Before jumping into business, make sure you are fully equipped with the right knowledge and mindset. It's great that you grab opportunities and take your dream to be an entrepreneur into the next level, but before starting out, here are some of the things you need to know before starting a business in the Philippines.
1. Target Customer
“A product or service for everybody is a product or service for nobody.”
Before venturing into business, you should first know if there is an available market for the products or services that you will offer. This would include a need for extensive research for your target market. If you are able to find a demand for a certain commodity or service, you will get closer to finding success in the first steps you take in starting-up a business.
One helpful way to determine a market and target customers is to answer a key question such as "Is there a need? How significant is the need?"
2. Target Products or Services
One of the most crucial parts of starting a business is determining what products or services to offer. Most often than not, aspiring entrepreneurs are hopeful to be profitable in the long-run. As part of this, it is important to always first answer what product or service to offer first.
Here is a product brainstorm checklist to help you out on this.
Identify or create products that solve a problem.
Find products you and other people are passionate about.
Find products with branding potential.
3. Location
“E-commerce lets firms and individuals conduct business over the internet."
Businesses can still be successful even if transactions take place online or virtually. E-commerce has become more common in this technological age of advancement. Although establishing an e-commerce based business is much easier and in some way cheaper, it is still likely that choosing a location wherein you conduct business will be a must. Make sure you identify or look for the best location for your business or where you would bring your own business office. For start-ups, having it at home would be great, but as your business continuously grows, you would eventually have to move out and find a better place to do business.
4. Capital
It is almost always essential for businesses to have the right amount of capital to kick start their business. Entrepreneurs who want to raise startup capital have to create a solid business plan in order to sell the idea. Startup capital must cover all of the start-up's major initial costs such as inventory, registration and license fees, office space, and product development.
Third parties can provide funding such as banks who provide business loans to fund a new business. Although, drawbacks to this type of approach would include the business not being that much profitable in the earlier years of its operations because of payments of interest for the debt assumed.
5. Suppliers
Identify potential suppliers needed to produce the service or goods you will sell. Consider their price, location, reliability and operating hours.
6. Marketing
“The best marketing doesn't feel like marketing."
Rarely a business sell without a good marketing plan. Marketing is one of the key factors why businesses succeed, and why it fails. Choose the right marketing platform for your business.
Without a good marketing plan, businesses would not flourish or sell well. This is where marketing is a key factor for the success of a business, and also why some fail. Entrepreneurs must be able to choose the marketing platform that fits their business plan.
7. Registration
After considering all the capital and expense requirement, before you start operating, make sure you have the registrations needed to legalize your business. At a minimum, you must have DTI or SEC, Barangay, Mayor and BIR. If you have employees, register to SSS, PhilHealth and Pag-IBIG.
8. Business Bank Account
Consider opening a bank account separate for your business. When choosing a bank, it must be accessible and available.
As the business grows, it would be good practice to apply the imprest system as an internal control over cash. The imprest system requires that all cash receipts should be deposited intact and all cash disbursements should be made through checks. Disbursements for small amounts are made through the petty cash fund under this system.
This is to simplify your record keeping and avoid mixing your personal to your business, especially if you are a single proprietor.
9. Government Compliance
Another important item to consider, but often neglected, is the government reporting you need to comply with every month, quarterly and annually. Neglecting government compliance, taxes due to the BIR to be specific would later result to penalties imposed on the registered taxpayer.
Government Compliances include at minimum filing and payment of taxes, SSS/PhilHealth/PAG-IBIG contributions. As well as yearly payment of Barangay and Mayor’s permit.
10. Accounting and Financial Analysis
Last but not the least, when you start a business, ensure you have a reliable accounting and financial reporting process in place. Accounting is the language of business. To know what’s really happening in your business, you must have a reliable accounting and financial reporting system.
To make sure that this is easily met and achieved, there should be proper supporting documents for each transaction cycle in the business such as issuances of sales receipt and purchase orders.
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