th images menu user export search eye clock list list2 arrow-left untitled twitter facebook googleplus instagram cross photos entrep-logo-svg

How Small Businesses Can Compete Vs Corporate Giants: Lessons from Cebu Landmasters Founder Jose Soberano III

What used to be a small two-man outfit is now Cebu’s biggest local property developer
By Pauline Macaraeg |

 

 

Large companies enjoy a lot of advantages: economies of scale, wide client network and customer base, diversified streams of income, among others.

 

But if you’re a small company that is just starting to gain a foothold in your market, how can you compete with your larger competitors?

 

Cebu Landmasters Inc. (CLI), a homegrown property developer from Cebu, started really small when it was founded by Jose “Joe” Soberano III after losing in a congressional bid in 2001. From a small, two-man company in 2003, it has since grown to become Cebu’s biggest local developer, second only to Ayala Land Inc. in terms of building activity. It has also listed at the Philippine Stock Exchange where it is trading with a market value of Php8 billion.

 

 

Related story: How A Defeated Congressional Candidate From Cebu Turned to Entrepreneurship and Built a Property firm Now Worth Php8.1B

 

 

So how did Soberano do it? Based on CLI’s 14-year history, here are some insights on how small businesses can leverage their size and agility against their big competitors.

 

 

1. Personal touch

Conglomerates tend to have a system for their operations, and they always make sure to follow those processes. It’s part of how they present themselves as an organization. But sometimes, as a result, their products become somewhat homogeneous. This can throw off potential clients who want something more unique and personalized.

 

Small and medium-sized businesses also have policies of their own, but they can be more flexible since they don’t have to adjust much.

 

 

 

“The priorities are also there for the large companies, of course. If they could only do that, they will. It's just that their hands are tied. Unlike me, [when] I was starting, I know what to do to make things count,” Soberano explained.

 

CLI’s tagline is “We Build With You In Mind,” and the Soberano family really places it to the core. This “personal touch” can go from his son, Franco, delivering lechon during a homeowners’ meeting, to Joe personally handing over the keys to residents.

 

 

2. Lower overhead cost 

CLI built its first project in 2003, which was a residential subdivision for the employees of a shipbuilding company in Balamban, Cebu. Though there were big developers already present in the province, Soberano surmised they steered away from the project because it would have cost them more because of their larger overhead cost. “Probably they figured, ‘What kind of money are we even going to get from here? It's not going to be (enough),’” he said.

ADVERTISEMENT - CONTINUE READING BELOW

 

Big companies would have had to disburse more money for the project, considering that they have a larger workforce. In contrast, Soberano recounted how he did his first pitch for the Balamban housing project: “It was just me and an assistant. I did the planning, I did the follow-up, permits--I was even the one doing the [sales] presentation in the auditorium. During break time, my assistant would distribute the sandwiches. I will be the one opening the soft drinks,” he said with a chuckle.

 

Soberano revealed he earned a 30-percent profit margin on the project and speculated that if big developers have done it, they would have probably earned only around 10 percent.

 

 

3. Better relationships with clients

Because founders of small and medium companies have the opportunity to get closer to their clients, this becomes a reason for clients to prefer them over conglomerates--who usually send a project manager on the owners’ behalf.

 

“Honestly, this is sometimes the irony of business. If you ask contractors whom they would like to build it better, they'd like to look at us, medium companies. Because they feel that they can talk to the owner directly,” he said.

 

 

 

Based on Soberano’s experience, considering that he had previously worked with Ayala Corp. as project manager at regional subsidiary Cebu Holdings Inc. for 23 years, this type of setup works better because it presents a more effective work dynamics, making the clients feel more secure.

 

 

4. Reduced bureaucracy 

Having a good and personal relationship with their clients also allowed CLI to effectively get better prices than a big company. This is because he said small and medium-sized companies like CLI present opportunities for clients to deal with less bureaucracy compared to large corporations.

 

“They'd rather give a good price, a much lower price to me because [it’s] unlike the bureaucracy of presenting a billing, and how long will it take for them to get the releases,” he said.

 

As long as their clients maintain the good partnership, Soberano shared they can often get away with lesser cash advances and faster retention releases.

 

“You know with big companies, retention releases can take as long as 2-3 years. In our case, why should I keep your money? Just give me the bond. I'm happy with your work anyway, I make sure it's turned over and the buyers are already there. Why should I hold that money?” he explained.

 

 

This kind of treatment helped him develop a strong bond with the clients and contractors. “And at any time, they call me directly,” he proudly added.

ADVERTISEMENT - CONTINUE READING BELOW

 

 

5. Relationship with LGUs

More than building stronger relationships with clients and partner contractors, Soberano said another advantage they have is their capability to secure permits more efficiently because of his ties with the local government units (LGUs).

 

“Quite honestly, that's probably where I could have an edge over those big ones: being able to get the confidence of the LGUs, and because of the more direct association,” he shared.

 

Soberano said there’s an art in dealing with people, and small companies have better opportunities in using it to their advantage.

 

Jose Franco Soberano, Joe’s son and CLI’s president and chief operating officer, backed this up and said their capability to communicate with the LGUs springs from the shared cultural association.

 

“It's easier to work with somebody within the region. [It’s easy] to deal with regulators because we're there,” he said, saying that they’re more attached with each other in the area.

 

 

*****

 

 

Pauline Macaraeg is Entrepreneur PH's data journalist. Follow her on Twitter @paulinemacaraeg

Latest Articles

A Peek Inside Megaworld Corp’s Php100-M Art Museum in Iloilo City

The Iloilo Museum of Contemporary Art features artworks by modern Filipino masters

byPaul John Caña | May 20, 2018 09:00:00

How to Market to Moms: 5 Insights Brands Should Know (Infographic)

With 85 million moms in the U.S., it's safe to say their opinions are highly influential.

byRose Leadem | May 20, 2018 08:00:00

4 Practical Tips for Building Up Your Savings to Launch Your Small Business

These everyday fixes can supercharge your stash and help you reach your goal.

byHayden Field | May 20, 2018 08:00:00

Tycoon Andrew Tan Receives Spain's Highest Civil Honor Established by King Alfonso XIII

Tan was recognized for his "many entrepreneurial activities and initiatives."

byPaolo Chua for TownandCountry.ph | May 20, 2018 08:00:00

How Rich is Prince Harry Compared to Other Royals in the UK and the World?

A number of Philippine billionaires are richer than some of the world’s wealthiest kings

byEntrepreneur Staff | May 19, 2018 14:00:00

Is Airbnb Disrupting PH’s Exclusive Beach Resorts and Hotels?

A guide to the least-cost options of enjoying some of the country’s premiere vacation spots

byElyssa Christine Lopez | May 19, 2018 09:00:00

Shifting to A Green Economy Can Generate 14 Million New Jobs in Asia

Going green can be profitable too, and it turns out the Philippines has already been taking steps...

byAngelica Gutierrez for Esquiremag.ph | May 19, 2018 08:00:00

8 Books Every Manager Should Read to Become a Better Leader

There's a worthwhile book out there for whatever you need to move forward on your leadership...

byJohn Boitnott | May 19, 2018 08:00:00

How a 17-Year-Old With $1,000 Started Subway and Became a Billionaire

Fred DeLuca started what would become a billion-dollar business to help pay for college.

byMatthew McCreary | May 19, 2018 08:00:00

Ateneo-Based Startup Wins Pitching Contest With Business That Cuts Costs of Large Electricity Users

Exora Technologies to represent Philippines at a global technology summit in Thailand on June 22-23

byPauline Macaraeg | May 18, 2018 11:00:00

JG Summit’s Fintech Unit Launches Mobile App For Fast and Easy Cash Loans

Oriente Express begins beta testing with pre-approved users and partners

byElyssa Christine Lopez | May 18, 2018 09:00:00

From Gas Stations to Shipping to Casino Resorts: The Unstoppable Rise of Dennis Uy

At just 43, the Davao entrepreneur known for his close ties to the president has built a business...

byPaul John Caña | May 18, 2018 09:00:00
Close