When Karlo Cruz married his long-time girlfriend Elisa Siducon, his father, who was a vendor at Blumentritt public market, gifted him a small capital to start a cassava cake store.
The couple rented a 30-square meter, two-storey house in Mindanao Avenue where they opened a cassava cake shop on the ground floor.
Karlo, who was then working in the legal department for a government agency, would buy cassavas at the Balintawak market on the way home and prepare the cakes for his wife to sell the next day.
The business did not do so well during the first year but because the operating expenses were so low, the store survived and helped the couple cover their household expenses.
At that time, Elisa, who graduated mass communication from college, thought that she could scale up the business in the nearby areas using their home as commissary.
With the support of their suppliers who provided them generous terms, the couple put up more stores in Novaliches, Fairview, Lagro and San Jose Del Monte, Bulacan.
The business slowly grew and expanded into more areas in the provinces the following year, which prompted Karlo to resign from his day job to help Elisa in growing their startup.
Don Benito's specialty is the cassava cake
Today, 10 years after the couple founded the store, Don Benito’s is the leading brand for Filipino delicacies in the country with a growing network of store outlets all over the country.
How did Karlo and Elisa manage to expand and sustain the business despite competition from more established players in the market? How did Don Benito’s become the most recognizable brand for cassava cake and native delicacies in short period of time?
Here are the five business lessons every entrepreneur can learn from the founders of Don Benito’s, Karlo and Elisa Cruz:
1. Know how to understand your market
If you know who your customers are and what products they want you to offer, you can make strategic decisions on how you want to sell your products and at the most affordable price possible.
Focusing on satisfying your customers’ needs can increase your sales and profit while reducing your marketing expenses.
“The typical Filipino would usually take cassava for snack but could not give it as gift because it used to be unpresentable,” Karlo says. “But because we package our cassava cakes in a nice box, our customers can now buy our products as a gift.
“No matter how good the cake is, the local taste bud will always go to the native delicacies such as suman, bibingka, kutsinta or pichi pichi,” he adds. “The locals will never eat cakes on a regular basis because cakes belong to the foreign taste.
“This is the reason why our products are saleable in the provinces because the local market can easily adopt to it.”
2. Know how to differentiate and innovate products
Differentiating a product means being able to articulate the features of your product that would set it apart from competition.
One way to differentiate is by innovation. When you innovate, you leverage on the qualities of your product by offering it in different ways through value combinations.
“After our first year of operations, I decided to adjust the recipe of our cassava by adding macapuno and langka flavors,” Karlo says. “Few years later, we also developed personalized small cassava cakes and pichi-pichi.
“Three years ago, we also launched leche flan, ube, nilupak and steamed mashed cassava, which is like a mashed potato but sweet in our stores,” he adds. “This year, we are planning to introduce the cassava ice cream.
“We keep our products fresh at all times. We pull out all our unsold products every 24 hours. Our wastage cost is high because we want to keep our products clean and delicious.”
Don Benito's continues to grow its store network all over the coutry
3. Know how to invest and train employees
Investing in staff development can help you improve productivity, develop a positive work culture and increase employee retention.
When you train your employees, you enable them to grow individually and feel that they are supported and cared for by management.
“We try to empower our employees especially those who are high school graduates by providing them free training and education with no strings attached,” Karlo says.
“We send them to TESDA, for example to study bookkeeping and take care of their transportation and food allowance. We like to help employees who want to improve themselves with education because we are after the heart. We would rather hire employees who are incompetent but honest because we can always train.
“We also have employees who have been with us from the beginning. We gave them free outlets to help them augment their monthly income because it is different when you have people who share the same concern as you do in the business.”
4. Know how to balance family time and work
It is not easy to have work-life balance but if you can find ways to spend quality time with your loved ones while working, you can help build your family relationships become stronger.
“Every Sunday after church, our bonding time together as a family would be to look for potential locations,” Elisa explains. “For example, if we wanted to expand in Pasig, we would explore the whole area. We have been to many places in the past such as Batangas, Laguna, Pampanga and Pangasinan.
“This has been our hobby for many years until one time, when we went overseas, my three-year old son, who had been used to visiting different locations with us, would tell me “Mama, there is a potential space there. You should inquire!
“When we travel together, we do not feel the burden of expansion,” she adds. “We enjoy it and take it as an opportunity to appreciate our family time.”
Besides cassava cake, Don Benito's now also offers leche flan, ube, nilupak and steamed mashed cassava
5. Know how to collaborate with your spouse
It can be challenging for a couple to balance their work and personal relationships. Without understanding each other’s strength and weaknesses, it may be difficult to take the business to the next level. Like any business relationship, partners have to trust and support each other no matter how difficult the situation is.
“There were times in the past when we would only make Php1,000 in profit,” Elisa says. “We would only sell six boxes of cassava cakes or barely break even but you will never hear any complaints from my husband.
“My husband has always been supportive of my business decisions when we were expanding,” she adds. “When you have a husband who is always there at your side to back you up, it is not hard to take a risk.”
“Money is your scorecard in business,” Karlo says. “It doesn’t define who you are. Your family will always know you for your traits but your scorecard will tell you if you are doing the right thing or not.”
Henry Ong, RFP, is president of Business Sense Financial Advisors. Email Henry for business advice firstname.lastname@example.org or follow him on Twitter @henryong888