So you want to start a small business in the Philippines? Aside from creating a good business plan, here are 10 tips you should know before you jump into the world of business and entrepreneurship:
1. Settle your personal debts first.
Starting a business is like gambling. If you have a lot of personal liabilities, it’s better if you strive in paying them off first before you gamble in another venture. The usual business doesn’t earn profit immediately after starting operation. And even if it earns, there’s a chance that your profit would only be exhausted in settling your personal debts rather than putting it back to your business. It’s okay to have business liabilities when in business, but a personal debt is another thing.
2. Start with a capital that is adequate for your kind of business.
Even if you will only start a small business, it could be costly when you do it in the Philippines. You will be paying a lot of permits and licenses, not to mention the monthly, quarterly and annual taxes you will also be paying. And if you don’t own a land and building, you will be renting out space for your business, which requires you to shell out money for monthly rental aside from the deposit and advance payment.
3. Hire a bookkeeper or accountant.
If you think you can DIY the bookkeeping and accounting of your small business, think again. The monthly preparation and filing of your taxes with the government can be time-consuming, complicated and exhausting. So if you don’t like to spend a lot of your precious time and damage your brain cells, better delegate it to a bookkeeper. Of course, don’t forget to choose the most reliable bookkeeper or accountant to avoid facing future tax troubles.
4. Follow the law.
Register your business, issue official receipts or invoices, and pay the right taxes. Don’t start a business if you can’t follow the laws of the land. You may escape them for a while, but eventually, the authorities will still catch you and impose you with penalties, charges and even imprisonment. So if you will not comply, better remain as an employee or a law abiding citizen.
5. Don’t make your small business look too big.
It’s good to make your small business look big to attract big customers and investors. However, don’t overdo it. There are also disadvantages that you should expect from doing it. If you make your small business look big, it may also attract stubborn vendors and even authorities who will tax you more than your actual business size.
6. Find trustworthy and responsible business partners.
You may have a profitable business, but if your business partner will double-cross you, you may end up having nothing. I knew it’s difficult to find honest business partners. But to protect yourself from scammers, at least secure notarized business contracts and agreements so that you can run after them when they dupe you.
7. Hire honest and competent employees.
Just like choosing your business partners, hiring employees should also be done with utmost care. If your business partners deceive you, you will lose money. If your employees leave you unexpectedly, your business will lose productivity, and therefore, also money. Don’t be hasty to hire. Even if your business is small and you’re hiring relatives or people whom you’ve already known, don’t escape the usual process like conducting interview, giving examination, and requiring documents such as NBI clearance and medical certificate.
8. Organize your business records.
Always document your business transactions. Then keep your accounting and other business documents organized. If your small business has an extra budget, hire an admin assistant (or executive assistant) and an in-house accountant (or accounting clerk) to summarize and organize your business records. It will be easy for you to monitor the financial and operational flow of your business if your business is neat and clean.
9. Invest in marketing.
Any business won’t survive without sales. Thus, you have to invest in marketing. If your target customers are found online, invest in website and digital marketing. Hiring a business development manager, marketing assistant or sales agent can also help you do the marketing tasks that you can hardly do.
10. Delegate other tasks to focus on the most profitable ones.
Don’t be a “Jack of all trades, master of none” person. Learn how to leave other things to other persons. Hire experts instead of trying to make yourself an expert on many things. Focus on the core activities of your business, which can generate more revenue or profit.
Starting a small business doesn’t mean you will be facing small challenges. No matter how small or big your business is, you have to prepare big time. If it’s your first time, you don’t need to taste failures just to learn from your lessons. You can actually learn important lessons from entrepreneurs who have already failed in the past. Don’t do the same mistakes.