It is now down to the last quarter of this year and another century is about to start. If becoming financially independent and managing your time with your own business are still on your bucket list, then it is time to make it happen. Be the entrepreneur you aspire to be. It’s never too late to learn a thing or two about how to put up a business in the Philippines.
Starting a business may require a great amount of time and effort. As a hopeful entrepreneur, you must understand the importance of exerting more energy in doing the necessary actions to launch a business venture.
Here are a few basic steps that might help you on how to put up a business in the Philippines:
1. Allocate ample time for brainstorming for business ideas.
It is very important to note that brainstorming for business ideas is very crucial for any business aspirants who wish to start on their entrepreneurial journey.
Like the renowned companies you know, they didn’t start the business overnight. The people behind the success of every brand or service underwent extensive brainstorming in order to achieve the set goals and ensure optimal positive results.
If you still don’t have any idea on what to introduce in the marketplace, you can:
A. Do some research and gather as much information as possible on the businesses around you and the business trends. With this, you can be aware of the existing products and services available in the commercial space.
B. Identify your target market. You need to know what your future customers’ wants, needs or problems are. In this way, you will have an idea of what to offer to them, at the same time, it will be clearer and easier to distinguish to whom your products or services will be available.
C. List down all the qualities of the companies you admire the most. This will give you an idea of how to visualize your business. This may include their products, customer service, website, marketing, and all other details that caught your attention.
Such companies can also serve you as your business model. This will provide you with possible weaknesses and areas for improvement which you can apply to your business.
D. The most significant thing to do is to evaluate within yourself if the product or service in your mind aligns with your passion. Apart from providing a new product or service that may help the customers, it is also vital that the one you offer is something that you love. If it is not, then it’s best to reconsider and back to square one in doing research and brainstorming again.
2. Layout the business plan
Cliché as it may sound, but this holds true until today: “Failing to plan is planning to fail.” When starting a new business venture, a business plan is needed to be developed to guide you on the steps to be done.
It is a blueprint that will list all the actions from the starting or testing phase until the goals set are reached. You can read more on how to make a franchise business plan to know more about the business plan, its major components, and definitions of each, and tips on how to write one.
After deciding the type of business to venture, it will be simpler to layout the business plan. Note that there is a specific business plan for every type of industry you want to focus on. A traditional business plan may be needed if you seek financial assistance from an investor or a financial institution like banks. This type of business plan typically contains wide array of sections or topics and covers key business concepts like marketing and finances for you to be granted with money to operate the business.
3. Prepare your initial investment
The initial investment is a prerequisite before starting any business. To get a rough amount to prepare, it is best to determine the possible costs that you may need to pay. This may include licenses, permits, legal fees, insurance, branding, marketing, trademarking, inventory, property leases among others.
If in case you can come up with an estimated amount to cover the aforementioned costs, then you are good to start. However, if you are short for a few hundred, then you may seek help from lending institutions like banks.
4. Identify your business structure
In the Philippines, there are three common business structures - sole proprietorships, partnerships, and corporations.
A sole proprietorship is the kind of business structure that is owned by an individual. He/she is the sole responsible for all the transactions, owns all the assets, holds authority in every decision made for the business and enjoys the profits all by himself/herself. However, he/she also bears the burden alone on liabilities or suffers all the loses.
On the other hand, a partnership is another type of business structure. Defined by the Civil Code of the Philippines, a partnership is binding of two or more persons to contribute money, property, or industry to a common fund, with the intention of dividing the profits among themselves.
The partnership can be general or limited. The general partnership means that the partners have unlimited liability for the debts and obligations of the partnership. Moreover, limited partnership means that one or more general partners have unlimited liability and the limited partners have liability only up to the number of their capital contributions.
The corporation is composed of at least five to fifteen incorporators. Each of them should hold at least one share and must be registered with the Securities and Exchange Commission. The minimum paid-up capital is P5,000.00.
Like a limited partnership, the liability of the shareholders of a corporation is limited to the amount of their share capital. It is important to note that a company should be 60% owned by a Filipino and 40% by a foreigner to be considered as a Filipino corporation. If it is more than 40% owned by foreigners, it will be considered as a domestic foreign-owned corporation.
Each business structure has its own corresponding tax to pay. It is better to know which business structure best fits with your budget to avoid early loss of money.
5. Follow necessary legalities imposed by the government
As mentioned, licenses, permits, legal fees, insurance, branding, marketing, trademarking, inventory, property leases are among the costs that need to be covered once you plan to start your business.
Obtaining a business permit is one of the major requirements of the Philippine government to fully register your business. The municipality/city or local government unit (LGU) which has the jurisdiction of your business’ principal place can issue the permit/license for you to complete the registration process and enable your company or your business to start in the country.
Among the common requirements needed by the LGU are the following:
- Securities and Exchange Commission (SEC) Registration
- Bureau of Internal Revenue (BIR) Registration
- SSS, Philhealth, and Pag-ibig (HDMF) Registration
- Mayor’s Permit
- Barangay Clearance
- Building Permit
- Occupancy Permit (Building and Unit)
- Sanitary Permit
- Locational Clearance
- Fire Clearance
An important reminder: business permits must be renewed every year before the 21st of January if the company exists, whether the company is dormant or operational.
6. Choose your team
Prepare job descriptions and specifications that will be crucial in choosing the members of your team. Take time in thinking and outlining the positions needed to be filled.
If you have a limited idea of implementing the hiring processes, a third party can do it for you. Regardless of business structure, you still need a team that can help you in attaining the goals you set and hit the target sales.
A sole proprietor needs a team comprised of a mentor, legal counsel, small business coach or anyone in the family who can be one-call away. For partnerships and corporations, an outsourcing company can aid you in fulfilling the manpower you need for the company.
7. Advertise your business
The business industry has been highly competitive. Standing out above from the competitors can be a challenge. You need to attract clients and customers.
In this part, a marketing plan is crucial in promoting your business. Its effectivity will be shown on how the business will grow and hit the target sales. Exploring business marketing ideas can be of great help so you will get more ideas on how to promote your business.
If you find these steps too overwhelming but still want to start your own business, you can choose to franchise a business. Everything from the concept, brand following to business model, all are already made. The policies, procedures, and control systems for running the business are arranged systematically and all you must do is follow it.
Franchising a business offers you wide array of opportunities that you shouldn't miss out. A few of the things you need to prepare are the location of the business and the fund to start the operation. It is guaranteed that you can expect a faster return of investment compared to business ventures that started from scratch. Although no successful business happened in one night, franchising cuts your effort shorter in establishing a brand name, customer base, operating system.
For business franchising ideas, check our franchise listings and decide which business is most suitable to your passion.
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