Philippines Guide
For Travelers, Expats and Pinoys
Water Business: Franchise or Independent?
Supplying bottled safe drinking water is a booming business nowadays. If you have enough capital, you can either get a franchise of a known water refilling station or go independent and start your own brand from ground up. Either which, you really need some serious thinking but the profits from this kind of business is very promising.
However, franchising or going independent has both their share of advantages and disadvantages.
Franchising a water refilling station can mean capital infusion than being independent. Franchising fees can range from around P800 thousand to more than P1 million depending on the franchise, the space, and the location. On the other hand, being an independent seller can cost an initial investment of around P400 thousand to P1 million, based on the capacity of the tanks and filtering system.
Most franchisees, however, enjoy a head start in terms of starting their operations rather than the independents since franchise programs include management assistance/support in their package. This way, new franchisees are guided on how to start their operations while independents have to commence on their own and rely mostly on their entrepreneurial instinct.
Franchise packages likewise include marketing programs for the franchisees which will definitely help in selling their products. Independent sellers, on the other hand, have to come up with their own promotional scheme to attract their buyers. With a marketing plan clearly laid down, franchise holders enjoy name recall and brand attachment to entice the customers while independent sellers have to be more creative in this aspect to gain a share in the market.
On the other hand, independent sellers have the luxury of setting their own prices. Some independent sellers can lower their prices to P35 per gallon while franchisees could only offer around P40 on the same volume because of the royalties they have to pay, which is based on the quantity they sell. Most franchisees revealed that they could not afford to reduce their prices because, aside from the royalties they have to pay, they are also bound by uniformity in their prices included in the franchise agreement. Independent sellers revealed that lowering their prices is their main marketing strategy, considering that franchisees already enjoy the name recognition from clients.
In the end, whether you decide to franchise or become an independent seller, the water refilling station business is definitely a good investment to venture into. No matter how these stations have grown in the vicinity, water remains to be a basic need and you will definitely have a household or company to supply their water needs. But you must be aware of how stiff the competition has become. Thus, you need to provide quality service to be able to come up with loyal clients.
TLRC Programs for Home Businesses
Gloria Mendoza is a home businesswoman. She owns a bakery store right in front of her home and makes her products at her own backyard where she set-up a mini-factory. Her story is just one of the many success stories from this side of the world, in the Philippines, thanks to the government’s Technology and Livelihood Resource Center (TLRC).
The home business was built in 1992. She didn’t know anything about baking and relied heavily on the skills she acquired from TLRC. Her baker died two years prior to that and she nearly closed her bakery. But she mustered her strength and enrolled in TLRC and took up baking courses.
“I searched through newspapers and directories and it was there that I found TLRC.” She narrates. “I personally visited them and told them I wanted to learn because I didn’t know anything about baking.”
Gloria started taking courses at TLRC in 1994. First she enrolled in Basic Baking course and moved on to advanced courses like Bread-making, Cake Baking, and Cake Decorating. She has taken six courses in TLRC to date.
These are just some of the courses offered by TLRC. The center had already developed more than 300 courses in home-based, agri-aqua, and crafts-based business. The course also come in video and print formats which serve as references and easy-to-follow gyides for technology applications at home.
TLRC pioneered in the development of livelihood and business technology training aimed at providing would-be and practicing entrepreneurs with the skills and techniques in putting up and managing a business.
It continues to provide and disseminate knowledge, skills, technology as well as financial intervention through loans for the Filipino SMEs. They also have developed such as the Program for Countryside Economic Empowerment and Development (PROCEED) which aims to bring TLRC services all over the country. The program will establish Technology and Livelihood Development Centers (TLDCs) at the local level and will serve as channels for TLRC’s livelihood and technology programs.
The center was also able to promote the application of information technology Services Group (ITSG). ITSG pioneered the development and implementation of computer-related projects and also provides other information technology (IT) related services for the SMEs.
In 2001, SMEs started to enjoy a fast and easy access to TLRC’s programs through its e-Library project. It has made technology information and livelihood information available to local government units throughout the country.
After Gloria’s trainings at TLRC, she was able to supervise every detail of her baker business. “Using what I learned from TLRC, I was able to monitor the operations of my bakery,” she says.
She states everything that she had learned at TLRC, she was able to apply in her home business. At present, the bakery employs more than 20 personnel and earns a net income of P3,000 a day.
There’s Money In Wax
Rose started a home business with an ordinary but in-demand item: candle. The road to success is difficult but rewarding especially when you see the business picking up well. And yes, there’s money in making candles particularly in a religious country like the Philippines.
The secret is keeping the prices of their candles lower than that of their competitors. For example, the regular white, red and yellow candles usually thriving near the churches are sold for only fifty centavos (P.50), other candle-makers sell them for P.75 cents to a peso. A single scented candle of about six inches tall and three inches thick can be bought for as low as P40 pesos, much cheaper indeed than when you buy them from the mall. Their most expensive product, the pascal candle or those gigantic candles used during church rites, is only priced at about P850 pesos.
There is yet another secret to this. Rose learned from her in-laws the importance of recycling. They collect used candles and those wax balls we usually form in the cemetery during All Saints’ Day. They are bought for P10pesos per kilo. Then they are thrown to the furnace for melting and are made into new candles.
“We use the recycled wax only with the red and white candles that we sell for cheap prices. It’s not really practical if we’ll use pure paraffin wax..
“Besides we really can’t sell the candles if they’re too expensive. People around here cannot afford it, unlike in Manila. And we sell them for the same price even during peak season.”
Business is fairly good, with growing clientele and the continuous demand for candles. Even some TLRC classmates come to her for additional supply. Rose admitted that making scented and decorative candles is quite costly that’s why the bigger bulk of their production is still the regular non-scented ones.
Rose was kind enough to show us the step-by-step process of making candles. Here’s how it goes:
1) Candle-making basically starts with the wick. Buy cotton strips from textile mills costing about [45 pesos per kilo. Use pure cotton for better quality, making sure there’s no nylon material mixed in the cotton strips.
2) The cotton strips are cut and made into knots. Soak them in hot wax to make them stiff and hard and ready for candle-molding.
3) Tie the wicks to a stick about two feet long and carefully place them at the center of the hot wax in the mold.
4) Add the scent while the wax is being poured into the mold.
This small home business has become the bread and butter of the Ludgarda Family. And this home business is what Rose can proudly pass on to her children and grandchildren. Judging from the way she puts her heart into her work, there is no doubt on the very bright future for Rose Candles.
Starting Small for the Big-Time
Entrepreneurial seafarers can take their first shot at business and all they need to get going is of course the capital. They can start with a capital of as little as P2,000.
Easily, the hottest and trendiest option for many entrepreneurs is franchising. It is one venture that offers you some small success even before you start. What’s good with franchising is that you’re linking up with established names such as Jollibee, Goto King, Foto Me, 3M Pizza, Shell, Caltex, and many others. Other than the financial resources, an interested franchisee only needs to present a letter of intent detailing his initial business plan. This is because companies understandably screen their prospective franchisees to ensure that the business’ image is not tarnished.
So rather than spend your hard-earned money in shopping or placing them in banks which could only earn a measly two percent interest annually, why not pick from among the following business undertakings you can possibly venture into:
? Gas Station – Investing in a gasoline station business would require a capital of from P3 to P5 million. That is if you apply as dealer of the Big 3 oil companies: Shell, Caltex, or Petron. New oil players such as Total and Flying V offer lower packages, while others can make you a gas station owner for less than P200,000. Of course, the location must be considered to realize profits early.
? Fastfood Chain – You don’t need to despair if you can’t afford the franchising cost of Jollibee, McDonald’s, Max’s, or Goldilocks which cost at least P10 million. A relatively smaller capital can give you a franchise of a smaller, but nonetheless, recognized fastfood chain. Why not try 3M Pizza, Goto King, Mister Donut, Potato Corner, Lapid’s Chicharon and Todits? A Potato Corner franchise costs from P200,000 to P300,000. Sure you can also get a food franchise for P100,000 but these are the less popular ones. Pooling your resources, however, can still bring your dreams of becoming an owner of a big-ticket fastfood franchise.
? Laundry Shop – Today’s fast-paced and highly urbanized lifestyle led to the instant success of laundry shops. The old reliable neighborhood lavandera can still do your laundry, but the trend nowadays is the laundry shop. A Lavandera Ko franchise would not cost at least P800,000, including self-serve washing machines, dryer, and chemicals. For around P500,000, you may consider opening your own laundry shop. Laundry machine suppliers offer friendly financing terms. Go check out the telephone directory.
? Water Station – Some 20 years ago, a group of students in a masters business class proposed a plan to undertake the possibility of a bottled water industry as part of their thesis. Their professor, however, thinking that such idea was too far out did not approve it. The rest, as everyone knows, is history. With pollution all around us, tap water nowadays is no longer considered safe and is largely used only for washing and bathing. To be a water station owner carrying known brands such as Agua Vida, you have to shell out from P25,000 to P500,000. You can check daily newspaper advertisements for details.
Making A Dormitory as Home Business
Corte Real started out as an idle space until Illac Diaz, a man with great entrepreneurial spirit turned it into the Philippine’s first dormitory for seafarers. From a 20-bed dormitory in Intramuros (Manila), Illac strived to make it 600-bed strong. The first months since its opening in Jun e 2001 were bad but it picked up quickly.
Illac recalls with fondness the very first tenants his dormitory had. “I was sitting inside my room then, planning for the dormitory. I was very worried. I mean, I had more than 600 vacant beds and what would I do with that? It was such a low point for me. Then all of a sudden someone knocked in and asked if he can stay. What is interesting is that his name was Amen. He was my very first tenant. So it was like an answer from the heavens since I was praying hard for my business.”
Illac considers Amen, who stayed for one night, as his angel, a heavenly sign for his business. True enough, after Amen left, more tenants knocked in to his dormitory.
“I knew I had the intentions. Mine was for social development, using industry for a better society. I mean, it’s how you change the lifestyle of your seafarers by using a business model.”
Corte Real strives to change the lifestyle of seafarers, which Diaz describes as one of the abused sectors of our society. Along with keeping his rates affordable for seafarers, he makes it a point that the dormitory will not just be a space to stay but a community as well.
“We offer more than the space. We are not all about business. They pay much more for the services than the space.” Illac contends. Apart from the recreation, the dormitory offers free use of game materials such as chessboards, television, a nearby basketball court and billiards hall; they also hold self-defense lessons for seafarers every Saturday. Add to that the weekly religious activities they hold.
Corte Real also gives assistance to seafarers with legal problems and assist them in finding a job. Just outside the dormitory premises are job listings for seafarer-tenants. They also have 24-hour security, and comprehensive record of their tenants including the manning agency they belong to.
Illac has high regard for the country’s seafarers which probably explains his commitment to elevate their status. “Our seafarers are well-trained, very calculated as regards to their movements. I only encountered a few problems with regards to the seaman, perhaps 1 or 2 among the 3,000 that have been here. They have a high level of accountability to their family and company.”
He also tries to accommodate then in every way he can. The dormitory for instance offers credit facilities and accepts delayed payments for seafarers. Aside from this, a new dormitory will be opened in nearby Ermita where a plan of accepting women seafarers is being considered.
Haircut Anyone?
So you think only women are vain? Think again. I just found out that men can be as prissy with their looks like women are. And the good news is, an enterprising person can take advantage of this turn it into a home business. How? By opening a barber shop!
The following is a Q&A with a barber who opened up a barber shop to response to this sense of aesthetic and call for business venture.
Q: What made you decide to have your own barbershop?
A: Even while I was still in school, I would also find its way to fix my hair differently especially when I had to attend parties or gatherings. The problem then was that in order for me to get the “fix” I wanted, it was either I would do it on my own or go to the beauty salon. In the case of the latter, I sometimes felt awkward being in what is supposed to be a woman’s world. So, I decided to set-up my own barbershop to answer this “need.” And it turned out that aside from being able to get the haircut I want, I am able to earn additional income as well.
Q: So how profitable is this business?
A; Well, it really is profitable. Haven’t you noticed the number of barber shops that have lined up the streets of the city or even in rural areas? Barber shops open up like mushrooms just like beauty parlors do. It only shows that you can earn quite a good sum of money from this business. Besides, it is not really difficult to manage one.
Q: How did you start?
A; The good thing in my case is that I did not have the problem looking for a location. I simply used the space available in front of my house which makes the barber shop a true-blue home business. Then I started to get the shop fixtures I needed, particularly the barber’s chairs while I had the shop furnished and designed. It was important for me that my shop looked unique despite my loyalty to the traditional interior and exterior design of a barber shop. I made sure my barber shop stands out among the rest. Then of course I had to scout for good barbers. It was not hard because as soon as news of a new barber shop opening spread, barbers started applying. I got the best ones.
Q: How much capital did it cost you to start the home business?
A: Well, let’s just say around P150,000 including the carpentry work. The chair alone cost me around P7,000 each. It would be more if you still have to consider a rental fee which isn’t my case since I own the space.
Get Into The Catering Business
One great example of a home business that anyone with interest in food and parties is the business of catering. Just arm yourself with a sizable capital not less than P100,000, an assistant cook, at least 3 waiters, a couple of helpers, a driver (unless you can drive) and your on your way to income galore.
Here’s a Q&A with a friend-entrepreneur who decided to make use of her cooking abilities.
Q: How do you plan for your menu?
A: Initially, I inquired from other caterers. Then, I tried to come up with m own menu. It is important to highlight your specialty. But you have to be flexible too in order to meet your client’s preference and budget.
Q: How much effort does one put into this business?
A: Like any other business, you have to give it your full time. Catering needs your personal touch and attention all the time. Even if you have a cook to assist you, you are still the one in charge of the kitchen. Even if you have waiters top serve the guests, you will have to be there to attend to the needs of your clients.
Q: You mentioned “personal touch” but what if you have to cater to different events in a day? What do you do?
A: It is really hard when you have two or more events in one day. You have to exert extra effort, especially of the events are scheduled at the same time. There was one time when I had two events to cater on a Saturday evening. One was in Quezon City and the other in Pasig. I asked my partner to attend the one in Pasigs while I attended the one in Quezon City. But during the affair, we were in constant communication (thanks to cellphones!). It is really hard but at the end of the day, you find yourself fulfilled. It is rewarding!
Other caterers I know, they have people to contact to whenever events overlapped and they find it difficult to go to all those catering parties for the day. What is important is that you have someone to take your place if you cannot be there. That someone should be able to answer the questions of the guests, be there to build contacts for you, someone who could really represent you and our catering business.
Q: In terms of profit. How much do you earn from this business?
A: With all the effort that I put into this business, the returns are quite rewarding. Mark up can be around 50%. But you cannot actually save much because as I mentioned, the moment you earn from a particular event, you definitely used a big part of your earnings in buying additional things you need to upgrade. You spoons and forks or plates and glasses would not last forever. Expect some of them to get broken or be misplaced. But taking everything into consideration, you really earn quite an income from this business.
Q: Any advice for those interested to enter into the catering business?
A: If you don’t really have much investment to put into it, it is advisable to start small, that is by the order (per shaffing dish). Just try to build contacts first before going into a full-blown catering service. In my case, it was my friends who became my first clients.
You must also maintain the quality of your food and service. No matter how big your business gets, your personal touch is still important. The quality of your food is very necessary. You must also continue to update yourself with trends in the catering business. Enroll in cooking classes from time to time.
Fortune With Cookies
Christine Jacinto thought that her new career as a homemaker would mean losing the opportunity to earn her own money. Attending to the needs of her husband, raising her sons (ages 5 an d3), and doing most of the household chores took most of her time that she never imagined she could start her own business. But entrepreneurial as she is, she found herself earning quite a sum of money right at the comforts of her home, specifically in her kitchen, baking cookies.
Q: What made you venture into this business?
A: Ever since I was in high school, I already love baking and cooking. In fact, I have a degree in Hotel and Management and worked with several restaurants before I got married. But with two kids to raise, I decided to just stay at home. So I was left cooking only for my family.
But on several occasions where friends and relatives would get to sample my baking, they would be impressed and some started to place their orders. In most cases, they would delight themselves with the cakes or cookies that I baked. But back then, it was more of a hobby and I only accommodate orders on selective basis.
Q: When and how did you start?
A: I started three Christmases ago. My youngest son’s birthday falls on November 10 and during his first birthday, we had a children’s party at home where I served several baked goodies for the kids. Surprisingly, many of the parents placed their own orders. I found out later that they intended them as gifts for Christmas.
Q: What were the initial problems that you encountered?
A: Quite a lot! Basically because everything was unexpected, I really did not plan to start a business during that time. First was buying the ingredients and other supplies that I needed. Of course I have to shell out some money for them. Thanks to my husband for providing me with the initial capital. Then there is also the problem with packing the goodies since they were Christmas gifts. There was also the problem of meeting with the schedule. Since I was doing the baking myself, it was really tiring.
And as I found it to be an additional source of income, I also have to employ people to assist me and it was hard to get someone you can trust since I have to make sure of the quality of the products. Plus the fact that this was being done at home, you wouldn’t just allow a stranger to enter your home.
Q: How much was your initial capital and how much working capital do you now maintain?
A: More or less around P15,000 which was used mostly to but the ingredients. But I did make additional purchases later on especially for the packaging. Then I also have to buy additional equipment as the orders started to grow.
Right now, my working capital has reached P50,000. And it actually depends on the orders. During Christmas season, I really get a lot of orders so I have to make a lot of purchases.
Food Is Money
Just recently, I had the opportunity to meet up with my college friends. After more than 8 years of not bumping into each other, it was a chance to get updated in what we all have been doing after graduation.
One of my closest friends in college was Anne Capitulo who is now into a home business: food catering. Back then she was already fond of cooking. She would prepare pasta and pizza recipes for us to enjoy whenever we spend out afternoons at her place. Little did she know that this simple hobby of hers would turn into a booming home business. I immediately bombarded her with questions.
Q: What made you decide to venture into the catering business?
A: Around 1998 I had this business with other friends. We were into events planning for weddings, debuts, and other affairs. That time, there were instances when some of our clients would order a particular dish from me. So I would do it a sideline. Then in 2000, I decided to subcontract for my other friends who were into catering. As I realized how profitable this was, I decided to go into full-time catering by 2003.
Q: How did you actually start this business? What’s your initial investment?
A: My initial investment was around P70,000, but I tell you, this was not enough. However, you could start with this amount since you really don’t need to buy everything. The amount is actually used for the ingredients, the dinnerware/silverware, shaffing dishes. Initially, I had to rent the chairs and tables from other caterers, even the waiters. That is why it is important that you build contacts.
In fact, I had to go to thrift shops in Divisoria and Quiapo to purchase what I needed. It is definitely much cheaper in these places. Shaffing dishes and dinnerwares are priced lower by around P1,000 compared to those sold in department stores. Just imagine how much you could save if you know where to buy. Be patient though and try to do some haggling.
Also, one has to have an enclosed vehicle for the delivery of food. Enclosed because you need to keep your food clean. Fortunately, my dad gave me a van for this business. Otherwise, I have to rent whenever I had to deliver my food.
Q: What does it take to be in the food catering business?
A: First, you must know how to cook. Starting out in this business, you do all the cooking. Also, you need to be resourceful in establishing contacts. You need to build contacts not only for your clients but as a source for your supplies—like your favorite mean vendor, vegetable dealer, table-chair rentals, cake, flowers, waiters and other details.
One also has to be outgoing and you have to love attending parties. In catering, your work doesn’t start and end with cooking. You have to be present during the event itself. You actually organize the event too. You talk to the visitors and get their feedbacks. You talk to a lot of people during the affair. That is also one way of building contacts.
Earn Money From Paints
Sheryl had a promising career in banking but she knew her calling was in the world of businesses. She packed her things one day and decided to help out in the family business which was a hardware store. From there the learned the ropes and later on decided to focus on one product alone: paints. Now that her paint supply business is a money maker, she’s glad to share some insights.
Experience Shared
“The first thing I learned was that having your own business is not an easy task to do. Before I only used to worry about my credit card payments, but now, I have payables reaching up to six digits,” she quips.
As Sheryl further relates, “In this business, it is important to have a good location. Your store must be located in an area where you can cater to both residential owners and commercial establishments. Then, as I pointed out earlier, you have to do some marketing work to be able to have a stable pool of clients all year round.”
She also points out the importance of prudent finance management. “You see, people don’t buy paint everyday. So your money is tied up to your inventory for quite sometime. You will have to find the means to be able to maintain a sound working capital.”
Looking back, Sheryl is proud to have survived the initial year and is looking forward to more years in this business “It is tough at first but it can eventually be a stable source of income in the long run. Just imagine, our family has been in this business for more than two decades already. It only takes a lot of guts to start out and be able to maintain loyal clients.”
Encouraging Small Enterprises
It also helps small entrepreneurs like Sheryl that there is a law like the Baranggay Enterprises). The law is aimed to exempt micro-business enterprises from income tax and the minimum wage law and reduce or exempt the “babes” from local taxes and fees and charges.
To qualify under this scheme, a business enterprise must have no more than P3 million in total assets including loans availed, excluding the value of the land used in the said venture.
The law also calls for the establishment of “special credit windows” to be set up by the Land Bank of the Philippines, Development Bank of the Philippines, the Small Business Guarantee and Finance Corporation and the People’s Credit and Finance Corporation.
Under the bill, the Social Security System and the Government Service Insurance System shall likewise extend additional to its members who wish to establish a small enterprise.
