Philippines Business Guide Part 4

Top Foreigner Businesses

The main businesses that foreigners seem to operate fall into the following list.

  1. Internet Cafe.

  2. Sari-Sari store (corner shop).

  3. Export.

  4. Jeepneys / taxis.

  5. Internet based.

  6. Farming / food production.

  7. Manufacturing.

  8. Call centre / virtual assistant.

  9. Property Rentals.

  10. Real estate agent.

  11. Accomodation e.g. hotel / pension house.

  12. Money lending/changing.

  13. Restaurant.

Now a lot of foreigners (the majority) will tell you that its difficult or impossible to operate most of these businesses because you cant compete with local operators or that its more headache than its worth. I have operated and owned companies in the UK and believe me its like pulling teeth there and a lot easier to do in the Philippines. In the UK you pay someone cash in hand for a days work you have to be careful incase they are caught for “benefit fraud” which keeps labour costs high as often you want someone for 1 – 3 days work you dont want to pay market rip off rates when you can employ someone nearby who can do it for 1/3rd of the price and still get the job done. The Philippines on the other hand operates around 40% on black market. Back yard food meat producers dont file tax returns for the cattle they have produced of the year for example and construction labour you just get when you need it. At the local rate which in Cebu is P300 a day. Make food available and beer for after work you can probably get P50 of that back into your pocket.

So what is the point of the list? Firstly because there are people who have made a success of all of the above. But also some of these ideas are already going through your head especially if you havent been to the Philippines before. As I hear it often from people they plan to “open a netcafe or eatery”. On arrival yet they havent even been here to get an understanding of the market and the fact a lot of areas are saturated.

Dont get me wrong as at the end of the day the operators of the businesses

above all arrived here at some point but the important factor is being aware that many other people have done it, tried it or doing it. So you need to spend more time on thinking how you will make it a better business than the next guy. Because business is cut throat, on top of that a lot of the businesses above will have owners that will tell you there is no money in it. But my question would be if there is no money why are they still operating the businesses?

Internet Cafe

If you read the guides they will tell you to have the latest and greatest machines to compete with the neighbouring cafes but in reality is this true?

Personally I think getting the PC that does the job for the lowest amount of capital is the way to operate. Surplus machines are a lot cheaper and lower running costs due to the age of the machines. But will run most games that people want to play although may need tweaking for some things. Ideally I try to split people onto Xboxs who want to game as this keeps my bandwidth available for people who actually want to use the net.

Also the Internet might be 50% of the real business potential. As printing/photocopying, CD/DVD burning, ID Photos/print, snacks, drinks or online/computer training are all things that can make the difference between making a few pesos and making a living. Its a business and should be run as one not a hobby (at least until its making money).

Sari-Sari store

Most stores you will find have very limited stocks and make very little money. But you can make it viable by either going big or running it as an add on venture to something else. Filipinos spend most of their income on food of some sort. So although it may not be the greatest venture it is one that can make an additional income.

Exporting

Is something that has been very profitable if you are lucky enough to find the right products and connect to the right buyers. Sea food for example can be a lucrative business with research and finding contacts within the industry. Same as furniture and clothing exports. Cebu for example is famous for guitars so being able to get “export quality” guitars transported to stores in the UK could give high profit yields if you know how to get them transported safely. There is a lot of paperwork and export taxes so taking all this into account before you even start to part with cash is important. Corruption in customs is some of the worst in the Philippines so be aware of that fact.

Jeepneys – Taxis

With an ever increasing local population and visitors these businesses can only increase over time. The factors that are paramount are getting the right routes and good maintenance. Poorly maintained vehicles spend a lot of downtime and losing you money as soon as they hit the garage. So investing regular in the upkeep of the vehicle as well as checking out the routes which could be done simply by asking a relative to visit a route your interested in and riding a few Jeepneys asking drivers how easy they reach their boundary each day. The boundary is the amount they would owe you before they start making a salary as its this factor that will tell you if the route is over subscribed and a waste of time or a regular money earner.

Taxis on the other hand are a different kettle of fish as finding a good driver they will know how to make money and the best way to pick up customers. So maintenance is the primary factor the rest is upto the driver to make you money. But obviously making sure you have all the details of the driver so the taxi doesnt disappear into the wilderness is one thing you will have to make sure you do. Ideally you want a “friend” mechanic who is a lot cheaper than going to the garage but will carry out general repairs for you at a much lower