Philippines Guide
For Travelers, Expats and Pinoys
Requirements for a School Business
With government hands all tied up due to lack of funds, public education is at its worst. So private elementary schools are popping up like mushrooms in the country. And for a good reason: middle class people who make up a vast portion of society are looking for elementary private school alternatives. A famous proverb in Philippine business is: any business that deals with kids’ needs will stay and prosper.
First, an elementary school business will need a principal and teachers who are all licensed teachers. The principal must at least be presently having a master’s degree in education. The school business can start out as a preschool first and gradually expand its grade levels. After being a preschool for 2 to 3 years it can apply for permit to hold the first 3 elementary levels, and so on.
The school must have at least 500 to 1000 square meters of property which is not traffic hazardous. It may be in the safest street corner of a subdivision or interior road. When this is secured, the school business will need the following papers: homeowners’ consent, barangay clearance and permit, Securities and Exchange Commission (SEC) papers (it must be a corporation), Bureau of Internal Revenue permit (BIR), business or mayor’s permit, and a permit to operate a preschool and elementary school from the Department of Education (DEP ED).
For a secure school business, foremost features a school must have are: strong and safe structures, fire escapes, fire alarm, fire extinguishers on every floor and in every room and corner, good ventilation, well kempt rest rooms, spacious classrooms, playground and sport facilities, clinic, ample library, laboratory, computer room, administration offices, teachers’ lounge, and a clean canteen. The school may plan a future expansion horizontally or vertically. These are necessary things for a DEP ED permit.
The school business must have an organization composed of the school administrator, principal, head teacher, teachers, librarian, office staff, nurse, security, maintenance, and canteen staff. The administrator will head them with the principal. This is for the DEP ED side of the school requirements. In addition to this, the school must have a board of trustees, officers (chairman, vice chairman, secretary, and treasurer), or president and vice president. This is for the SEC side of the school requirements.
A school business needs pertinent documents and organizations to complete certain government requirements. With these paper works secured and the organizations set up, the school business will be running smoothly and effectively.
Selling Business Techniques in the Philippines
There’s definitely a peculiar Filipino buying and selling culture. Knowing them may help get an edge in the selling business.
First, there’s a so called “buena mano” or good hand in the selling business. And what’s a good hand? The first buyer in the morning or afternoon is the good hand that brings in business luck. Not only that, being a good hand also makes the first buyer a recipient of luck through the day. So there’s a lure in telling Filipino buyers they’re the good hand.
Being good at counseling buyers also does the trick. Most Filipino buyers like being helped out in finalizing their buying decision. Lots of times they’re lost as to what and how many to buy. It’s not simply telling them to “just buy” but it’s in helping to convince them that they’re about to do a good, wise buy. Most Filipino buyers want to share the guilt of having bought something they really do not need—or share the burden of a tough buying decision. A sharp and skillful seller will make good selling business if such opportunity is discerned and grabbed.
Good pairing or partnering sense is an asset in the selling business. Most Filipino buyers love being praised. And it’s good to place praise where it is deserved. A discerning seller readily sees how a merchandize will look good on a potential buyer. A hanky being sold can easily be paired with a buyer’s earrings, a pair of sandals with a pair of jeans, a wrist watch with the color on the fingernails, and a shirt with the built or size of a buyer. Filipino buyers love the idea that items are seen making them look better, or younger. That’s excellent business sense in the Philippines.
Here’s a taboo: never, never address Filipino buyers as grandpa (“lolo”), grandma (“lola”), old man (“tatang”), or old lady (“inang”). A good selling business sense is call them “sir” or “ma’m” or bro (for brother) or sis (for sister). Address young adult Filipino buyers as “kuya” or big brother, or “ate” or big sister. To most Filipino buyers addresses that insinuate old age are an insult. They may not react violently but they won’t buy anything from the addresser—and might even make sure they never pass that way again, ever.
The most effective selling business techniques to lure Filipino buyers into really buying a lot and more often are relational in nature. If one can make then feel special, they’re hooked.
Small Business from Scratch In Manila
Trying out a business in the Philippines is a sure risk. The options are numerous, but so are the perils. But once the right business is hit, the rewards are sure to pour in.
Let’s start realistically. The usual way is doing employment first then business, if we want to play it really safe. Either earn the capital from the work pay or avail of a business loan with the employment as collateral—like a salary loan.
At least have 30 percent of the total capital needed for a desired business. Say, the initial capital for a medium size ice cream and soda stand is $500 or P 23,500 (at a rate of P 47 to a dollar). Thirty percent of this is $150 or P 7, 050. Add to this your loan of, say, $200 (P 9,400) or $300 (P 14, 100). So initially, you have at least P13, 000 plus or about $277. Start a small ice cream stand.
Then accurate information comes in. Seek professional mentorship. Seek out several friends, relatives or referrals that are in the business of one’s choice and have them as informal mentors. This is often given for free. This way you save money intended for a seminar fee.
Learn as much as possible. Be sure to get hands-on experience. Learning merely in theory won’t get anywhere but a downward spiral. Getting the basics and some secrets of trade is crucial.
One of the vital things in a starting a business is location. It often decides whether the business thrives or dies. Choose several places and survey human traffic at specific times of the day—preferably morning, lunch time, and at 6 pm. If the location is mostly packed with crowds, and the rent is reasonable (which is about P2,500 or $53 a month for an ice cream stand), then the place is worth trying.
Strong will. Many will dissuade you. Proceed with sturdy confidence but put allowance to some letdowns—first times are prone to mistakes. Feel free to go back to the mentors for further enlightenment.
Hard work is a given. Often it means the owner will man it himself for months or even years.
If an initial $8,000 is desired as net income for the first year (that’s P 376,000), each month ought to yield at least $667 to $700 a month (P 31,349, at least). That’s $167 to $200 net gain daily (P 7,849, at least). This is conservative.
A European waffle franchise can cost $450 or P 21, 150 in Manila, complete with the collapsible booth, ovens, display rack, initial flour pack, boxes and waffle packs.
All the business success elements must be there: information, will, hard work, and faith to sustain all three. Then scratch starts to translate into cash.
Scouting a Business Location
As the Chinese businessmen in the country say, “In business location is everything.” How should a business be located?
Nature of business is directly proportional to its location. Business in the Philippines is informally “zoned” as follows: commercial, community, sidewalk, or stocky. Commercial businesses have malls and shopping complexes as their business location. Community businesses like groceries, marts, hardware and sari-sari stores, have street corners or main roads in communities as their business location.
Sidewalk businesses like selling in small, makeshift stalls, or kiosks, or carts have byways and pathways as business location—or even spread-out mats right on overpasses—which the MMDA abhors, and which we, therefore, don’t want. A new trend in business in the Philippines is being a stocky—a networking business term which means one’s got stocks of marketable items at home and sells them through word-of-mouth. So the home’s the business location.
After knowing the proper zone or area where one’s business location is supposed to be, the next task is to know where “exactly” the business site is to be. In doing a business in the Philippines, we’re going by the adage that location is everything in business.
Here are tips on where exactly a business location should be placed.
Human traffic. Check if the place is a major route of human traffic at least at 3 major times of the day—morning rush hour, noon rush hour, and afternoon rush hour. Some ideal business locations get heavy human traffic 16 hours a day. In this case, sometimes night shift work is needed to take full advantage of the human traffic flow. To be sure of human traffic, schedule 1 to 2 days observing it in the vicinity. Go there at certain times of the day to study human traffic and do surveys around. Ask other businesses how they’re doing and what seems to be the problem, if any.
Next is settlement of the rent issue. Say, for a small 3X3 stall the usual rent is P5,000 monthly. To beat the rent one has to make at least P200 a day. But we also want to make profits—not just pay rent to fatten up the landlord, so it’s got to be at least P300 a day. But we have to pay taxes, annual permits, overhead expenses, etc. Meeting these needs make for a good location.
A good business location when doing a business in the Philippines is one that is strategically located to meet expense needs and make lucrative profits.