The 5 Golden Rules of Entrepreneurship: Lesson for SMEs

SME awards 

The government can do so much and I commend the effort of Honorable Richard Maru in driving the SME agenda forward. But real change and success is internal. Wealth is created in the mind before it is manifested outside. Success in business and investment is a matter of mind and heart and not just paperwork and more and more funding which off course is the easiest way to kill the creative financial genius of the entrepreneurs.

The fancy policies and complex politics would be wasted, if the aspiring entrepreneurs are not taught the basic principles of wealth creation. Often times, one gets blinded by status and academic qualifications and easily misses the basic facts of business and wealth creation.

Entrepreneurship simply starts with finding a solution to a problem and solving it by means of serving as many people as one can within the constraints of available resources. Entrepreneurship is the art of finding profitable solutions to problems. Every successful entrepreneur or business person has been able to identify a problem and come up with a solution to it before someone else did.

Here are the five rules for success for the aspiring entrepreneurs.

1. Find a Need and Fill It

Human needs and wants are unlimited. Therefore, the opportunities for entrepreneurship and financial success are unlimited as well. The only constraint on the business opportunities available to you are the limits you place on your own imagination.

2. Find a Problem and Solve It

Wherever there is a widespread and unsolved customer problem, there is an opportunity for you to start and build a successful business.

Once upon a time, before photocopies, the only way to type multiple copies of a letter was with carbon paper places between sheets of stationary. But a single mistake would require the typist to go through and erase the mistakes on every single copy. This was enormously clumsy and time consuming.

Then a secretary working for small company in Minneapolis began mixing flour with nail varnish in order to white out the mistake she was making in her typing. Soon, people in other offices began asking for it. The demand became so great that she quit her job and began working full-time manufacturing what she called “Liquid Paper.” A few years later, the Gillette Corporation came along and bought her out for $47 (PGK117.5)

3. Unlimited Opportunities

There are problems everywhere. Your job is to find one of these problems and solve it better than it has been solved in the past. Find a problem that everyone has and see if you can’t come up with a solution for it. Find a way to supply a product or service better, cheaper, faster, or easier. Use your imagination.

4. Focus on the Customer

The key to success in business is to focus on the customer. Become obsessed with your customer. Become fixated on your customer’s wants, needs, and desires. Think of your customer all the time. Think of what your customer is willing to pay for. Think about your customer’s problems. See yourself as if you were working for your customer. Steven Jobs of Apple never did a market research. He only asked one question and that is “If I was the customer for an apple product, how will I wish to be treated?

5. Bootstrap Your Way to Success

Once you have come up with a problem or idea, resolve to invest your time, talent, and energy instead of your money to get started. Most great personal fortunes in the world were started with an idea and with the sale of personal services.

Most great fortunes were started by people with no money, resources, or backing. They were started by individuals who came up with an idea and who then put their whole heart into producing a product or service that someone else would buy.

Ancient script has the oldest wealth creation principle that stood test of time. It says “Service to many leads to greatness”. It’s in the bible. Read it.  

Action Exercise

Look for business opportunities everywhere, develop, an entrepreneurial mind-set, and continually be open and curious about the needs not satisfied and problems not solved.

One idea is all you need to make your first million.

PNG fighting economic crime in the modern world

Mr. Koim speaking during the symposium

The international community now appreciates Papua New Guinea’s effort in fighting against corruption.

This was revealed by the head of the Task Force Sweep Team, Sam Koim after the recently concluded Thirty-first International Symposium on Economic Crime in the United Kingdom.

“I am satisfied that the International Community is recognizing what we are doing to rid our country of corruption” said Koim.

The Thirty-first Symposium focused on the identification and control of real and current threats to the financial system and in particular financial institutions from those who engage in self-dealing, corrupt practices and fraud or who assist and facilitate the crimes of others by laundering criminal property or evade taxation.

Pacific Business Review interviewed Mr. Koim, who also presented a paper during the symposium on the Practical Problems in International Co-operation in PNG. Our analysis revealed that the regulatory and enforcement environment has changed in many jurisdictions as a result of the financial crisis and the parameters of responsibility and therefore liability have become even less clear. Increasingly, responsibility is placed on those in supervisory positions to ‘insure’ the integrity of subordinates and others. These obligations themselves create the potential for new forms of civil and administrative liability. All contribute as very real risks to reputation and thus, stability and sustainability of nation.

“Normally, international co-operation in combating cross-border corruption and money laundering are done through the Mutual Legal Assistance (MLAs) arrangements between countries. MLA’s are however, at times hindered by convoluted bureaucratic red tapes, compounded by differences in jurisdictions and domestic requirements, the protection of sovereignty and lack of capacity to deal with the requests. On the other hand, multinational conglomerates are structuring their operations to span borders and conducting transactions at a click of a keyboard. In those circumstances, Informal intelligence information sharing between countries becomes very useful in combating cross border crime” Mr. Koim said.

According to Koim, many developed countries house most of the proceeds of corruption from the developing countries as politically exposed persons move their illicit gains for a better lifestyle abroad.

Koim also highlighted his recent trip to Australia where he addressed representatives of the Anti-money laundering (AML) divisions of all of the major Australian banks. He urged the Banks in Australia to treat all large transactions from PNG as “high-risk” and to conduct enhanced due diligence on every customer from PNG.

Mr. Koim  also had the opportunity to meet a UK based risk advisory group that do skills trainingHe also met with a Proceeds of Corruption Unit that the British Government established which traces the flow of foreign politicians' money through London, and is funded by the UK government's Department for International Development, which also delivers aid to Africa.

and other anti-corruption related projects in many countries around the world.

Koim also paid a courtesy call to the PNG High Commissioner to UK, Ms Winnie Kiap. It is not known what he discussed with the High Commissioner but it would be interesting to know if he had discussed anything with relation to the closure of PNG High Commissions bank account in the UK by HSBC Bank for possible money laundering activities in the very recent past.

Vanguard International: Core Growth Strategies-People, Relationship and Culture

PORT Moresby based leading Recruit­ment, Labour Hire and HR services or­ganization, Vanguard International, re­cently announced that Mr. Peter Garnsey, a well known and highly experienced La­bour Hire and Recruitment manager has joined the company as Executive Director in charge of their Labour Hire / Contrac­tor Division.

Peter has more than 20 years experi­ence working as an expatriate manager on remote mine and construction sites throughout Papua New Guinea. He has also worked in Indonesia, England and the US and has been in the recruitment and Labour hire industry based in Papua New Guinea for the last seven years.

 

Vanguard International Managing Director Colin Boreham, told The Intelligence Magazine  that these valuable ex­periences have given Peter a unique un­derstanding of Vanguard International’s PNG Resources and Construction Indus­try client HR requirements for both pro­fessional recruitment at all levels and the efficient supply of citizen and expatriate trades based contract labor.

 

“With his extensive client network and connections throughout PNG, Pe­ter is able to keep up to date with large and small development activities and ef­ficiently help client organizations source the best possible people to fit their often urgently needed job requirements” says Boreham.

 With the current exponential growth trend in internet users in PNG, Vanguard International has strategically positioned itself to facilitate the recruitment process online. Vanguard International as emerged as a household name in terms of management of Organization Change, selection and recruitment of PNG citizen and non- citizen staff, Consultant / Contractor support services, including arranging and hosting of mandatory PNG Work Permits and Employment Visas, pay roll, payment of statutory and insurance charges and general administrative, logistic and personal support services.

 

The nature of business conducted by Vanguard International, calls for visionary leaders who can marry the three elements of 21^st century business success namely; people, relationships and culture and think globally but act locally to keep a competitive edge in the international and national business community.

   Peter’s vast experiences in corporate managerial duties and leadership abilities adds more value to Vanguard International as the only recruitment organization in PNG with real time, on line data processing of job applications.

Port Moresby artificial property bubble is about to burst

Home owners in Port Moresby, the nation’s Capital of Papua New Guinea (PNG) been hit hard by high rentals over the years despite the economic boom the country has been enjoying. Rentals have gone sky high forcing many working class people to move the settlements. 

According to inside sources, the artificial property bubble is about to burst. There is a good reason to believe that because PNG's economy is resource driven. The two-train facility owned by Exxon PNG Limited is just about done and so the top end market is coming off but not so fast for the middle and lower classes as yet. Therefore we expect a slow down for the next 18 months or so and then there might be another boom period if, the rumour that Oil search might have just enough gas for a third and fourth train LNG facility.

There is yet another interesting side to the same story from the banks. Commercial banks are no longer funding property loans due to oversupply. Existing Developers and landlords are desperate to find tenants to have the cash flow to repay their loans. Rentals for up market properties declining. A block of units downtown that would fetch K10 million in 2011 is selling for K4 million as reported in The National. Good news for first home buyers, you will soon be able to afford a brand new 3 bedroom home complete for under K300, 000.

Property prices and rental rates for the up market properties like down town and Boroko have surely come down but the standard houses in the regular suburbs remain relatively high due to the high demand since this is the category where the majority of buyers and renters are in.

We also noted that The Department of lands is also working on Strata-title legislation which will make life easier for multiple owners on a single block of land. One could build a high-rise building and have the title shared between multiple shareholders (e.g. one unit per shareholder).

However, the real effect of the so called property bubble is yet to be seen and felt and this does not translate well if it is only confined to a specific "high end" section of the market.

Occupancy rate is one way of probably looking at it, but it’s important to be more focused on the price of properties. The rule of thumb still stands, "high supply, low demand, price drops", and that is where efforts by NHC and Lands Department for example will help.

Building a competent business culture in PNG

Johnson Pundari, manager of The Enterprise Centre. Picture by Raksy Heron

Given its low per capita GDP, Papua New Guinea (PNG) should be a low cost place to do business. Reality, though, is contradictory. The country’s inadequate infrastructure and geographical limitations makes it even more challenging to do business in PNG. Added to that challenge is the low business intelligence, poor networking skills and high financial illiteracy rates that causes high rate of failure among business owned and operated by indigenous Papua New Guineans as opposed to their Western counterparts.

PNG however, continues to enjoy an unprecedented economic boom as well as high international commodity prices, amidst a mighty array of challenges. Pacific Business Review did an organizational profile analysis of PNG Institute of Banking and Business Management (IBBM) Enterprise Center on some forward-moving strategies they are employing to develop a competent business culture in PNG.

The Enterprise Center was established in 2010 by PNG LNG Project, operated by Esso Highlands Limited, in partnership with PNG IBBM. The centre’s main purpose is to help build the capacity of local suppliers of PNG LNG Project. The Centre is now expanding its scope to help build capacity of local PNG companies, regardless of they are involved in PNG LNG project or not.

The center has taken a more practical approach in building competent SMEs in PNG Under the public-private partnership program. In what this paper realized as a forward-moving strategy; the center uses a proven business assessment to value PNG companies in the areas of business structure, operational systems and process. This provides skill gap analysis and identifies capacity building programs.

 “We use eight best business practices: Governance and organization, business management, finance management, human resource management, asset and inventory control, safety, health and environment, quality control and corporate image” says Mr. Johnson Pundari, the manager of The Enterprise Centre”

The assessment is a key diagnostic tool that provides a check of how a business is going, identifying gaps and then customizing capacity development programs for specific companies according to Pundari.

The center offers a unique mix of services to PNG LNG Project by developing and improving the capacity of its local suppliers including landowners as well as building their industry intelligence and network to enhance their profitability.

According to The Enterprise center Manager, Mr. Johnson Pundari, the enterprise has already assessed 270 companies.

The center has also taken its business to another level higher by launching its new PNG Employment and Supplier Data Base, a mechanism that will connect PNG business and job seekers    with business and employment opportunities.

The Center also provides other intelligence gathering materials like its high successful Business Assessment Magazine. The magazine captures the details of each company the center assess. It contains the contact details, brief profile, key personal, key business o contracts and the star rating of each company indicating each company’s capabilities.  

Twenty years of insurance business in PNG and growing fast

Phillip Tolley (left, first on backrow) with Capital Insurance Group staff

2013 marks 20 years of operation in Papua New Guinea (PNG) for Capital Insurance Group (CIG).  Capital Insurance Group is one of the fastest growing insurance company in PNG generating an estimated revenue between K26 to K30 million as of 2013.

From its humble beginning in the early 1990s, CIG has grown rapidly to be one of the leading general and life insurance company in PNG.

 “We have  a strong-20 year history of providing high quality insurance service to consumers and good employment opportunity and capacity development programs to our employees” says Phillip Tolley, Capital Insurance Group, Managing Director.

Under the general insurance, CIG writes insurance on property, liabilities, workers compensation and motor vehicles. Under the life insurance, it writes medical and life insurance. One unique feature of the medical insurance according to Tolley is the 14 Days claim guarrantee, which he said is attracting more customers.

The CIG is unique as it is the only insurance company in PNG that is institution owned. Teachers Savings and Loans Society owns the largest percentage (36%) of CIG shares and the rest is shared by Nambawan Super and Credit Corporation.

To lead such a dynamic and rapid growing organizations calls for globally literate leaders. Leaders who can think globally and act locally within confines of the available resource limitations.

Phillp Tolley is one such leader. He is a globally literate leader, who worked in large Australian insurance companies in Southern Australia, Western Australiam Northen Teritory and Queesland. Tolley holds a MBA degree and is a fellow of Australian Insurance Industry.

Tolley says that, Capital is built on the “customer first” philoshopy. Being a globally literate leader who has well developed business, personal and social intelligence, Tolley has guided his team to a greater leap in revenue from 13 million in 2012 to 30 million 2013 and anticipates the revenue to climb to K40 million in 2014.

Having one eye on the global insurance market grand scheme and another eye on the local insurance market, Tolley ensures that the operations of CIG revolves around the core strategic pillers of customer oriented service, an evolving  learning culture and localizations of talents.

Despite the challenges of weak insurance culture and skill shortage in PNG, CIG has enjoyed a strong growth and profitability due its strong strategic leadership.

“We are growing fast and we will continue to do so in years to come” says Tolley.

The CIG utilises its global knowledge and expertise to provide PNG consumers with insurance product innovation that addresses key insurance concerns. CIG fortifies its market share by aggrresively driving for general and life insurance.

The CIG actively engages with consumers to ensure they have access to information that will help them make informed choices.

Today, CIG employes 18 people in its Port Moresby office who are provided with the best-pratice in training and development in the insurance industry.

Tolley believes its people are its most important assets, and provide staff with on going training base on local and global expertise.

“We pride ourselves in providing good career opportunities to our staff by continuing to invest in training and developmebnt” says Tolley.

Tolley is confident on the long term future of CIG and says the success of CIG in Port Moresby will then be duplicated anywhere else in the world thus sharing the capital and geographical risks.

“We remain commited to investing in PNG and are planing to duplicate our success elsewhere around the Pacific and the world” he says.

This is a strong testament to CIG’s continued confidence in PNG and its comitement to continue deligting PNG consumers in years to come. 

High internet cost in PNG hinders business



Mick Nades addressing the audience during the PNG computer society seminar. Picture by RAKSY HERON

High internet cost in PNG is a hindrance to development. This was revealed by the President of Papua New Computer Society, Mick Nades in an interview with Pacific Business review, during the PNG Computer Society third quarter seminar held on 04 September 2013, at Holiday Inn, Port Moresby.

Nades when questioned on the impact information communication technology (ICT) has on business in PNG replied that ICT affects all facets human life.

“In a big way, ICT is having a tremendous impact not just in business but every facet of human life in PNG. Although we are few years behind from the Western world, we are catching up very fast”

He also said that PNG is behind the western world in terms of ICT but said he is amazed as how fast PNG is catching up with the developed countries in terms of ICT development.

All these issues can be addressed if the Internet Service Providers (ISPs) in the country lower their internet provisions charges. Nades said “Even though big players like Telikom had promised to reduce its internet costs, it really hasn’t done much”. He also said that all other ISPs in PNG haven’t really brought the internet cost down.

Internet cost in PNG still remains high and it is almost impossible for ordinary people to access internet and use it for business or personal needs.

Nades when questioned about the currently used 2008 National ICT Policy and its effectiveness, replied “We got to do a lot better what we have now”

He also suggested that the 2008 national ICT policy be reviewed to suit today’s needs.

“The 2008 national ICT policy has been around for 5 years now and that it must be reviewed to make it more applicable to today’s ICT needs” he said.