By Gareth Leung
“I want to provide the people in Guimaras the best quality clothes and the fastest and cheapest tarpaulin printing service.” the man sitting opposite to us said. He was a slightly bulky and short man who was in this thirties, wearing a green T-shirt. His eyes sparkled when he told us the reason why he started his business, La Imprinta Designs and Fashion. “Tata, do you have any plans to grow your business?” I asked. “I am going to open two new stores in San Miguel by the end of August. This is the first step to make La Imprinta the leading clothing and printing business in Guimaras. This is also the only way to give her a better future.” Tata said while he was looking at his 1-year-old daughter.
La Imprinta Designs and Fashion is a small family-owned business which sells clothes and provides tarpaulin and T-shirts printing service. Tata started the business one year ago. The major customers are schools, government bodies and political parties which usually purchase a huge quantity of printed clothes and tarpaulins. The net income has been outstanding last quarter. Although there is no accurate accounting record, the approximate net income earned from March to May was more than PHP100,000. However, Tata told us that the sales was stalled this month. It was mainly because the Philippines election period ended in May. The Philippines election brought Tata’s business a lot of transactions as people would order printed T-shirts and tarpaulins to support their favorite parties and candidates.
On the first day when I and my partner, Rachel met Tata, we discussed the scope of the consulting project. We agreed to focus on (1) building an easy-to-use and helpful accounting system and (2) developing strategies to increase sales and to stabilize net income per month.
We were surprised that there were almost no regular book keeping practice in Tata’s business. The inventory refilling decisions were made based on intuition rather than objective records. Notwithstanding Tata’s ambition, he was not very sure about the scope of his business and who the major customers were at the beginning. We had to ask him a lot of questions to guide him to think through these important questions one-by-one. This was very different from my previous consulting experience. I worked as a student consultant for two start-ups clients in Hong Kong last year. Although both clients were struggling to build up a sustainable business model, they knew what they were doing, what they planned to do and why they were doing things in a certain ways clearly. My job was to simply show them the potential linkage between their business’s capabilities and the external opportunities. However, I know that this time I have to get my hands dirty and directly involve in actual implementation instead of simply giving strategic recommendation as an outsider.
Rachel and I spent a week to build up a simple accounting system for him. We only focused on the income and expense side because Tata’s business has neither significant amount of assets and liabilities nor frequent changes in them. A balance sheet may not be very helpful to him. We implemented a system which will automatically update the inventory level, cost of goods sold and net income for the month. We knew that we have made something useful when we saw Tata’s smile after he tried to use the system we designed.
We will now focus on developing strategies to help Tata to expand his business and to stabilize sales. I know this consulting project is going to be challenging but challenges always keep me excited. I find this project very meaningful because I am contributing to a business which is the main sources of incomes to Tata’s family.
(Tata, Rachel and I)