Entrepreneurship - Binalot (Day 3)

Success stories of Filipino Entrepreneurs - Rommel Juan

Cited by AFFI. Day 3, Rommel had initially planned to position Binalot as a food-delivery service. Seeing customer service as the main tool toward success, the greenhorn entrepreneur felt having an army of riders and motorcylces would answer the demands of the huge customer base they were expecting. As it turned out, all their earnings went to paying for the crews' salary and the small store became crowded with idle employees. When the delivery market faltered, the company was left with a large overhead.

Slowly they evaluated and readjusted their goals. They trimmed down their employee force to the essential personnel and opened a store in Mandaluyong where other riders and motorcycles could be assigned. It was a good move, but not quite enough. Delivery peaked at the opening of the new branch but waned after a couple of months. This was 1998. Two years into the business and Rommel did not know what to do. He was disappointed with the way business was unfolding, but he was not discouraged. Just when he thought they've hit rock bottom, Binalot received an invitation from a major food court.

Rommel convened the board and presented the option. It was Binalot's last straw. The owners decided to give it one more shot, placing all their resources into this new branch in Shangri-La Mall's food court. Backed into a corner, Rommel knew he had to use the company's resources wisely. He set up the outlet with only P24,000. His biggest expenses for the new store were the signage and menu board which, together with the cash register, he was able to buy on an installment plan.

The gamble paid off - Binalot Shangri-La opened to lines of customers. Rommel was unprepared for this warm reception but was happy to be there to personally entertain guests and serve them. The success the company experienced with the new outlet helped Rommel and company overcome their fear of shifting to another business model - the food court. The business and its owners were able to adapt.

The Shangri-La experience paved the way for other food court outlets to open. They took on Robinsons Galleria. Rommel then realized that being in fixed space helped bring in steady sales, and also it was easier to plan expenses. Having two fixed outlets helped Binalot grow and the company was able to regain lost ground by the end of 1998.

From then on, the business operation was smooth sailing, Rommel was able to project an expansion target of one company-owned store a year. SM Makati, MRT Ayala, and Glorietta opened one after the other, all from reinvested profits. But despite the company's growth, Rommel was also looking into franchising, an idea he had been considering as early as 1998.

I had already had a manual because we were really planning to franchise. I joined AFFI but not as an active member since I was not yet a franchiser.

Then in 2002, we met a very persistent franchise applicant. He was Joe Flores of Intramuros and he was indeed very persistent. In August 2004, we granted him our first franchise.

We wanted insurance of return of profit so we initially gave him a cart. We didn't want him to spend money he won't be earning in the end. So we tested the setup. His card made P5,000 a day and this encouraged us to go all the way.

To be continued...