JoMag, short for Jose Magsaysay Jr., is known as the man behind the success of Potato Corner. His insights on business success have been featured in many interviews, and he is an inspiration to many entrepreneurs. I had the pleasure of working with JoMag for almost two years. During that time, I had the opportunity to ask him questions, consult him on business problems, and take notes to compile for this blog post.
While he can be a bit enigmatic, I had the honor of learning from him firsthand when we built Gyud Food from conceptualization to reality. He is also crucial to the success of our anchor coffee concept, Mamonaku Kohi, a Japanese-inspired coffee shop that is the inventor of the Chizu Kohi..
Here are business lessons I learned from JoMag that I hope will inspire you on your own journey:
1. Start all your business with partners with a shareholder’s agreement.
Lack of clear agreements is the number one cause of business failure for startup projects. When things are going well, it’s easy to overlook the need for clear agreements. However, when things go wrong, it can be a disaster.
Here are some of the things that can go wrong if you don’t have clear agreements:
• Disputes over ownership: If you don’t have a clear agreement about who owns the business, it can lead to disputes down the road.
• Disputes over decision-making: If you don’t have a clear agreement about how decisions are made, it can lead to deadlocks and delays.
• Disputes over compensation: If you don’t have a clear agreement about how profits are shared, it can lead to resentment and conflict.
• Disputes over exit strategies: If you don’t have a clear agreement about what happens if one of the partners wants to leave the business, it can lead to a messy and expensive exit.
To protect yourself from these risks, it’s essential to have clear agreements in place from the start. These agreements should cover all of the key aspects of your business, including ownership, decision-making, compensation, and exit strategies.
2. Learn the difference between equity partners, industrial partners, and partners taking advantage.
- Equity partners invest capital in a business and, in return, receive a percentage ownership of the business. You can’t be equity partners if you don’t bring anything on the table. You need to have an important expertise that the business would need to be successful from startup to scaling it up.
- Industrial partners do not invest capital in a business, but they provide specialized expertise or services that are essential to the business’s success. They may receive a share of the profits in return for their contributions, but they do not have an ownership stake in the business.
- Partners taking advantage are individuals who seek to exploit the expertise or resources of others for their own personal gain. They may not invest capital in a business or provide any specialized expertise, but they may try to gain control of the business or take advantage of its profits.
It is important to be aware of the differences between these three types of partners when you are starting a business. By understanding the roles and responsibilities of each type of partner, you can protect yourself from being taken advantage of and ensure that your business is successful.
3. On raising entrepreneurial kids, I learned from JoMag to let them be kids and let them create their own path. We expose them to our business, share with them our entrepreneurial struggles, and give them a seat at the table on how we are building our business. However, we also make sure to give them the space to be kids and explore their own interests.
Our role as parents is to provide for the family, give them all the learning opportunities to make them successful in life, and support them in their passions. We don’t want to force them to become entrepreneurs, but we want to give them the tools and resources they need to succeed, whatever path they choose.
4. Be decisive, always.
If a person is not delivering or difficult to work with, or a tenant who has an attitude, sever ties as soon as possible. The longer you delay, the longer it will drag down your business.
Employees are not your friends. Make sure you have written contracts and the expectations are very clear.
Decision-making, reporting lines, and accountability should be very clear. Have one person responsible for the entire business.
5. There are three things you need to have to create a successful startup food concept:
- What is your hero product? To cut through the noise, your hero product should be the best-selling product, consistently made with quality, and the reason why people would come back to you.
- What is your unfair advantage? You can create an unfair advantage because of the skills of the founding partners of the business. It is better to partner with someone who has failed in business and brings to the table all the learnings from it(less emotional attachment from the failures).
- What makes your concept different? You need to be taking the lead and making sure you have an entry point to a very competitive market. Your unique go-to-market proposition is important to get noticed.
Next Lesson: How to Scale.
In one of the board meetings of Mamonaku Kohi, we were celebrating the success of our first branch in Gyud Food. Our first branch is the number one concept in the market in terms of sales, profitability, and readiness to scale. We were proposing to expand to three to ten stores in 2023. However, JoMag inspired us to shoot for expanding to not just 100 stores, but to 1,000 stores. He believed that we have the next Potato Corner concept, the Koomi of the iced coffee segment, or the milk tea replacement.
As I write this, we are launching Mamonaku Kohi at WOFEX from August 2-5, 2023. We are looking for potential partners to help us expand our business.
In the first six months of our first store operation, we have already accomplished the following:
- We technically have a return of investment on our first store.
- We have created a business turn-key manual ready for the expansion.
- We have established a commissary in Kamias that is ready to scale for the next few stores.
- We have formulated our own proprietary Chizu for our business expansion.
- We have customers returning and saying this is the best coffee discovery of 2023.
We are excited to share Mamonaku Kohi with the world and we believe that we have the potential to be a major player in the coffee industry. We are looking for partners who share our vision and who are passionate about helping us achieve our goals.
We are ready for the next phase of our on-the-job MBA with JoMag. Hope to make him proud with a “nakakalibog na expansion.”
to be continued…
Live an Awesome Life with Christ,
Founder & Digital Creator, Our Awesome Planet
Disclosure: I wrote this article with my biases, opinions, and insights.
This story is an entry to COMCO Mundo’s “UNMASKED: The COMCO Mundo Write to Ignite
Season 3″. The initiative aims to pull and collate powerful stories from the Philippine blogging communities. “UNMASKED” aims to explore how each mask is a person brimming with hope and wonders to share with others, as well as why it is important to tell their inspiring journeys in life. The “Write to Ignite” Season 3 is made possible by COMCO Mundo League of Enterprises with airasia, Babyflo, PHILUSA Corporation, Century Tuna, Licealiz, Lamoiyan Corporation,
Rémv Martin. and Uratex Monoblock as brand partners.