Starting a business in the Philippines is challenging for most Filipinos since not everyone can go to business colleges. For you to find out everything you have to know how to become an entrepreneur, you may have to do it the hard way. This means you have to be hands-on do everything. There will be trial and error, with a majority of failures. Well, to get you started here is an extensive, practical and helpful guide for you to jump-start your small business.
How To Come Up With Business Ideas
Finding a business concept can be hard, both for beginners. So here are some tips on how to create a profitable venture.
Solve problems – One of the most effective business objectives is that it should be able to find solutions to people’s problems. It doesn’t even have to be on a global scale – just think of issues that affect your daily living, or from a bad experience from a service or product. If you wonder why there’s no ‘halo-halo’ flavor in a milk tea shop you’ve been into, this can lead to a business idea.
Lower prices – Often, most products sold to consumers are considerably more expensive than they should be due to various factors like packaging, advertising, distributors, shipping, tariff, taxes, and other overhead costs. Take for example an accessory like a headset. Expensive brand names could range from P1K to P5K – but you can also get functional headset of a lesser known brand from P500 to P1000.
Consumer need – You can also ask what consumers want. If you’re interested in starting an ice cream cake business, perhaps you may want to ask what flavors your neighbors, classmates, co-workers, or friends like. You can also start conducting online surveys to get a good idea of popular ice cream cake flavors.
Make it better – You don’t have to create the most original business idea or product. You do need to be observant on types of services or products that you think you can do better. Most of the successful entrepreneurs in history like Richard Bronson, Mark Zuckerberg, and Steve Jobs didn’t even have original ideas, they just made the concepts and products they found much better.
Business Analysis And Feasibility Study
As soon as you have a business idea, you should conduct a business study. Trying to depend only on observation, desire, and motivation can’t lead to business success. Here are some steps in doing a business analysis:
Feasibility study – This tells you if the venture is workable, providing you an assessment of the practicality of your proposed venture.
Market research – Gives you an idea if there’s a need for your chosen product/services and what’s your target market. This should also inform you of competitors if any.
Business plan – Describes the strategies you need to do to fully launch your product or service, with plans on how you can make it successful Be sure to take your time to work on the business analysis. If you have the resources to hire an expert who can do these steps, then do so. Once this is completed, you can now proceed in preparing your business plan.
Creating Your Business Plan
All businesses require a blueprint or a guide to help you map the course of your venture. A business plan, as it’s called, serves as a guideline to execute the nuts and bolts of an enterprise. It definitely helps during times of uncertainty, when you don’t know what are the next steps you take. A business plan should be written down, in print, and in an online document. It is made up of these sections:
Executive Summary – This section provides a summary of your whole business plan. It’s an abstract of your business, where it presents the highlights of your objective and strategy. Since this is the first section that readers see, so make sure to keep it short, but engaging and compelling for them to read your plan.
Business Profile – The section allows you to introduce your business to other people. This is also called a business description or company information. As a guide to developing this section, just answer the questions ‘who, what, when, where, why, how’ of your business. So, let them know of:
- Who is the owner/founder (including members of the organization, if any),
- What’s the business about
- Where’s the business address
- Why you’re providing the service/product
- How you’ll run your business
Business Goals and Objectives – What do you want to achieve with this venture. Describe your business aim, objective and mission.
Products/Services Description – Discuss the types of product or services that your business will be offering. You may also provide a rough estimate of the price you’ll set for products or cost of services.
Structure of Operations – Identifies the steps which your company proposes to implement to achieve its objectives and goals. This comprehensively describes how your business will be conducting its operation.
Financial Plan – This helps you assess how much fund you need for your firm. you should identify your financial sources on how you’ll to get your business started and sustain the daily operations in the next few months or the next year. The total of the financial estimate here will be considered to be your business capital. Most of the time, if your financial resources will not meet the start-up capital of a business, you would need to get a business loan from banks or investors. The financial details for this section provide the lender an idea on the full cost of your business to get started. It should include how much you’ll borrow, proposed payment terms, the period of payment, itemized expenses (like materials, tools, machines, ingredients).
Fund Allocation for Business
So you finally have funding for your business. A question for you is how do you correctly allocate it? Here are points to consider when assigning your financial resources.
Manage product or service operation fees carefully – It’s up to you how you would want to provide the quality of your products/services. Remember that your revenue margin needs to be higher from your cost of operations. Take into account in finding alternatives to the materials you require for your commodity or the material you need for the services.
Do not spend a lot on advertising and marketing – Although advertising and marketing are just as important, they could drain most of your financial resources if not handled well. As much as possible, discover ways to promote your business at a low cost or ideally totally free. Social media are perfect for free marketing. Marketing is an additional way to spend less on advertising. Talk with people and promote your company to friends. Hopefully, they also will start advertising your products.
Focus more on sales – As is a growing organization it will be most effective for you to spend your investment capital to people and assets which help increase your income. One of the first people you should consider employing is someone that can help you with sales. Also, investing in an e-commerce department for your website also helps you raise income as you start getting known in your industry.
Have an affordable budget – Without a financial plan, it’s easy to pay for things that might appear important right now but in reality, you’re spending on an issue that might be more of culpability than an asset. Developing a budget strategy will keep yourself on track on what aspects of your small business are genuinely essential.
Business Legal Requirements
After you have a business plan, brand, and operational structure, you should now register your enterprise. Here are the most common documents to secure in starting a business in the Philippines:
SEC Articles of Incorporation – This document proves that business is legally registered in the Philippines. (for corporations)
BIR Clearance – You need this clearance from the Bureau of Internal Revenue.
DTI Registration – This provides ensures your business name or brand can’t be used in other businesses.
Barangay Clearance – This certifies that the business conforms with the community or barangay where you is located. Requirements incorporate:
Mayor’s permit or Business permit – This helps ensure that your business is secure to operate according to city ordinances. Take note that you could only get this from the Mayor’s Office of the city or town which you sign up your business with DTI (and SEC). Take note that before you can get a business permit from the Mayor’s office, you’ll be asked to get permits from other departments like Sanitation/Health, Police, Engineering, etc – generally, you might be asked to get other permits depending on the nature of your business.
Tips on Starting a Business in the Philippines
Consider the demand for a product or service– Offer to people what they want to purchase, not just what you wish to sell. Keep in mind that the desire for your product or service is important, but providing what your customers want and need is even more crucial.
Get profits ASAP – Cash flow is the lifeblood of any business. It’s completely essential to get back some profits from expenses and investment you made in a business. Find ways to start having cash flow and income to your business as soon as possible.
Overestimate expenses, underestimate profits – In your business plan, the best way to get an overview of the business financial standing is to overestimate the expenses and underestimate the profits in a given year or so. Realistically, this provides a basic safety net.
Have a contingency plan – Be sure you can keep your business operating in any natural crisis or problem. You need to have money to deal with unforeseen situations that covers functional costs or other non-budget needs.
Test and survey – Figure out the most effective strategy to do your business. Try out different ways to offer or market your products/services.
Sales and marketing – Nothing happens to business until a sale is made. From the start, you’ll be looking for a way to get leads, and then turn this leads into sales. Find ways on how you can keep repeating these sales from buyers.
Keep expenses low – Always find ways to keep your operational expenses low when you’re starting a business.
If you have never operated a business, you can learn by doing and thru self-study. The real key to learning to be a successful business owner is to never ever stop discovering.
Don’t be discouraged by setbacks. They will likely happen at one point or other. But when these happen, keep in mind that they’re challenges.
Surround your self with the best people when you start hiring. Operating a business can be difficult. You have to get along with people that have a good attitude to help your business succeed.