How 'tindero' turned SEAOIL into a successful business
Editor's note: The Business Mentor is a weekly business column by Armando "Butz" Bartolome, president of GMB Franchise Developers Inc. and chairman of the Association of Filipino Franchisers Inc.
MANILA, Philippines - Two weeks ago, I wrote about the "8 Red Flags in a Family Business." I received many comments received from different people.
Some even narrated the bitter ending of how their family business turned from rags to riches and back to rags. A reader, who is now in her 80s, wrote how she felt sad seeing her children and grandchildren quarreling over the business she began.
Surely getting into business is not that easy. Many tried and only a few succeeded. Emotions sometimes overrule objective decisions.
For this column, I decided to feature an inspiring story, which many may not be aware.
Francis Yu and his family, who own SEAOIL Philippines, are a good example of how a family-run enterprise can become a success.
I outlined four key points in running a successful family business, which readers may learn and see how each can be applied.
1. Understand the struggles and challenges faced in starting the business.
Francis Yu began working as a "tindero" in a medium-sized store in Blumentritt while he was still in high school. When he entered college at the Mapua Institute of Technology (MIT), a distant cousin who had a gasoline station hired him as a bill collector for their key accounts.
On his regular rounds as a collector, he received a lot of requests for industrial and bunker fuels for companies' manufacturing needs. Yu saw the opportunity and immediately applied for a credit line to become a wholesale supplier to these companies. A big oil player turned him down, but this did not discourage him.
He then applied for a credit line from a new local oil player and this time, his application was approved. At several occasions, he would deliver the drums of bunker fuels, and personally drove the delivery truck.
Yu married his wife Josefina in 1967. She was also a working student when they met. She was the one who urged Yu to put up a business.
With their combined savings, they bought a franchise for a service station in Taft. This started the couple's entrepreneurial ventures, and thus began their journey with SEAOIL.
They encountered various challenges especially being in the oil industry which is subject to outside forces: 1973 oil crisis, overnight downfall of the peso from P27/$1 to P40/$1 in the 1990's. To survive and prosper, they had to innovate and respond fast to changing business infrastructures.
2. The decision of transferring the business to the eldest son
The Yu couple took great pride in having 5 children who have all grew up to become achievers themselves. The eldest, Glenn, was a great role model to his siblings. He went to Canada for college, and so did the others, except the youngest who was requested by his father to get a college education in the Philippines.
When being asked to give a speech or an interview, the elder Yu would always say, 'Ask my sons instead.' He'd say that if he is good at anything, it would be training his children to become great at running the business.
With this much confidence in his sons, he had no qualms in handing over the reins to Glenn.
3. The growth stages under the new management
Upon oil industry deregulation in 1998, SEAOIL Philippines, Inc., which was already headed by Glenn, was the first independent fuel company to put up a gasoline retail station. The company then opened up to franchising, which paved the way to its exponential growth over the succeeding years.
Under Glenn Yu, SEAOIL pioneered in selling and promoting biofuels in the Philippines. This has now become an industry standard. Recognizing that the environment is not inherited from previous generations, but borrowed from the future generation, he makes conscious effort that the products that we sell are environment-friendly.
Being inherently innovative, he was also key in SEAOIL's current partnerships with STP, one of the most trusted brands of automotive care products in the U.S. Now, all SEAOIL fuel products are blended with STP additives that improve their cleanup and keep-clean properties.
From one station in 1998, SEAOIL now has over 350 stations nationwide.
Glenn is also the model of integrity in the organization. He requires all departments and personnel to make sure that their personal and business dealings are honest and clean. SEAOIL is recognized as one of the country's top importers. The company and its leaders have also signed the Integrity Pledge, thereby becoming part of the Integrity Initiative - a private sector-led campaign that promotes ethical and fair business practice.
4. Establishing and sustaining corporate social responsibility (CSR)
SEAOIL commemorated its 35th year in 2013 by sponsoring the elementary and high school education of 35 children from Cebu, Negros, Batangas and Manila. To do this, SEAOIL partnered with World Vision, a community-based non-governmental organization (NGO). The grant covers not only the education expenses of the children, but also funding of community projects that will be implemented in the children's areas of residence. This activity is funded not only by SEAOIL, but also of its employees who have pledged to allocate a portion of their salary for the children's education.