A lot of Filipino entrepreneurs are asking me if it’s wise to register their businesses even if they’re still small.
Considering that the processes of getting business licenses in the Philippines is quite expensive and time-consuming, many Filipinos who venture into a small business hesitate to register their businesses with the applicable government agencies, such as the Department of Trade and Industry or DTI (for sole proprietorship), Securities and Exchange Commission or SEC (for partnerships and corporations), Bureau of Internal Revenue (BIR), and Mayor’s Office.
Another reason why many micro or small business owners are not registering their businesses is that they are worried that once a business is registered, its existence will already be recorded in the government’s database, and will cause it to become a target for BIR audit and other examinations by the government.
However, those hassles are part of doing business. We can’t genuinely call someone a businessman or an entrepreneur if his or her business isn’t a legitimate one. Besides, entrepreneurship is about taking risk. And putting money and efforts on registering a business is a risk every entrepreneur should take.
You can escape registering your business to make it invisible in the government’s records but it won’t make your business invisible in the eyes of their inspectors.
Speaking of visibility, your business, to be successful, should be visible online and off to make your potential customers aware of your business. If your business isn’t licensed, you will not be confident to broadcast and promote it to attract prospective customers.
That is why a license is vital for business success. It’s not only essential for your business operation but also for your business marketing. It can be your key to earn trust from your customers. Since more customers means more sales, the costs of taxes and licenses can actually be recovered. If you’re an entrepreneur, it’s a risk to be taken.
There are also business owners who don’t register their businesses because they think that other entrepreneurs also do the same. They are thinking that since their businesses are still small, it’s unfair to require them to get various licenses to run those businesses.
However, that’s not always true. In fact many micro business owners, such as sari-sari store owners and multicab drivers get licenses from the government. Even tricycle and pedicab drivers are paying licensing fees from the local government. Thus, if you’re a business owner who’s not paying any amount of tax or fee to the government, it would be unfair for the tricycle and pedicab drivers who are paying licenses to operate their micro business or to practice their job.
So my advice… know your obligations. If your small business is required to be registered, it’s wise to comply. It can be a tedious task to duly register your business but as long as you are doing business in good faith and following the laws and regulations, your business can pass all the government’s requirements.
Red-tape is still apparent among government offices. However, there are still government officers who are friendly and will be happy to serve you. So don’t be afraid to face the government. As an entrepreneur who’s determined to succeed, you shouldn’t think of business registration and paying taxes as problems. You should think of them as opportunities to be challenged, be free and grow as a businessman.
Do you have any question regarding this post? Feel free to make a comment below.
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