As the popular proverb says… “from small beginnings come great things”, more and more Filipinos are aspiring to be successful business owners and entrepreneurs even just by starting from a small business idea. And in this country where cost of labor or employee compensation might not be enough to guarantee a sustainable means of living, employees are starting to enter into entrepreneurship to escape from their corporate cubicles.
There are also Filipinos who don’t want to risk togetherness and don’t want to leave their family behind to work and earn more money abroad, leading them to be resourceful and to explore unlimited income opportunities through starting a business here in the Philippines. Moreover, there are also business hopefuls that are just born to be entrepreneurs, causing them to start a business by any means.
Whatever your reason is for starting your own small business, here are some tips on how to put up a small business in the Philippines.
1. Research and define your target market
If you are planning to start a small business, you have to realize that you are also about to face a tough competition out there which includes big businesses as your competitors. Thus, you have to target a specific niche market to effectively compete with your bigger competitors.
For example, if you plan to start an online business, like blogging, you have to narrow your market for targeting. Instead of targeting general audience, where competition is too high to penetrate, you can aim for a more specific audience where you can earn blog readers who will find your content as the best available on the Internet. To understand this further, let’s assume you want to start a blog that will cater audience who are interested in business and finance. Targeting that audience will cause you to face big competitors, like Forbes.com, Entrepreneur.com, Inc.com and other big online publishers on the business niche.
To be successful, you’ve got to further narrow that market. Instead of targeting general audience who are business enthusiasts, you can further narrow your target audience to a specific branch of business, to a specific geographical location of your audience, and to their specific age, gender and social status. Thus, you can try to target audience who are Filipinos wanting to learn how to start a small business in the Philippines.
Furthermore, when searching for a specific niche market, you should also assure that you have the right resources and the passion to produce and provide the right products or services for that market,
2. Come up with a plan
Unless you are trying to convince some investors to invest money on your small business startup, you don’t have to create a very formal and comprehensive business plan. If you’re just starting a small business on your own, you can make a plan that will suit you best – a plan that you know you can follow and accomplish. Your plan should be an action plan… not a dream plan. Meaning, it should consist of achievable steps and procedures, instead of unreachable ones, to achieve your business goals.
Writing a simple plan for your small business doesn’t take months or even a week to finish. You can even write down your business plan in one day or even for a few hours. In your simple plan, you should include your achievable mission, clear vision, specific objectives or goals. It should also include your business strategies and marketing tactics that answer how you will build up your business and promote your brand or products to your target market. Your plan should also include your budgeted financial capital, as well as your forecasted monthly income and expenses.
Your simple plan must be specific, measurable, achievable, relevant, time-bound, evaluated, and reevaluated (SMARTER). It should be trackable so that you can monitor your progress and make the necessary adjustments to better achieve your goals.
3. Equip yourself with the necessary capital
Business capital doesn’t only mean money invested in your business. It includes financial capital, real capital and human resource capital. Most small businesses can be started with little amount of money capital. But when little or no financial capital is required in starting a business, it also means it requires significant human resource capital. Human resource capital consists of a person’s or group of persons’ competency, knowledge, skills, talents, and other personal qualities that can produce something which have an economic value.
Every entrepreneur should be equipped with adequate human capital to run his or her business successfully. Therefore, to set up your business, you have to fully develop your talents, skills and other attributes necessary to produce the products you will provide to your targeted clients or customers.
Moreover, small business owners also have to use today’s cost-effective technology, such as the Internet to boost their business or brand online. Hence, computer and Internet connection is a must these days for small business starters.
4. Assemble your team
Probably, you will start your small business alone or without hiring any employees. However, that doesn’t mean you don’t need to make a team to work on your business. Even if you will be the boss and at the same time the only employee of your enterprise, you have to unite people that are related to your business.
You should consider your suppliers, the outsourced professionals who work for you, and even your family and friends that voluntarily help in promoting your business, as part of your business team since they all contribute to the production and promotion of your products for distribution to your customers. Thus, always see to it that you create good and lasting relationship with them to make sure that your team works.
5. Register your business
Business should operate with the applicable license or licenses. Business also makes profit. It generates revenue and income that give rise to business and income taxes. Thus, you have to register your business and pay the taxes you are required to pay to the government.
Registering your business in the Philippines involves various registration processes with different government agencies. A small business usually starts as a single proprietorship business, which is the easiest, fastest, and most affordable type of business to register, unlike a partnership or a corporation, which need to be registered with the Securities and Exchange Commission (SEC). Check out the different types of business in the Philippines here.
Registration of a single proprietorship business typically starts from registering your business name with the Department of Trade and Industry (DTI), then followed by registering it with the Mayor’s Office, Bureau of Internal Revenue (BIR) and other government agencies. Check out our post about how to register a business in the Philippines for more information.
6. Set up your accounting system
Every business owner, small or big, should understand the language of business – which is accounting. Financial statements and other financial records give any business owner the picture of his or her business. A simple balance sheet will show you the financial condition of your business at a given point in time, while a statement of income or loss will let you see the financial performance of your business for a certain period of time. Furthermore, a cash flow statement will help you analyze your business cash inflows and outflows.
The BIR also requires businesses to keep accounting records that will support their financial declaration on tax returns, such as income, sales, purchases and expenses. To be registered with the BIR, the business owners should also register his or her books of accounts for keeping accounting records. Thus, you have to learn even the basics of accounting and bookkeeping.
7. Run your marketing campaigns
What is a business without customers? To generate sales or revenues for your business you have to attract more customers. Hence, you have to launch effective marketing campaigns. For small business owners, who don’t have the money that big businesses possess, there are number of marketing tactics they can do, and Internet marketing is one of them.
Internet marketing, such as blogging, search engine marketing, and social media marketing are inexpensive online marketing campaigns that a small business owner or entrepreneur can leverage to get the attention of potential customers. However, though it can save you a lot of money than spending on expensive traditional marketing or product promotion, it will also require you to invest your precious time to implement it successfully. But with fact that the majority of the customers we are targeting are already found on the Internet, it is almost mandatory to every business owner or entrepreneur to learn Internet marketing.
To learn more about how you can utilize Internet marketing to boost your enterprise, you may read our post about the 36 ways to rock your small business online.
Remember that a business is a business no matter what size it is. You are not different from other business owners who run multi-million companies. Therefore, when you start a business, no matter how small it is, you have to take it seriously and passionately. Make your small business a big deal!