Starting a business in the middle of nowhere – Philippines

Ok middle of nowhere is an exaggeration but there is part truth in the comment. Our location is not on a main road, infact its more of a dirt track than a road at all. So why is business working and why could it work for you?

Firstly there is always something in demand or something people don’t even know they need yet until you start selling it. First you have to look at the nature of people in the Philippines aswell as lifestyle. Generally people are struggling to make ends meet so regularly buy food stocks often on a daily basis. Second is realising there are a lot of things that are randomly bought from you simply because you have built up trade. We initially setup selling goods our neighbour doesn’t sell so we wont offend them. Your probably thinking fair competition? but the thing is it was his inheritance from his mothers death that started his small sari-sari. On top of that they are related and we live in a pretty much clan type area. But one thing most of our neighbours haven’t got is refrigeration within 20 feet of our net cafe is a location that is used for Mahjong which in reality gives you a steady flow of customers not the players but their kids! Frozen drinks and ice pops sell throughout the day easily and will only continue to expand. Its things people can’t get that count. In the future we will adopt more stocks if the other sari-sari closes but at the moment it seems to be doing ok and I hope its successful. But there are plenty of other things to be selling anyway. As well as stocks to supply. Detergent is something we have recently also started selling as we are buying in bulk and dividing down into small bags for “daily” use. Same with rice.

The other reason this type of business works from being off the road is that we have a combined business as well as operating on realistic profits. In the UK I remember looking at a 50% profit margin across food and drinks on businesses I operated before as a minimum due to operational costs. In the Philippines the operational costs are a lot lower and in many cases are none existent. E.g. if the ice pops are stored in your freezer with your other stuff or chilled meats are pre-cut into bagged weights on a spare shelf in your fridge. Its all business and its all business that can do nothing but grow if operated correctly. Its the fact we are in the middle of nowhere in street terms that we have no real competition. The net-cafe has a rival which is a tricycle ride away which is the same cost as half an hour in the cafe. Would you get on a trike when there is a perfectly good cafe nearby? On top of that a few of the peddle cad drivers use the cafe aswell. Which no doubt has a positive affect on the business in passing conversation. Especially when I give them some T shirts with advertisement for free. Also the fact of our location is there are a lot of small houses and a small coconut plantation area behind with more houses further on. We are the nearest store and net cafe to everyone in this area. The competition only exists in small amounts e.g the odd house doing rice or something else as budgets can’t expand as far. So it goes from a “you must have a main road location” which many people will preach to you to the fact is look at your location and see what you can do with it. Even if it makes you P150 a day its still an extra P150 which probably covers your electric,propane and water bill each month and its not hard to do. The net-cafe is slowly growing and a lot of people have warned me away from this type of business but like I keep stating its all on the area. We don’t live in a wealthy sub-division we are in a very local neighbourhood to be honest I don’t know if I could live in a sub-division as I like the people I have around me here they don’t ask for anything. But I know in a sub-division the “rich foreigner” will attract interest from others and I just can’t be bothered. Not because i’m unsocial its because people who are in the middle salary bracket are looking to make money out of us and if anyone is going to make money out of me its the people around me who help when we first started. Not the people who think we are just dumb foreigners they can rip off because we don’t know local pricing.