Ilonggo village entrepreneurs must learn how economy works

By: Alex P. Vidal

“It’s fine to celebrate success but it is more important to heed the lessons of failure.” – Bill Gates

NOW that the Department of Trade and Industry’s (DTI) “Negosyo Serbisyo sa Barangay” program has started to revolutionize Iloilo Province, local entrepreneurs must understand and educate themselves how the market economy works, in a tacit if not intuitive sense, to avoid many of the mistakes that entrepreneurs tend to make.

“Negosyo Serbisyo sa Barangay” is a nation-wide program currently making waves in 87 villages from Iloilo Province’s 17 fourth to fifth class municipalities.

Through information dissemination, DTI Assistant Regional Director Ermelinda P. Pollentes announced recently that “entrepreneurial revolution” can be instituted by opening the eyes and minds of the project recipients on starting a business.

According to Pollentes, who is also concurrently DTI Iloilo director, they targeted the villages “because we want them to become entrepreneurs. We want to create entrepreneurial revolution because that’s the only way we can compete with our neighboring countries in the context of Asean economy.”

Pollentes’ insights and rationale on the “entrepreneurial revolution” was right.

 

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In order to compete, it is also important that participants must learn to understand people so that they will avoid putting together a dysfunctional team and they can orchestrate success.

Here’s a guide and suggestions from an expert, Per Bylund, assistant professor of Entrepreneurship and Records-Johnston Professor of Free Enterprise in the School of Entrepreneurship at Oklahoma State University:

You’ll avoid misinterpreting and misunderstanding your customers and minimize the risk that there is no market for your product.

If you understand how the economy works, and how your business fits the overall market process, you can position your product and production to make the largest contribution to society.

This means you’ll avoid risky, short-sighted decisions and destructive strategies. And you can prioritize accurately. The best part? Even if you lack either or both kinds of knowledge, you’re not doomed. Both of them can be learned.

 

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Understanding people is tricky, but straightforward. It is not simply about reading up on psychology, even though that probably helps.

More important is to have a deep sense of what makes people do what they do, including what to expect given their backgrounds, attitudes and abilities.

Bylund added: “It’s partly about getting along with people and developing trust relationships and mutual respect. But it is also about being able place yourself in other people’s shoes and understand where they’re coming from and where they’re headed.

Understanding people helps all aspects of your business. It is about putting together a great team with the right attitudes, avoiding conflict and, where that is not possible, finding respectful solutions. It’s about being tough when you need to be, and to be a reliable friend when things get tough.

Within your business, understanding people is as much about leadership as it is about friendship. It is also about understanding who your customer is, on a personal level, and what that type of person is thinking, feeling and dreaming of.

The only way of offering a product or service that is of real value to that person is to understand what kind of person he or she is. If you do, then you can make sure your offering fits in and improves that person’s life–assuming you know how to communicate the benefit.

Understanding people is as important within the business as it is outside. There are people everywhere, and people always matter. Entrepreneurship is always social, so if you figure out what people are about, then you’re already ahead.

 

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Understanding the economy is not about financing or accounting or cutting costs.

Good entrepreneurs understand their startup as a business. They understand that the business exists in an economic context, that there are mechanisms and processes innate to a market economy that makes it function in a certain way.

They understand that there are trends, but that those trends can be disrupted; they understand that things change, but that this change is often predictable; they understand that prices are information and that competitors, suppliers, and partners all aim for the same thing: they stand and fall with providing consumer value.

Economic understanding is far removed from the mathematical models taught in intermediate and advanced economics courses in universities, and is more akin to the economic reasoning taught in the principles courses–and in entrepreneurship. There is an order to the apparent chaos that is an economy. The market is best understood as a persistent process of production and change, directed by entrepreneurs’ anticipations of that consumers want.

(The author, who is now based in New York City, used to be the editor of two local dailies in Iloilo)