ENTREPRENEURSHIP MGMT 3004

Theory Application Component

Deska Dwi Putra 17677954

Joe Satria Sohar Karon Pohan 17805506
Nadya Juliana 17545035
Muh. Pratama F. Juanda 17986935

Word Count: 4031 Words

Appendix A: Report

Introduction

Black123 is a company that is selling supplements for hair problems, and it is already
being sold across five countries in Asia, which is China, Hong Kong, Thailand, Malaysia,
and Singapore. Aames Tang founded the Black123 supplements from germany and he
felt it has a big opportunity and potentials in singapore. Therefore, in 2013 he bought
over the franchise and sold it in other countries, as well as partnering with other Chinese
company, where they are also doing business in the same field, with more experience and
right now Black123 has operated exactly three years old.

This report will be explaining about entrepreneurship aspects from Black123 company
which is based on the interview with Aames Tang. In this report will be focusing on how
the company manage their financial difficulties. Furthermore, this report will also explain
how the company has managed their challenges and how an entrepreneur was able to
seek and utilizes the opportunities given by the market. Additionally, the company
differentiate their products with other competitors, and lastly in the report also will
conclude whether the entrepreneur will do the succession planning or not.

Hence, this report is made to highlight the opportunity recognition theory as the
fundamental aspect in entrepreneurship. As well as to utilize the strategic planning theory
and its entrepreneurial aspects in managing all the common challenges that will be
experienced by the entrepreneurs on their growing enterprises.

2
Entrepreneurship - Opportunity Recognition

According to Nicolaou Nicos (2009), the theory of opportunity recognition is defined as

the identification of chances, to combine the available resources in ways that could
generate profit (Nicolaou, Shane, Cherkas, and Spector. 2009). It is an important aspect
in the field of entrepreneurship (Baron and Ensley. 2006). People identify opportunities
in order to become successful entrepreneurs, however not everyone is equally skilled at
identifying business opportunities. In fact, early starters would end-up combine the
wrong resources and information, by which would fail them to recognise the
opportunities in helping their businesses grow (Nicolaou, Shane, Cherkas, and Spector.
2009). Looking at the way Mr. Aames Tang grows his hair supplement business, he was
able to recognise the opportunities that Singapore offers. He has gathered many prior
information about the products, and used the resources he owns to buy over the products
franchise from Germany. In addition, Mr.Tangs business is the only one in the market,
where consumers would only be required to consume the supplement, and hair will grow
naturally. Therefore, Mr.Tang has used all of the opportunities and resources available in
the market, to grow his hair supplement business in many countries.

Strategic planning

Theories and concept

In doing business, strategies and plans are required throughout the objectives of the
business itself. It commonly aligned with the stability environment and entrepreneurship
along with chaos, and creative destruction of an organization. Lewis, Goodman, and
Fandt (2001) explained that in the study of entrepreneurship every business requires
strategic planning, in order for the business to come up with solutions in the way it
manages competitive advantage and both internal and external strategy of the business
itself.
3
With the current globalization changes, researchers highlight the strategic planning in the
entrepreneurship terms as one bound with the practices and actions, it is called as
Strategic entrepreneurship (Legge and Hindle 2004). Strategic entrepreneurship
connects the opportunity recognition along with advantage-seeking recognition to
develop and implement entrepreneurial actions that develop ways in achieving wealth.

Strategic planning steps

There are five important steps in applying strategic planning, and it is based on internal
and external analysis, strategy formulation, strategic implementation, performance
evaluation, and follow up the actions (Earle 2009). In this case, the five steps will be
linked to based on Mr. Tang actions and strategies in order to justify the facts whether
the entrepreneur has applied it in his business according to the theories in entrepreneur
term.

Internal and external analysis

The first step of applying strategic planning is conducting SWOT analysis, which covers
the strengths, weaknesses, opportunities, and threats of the organization (Frederick et al
2013, 367). It considered a best way to determine the organizations internal and external
environment, along with performance and resources that supported the organization in the
way accomplishing objectives.

Additionally, SWOT analysis should be reviewed as the four criteria, which are
maintaining the strength, built upon and leveraged; whereas weakness need to be
minimized or even stopped; prioritize opportunities and optimize it at the maximum
point; lastly, threats need to be solved and diminished (Parnell and Karger 1996).

Relating to the entrepreneur, Mr Tang has developed a way to get information regarding
the strength and threats of his business, but the entrepreneur committed that so far, he has
not seen any the weakness of the products sales, due to the limited target market and
4
ability to serve other global countries. However, the strength of the company relied on the
ability of the products itself, since Black123 is the first and the only company that offers
hair supplements products that different from others and the entrepreneur also strengthen
the strategy as convincing the consumers by providing refund to them if the products
wont work.

As for the threats, in the way that the company has establish in different countries, such
as Malaysia, China, and Singapore, the entrepreneur stated that every country has a
different regulation and rules and that what makes the company struggling to established,
for instance packaging regulations. Lastly, the entrepreneur has seen the opportunities of
the business relied on Singapore, because currently Black123 is the only company to
offers the different way of solving hair losses, which only by consuming the supplements
consumer will get the best result from it.

Strategy implementation and Evaluation

In the way of implementing and evaluating actions, entrepreneur, however, would need to
make sure that the actions are in line with the performance and organizational needs, for
instance whether the business has done everything it takes or still needed more changes
towards the strategies or the actions (Bhuian et al. 2005). Therefore, there are certain
important things that the entrepreneur should highlight in implementing the actions, such
as ratification of actions, target behind it (what has become the purpose), review of
actions, and system development (Kangasmaki 2014).

Furthermore, despite implementing all actions that are needed in the business, Slater and
Olson (2000) mentioned in the journal regarding the final step of strategic planning,
which is evaluation. The evaluation process basically determines business outcomes,
whether the outcomes are still meaningful and in line with goals of the company and the
value to the customer (Kaplan et al. 2000). It also considered Dix and Mathews (2002)
illustrated the evaluation process as the early warning system to the business, since it
develops information regarding both inadequacy and surplus of the company to the
5
business. Hence, after evaluating strategies and actions, there will be decisions that the
company must be take care of in order to improve the business in a better way.

Relating to the entrepreneur style of business, Mr. Tang definitely has implemented
important actions that needed to be done in the business, for instance selling the products
not only in one country but multiple and as the entrepreneur mentioned in the interview
that Mr. Tang and team need to create an innovative and interesting packaging in terms of
the products so that consumers will easily attracted and consume their products.

Additionally, the entrepreneur also committed that in order to successfully targeted the
consumer, Black123 needs to differentiate consumers segments in terms of income and
annual earning. In technical terms, products prices must suitable to most of consumers
income, for instance Mr. Tang illustrated that if the percentage of the consumers ability
to buy the products is small, then there may be low chances the products will be sold out
successfully, on the other hand if it is a big percentage, high opportunities will arise to the
products selling. Therefore, this common strategy that the entrepreneur has done in the
business in one of the important implementation strategy and it continuously evaluating
in order for the business to be improved.

Follow-up actions
Lastly, in order to maintain and improve organizational practices and strategies, the
company needs to develop ways in taking new actions after evaluation has taken
(Elbanna and Fadol 2013). Basically, after implementing and evaluating strategies,
certain level of weaknesses and must be occurred in the process. Thus, the
improvement actions that has taken could provide solution in solving the weakness.

In this case, the entrepreneur stated that together with his team, they need to develop
ways to be able to be more convincing its products toward the consumers, because it
considered as rare products, and not many people know about the products information.
In addition, relating to the succession plan of the entrepreneur, Mr. Tang committed that
6
he will not follow up actions in succession plan, on the contrary, the entrepreneur will
eventually sell out the company / business to executives who are interests in the business.

Source of finance

Finding financial sources for entrepreneurial could be a huge barriers for any
entrepreneurs to make their entrepreneurial idea into reality. the process of choosing the
source of finance could a challenging. Most of new entrepreneur relying on their own
assets, informal investors such as family, and debt financing in the financial institution
such as bank (Mikic, Novoselec and Primorac 2014). Financial resources are needed by
any entrepreneurs to put their ideas into reality. Financial request directly involved with
business strategy, thus financial strategy are conducted in order to boost the level of
competitiveness against the competitors.

Without any financial resource, setting up new business will remain absurd. The growth
of the company could influence the chance of getting a finance sources from anywhere.
Each stage of companys life cycle has different sources of financing. In the beginning
stage, most of the finance sources comes from family/friend loans or other minor loans,
further stage of the companys financing sources comes from equity funds, informal
investors and public financing.

Aames Tang who is the owner of Black123 hair supplement company, is selling
supplement for those who suffer from hair problems. At the beginning, Mr. Tang came
across this product from Germany, and there is a chance of market growth in the product
since it is the new market opportunities and with different method of application for
customer. Generally, hair product supplement was based on application towards the
affected area or through surgical, the Black123 product only require its customer to
consume the supplement. Black123 product is originated from Germany, during that time
there is no presence in Asia market, therefore he bought over the franchise and trying to
7
make their presence in Asia, including China, Hong Kong, Thailand, Malaysia and
Singapore.

Traditional way of looking for financing sources are through personal saving or
borrowing from financial institutions. Entrepreneurs who are unable to look for finance
sources through traditional sources will try to look for another alternative source. These
alternative sources refer to bootstrap financing. Bootstrap financing is the alternatives for
entrepreneur to create a new firm and to support the company's growth strategy (Van
Auken, Howard and Neeley 1996). Bootstrap financing method is important alternative
source of finance for every organisation as their growth capital.

When it comes to finding financial resources, Mr. Aames Tang did not find it difficult to
look after its financing resources. He believes that when it comes to good product such as
Black123 it is not hard to look for people who wanted to invest in the company,
especially for those who have experienced in investing their money on certain company.
He also believes that people who are experienced in investing might find an opportunity
to invest in Black123 because the product is good, and the products are different in the
market which is potentially to gain a huge success in the market.

In any company, regardless the size of the organisation, there are always some difficulties
when it comes to finding financial resources. Mr. Tang believe that it is important for
every entrepreneur to find the sources, He recommend to get financial resources from
financial institution such as bank or from informal investors such as family.

The way Black123 sustain itself it through Word of Mouth (WOM) and online presence.
At the beginning, the company trying to convince its customers to try their product with a
total refund guarantee if the product does not work as expected, after customers find the
product works, information about the product will spread through Word of Mouth. The
other way is through online presence, Mr. Aames is aware through the power of internet,
Black123 currently sell its product in their online websites targeting at high end
8
customers through the well establishment of the company. Overall, Mr. Aames Tang as
an entrepreneur with his ability, experience and knowledge in running his business and he
has some similar thoughts towards entrepreneurial theories in terms of finding financial
sources. Mr. Aames Tang recommend for people who want to start their business to
choose a proper financial source such as bank and informal investors as a starter for
young entrepreneurs who want to start a new business firm.

Managing and dealing with challenges of a growing enterprise

Being as successful as he is now, Mr. Tang has the abilities to identify plenty of business
opportunities for his hair supplement business to grow. However, through managing his
growing enterprise efficiently, Mr. Tang was bound to face many challenges and risks
(Dingee, Haslett, and Smollen 1997). The challenges he mentioned include legal
requirements, instability, financial supports, innovation, and marketing difficulties.

Mr. Tang has an optimistic behavior towards his hair supplement business, this helps him
a lot to grow the business as well as to overcome the challenges that his company is
facing. Furthermore, Mr. Tang explains how he easily overcome his financial struggles
through introducing his products to the investors. Being an immigrant from Malaysia to
Singapore, Mr. Tang was bound to follow all of the legal requirements in the countries,
where his business is operating in. For instance, the legal requirements in Singapore is
different from the ones in Hong Kong or Taiwan.

As explained by Kanchana R.S (2013), to become a successful entrepreneur, one must

find out and evaluate the current situation in the market environment. Also, one has to
make adjustments to fit with the current conditions in the country, where the business is
currently operating in (Kanchana, Divya, and Beegom 2013). Other than exploiting
opportunities, entrepreneurs are also encouraged to innovate their products, business, and
services in meeting the demands of the target markets (Sharma and Kulshreshtha 2014).
9
According to Federick, OConnor, and Kurakto (2013), there are many sources of
innovative ideas generated from trends, process needs, demographic, market changes, etc.
Entrepreneurs are also required to follow the principles suggested in learning ways to
innovate for their businesses. Some of those principles would include being an action-
oriented individual, make the services and the products understandable, make the product
service a customer-based, and to always aim for success (Federick, OConnor, and
Kurakto 2013).

Hence, in terms of innovative extensions on his existing products, Mr. Tam are focusing
on trends, demographic, and process needs to innovate on his packaging in such that
would attract more consumers. As consumers, must directly consume the product, which
do not require them to go through any surgical method, hence Mr. Tam has the need to
constantly make changes to the packaging, in order to make it as interesting as possible.
This could be achieved by putting the top formulas, safe ingredients, and other proof of
safety consumptions. Referring to the innovation principles suggested by Federick,
OConnor, and Kurakto (2013), Mr. Tang has followed all of the four principles
mentioned above in creating an innovation to his products.

Patent right is defined as the agreement or contract between society and a product
inventor to be granted a registration under the governmental and national laws (Dingee,
Haslett, and Smollen 1997). Whereas trademark would be defined as the distinctive
symbol, name, or motto of a company to distinguish its services and goods offered to the
consumers (Sharma and Kulshreshtha 2014). In terms of patent rights and trademark
issues, Mr. Tang has mentioned that it was the main reason that the company has decided
to initially enter the Singapore market. Singapore is well-known for its government
policies to protect any patent rights and trademarks of a business.

This however, especially when it comes to supplements, every country would have
different rules and different kinds of requirements for these types of products to enter
10
their market. What Mr. Tang did was through working with the local ministry of health,
the products were able to receive legal patent rights and different packaging styles in the
different countries that products are being distributed to. For instance, the packaging that
we have in Singapore is different with the packaging in China. Therefore, it is an
important factor to follow the countrys legal requirements for any kinds of business.

There are numerous challenges and requirements on the road to successfully establish his
business in Singapore. However, Mr. Tang has explained that the biggest challenge he
had experienced would be in terms of marketing the product. Mr.Tam had mentioned that
the main challenge was to make people believe in the products that he offers, because the
hair supplement product is very rare, it is not something very common or can be easily
found anywhere at the drug-stores. Hence, it is something that people need to believe in,
by which makes them want to try the supplement themselves, and their hair is guaranteed
to grow. Not only in term of technicality, but Mr. Tang has also done a lot of clinical
studies, and honest testimonials to prove to his customers.

These things mentioned above have been the most difficult challenges for Black123
company in the growth stages. In addition, Mr.Tang suggested that in order for a business
to succeed, the product it offers must be good, because once the product is good, one
person will find out that product is good, he or she will recommend it to other people.
Therefore, at this moment the biggest challenges for Mr.Tang as an entrepreneur is to let
the consumers know about the values that the product offers.

Succession Plans and Recommendation for young graduates

Succession planning is defined as the process that helps the company to identify the best
candidates to act as the successor in the family business or in the future operations of the
business in order to sustain the successes achieved by the current business entrepreneurs
(Lamoureux, Michael, Roland 2009. 3). Whereas a succession management, is defined as
the strategic processes conducted to minimize any leadership gaps, to look for any critical
11
position in the business, and to provide opportunities for the top talent managers in
developing their own skills for the future roles in the business (Lamoureux, Michael,
Roland 2009. 4). The difficulties and challenges in creating a succession planning would
be on mentoring the candidates, because normally when an entrepreneur has decided to
plan a succession planning, he or she would be required to conduct many preparations in
the process. Simultaneously, those preparations would include training, mentoring, and
high selectivity to increase the chances of success in the future of the business. Hence,
current business entrepreneurs would need to pass on their skills, resources, and strategies
to the new successor candidates in order to correctly maintain and sustain the long
operation of the business. Through a recent study, researchers have explained that 40% of
the 200 have reported that their older workers was unable to successfully equip them with
the proper training and knowledge to run the business, hence this created a large gap in
the process of succession planning (Estedadi, Reza and Kambiz 2015). The challenges

Knowing about the challenges and struggles of creating a succession plan, Mr. Tang, who
is the owner of Black123 company has decided to not conduct any succession planning in
the future and he has not even thought about it yet. Mr. Tang personally suggested that
the best way is to sell out the whole company, because he believes that the way people
make business nowadays, is to build and create their own brand to be sold on a high price
to the buyers,

Being the director of Black123 would make Mr. Tang in the Sales sector and the
Healthcare sector. As seen in the figure 1.0, the rate of entrepreneurs, who wanted to
conduct succession planning in the near future for their business in the healthcare sector,
such as Mr. Aames Tang himself is the lowest.

12
.
Figure. 1 Succession rate in the Industry (Source: Andric et al, 2016)

Mr. Aames Tang gave a recommendation for the young graduates that if they want to
start their own business, they need to find out ways to allow them to earn money, then
they should do it immediately, avoid over-thinking, take big risks, and just start the first
move in achieving the goals. Mr. Tang also thinks that young people have the most
sensitive sense in terms of business and Mr. Tang has suggested that in order to success
they need to find resources, able to see the opportunity, and do not be afraid to take big
risks, while growing a business. Additionally, Mr. Tang encourages the youngsters to be

13
more creative and innovative to succeed in this competitive industry.

Conclusion
To sum up, looking at to the entrepreneurial journey of Aames Tang in doing his
successful Black123 business, it can be summarized that Mr. Tang has been applying
most of the entrepreneurship theories mentioned inside of this report. Being the only one
in the Singapore market that sells trustworthy hair growth supplement product, Mr. Tang
has identified the opportunities given for his business, as well as followed some of the
strategic planning processes, such as differentiating the SWOT factors of the company,
implemented his strategies to the business, and conducting the follow-up actions on his
clients. Mr. Tang also used many ways to manage the challenges that the company is
currently facing, which includes financial supports, regulation requirements, and
marketing difficulties. However, according to Mr. Tam, the biggest challenge that the
company has always experience is to convince the consumers to try the product
themselves. Nevertheless, in overcoming all of the business challenges, Mr. Tang was
able to have an optimistic behaviour towards those challenges, he also was able to follow
all of the legal requirements in many countries where his business is operating in. Using
the trademarks and patent rights, Mr.Tang was able to receive the legal registration for
his products, also to distinguish it from any potential competitors. In addition, through
creative innovations on his packagings, Mr. Tam was able to convince and attract more
consumers in buying his products

As Kvrgic (2014) stated that entrepreneurship is the matter on how one individual can be
innovative in terms of developing ideas, and transform the ideas into something useful for
the public, as well as the business. Aames Tang has his own ways and ideas of
developing his growing business, even if it is different to some general entrepreneurs. For
instance, in creating a succession plan, he does not believe in handing over his well-
established business to neither of his relatives or families, the entrepreneur would rather
sell out the company to the executive that has interest on the business. By which will
14
allow Mr.Tang to receive high amount of money for selling out his Black123 company in
the future.

Mr. Tang also believes that being the successful entrepreneur as he is now, the key to
success is to always find resources, seek opportunities, and to never be afraid to take
risks, while growing a business. Therefore, as Mr. Tang has shown how he combined his
resources and skills along the way, and utilizes all of the opportunities for his business,
Mr. Tang has illustrated the good and successful way of being an entrepreneur. Mr. Tang
also added that with the current technological advancements and globalization, it is very
important for people, especially the youngsters to keep finding innovative pathways that
can be sold out in the society and generate high revenues or profits.

15
References

Andric, Mateja, et al. 2016. The Challenge of Generation Change. Investment Solution &
Products Economic Research. University of St. Gallen.
http://www.gcei.unisg.ch/~/media/internet/global/instituteundcenters/cfb/2016csunterneh
mensnachfolge2016enfinal.pdf

Baron, Robert A. and Michael D. Ensley. 2006. "Opportunity Recognition as the

Detection of Novice and Experienced Entrepreneurs." Management Science 52
(9): 1331-1344.

Bhuian, S.N., B. Menguc, and S.J Bell. 2005. Just entrepreneurial enough: The moderating
effect of entrepreneurship on the relationship between market orientation and
performance. Journal of Business Research (58): 9-17.

Dingee, Alexander L. M, Brian Haslett, and Leonard E. Smollen. 1997. Characteristics of a

Successful Entrepreneurial Management Team. Pratts Guide to Venture Capital
Sources.
http://www.simon.rochester.edu/fac/raith/Entrepreneurship/Waasdorp%20et%20al/Week
2%20handouts/Character%20of%20Successful%20Entrepreneurial%20Team.pdf.

Dix, John F., and H. Lee Mathews. 2002. The Process of Strategic Planning. In Business
Development Index, Ohio, United States, 15 28. Ohio: The Ohio State University.

Earle, James V. 2009. Development of a Strategic Planning Process Model for Division I-A
Intercollegiate Athletic Departments. Doctoral Dissertation, University of Pittsburgh.
http://d-scholarship.pitt.edu/6458/1/JEarleJun09.pdf.

Elbanna, Said, and Yasir Fadol. 2013. Strategic Plan Implementation: The Antecedents and
Outcomes. In The British Academy of Management, Cardiff, United Kingdom, 3-16.
Cardiff: University of Dubai.

16
Frederick, Howard H., Allan O'Connor, and Donald F Kuratko. 2013. Entrepreneurship : Theory,
Process, Practice. South Melbourne, Vic.: Cengage Learning.

Estedadi, Ershad, Reza Shahhoseini, and Kambiz Hamidi. 2015. The importance of succession
planning in organizations. Advanced Social Humanities and Management 2(3): 41-47.
Ashm-journal. http://amiemt-journal.com/test2/vol2-no3/9.pdf

Kangasmaki, Mari. 2014. Planning and Implementation of Entrepreneurial Marketing Processes

in SMES. Masters Thesis, Lappeenranta University of Technology.
http://www.doria.fi/bitstream/handle/10024/101767/Thesis_Kangasm%E4ki.pdf;jsessioni
d=D587752C1A1CBBF94668F18DEADC5733?sequence=2.

Kaplan, Robert S., and David P. Norton. 2000. The Strategy-Focused Organization: How
Balanced Scorecard Companies Thrive in the New Business Environment. Harvard
Business School Press, 2000.

Kanchana R.S, J.V. Divya, and A.Ansalna Beegom. 2013. Challenges Faced by New
Entrepreneurs. International Journal of Current Research and Academic Review 1(3):
71-78. Excellent Publisher. http://www.ijcrar.com/vol-3/R.S.Kanchana,%20et%20al.pdf.

Kvrgic, Goran. 2014. ENTREPRENEURSHIP: FACTORS AFFECTING SMALLSCALE

BUSINESS PERFORMANCE AND DEVELOPMENT. In Employment, Education,
And, Entrepreneurship, Serbia, Belgrade, 13-15. Serbia: Faculty, of Business Economics
and Entrepreneurship.

Lamoureux, Kim, MIchael Campbell, and Roland Smith. 2009. High-Impact Succession
Management. Center creative for leadership.
https://myccl.ccl.org/leadership/pdf/research/HighImpactSuccessionManagement.pdf

Legge, J., & K. Hindle. 2004. Entrepreneurship, context, vision, and planning.
New York: Palgrave Macmillan. Second Edition.

Lewis, P.S., S.H. Goodman, and P.M. Fandt. 2000. Management challenges in the 21st
17
 century. South Western College. 3rd Ed.

Mikic, Mihaela, Tomislav Novoselec, and Dinko Primorac. 2014. "INFLUENCE OF

FINANCING SOURCE ON THE SMALL BUSINESS PERFORMANCE." Varazdin
Development and Entrepreneurship Agency (VADEA), Dec 19. https://search-proquest-
com.dbgw.lis.curtin.edu.au/docview/1643366881?accountid=10382.

Nicolaou, Nicos a. , Scott Shane b , Lynn Cherkas c , and Tim D. Spector. 2009. Opportunity
recognition and the tendency to be an entrepreneur: A Bivariategenetics perspective.
Organizational Behavior and Human Decision Processes 110 : 108117.
http://www.academia.edu/4570617/Opportunity_recognition_and_the_tendency_to_be_a
n_entrepreneur_A_bivariate_genetics_perspective.

Parnell, J.A., & J. Karger. 1996. Strategic planning emphasis and planning satisfaction
in small firms: An empirical investigation. Journal of Business Strategies 13 (1): 42-64.
Sharma, Gunjam, and Kushagra Kulshreshtha. 2014. Challenges and Opportunities of
Entrepreneurs in Emerging Economies. International Journal of Public Administration
and Management Research (IJPAMR) 2 (3): 1-8. Research Centre for Management and
Social Studies. http://rcmss.com/2014/IJPAMR-VOl2-
No3/Challenges%20and%20opportunities%20of%20Entrepreneurs%20in%20Emerging
%20Economies.pdf.

Slater, S.F., & E.M. Olson. 2000. Strategy type and performance. Strategic Management
Journal (21):813-829

Van Auken, Howard,E. and Lynn Neeley. 1996. "Evidence of Bootstrap Financing among Small
Start-Up Firms." Journal of Entrepreneurial and Small Business Finance 5 (3): 235-249.
https://search-proquest-
com.dbgw.lis.curtin.edu.au/docview/1704736065?accountid=10382.

18
Appendix B: Transcript of Interview

Section 1: Managing Financial Struggles and Investors (interviewer: Deska Putra)

Mr. Aames Tang owns the Black123 Company that sells hair growth supplements. Basically, he
found the product and brings it from Germany through buying over the franchise, and he ended
up selling the products here, in Singapore. He had successfully sold the products through five
different countries in Asia, including China, Hong Kong, Thailand, Malaysia, and Singapore. His
company is about three years old now, the partners of the company are mostly from China, and
has been selling similar products, so they are very experienced in this particular field.

In starting his own business, he came across this hair supplement product that he found from
Germany, not only interesting but he felt that there is a very large market for the product, so that
is basically why he started this business.

Mr.Tang also answered our question on how he makes money and sustain the business financially
and what is his business model was. He is doing more like an e-commerce (online) business. His
company is able to make money from selling the products via online, whereby he invested in the
product, and he sells it to the end users. That is how he gets the profit and the company makes
money from there. In finding his investors, he stated that it was not hard to find investors for his
company. When the product is good, people with those kinds of money are people who already
been through many things in their personal life so they know better whether this product can
make money or not. So, when you say something is good, they would definitely get money and
invest.

In any company no matter how big your company is, there are always financial difficulties along
the way, so Mr. Tang thinks that it is very important for any business partners or even any
entrepreneurs to really find resources, resources through bank, suppliers to go through such
difficulties.

19
Section 2: Managing With The Business Challenges (Interviewer: Nadya Juliana)

Mr. Tang has explained that the biggest challenge he had experienced was to make people
believe in the products he offers, because the hair supplement product is very rare, it is not
something very common or can be easily found anywhere, it is not a very usual supplement that
you can actually take from the regular store. Hence, it is something that people need to believe in,
by which he has to make them to try the supplement themselves and the hair can grow. Not only
in term of technicality, but also Mr.Tang has done a lot of clinical studies, testimonials, to
convince his customers, these things have been the most difficult challenges for his company. In
addition, Mr.Tang suggested that in order for a business to succeed, the product it offers must be
good, because once the product is good, one person find out that product is good, he/she will
recommend it to other people. Therefore, at this moment the biggest challenges is for the
consumers to know the values that the product offers.

In terms of patent rights and trademark issues, Mr. Tangs company had mentioned that it was the
main reason that the company decided to initially enter the Singapore market. Basically in every
country, especially when it comes to supplements, every country would have different rules and
different kinds of requirement for the products to enter. What Mr.Tang did was through working
with the local ministry of health, the products were able to receive patent rights and different
packaging styles in the different countries that the company enters. For instance, the packaging
that we have in Singapore is different with the packaging in China. Therefore, it is an important
factor to follow the countrys legal requirements for any kinds of business.

In seeking business opportunities, Mr.Tang had foreseen many opportunities in growing his hair
growth supplement business in Singapore. He explained that currently the company is the only
one in the market, where you dont have to go through surgical procedures and apply the product
directly to your head. Consumers would only be required to consume the supplement, and hair
will grow. Therefore, it created many opportunities in the market. However, the challenge for the
company is to convince people, who have not been explored towards this product also to
encourage them get to know the product and consume it.

Innovation also holds a very strong factor in growing his business according to Mr.Tang,

20
especially when it comes to the packaging itself. As consumers do not have to go through any
surgical method, the company would need to constantly make the packaging as interesting as
possible. This could be achieved by putting the formula, ingredients, and other proofs of safety
consumptions (to let the consumers know that the products are safe to be consumed).

Section 3: Strategic Planning and Competitive Advantages (Interviewer: Muh. Pratama)

In terms of differentiation strategy for the product and maintaining business competitiveness, Mr.
Tang explained that the reason people lose their hair is because aging, lifestyle and many other
factors, while some might include genetic reasons. In the market, consumers would immediately
go to the doctor, where they will advise to go through surgical procedures and other medications
that would help their hair loss problems. Some doctors would even encourage strong medications
to be applied directly to the scalp. Those methods are effective, but it is very costly and very
troublesome. Hence, the product that Black 123 offers is different from those methods
recommended by the doctors. By only requiring the consumer to buy and consume the
supplement, the formula in the the product will stimulate the hair growth.

According to Mr. Tang, the target market of the company would be anyone from the age of 25-55
years old, targeting both male and female market. The strategy that the company use in
convincing the consumers are also very straightforward. Mr.Tang would tell the consumers that if
their hair do not grow as it was promised, then he will immediately refund the money.

In answering the question on the current market situations and the differences in selling the
products in Singapore, China, and several other countries, Mr Tang answered that every country
has different requirements of regulations. For instance, in the market of China, the company
would need to follow certain rules and regulations for its packaging. However, there are different
types of requirements applied in the Singapore market. Every country requires different types of
packaging. Political stability is currently not affecting any of the companys operations in each
countries.

In terms of economical factors, Mr. Tang mentioned that entrepreneurs must first know the
average earning in a certain country in order to see the chance of selling the product. For
example, you are selling $1000 dollars on each product, and on average only 10 percent of the

21
people earn $5000 per month in the country. It means that the product would be hard to sell, the
other way around, for example if 90 percent of people in a certain country earns $5000 per
month, then it is a good place to start.

Section 4: Succession Plans and Business Expansions (Interviewer: Joe Satria Pohan)
As an entrepreneur, Mr.Tang would suggest young entrepreneurs to take more risks since they are
probably still young. There are always challenges or barriers in any business industry, people will
always face different challenges, and probably only need to be prepared for whatever will happen,
financially, competitions, feedback from consumers, and setbacks.

In answering on his plans to expand the business, Mr.Tang answered that all businessman would
want their business to expand further and growing it much larger.
So far, Mr.Tang is stepping the giant economy of the world, China. He would be very happy if he
could cover 5% of our total revenue in the market of China.

In Mr.Tangs view what has made him so successful until now is not afraid of taking risks, and
being able to face challenges in the positive manner, he thinks that is very important.

In regards to creating a succession plan, he has not yet thought about it, because nowadays the
way people make business is to build the brand, and he thinks that the best way is to sell out the
whole business. Of course, with the reasonable amount offered. Mr.Tang also thinks that creating
a succession plan is not really important, as life is very short. For instance, you have built this
brand for over 10 years, and 10 years later someone offers you a good price to buy over your
business, Mr.Tang would suggest to sell the business out.

When asked about some advices for fresh graduates out there, who would want to start their own
business, Mr.Tang said that the young people have the most sensitive sense in terms of business,
because most of the youngsters are not bound by what they have been through in their life. For
example, his style and his strategy are changed to blend to this generation. The youngsters
however grew up from this generation, and so he said that whatever the youngsters feel in their
hearts would make you earn money, just do it, do not over think and just start the first move in
achieving your goals.

22
Appendix C: Thank You Letter to Mr. Ames Tang

Singapore, 15th January 2017.

Dear Mr. Aames Tang,

First of all, we would like to express how grateful we are for giving us some of your
precious time to be interviewed for our entrepreneurship project. We are really thankful
for your generosity in helping university students like us, as well as for giving use some
of your useful advices on starting up on our own business. We definitely have learnt a lot
from our last meeting, and would be happily apply those advices in the future. It was
really an honor and we feel very privileged to meet such an inspiring entrepreneur like
yourself, Mr. Tang. What we have learnt from our meeting and what we found very
inspiring was how you managed all of the difficult challenges in building up your own
business in Singapore. You were able to push through many obstacles in making your
business grow, and eventually enter the market giant of China. Your entrepreneurial
journey as an entrepreneur was very relevant in helping us complete our assignment
projects. Your advices and words were very compelling and were able to motivate us
(fresh-graduates) to become as successful as you are. We truly hope that each one of us
could follow your footsteps, as we build our own business in the future. We are wishing
you nothing but the best for your business ahead. Hope to meet you again in the future,
and it was such an honour to be able to know you personally.

Thank you very much for reading this letter and for all of your generosity.

Best regards,

Deska, Tama, Joe, and Nadya.

23
24