8 Golden Rules for Starting a Small Business in the Philippines
Published on: December 2, 2020 . Last updated: December 7, 2020 Category: Personal Finance
Still struggling on how to start a small business in the Philippines? To do so, you need to be driven, patient, hardworking, and knowledgeable. But it takes more than that to succeed as an entrepreneur. There’s no definite formula for success. However, there are rules that beginning entrepreneurs live by. Here are the eight golden rules on how to start a small business in the Philippines.
Table of Contents
- How to Start a Small Business in the Philippines
- Final Thoughts
How to Start a Small Business in the Philippines
1. Create a New Market or Benchmark
Be innovative! You have two choices on what business you want to venture in.
First, offer something that is not yet in the market. How can you make your business stand out? Think creatively and identify an innovative product or service that can satisfy the needs or provide a solution for your target customers.
Second, benchmark successful businesses. Observe what they’re doing right and create something greater.
You can also apply at PhilGEPS wherein you can have government agencies as clients. This allows your business to grow by expanding your network.
2. Validate Your Small Business Idea
You may have something in mind that you believe will be a big hit. But does your business idea really have the potential to succeed?
Conduct market research before you start a small business. Find out if the product or service you’re considering to sell is something people need and would be willing to pay for. Check also if other businesses in your area are offering the same product or service and how the competition is like.
3. Plan Your Business Finances
When figuring out how to start a small capital business in the Philippines, know that while doesn’t generally require a lot of funds, it will involve some capital. You need money to buy equipment, tools, supplies, and materials, as well as to cover ongoing costs for six to 12 months before you make a profit.
Start with listing down all the required expenses for starting your business. Group them into two categories:
- One-time startup costs: Market research, branding, licenses and permits, initial inventory, grand opening event, etc.
- Ongoing costs: Rent, marketing, employee salaries, taxes, etc.
It’s also important to have backup funds. When you start a business, you have to allocate backup funds (aside from your initial capital) that will sustain your business. It will take time for your product to be known. When you’re starting out, it’s normal to suffer some loss. If you don’t have backup funds, how will you sustain your business?
If you want to add more funds to start your business. Try applying for a personal loan.
4. Pick the Right People
You need a pool of talented, hardworking, and trustworthy people driven to grow your business. They are your greatest asset, so you have to also take care and grow them. With the right people, you can serve your customers better.
Identify the positions to fill and the core skills, competencies, and responsibilities for each. These will guide you through screening applicants and hiring the right ones.
If you’ll run your small business alone without any employee or contractor, you still need people you can run to for support. These could include your family and friends, a trusted mentor, or a fellow entrepreneur who can provide you with advice and motivation during the highs and lows of managing your startup.
Back to the main article: 25 Small Business Ideas You Can Start With Low Capital
5. Choose the Best Name for Your Small Business
Your business branding starts with a name. When you’re pondering on how to start a small business in the Philippines, make sure to pick a name that not only describes what you have to offer but also will have an easy recall among consumers.
Once you’ve come up with at least three potential names for your business, verify if it’s trademarked or another business is already using it. If there’s none, register your business name with the Department of Trade and Industry (DTI) if you’re a sole proprietor.
6. Apply for Licenses and Permits
In the Philippines, small capital business owners still need to acquire documents to prove that they’re running a legitimate enterprise. This is one rule you shouldn’t ignore before starting your business, lest you’ll get into trouble with the law later on.
After your DTI business registration, you need to get the permits. Here are the permits needed to start a business in the Philippines. This should be accomplished from the local government where you plan to build your business:
- Barangay clearance issued by the barangay hall
- Mayor’s permit/Business permit issued by the municipal or city hall
- Tax Identification Number and BIR registration documents
- SSS, PhilHealth, and Pag-IBIG registration as an employer and for new employees
- Special permits depending on the nature of your business, such as registration with the Food and Drug Administration for food businesses and with the Bangko Sentral ng Pilipinas for pawnshops, remittance centers, and other financial institutions.
7. Take Advantage of Social Media and Free Website Builders
You can cut down on your marketing costs by tapping social networks and free website builders such as Wix and Shopify to promote your small business. This rule is especially important if you’ll start an online business. You have to be where your target clients are. So if they’re frequently on a particular social networking site, you have to build your presence there.
If you can’t afford your own website, becoming a social media wizard is the next big thing. You can find various social media tips to help spread the word about your business. Sometimes, you don’t even have to spend a dime to go viral.
8. Be Resilient
As a beginning entrepreneur trying to propel your business forward, expect several bumps along the way. There will always be setbacks to deal with. But these should not discourage you.
Instead, have the resilience needed to get back on your feet after any challenge that comes your way. The COVID-19 is a tangible example of this. The pandemic may have devastated most businesses both big and small, but it doesn’t mean no one should try and start a business anymore.
The ability to survive any type of setbacks is what separate great businesses from the others. Start a business that will surely stand the test of time, fate, and nature itself.
- 5 Ways to Save Your Small Business from a Pandemic
- Seller’s Quick Guide to Dropshipping in the Philippines
- 10 Steps to Starting Your Own Buy and Sell Business
A lot of Filipinos nowadays want to start a small capital business of their own. However, many disregard the importance of the science of business. Instead, we rely solely on intuition. Before you tackle the problem of how to start a small business in the Philippines, you need to carefully study and forecast a lot of factors to ensure that your business will succeed.
-  The Best Ways to Do Market Research for Your Business Plan (Entrepreneur, 2015)
-  10 Expert Social Media Tips To Help Your Small Business Succeed (Forbes, 2018)
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