Starting a business in the Philippines and trying to make it sustainable is challenging as we can do it, not only for ourselves, but also for our family and even for our country. Businesses and enterprises, whether micro, small, medium or large, play a vital role in shaping the economy of our country. They build wealth for business owners and entrepreneurs, as well as wealth for our nation. They also create more jobs for Filipinos and improve the human development index of our country. However, not all that we think about business and entrepreneurship are true. There are myths that we should debunk to gain the right ideas and concepts about doing business in the Philippines. The following are 12 common misconceptions about starting and running a business in our country.
1. Starting a business requires big investment or capital
Many Filipinos don’t start a business because they think that a large amount of cash is required to start one. Although some types of businesses, like financing companies require millions of pesos as an initial capital, common businesses can actually be started with low capital. Businesses that provide services rather than sell goods can actually be started with little amount of money since these kinds of companies don’t need to buy raw materials and merchandise to sell to their customers, but only use their skills and knowledge as their products to be provided to customers.
2. Starting a corporation form of business is too expensive
Most Filipinos start a sole proprietorship business since it is the easiest and fastest way to establish a business. Most of us also think that corporation is only for big businesses because it requires more capital and a lot of legal processing. However, we can actually start a corporation even for a small business. Unless your particular industry is not one of those businesses that the Securities and Exchange Commission (SEC) require hundred thousands or millions of initial paid-up-capital, you can actually register a corporation with an initial paid up capital of at least Php5,000 as long as this amount is at least 25% of the total subscription of the authorized capital stock of the corporation (Section 13 of the corporation code of the Philippines).
Small corporations usually start as a family or a privately-held corporation. Starting a corporation at the time of your business conception can be advantageous, especially if you are thinking for the long-term future of your business. Sole proprietorship businesses usually incorporate at a later date when they want to expand their business. However, this also means cancelling and closing their proprietorship business which may become a tedious process, especially at the BIR office. The advantage of starting a corporation from the first time you register your business is that you don’t need to do the process of closing a sole proprietorship business and incorporating it.
3. Venturing into business is too risky
Although there are risks in investing your money, time and effort in doing business, it doesn’t mean that these risks aren’t measurable and manageable. Venturing into business and entrepreneurship is riskier than just investing your money in mutual funds or in stocks of successfully proven public companies (blue chips). But since having your own business means you’re the one controlling your business, you can actually gain more confidence on the money and resources you would put in that business. Furthermore, you could prepare yourself completely before entering into business to reduce business risks. You can do that by choosing the business where your experience and expertise are, educating yourself to acquire more knowledge about your niche, training yourself to develop your skills and talents further, choosing the right people for your business team, and other practices that can reduce the risks of running a business.
4. Your life would be easier being your own boss
It’s true that there are businessmen and entrepreneurs who are now enjoying a more convenient life. They can delegate other tasks to their subordinates and just focus on the more important activities of their business. However, these business people who are now enjoying an easy life are business owners and entrepreneurs who are now very successful. They are just enjoying the fruits of their hard labor which they have done over the years. In other words, there is no easy life in the starting stage of your enterprise. Even though your will become your own boss, you will still make your customers your direct bosses. Moreover, you will realize that being the boss, manager or employer is even a more difficult job than being an employee or subordinate.
5. You can own all your time as the head of your business
Perhaps if your business is already a big company that employs a lot of people and division managers, you can already work at shorter hours and enjoy the rest of your time with your family and friends. But in the case of people who are just starting or growing their business, a greater amount of time is required to be put in their business. You will actually observe a lot of employers who are even busier than their employees. Some of them even work on Sundays. Furthermore, as a business owner, you don’t actually own all your time. A big part of your time is owned by your customers or clients whom you should always dedicate your time to succeed in business.
6. Most business people become rich quickly
Success, as well as wealth, are not done and built overnight. If there are instant riches in business, especially those that are practiced without ethics and morality, they usually vanish quickly. True riches in business are achieved through long hours, days and years of hard work, sacrifices, determination and consistency. Building a business that will give you wealth is like planting trees. You cannot harvest or enjoy its recurring fruits without taking care of it for a number of years.
7. You cannot compete with big business competitors
Many people don’t enter in a market where big companies are already playing because they are afraid to compete with them. Though it’s difficult for a small business to compete with big businesses, there are still ways to beat them in segmented markets. You can also implement guerilla marketing tactics to beat your bigger competitors. Small businesses are usually closer to masses, and since it has less bureaucracy than big companies, their owners can make closer and more efficient relationships with customers. Moreover, with the help of the Internet, small businesses can actually unleash big online marketing campaigns that are not expensive yet very effective and competitive.
8. You should only start a business that is hot right now
Many aspiring business people only start a business that they think are hot and profitable right now, without considering if they really had the skills, passion and resources to succeed that business. Consequently, most of them fail on those kinds of businesses. Another business misconception that every aspiring business person should realize is that a hot or trending business will not always guarantee a sustainable business. People should always see to it that the business they will start is the one that they really love, they can manage and lead, and they have the required skills and experience, not only to start, but also to grow and succeed it. In fact, most successful entrepreneurs are those who start a business idea that is unique and outside the box.
9. You need to learn how to lie to be effective in advertising
Another myth we should debunk is the required lie when business people do advertising or business promotion. The fact is there are really a lot of advertisers who are fond of lying just to convince people to buy their products. But another fact is… you don’t need to lie and fool people just to convince them. There is nothing more convincing than telling the truth. That is why marketing and advertising is done effectively if the business owner or marketer can tell the truth about the quality of his products. And in order to be confident in telling the truth about the quality of one’s products, one should ensure that he have indeed produced high-quality products.
10. Your best ideas would be best for your customers
Sometimes we become excited of the ideas that are coming from our mind. We think that our own ideas are great and they would be loved by other people. But that is not always the case when you do business. Sometimes or often, the ideas that we think are great are not accepted and appreciated by other people, particularly by our customers. We think that a product concept will be useful and enjoyed by our customers, but when we produce it and put it in the market, the customers don’t like it. This actually happens in the actual business world. That is why if you want to succeed in business, you should not only get ideas from yourself, but also from your team and from your customers.
11. Business owners can’t enjoy the same benefits enjoyed by employees
In the Philippines, many Filipinos choose to become employees rather than become full-time business owners because they think that business owners cannot have the benefits enjoyed by employees, such as SSS, PhilHealth, Pag-ibig and other employee benefits. I even heard some elders discouraging young people to enter into business because they are saying that businessmen have fewer work benefits than employees. But that’s a misconception. The truth is business owners and entrepreneurs can also be a self-employed member of SSS, PhilHealth and Pag-ibig Fund, and also taste the same benefits enjoyed by employed members.
12. Business income is not as stable as compensation income
Many people believe that a business will not give its owners stable income, unlike employees who are enjoying regular and steady salaries or compensation. Although this can be true, this is not always the case. The truth is that both business and compensation income can be unstable. Not all jobs or employment are permanent and steady because even the CEOs and managers can be fired out of a company and suffer sudden loss of compensation income. On the other hand, through years of hard work, determination and right business strategies and tactics, we can actually build a business that can give us, not only stable income, but also passive income.
In every world we enter, there are always stories that we will hear. Some of these stories are true, but some are also just myths. To succeed in the business world, we should first find the truth so that we can always bring with us the right ideas, knowledge and principles we can use to achieve our goals.