How Feasible are Sari-Sari Stores?

Sari-sari stores have been a tradition of community-based micro consumer businesses and have in fact become a basic entrepreneurial institution in the Philippines. They pop up here and there, often side by side.
 
But do they really make money?

A decent start with this business costs about P50,000. Some start it with P30,000 or less. But if the sari-sari store itself is not yet constructed a capital of P70,000 to P100,000 could be realistic enough.

A 16 square meter area ought to make for a spacious sari-sari store and would cost some P48,000 to P50,000 to construct if we use a P3,000 per square cost estimate factor. With a P70,000 capital and a P48,000 sari-sari-store construction cost, P22,000 is left for merchandise capital.

This remaining capital is distributed to at least 5 basic product items: canned items, sweets items, drinks items, plain food items, and miscellaneous items. We have left out wet items, hardware items, accessory items, and gifts and novelty items—items that can also easily make money. They may be added at a later time.

Say, for canned items we put P5,000, for sweets P2,000, for drinks P7,000, for food P5,000, and for miscellaneous P3,000. Drinks need more capital for buying drink cases and bottles in this business. Often, the experience among sari-sari store owners is that drinks, sweets, and canned items are the top three products that really make money. Under drinks are included soft drinks and beer and liquor. Sweets include affordable chocolates and candies. Canned items are sardines, corned beef, tuna, salmon, and cooking oil.

Then, we need to have a return of investment at the soonest possible time. If daily sales of the sari-sari store amount to P3,000 and three quarters of that is capital, we earn clean P750 daily. Not bad for a business to make money. We allot P150 of that for food for a day, P15 for next year’s business permit renewal, P135 for light and water bills for the month, P100 for miscellaneous. So we have P350 as daily savings. Now we have a good idea of how long before a capital of P50,000 or P70,000 can be returned to us. A P50,000 investment will take some 143 days or some 5 months to break even. That is if we make P3,000 sales daily.

Sari-sari stores have been around to make money for countless small proprietors. It is a business worth considering for a gradual entrepreneurship take off.

35 Comments

  1. Michael Birdzell

    I found your article on Sari-Sari Stores insightful and interesting I looking at soon other business maybe you can help. Between these for business I sure I am not the only person enterested in this information.

    question #1 How feasible are bakery’s
    question #2 How feasible are internet cafes
    question #3 How feasible are carenderia’s

  2. jasmine de villa

    I really enjoyed reading this and I want to start my own sari-sari store in our neighborhood in Quezon Province or in Sucat Paranaque. I am currently working abroad and would like to more of the estimated budget if I have my own space to put it up and other requirements like business permits and all. Please email me the details at the soonest possible time. Thank you.

  3. Emmanuel R. Mariano

    May I request for a data as to how many Sari-sari-store in the philippines per region. I’m thingking of SSS as a new target account for my products. Thanks!

  4. Maryanne francisco

    Can you pls. Help me how to handle internet cafe and what are important things to know about it .. Where do i can apply internet and where do i can borrow some computers .. Some says there are some companies like smart promo of 5+1 computers and internet .. I dont know much or knowledge about running a business like this .but im planning to have this in my place .. Can you pls. Email me some details about it . By the way how much capital it will cost .. Thank you ,hope you could help me !

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