The question on how to start a business in the Philippines is somewhat broad and needs to be specified. But if you really just want to fulfill your dream of having your own business and you don’t have any idea where to start, I hope this article will guide you to the right path.
There are many reasons why people want to start their own business. Some of the common reasons why are earning unlimited income, becoming your own boss, escaping from the employment slavery, achieving work-life balance, having more time to spend with family, and simply pursuing our passion.
But whatever your reason or purpose on starting a business is, you have to do it right. The following are important tips you should know in starting a business in the Philippines.
Choosing the right business to start
The first step to start a business is to determine the best business for you. Choosing the right business to start can be tricky. There are people who will jumpstart a particular type of business just because it is what is currently hot, trending or where the money goes. But is this how you should do it? If you want to start a business that will last, you have to consider the following five questions:
1. Do you have the knowledge, expertise, talents and skills to run and manage that business?
2. Do you have the money or financial resources to fund the business?
3. Do you have the passion to continue that business despite of the many challenges it awaits?
4. Do you have the qualities to beat your business competitors?
5. Can you satisfy or wow your targeted customers?
Take note that I have not included the question whether that business will provide you instant money or not. This is because the business that you should start is the one that should give you lasting profits, and not instant profit. Money and profit will eventually come to you if you will start a business that will consistently provide quality products and satisfy customers.
I also do not advise jumping into the bandwagon or starting a particular business mainly because that is what’s hot right now. What will happen to your business after some time? What will happen to it when the trend is lost? That is why you should find a business that you can build to last – a unique business you can continue thriving regardless of the trends. In other words, the trends should not control your business, but it is your business that should control the trends.
List of business ideas
If you have not chosen any business yet to start, you can check this list of 100 business ideas. You can also take a look at these lists of 51 home-based business ideas and 32 online business ideas. It is important to consider first every business alternative possible to carefully select what would be the best for you. Furthermore, you don’t need to rush things – you can start a small business and strive to make it big at the right time.
You can also start a business right at your home if you can’t still afford to rent a commercial space or office. However, working from home has its own advantages and disadvantages. That is why you have to develop a strong self-discipline to avoid some distractions at your home and maintain your professionalism. You can read the following article about the pros and cons of running a home-based business to give you some ideas.
Funding your startup
You have to fuel your business to run. Money is one thing that a business needs to have a life – at least a legal life. Although we can start a part-time business without spending a dime and only spending our precious time, we still need money to spend for its registration, organization, and for buying necessary tools and equipment to operate our small business. We can use our talent, skills, and personal resources as capital, but we should still consider providing financial capital to make our business run smoothly.
There are many sources of capital you can generate for your startup enterprise. It may come from your own personal finances or it may come from other people or institutions like creditors, business partners, and investors. Having an initial capital that is not owed or a capital that came from your own pocket is better. Perhaps, you have saved some money while you are still an employee, and now you are using it to start a business.
If you can obtain credit from your close relatives like your parents who can lend you money even without interest – you could be lucky. You may also consider obtaining loans from financial institutions where you have some deposits or contributed fund on it. If you are a member of government funds like Pag-ibig Fund, you may consider getting a multi-purpose loan to finance your small business – it has lower interest than what banks will charge you.
If you don’t like the idea of being exposed in debts, you may find trusted business partners or investors who will infuse capital on your business in the form of equity instead of liability. They won’t ask you for loan interest, but as co-owners of your business, they will have shares to your profit.
Remember that you don’t need to owe big money to start a business. There are small businesses that you can actually start with low capital as long as you have the skills, talents, and most importantly time and dedication to run your business the right way.
Looking for your team
Some aspiring entrepreneurs start their enterprise alone. Of course you can start a one-man company or become a solopreneur. But as the saying “no man is an island” goes, you really have to look for your team. Your team doesn’t necessarily consist of your employees. Your suppliers, your partners, and the professionals you will outsource for some services – they are part of your team. But if you have the money, you have to consider hiring employees that will help you closely to achieve your goals.
Looking for the right people should be taken seriously, especially when you are just establishing your business. As an aspiring entrepreneur, I know you have those big dreams on your mind. Thus, you also have to find people that will share their dreams to you – people that will help you achieve your goals from the beginning and beyond. And of course, you also have to make sure that you can also help them fulfill their goals if you want them to stick with you.
To look for the right team, you have to look for their unique talent, skills, principles, and dreams – dreams that can co-exist and can be fulfilled with your own dream. Remember that one of the major reasons why a team collapses is that their dreams are conflicting with each other. So don’t forget to closely look upon people’s dreams or ambitions in life.
Registering your business
Perhaps you’ve landed on this article to find information about how to register your business in the Philippines. The processes of business registration in the Philippines depend on your type of business (i.e., single proprietorship, partnership or corporation) and type of industry (e.g., financing, agriculture, et cetera). Unlike sole proprietorship businesses, partnerships and corporations must be registered with the Securities and Exchange Commission (SEC). Some businesses in special industries are also required to register with other government offices. For example, pawnshops, financing and lending companies, and money changers are required to be registered with the Bangko Sentral ng Pilipinas (BSP).
The regular government agencies that a common business should be registered include the Department of Trade and Industry or DTI (for registration of business trade name), Bureau of Internal Revenue or BIR (for TIN, official receipts and invoices, books of accounts, and for filing taxes), and Mayor’s Office (for Mayor’s business permit. If the business has employees, it should also be registered as an employer with the SSS, Philhealth, and Pag-ibig Fund.
While reading questions and speaking with some of my readers, I’ve noticed that some aspiring business people already consider the DTI certificate of registration as their business registration and a license to operate their business. The truth is that the DTI certificate only certifies the registration of your “business name” and not your business itself. This doesn’t also gives you the license to operate as a business since you still have to register with the BIR and other offices to pay taxes and comply with applicable requirements.
To learn the steps and processes of business registration, please read our post on how to register your business in the Philippines.