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

Google Offers Tools and Programs to Help PH Businesses Thrive Online

They offer free online tools and applications to help entrepreneurs

byNicai de Guzman | February 26, 2018 09:00:00

3 Ways to Make Memorable Small Talk That Gets People Interested In Working With You

The easiest way to be intriguing is listen closely after you've asked someone to tell you about...

byTor Constantino | February 26, 2018 08:00:00

How Much Money Do You Have to Make to Be Satisfied and Happy?

It's only a fraction of the millions you dream about

byLydia Belanger | February 26, 2018 06:00:00

8 Strategies to Become More Influential at Work

Wherever you are in the corporate structure, influencing skills are vital for anyone to be...

byConnie Wedel | February 26, 2018 02:00:00

Ryan Reynolds Just Bought a Gin Company He Called 'the Best on the Planet'

The company said Reynolds will 'play an active leadership role in the business and creative...

byAlison Millington | February 26, 2018 00:00:00

Did the 1986 EDSA People Power Revolution Make the Rich Richer?

Property boom boosts fortunes of the extremely wealthy even as widespread poverty persisted

byPauline Macaraeg | February 25, 2018 09:00:00

Ask the Relationship Expert: I Can't Stop Acting Like the Boss With My Partner

Sometimes you have to take off your 'boss' hat

byMarla N. Mattenson | February 25, 2018 08:00:00

10 Weird Habits That Can Actually Be Good for You

From cursing to fidgeting to eating chocolate, these so-called 'bad habits' can actually benefit you

byRose Leadem | February 25, 2018 06:00:00

7 Real-Life Business Lessons You Can Learn From Billionaires

The only variable you really control is how hard you work

byDeep Patel | February 25, 2018 02:00:00

Here's Why This Company Encourages Employees to Decorate Other People's Cubicles

It bridges the gap between work and personal life, making employees feel more connected.

byLydia Belanger | February 25, 2018 00:00:00

Try This New App To Help You Invest for Your Children’s Education

Manulife’s GradMaker app makes it easier and more accessible to invest your hard-earned money

byLorenzo Kyle Subido | February 24, 2018 09:00:00

How to Deal With the Criticism, "You need to be more likeable..."

Three ways to negotiate sexism in today's workplace

byCandace Sjogren | February 24, 2018 08:00:00