I often get asked about business advice on trying to do business in the Philippines and with the network of people that I have built up with over time in the Philippines you often come across people who have been through the hoops on most ventures already.
There are common problems that come up time and time again and a lot of it is down to a complete clash of mentalities between East meeting West and often for Westerners its simply just not worth the hassle which is why more often than not businesses not only fail they simply just give up and get chalked as experience.
The first thing that is obvious is that anybody will apply for a job regardless of what you state in an advert same as when you ask for skilled labour there never seems to be a shortage of those skills. Until you employ someone then find they are generally completely useless and lied to you just to get some work. The “Yes” mentality is a big problem as people will say yes regardless if they haven’t got a clue or simply should say no. I have heard people say about this being down to local population not wanting to offend or trying to please their employer, personally it makes no sense whatsoever as the damage they do to things is normally a lot worse than anything that would involve training someone to do something.
Another problem is down to respect of possessions as I don’t think it matters if your Filipino or not but simply its not theirs is enough for it to be used and abused in a way that in the West may end up in a punching match. A prime example of this is when some village idiots dropped 2 welding machines off a roof to save them having to carry them down. Put me P14,000 out of pocket and to the stage where tools are off limits because common sense seems to be. I remember hearing someone mention a couple of years back why a rich Filipino had his garden done by shears and not a lawnmower there is your answer the gardener is likely to destroy a lawnmower.
Company loyalty is something that is often missing as well I know of someone who employed 10 Filipino’s for a year and trained them in their work as they were all supposed to be competent when they joined him but none of them actually had experience or ability to lead themselves which left him having to go over everything they did as well as train them constantly. Once experienced they left for other jobs as they believed they were now worth more, this left him out of pocket as he wasn’t expecting to be a training service and the investment of time was based on getting people up to scratch before moving on to a more productive venture the time wasted on training people literally wiped out his cash flow leaving him after that to work alone also realising he was better off without the staff as things were more productive working on his own.
Theft is normal and part of the culture. Prime example of this is in contracting for construction. You get a builder to quote the job and he comes in cheaper he then gets the builders merchant to supply the goods with an extra 25% on the receipts pocketing the difference. Very common practice and you get your receipts thinking this builder is honest but he’s skimming straight from your pocket on every single thing you buy. How most people treat staff is to check peoples pockets on arrival and when they leave to make sure nothing is being stolen. I know of restaurants where the entire staff were in on defrauding the business. A prime example of a restaurant scam is chef’s will bring in their own food and sell it as if its your meals tight auditing is always needed on a catering business regardless of where it is but be aware you won’t know who you can trust or not and its much better to treat everyone as if there is a chance of them stealing to reduce your risk. There is no benefit from being nice.
The Philippines does offer a good way to work on things offshore such as web development and with that I would personally advise just getting people as and when you need them. The reason behind that is simple the employment laws here are a nightmare and you won’t get staff as commited to your business as yourself. Better to do a fixed price on each part of a business as and when required and just build a portfolio of people that are reliable, don’t overload any one person as this may stop things being finished on time and be aware often if you pay people too much they may not want any work for months as they will sit on the cash they got paid on the last job. Which goes back to my builders before who disappeared for 2 weeks after they had received enough pay for the last month that they could sit drinking and gambling until their money ran out which left me doing a lot of the work myself. There is no commitment from their end!
All in all if you can afford to just retire do it. If you can find work you can do yourself that churns a profit do that. Personally setting up business here would be the last thing I would advise any foreigner who isn’t looking to spend time wading through the crap and also hasn’t been in business before.