I dont see a conflict between your job as a salesman and your business.So keep at it.You can resign from your job on two conditions: (1) when your business profits are now twice your salary; and (2) when you see great expansionmore photocopying centers which you can no longer do because of your job. Blessings! Bo Business with A Friend? Dear Bo, The Truly Rich Club has really changed my outlook in life. I love listening to you, Bo. The club has taught me to always have a positive mindset. Financially, it has motivated me more. I am writing for an advice that I need. Recently, I proposed with my friend to start a business with me. I will be the one responsible for the capital and finances and she will do the labor since I live abroad. But DTI registration for partnership isnt possible. And the business account in the bank under our name isnt possible, too, since DTI doesnt register partnership business anymore. One reason I proposed for a business with her is because I want a passive income and for her to have an income as well. I know that she has been struggling so much financially. But being away from the Philippines where the business will be actively operating is hard. It will entail a lot of trust on my part. I would like to know if what I did is right. I appreciate your response. Thank you very much. Sincerely, Helen Hi Helen, Thanks for being part of the Club! So happy youre being blessed. I have a few questions about your business: Is your friend knowledgeable and skilled about the business youre going into?If she isnt, problems will come up.She needs to get a mentor that is already successful in that business.And even if she does this, expect failures.Are you willing to lose your capital? Will you re-finance if the first project fails? Personally, I dont invest with someone who doesnt have the experience in the business theyre getting into.Example: I have a business partner who was working as an employee doing corporate souvenirs.After nine years as an employee, she wanted to do the exact same thingcorporate souvenirsas a business of her own. Six years later, her business is doing very, very well nowbecause this was her core gift.I invested in her business and Im reaping the rewards. If you still decide to push through with this business, set up tight controls on a daily basis. For example, monitor daily sales. All sales must be deposited in the bank which you can check online (thru online banking).She cant use the cash that came from the sales for expenses. That must be withdrawn.Everything must have vouchers and receipts.Look for a third person to be on the ground, checking. Im very worried that youll just lose your money. I hope Im wrong. Praying for you, Bo

Volume 25 Number 1 December 2010

Page 5 of 5