MANILA - For some Filipinos, retiring early to become an entrepreneur can help them get rich. However, it takes more than business acumen to succeed, according to a member of the academe.
"The funny thing is most people want to retire and be comfortable. So if you're an employee, you retire and you go 'I want to have enough money so that I can do whatever I want and not have to work,' but then you turn around and say 'I'm going to start a business," said Maya Herrera, academic director of Asian Institute of Management.
Herrera shared with ANC's On the Money how to shift from a 9 to 5 office job to becoming the boss of your own business.
1. Set goals
Employees have a fixed salary as opposed to entrepreneurs. Setting goals like building retirement fund is important, Herrera said.
"For entrepreneurs, maybe it'll take 3 years for you to have a salary, for entrepreneurs it tends to be lumpy, end of the year - 'I can give myself a dividend,' That's why it's important to know what's my goal, because if you know that's your goal, you will set aside something," she said.
2. Separate life from work
One of the major challenges for entrepreneurs is to separate life from work. Putting all their money in the business could be just as bad as putting all their time in it, she said.
"You have lots and lots of assets except you're lonely and miserable because your wife left you, because you never have time for her, your children don't know you or worse you never actually got married. That means you did not set aside anything for yourself," she said.
Goals should be divided into 3: life goals, goals as an entrepreneur and goals for specific businesses.
3. Learn to handle basic business finances
Know the basics about taxation like value added tax. Businesses also spend on auditors, accountants and lawyers. Herrera said, the first thing they teach in business school is to always start with the basics.
4. Look at retirement differently
Entrepreneurs should be very clear with how much money they want to earn when they exit the business and how much they need for themselves when they retire, Herrera said.
Herrera also shared tips on how to become a happy retiree and entrepreneur:
1. Pay the right taxes
Cheating on taxes won't make entrepreneurs wealthy. "If you want to be wealthy, you got to be compliant," Herrera said.
2. Know the market
Businesses depend on what the people want to buy, therefore knowledge about what people want will be beneficial, Herrera said.
3. Maintain sustainable competitive advantage
It is wise to make something that's hard to copy, she said."You have to be better than your competition, in fact you have to be the best in your market."
4. Find time for your self, find money to save
Finding the money to save is the same with finding time to exercise, you "actually have to carve it out," Herrera said.
The key to this is creating a life plan that's anchored not only on the present, but the future as well, she said.