Edgar Saavedra was just fresh out of college when he started doing fit-out and renovation projects for friends and relatives with his college best friend, Michael Cosiquien.
Saavedra, who graduated with a degree in Civil Engineering from De La Salle University, wanted to do more by going into the construction business, but he didn’t have the experience and capital to expand.
During that time, the economy was reeling from the Asian financial crisis and it was not a good time to look for projects. But instead of getting discouraged, Saavedra used the situation as an opportunity to study the business.
Slowly, the partners built the company by taking small construction projects. When they were ready to handle bigger contracts, Saavedra thought that they should find ways to do job the faster.
One day, while doing research on the internet, he learned that they could increase their productivity by using technologically advanced equipment from Germany.
Realizing how backward construction know-how in the country was, Saavedra decided to invest in top-of-the-line facilities and even imported expatriates to become the best in construction engineering.
In 2007, Saavedra’s investments paid off when they won the bid to do a multi-billion-peso contract with SM Development Corporation. The business expanded rapidly and eventually went public in three years.
Today, Megawide is the leading construction company in the country with significant interests in infrastructure and property development.
How did Saavedra survive the challenges of growing a startup amidst lack of experience in the business? What important traits can we learn from Saavedra as a passionate and thriving entrepreneur?
Here are the five business lessons every start-up founder can learn from Edgar Saavedra, founder of Megawide Construction Corporation:
1. Learn how to persevere and endure
There is a saying that success does not come from giving up. It comes from believing in yourself and working towards to achieve your goal.
When you are passionate about something, you will persevere no matter how difficult and how long the journey is.
“We started the business during the Asian financial crisis,” Saavedra says. “We did not have experience in construction. It was all lakas ng loob. During that time, it was also difficult to get projects but I always thought that since we came from zero, we had nothing to lose. At worst, we could always go back to work for others if we failed.
“We started doing a few mid-rise projects in the beginning but after six years, we were already doing high-rise buildings. Looking back, I would always look at the bright side during those times even if we were in a crisis.”
2. Learn how to adopt a growth mindset
To succeed in business, you must be willing to learn. Challenges and failures are learning opportunities to grow.
Instead of telling yourself that you are not good in something, you should focus on how you can improve yourself and become better in what you do.
“Our learnings came from our lack of experience,” he says. “Imagine if we knew the business already, we would have never learned this because we could have just applied the methods we knew from our experience.
“Sometimes it is difficult to teach new things to someone who is already experienced. You have to unlearn the person. You have to unlearn what he already knows because you are going to teach him a new method. But if you hire someone who has no experience, you have nothing to unlearn. The learning is faster.”
3. Learn how to manage risks
There is always a risk that what you plan to achieve in your business may not always happen.
When you make a business decision, you must know how to take calculated risks. Identify the potential risks and develop a strategic plan to minimize it to achieve a better outcome.
“I maybe gutsy but I always have a contingency plan,” Saavedra says. “I know what we can do and what we cannot do. I always try to understand the situation operationally before I come up with a strategy on how to approach it.
“The risk in construction is when you have delays and cost overruns but if you know what you are doing, you cannot go wrong. If you screw up or make mistakes, the most you can go wrong should be less than 10 percent. If you go beyond that, make sure you have other profitable projects to cover you up.”
4. Learn how to pay attention to details
Building a business is all about the little details. You don’t have to become too obsessed with it but you just need to pay attention to the right details.
“I am a very detailed-oriented person,” he says. “Very often, the problem lies in the details, which many people don’t notice. You know that you need people and you need technology but the question is how do you capitalize it? The benefit is in the details. If you can’t see the smallest details, you won’t appreciate it.
“For example, we had someone who proposed to put up a plant for us to become efficient in our operations. In order for me to understand, I needed to go down and discuss with the person to see how the plant will translate into cost savings for us. You need to appreciate how you can merge engineering with (the) commercial (aspect).”
5. Learn how to work with advisers
As an entrepreneur, your role in business changes as you grow. Sometimes there are ideas that you can’t simply share with your team. You need someone more experienced who can provide you a different perspective.
“If you remember King Arthur, he had a right hand man named Merlin who was his adviser but was part of his round table,” he says. “I also have a similar setup like that where I have regular advisers that are not part of my management team. They help me balance my views. They can criticize me when they need to.
“When I started professionalizing our management, I felt our potential to grow becoming stronger. We were able to capitalize on our strength with best practices. Unlike before when we tried to save on salaries by hiring unskilled people I realized that the risk was higher than the savings.”
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