Taxi!

A Quick Peak At What Can Be Either A Nightmare Or A Dream.

taxi

An expat I know owns nearly a dozen taxis in Cebu.  Each one brings in P600 per day Boundary.  Boundary is the term for rental and goes back to the days when there were boundaries taxis had to work within and is often confused with the more apt term of bounty.  Most cabs in Cebu are worked 24/7 with a driver renting the cab for 24 hours by paying a boundary of between P550 to P700.  He then has to make enough to cover his gas which can be as high as P1000. An average day will make him P500 and then he has a 24 hour break before getting another shift.  A good driver can look forward to making P8000-P10,000 a month, not bad for spending your day in airconditioned comfort.

For the owner of the cab, the story can be either a dream business or a nightmare, usually it depends on who you get to manage the business and drive the cabs.  If your cab is earning P600 a day, that’s P15,000 a month if you work on a 26 day month.  This allows for maintenance and drivers that don’t show, either sick or lazy.  Since you can buy a cab from P250,000 for the rinky dink Kia surplus cars you can achieve ROI (return of investment) in about  16 months, or a more realistically two years.  Whether the rinky dink Kia will last that long at the hands of a Filipino cabbie is another thing.

If you buy a new Toyota Corolla, the cab of choice for us Bears, then you will pay about P650,000.  Add in license fees and you are looking at probably four years to recoup your investment.  At the end of that time you can still sell your cabs and make a profit of 15% or more, depending how well the cab stood up to the work.

Maintenance is a major cost for the cab owner and many also diversify into running their own mechanical workshops, often making more money than the cab side of the business.  I devised a business idea last year for running car washes via a small, cheap pressure washer but all the know all  said nobody here would pay to have their car washed.  In the last six months I have seen dozens of car wash businesses crop up along the side of the road using the very same cheap pressure washers and doing a lot of cabs and other vehicles.  If you own a washer as well as the workshop and the cabs, you have the whole thing sewn up!  As the cab fleet grows the next thing you need is a used car dealership to move them on.  I don’t think the law here requires you to inform the prospective purchaser that the vehicle was previously a taxi, as you must back home.

My friend with the dozen cabs says at first it was an expensive gambit that was little more than a drain on his resources while he kept the car sellers and mechanics happy.  He went through several trusted managers before he found one who really was honest and efficient and hasn’t looked back since.  That manager now owns a share of the business, something my friend had intended all along but nobody stayed honest with him long enough to qualify!

Drivers were another problem.  He found he had to have them pay security deposits on the vehicles to get them to respect them and drive them with some care.  Now, two years down the track he has a core of reliable drivers who look after the vehicles.  I suggested he have two drivers share the same car every time and give them a rebate each month if the maintenance bill on the vehicle is below the average.  The average varies from month to month but each car can cost up to P5000 per month in oil, tyres, aircon and other general wear and tear even before bingles and scratches are looked at.  In the nine months since he trialled that idea his average monthly maintenance costs on those vehicles fell by 25% or more.

Naturally he doesn’t really own the business as it is illegal  for a foreigner to own 100% of a land transport business.  His wife is the owner and he supervises the manager.  At first he was supervising
virtually every minute of the day but now he has found a reliable manager he admits he pops in to the office once a day and more to be seen by the staff than to actually supervise anything.

Insurance on the vehicles can be cost prohibitive if you have a spate of accidents and premiums are increased beyond what is economically viable for the business to support, but that is perhaps the only other drawback to owning taxis.  Where most foreigners come to grief is that they buy a taxi and have a relative of the wife drive it and it is not treated as a business.  The relative either begrudges paying the boundary and being harped on at about looking after the car, or simply doesn’t care and works the cab only sufficient to bring in some beer money, fobbing off his Kano brother in law when the boundary is asked for.  More horror stories come to the fore when talking about accidents and minor car park scratches.  Other drivers often see a licensed Taxi as a ticket to get their existing panel work paid for.  Some drivers may even work in collusion with a relative to have an accident that is the taxi driver’s fault and has the relatives vehicle being  repaired at the expense of the taxi owners insurance premium.

However, more is often less when it comes to headaches and nightmares and owning several cabs tends to add a note of serious attention and take the venture out of the hobby business mindset.  You can make money owning cabs and in many ways it is hassle free but it does take organisation, management and good selection of staff to begin with.

Who’s Your Suki?

A Very Filipino Way Of Doing Business From The Bottom To The Top!

who's your suki

Whenever I go to the local market with the Asawa, I love to wander around the meat and fish section.  I love the squalor and the flies and the noise and total lack of any lip service being paid to basic hygiene regulations.  It is so Filipino!

I have my Suki for meat and another for chicken and one I go to for fish and seafoods.  The Asawa has her own for vegetables, fruit and dry goods, spread around the market. A suki, for the uninitiated, is a regular provider of whatever it is you are buying.  I think to be  technically correct, you as the customer are actually the suki, but in typically Filipino fashion the word is used in either direction and you call the store you go to regularly your suki!

We have a suki for bottled water.  Our first suki would always deliver in the morning when we were out, despite having been told numerous times we wouldn’t be there to take the gallons (those large
bottles of water usually seen in the office back home but commonplace in every home here) until after noon.  Their insistence we change our routine to match theirs plus the fact it took six weeks to get them to sell us a table top stand for the bottles meant I spat the dummy one day and found a new suki!  They realized the error of their ways and tried to regain the business but the damage had been done!

Changing your suki is not something you undertake lightly.  The very fabric of commercial society here is built upon the relationship between buyer and seller.  When you look at any row of Filipino market stalls or shops, you may notice how everybody in a row is selling exactly the same thing.  The plastic bucket shops are all over there. The hardware stalls are all over there, the next row is all cloth and old clothes.  Not only are all the stalls for one line of merchandise in a row, they all look identical.  Every stall has the same goods displayed exactly the same way.  As if there is a pattern laid down by law as to how to display those goods!  Woe betide you if you do it any other way or set up amongst the wrong stalls.

The prevailing wisdom appears to be that you increase your chances of making some money if you are where people will go to look for the range of goods you offer. If the hardware stores were to spread themselves around the town then maybe one of them would wither on the vine as few people might find them. By having all of the hardware stores in the one spot, then it is guaranteed that anyone who needs hardware MUST gothere.  Brilliant!

So why would they shop at this store instead of that one if they all offer the same goods in the same location?  The only answer I have ever received for that question has always been the same;  because you know the store owner, or are a friend or, they are your SUKI!  Personal relationships are very  important to Filipinos and without them your business is pretty well doomed to fail.

Once you start buying regularly from one store and they take on Suki status then the suki will lose face if you are seen purchasing elsewhere in the same market.  Other store owners will know your suki is someone else and they will usually refrain from hassling you. Poaching customers has been known to lead to arguments, fights and even stabbings!

You should be able to expect a discount (walay hang yoo) from  your suki.  Of course over time the actual discount might decrease as both parties become comfortable with the relationship and outright price is no longer as important as the trust displayed and enjoyed between parties.  This is a factor of Filipino business that many foreigners never grasp.  They expect a good deal right from the beginning, yet what have they done to deserve that favouritism?

Anywhere in Asia there is a similar attitude to time.  Time being invested to really get to know each other and develop trust and a rapport that will span generations.  It is a long term view that we foreigners are coming up against way down the path the other parties involved have been traveling for perhaps centuries! The term interloper comes to mind and that is what we are in many ways.

Break that down to the local food market level of commerce and the relationship may take less time to build but the concept remains the same.  If you apply the same mindset to more expensive business
ventures here then it is easy to develop guidelines.  Firstly, don’t expect the best terms right off the bat, give the other guy time to get to know you and like you.  Secondly, never show your anger or emotion, it shames you and the other party and achieves nothing worthwhile. Thirdly, if you are being ripped off, don’t be in too much of a hurry to take your business elsewhere.

This goes for the meat suki too.  I had one who was putting the old thumb on the scales when weighing my beef tenderloin every Thursday.  I knew I was being short changed somehow, yet the challenge was how to turn this around to my advantage as I loved my beef and there was only one other stall that sold it.  My solution was to negotiate an extra piece thrown in after the kilo or two was weighed and agreed upon. This let the suki think they were doing me a favour and building rapport while I was actually getting what I was paying for.  The end result was they finally caught on and stopped thumbing the scales and I eventually stopped insisting on my extra chunk.  They got the message that I knew they were ripping me off, yet nobody lost face and business carried on as usual.

In some ways, dealing with your suki is good training for dealing with so much that you will confront in this country.  Going head to head will only have you losing time after time.  You may think you won, you made your point, you showed them but the reality is Filipinos, like most Asians, take the long term view in many things.  There is the short term immediate gratification often exploited by the lesser educated and those who figure they will never have to deal with you again but on the whole the opposite is more often the case. Choose your suki wisely, and then stick with them.  Work out your differences in ways other than the typical western yelling and posturing and you are sure to come out a winner in the long term.

Bed Spacers!

THAT’S THE BUSINESS FOR ME!

bedspacer

I will soon be releasing my StreetWise Business In The Philippines Guide and looking at the FIVE most successful businesses for Expats to engage in after relocation or retirement here.  Each one of these
businesses are proven performers with success stories and anecdotes given for each of the five.

My personal favourite, once you move away from the province and piggies, is the Bed Spacer!  I love this business opportunity and I know several expats who will be miffed for me bringing it to the attention of the world at large but that’s what happens when you make your living providing information on viable businesses rather than working them!

Actually, as we go to press I am in the throes of creating a Bed Spacer business exactly as I suggest in the Guide.  This is the proven formula for success here in the Philippines and while I don’t want to kill sales of the Guide, I will pass on some of the formula here, for FREE!

Firstly, what is a Bed Spacer?  Good question.  A bed spacer is a person who rents a bed space.  Originally it was simply a space, a place to lay a mat down and sleep upon it.  Over time it has evolved to mean more than just that, although there are still many places that offer little more than a roof over your head and a guranteed piece of floor big enough to spread the bamboo mat upon!

Some bed spaces are shared rooms or cubicles, others are single, private spaces that offer a modicum of privacy and the illusion of security.  Many include electricity and water, which usually means a tap from which you can obtain water for you hand laundry and also a light, perhaps a power point for a fan.  More upmarket places may also offer a fan, aircon (very rare) and TV, usually shared in a common area.

Luckily Filipinos like to be in groups and so communal living of this sort is preferred over the western style of single people living by themselves in single apartments and rooms.  Depending where you are and what social strata you are supplying, bed spaces can be basic or quite
comfortable.

The business end of providing bed spaces to bed spacers is simple.  If you have a bed room you can often partition it and put in bunks and provide accommodation for, say four people.  Each pays P1000 a month and you make P4000 for hiring out a room.  If you were to rent the entire house you might make that much, maybe less in some places.

If you have several rooms you can partition and rent out, then you multiply the income.  But wait, there is another secret which lets you make three times as much per person from the same space!  I’ll keep that one for the StreetWise Business In The Philippines Guide, but it is a genuine proposition that is neither illegal nor immoral!

The ideal bed space business would have a small apartment block type building holding at least 20 bed spacers.  Each pay P1000-P1500 per month for their room and light and water.  There is a laundry area for them to use and a small kitchen facility shared among the tenants.  You also add value and incerease returns by offering them food from your small carenderia and bbq stand. As well, there is a sari-sari store that sells them their toiletries and other consumables.

The smart thing is to set up near a college, hospital or major factory so that there is a need for accommodation in your area. Position, position, position!  A vital factor to any business and no surprise to anyone who has given the subject even a passing thought.  Find the right location, not the right building.  You can always knock it down and rebuild for a fraction of what it would cost to entice a major factory to set up next door to your perfect apartment complex!

You should also look at providing a jeepney with a regular schedule to take them to and from the college or factory.  Not only does this increase income, but it increases their dependance upon you.  No matter who takes their peso, they will have to spend money each month on room, food, personal things and transportation.  If you can package them up and offer them at a competitive rate, then why not get every peso they have to spend?  You don’t have to rip them off, just provide a  quality, competitive option.

Here’s a tip straight from the Guide.  If competition gets tough, you can maintain your rental rates while others engage in price wars, slashing the accommodation to ribbons and putting themselves out of business.  How?  Through increasing value!  You throw in the jeepney ride to and from work, saving them however many peso a month!  You write off any losses against what the jeepney makes the rest of the day plying its regular route.

Still not keeping the spaces filled? Offer free meals from the carenderia.  Two for one, all you can eat on Fridays, Tuesday Two Peso Time, use your imagination and offer more value and so keep your customers happier than if they went elsewhere! The other no brainer is to offer clean, safe accomodation.  Don’t  rent to men.  Just Filipina’s!  Far kinder on the eye and you don’t have  to break up fights induced by too much Tuba on paynight.  Filipinas are more reliable and more likely to pay on time and less likely to steal or damage the premises.  Of course there is always the exception and I
am not saying all Filipino’s are bad tenants, but it is simpler and much less risk of giving yourself brain damage if you simply rent to Filipinas only.

Setting up your bed spacer is fairly simple.  If you aren’t handy  with tools then you can always negotiate the local carpenter to fix up some partition walls, maybe build in some bunks and storage and generally make maximum use of space.  Think cruise ship cabin to get those ideas happening about sensible storage and maximum use of space and remember the renters are a lot smaller than you!

I think the minimum space per person is 2sqm, providing there is a common area they can lounge in, watch tv, chismis etc.  2sqm is 2m long by 1m wide, not much space but it can be comfortable and remember it is only sleeping space really.  So long as they have some room to stand and change in and somewhere to spread out and relax, the actual personal sleeping space doesn’t have to be too much bigger.

I like to work on having one CR between four to six.  Anymore and you really need a second toilet and separate to the other and the shower/washing facility.  Kitchen space really only needs to be a bench
with a two burner gas cooker on it, perhaps a water boiler for hot water for noodles and some shelf space.  I would discourage cooking in the rooms to prevent vermin and other infestations, not to mention you would rather they eat at the carenderia!

How much will it cost to get this business off the ground?  It all depends on the building and location.  You may have an existing venue or you may want to locate a promising position and buy or build there. I have several people interested in buying Lease Holdings on suitable properties near a major hospital which will see their US$5000 come back to them with up to 50% profit in just five years, all secured against the best guarantee of the lot, Real Property!  My estimations so far show a potential 12% per annum return, which is about the average for the stock market or real estate back home, the kicker being they can get in for as little as $5000.  If they change their minds they can always pull out and their initial investment is backed by the value of the property.  So long as they can wait until the premises are sold or someone else buys out their share, they are not going to lose a penny.

Other readers may have their own ideas and already know of a property that would be just right for conversion to bed spaces. Day to day management of the business is minimal, very similar to renting the entire house out.  You collect the rents on pay day, keep an eye out for possible repairs needing to be done and make sure nobody runs off with the fittings.  Part of my personal plan will be to offer reduced rentals to “Den Mothers” who will act as my managers and keep the  rest in line, or at least give me early warning of trouble.

All in all, bed spaces for bed spacers is the best business opportunity for many retirees and those relocating to the Philippines to be with their Asawa.  Unless you enter into a Lease Arrangement such as the one I am offering to some of my readers, you will need to have the deed to the property in the name of a Filipino.  If this isn’t an issue, then it is a great way to give the asawa, or her family, an income source. You can buy properties in fairly suitable locations from as little as US$10,000, maybe even less.  ROI is usually three years but it can be sooner depending on the way the business is operated.

If you are looking at options, give Bed Spacers some thought.  Feel free to order my ‘Making A Living In The Philippines’ Guide!  If you want more information about my Bed Space Lease Holding, email me personally at perrygamsby@yahoo.com

Another Day In Paradise

paradise

Today was one of those days.  Perfect.  There is a lot that can be fixed about this country, a lot that drives many of us foreigners up the wall, although if it is locally constructed that wall just might collapse on you. But there is so much to appreciate, to cherish and enjoy. Today was one of those days.  We went for a picnic.  Only a small picnic, just six adults and four kids.  Hardly worth cooking the rice by Filipino picnic standards. But we went all the same.

Everybody piled into the Red Terror and Papa Jusing and Vangie followed behind on the Lifan 100cc Super Tourer, minus the side car as the pigs are still too small to take to market.  The women had packed a mighty picnic lunch and lots of drinks and ice and with pots rattling in the boot we were off. Not too far from home we turned off the main road and went along the dirt, barangay road to the sea.  The chosen spot was beautiful!  A lovely bay with a coral beach and clear, azure blue water.  We parked the car next to some fishing bancas, under the shade of a jackfruit tree and got out the stuff.

High tide meant that the water deepened nice and close to the beach. Most of the coast along northern Cebu is mudflat reaching out a long way before the reef drops off into deeper water. It can make finding a decent swimming hole a bit of a lottery.  When you do find one, there is often a“resort” clogging the shore and charging money for a “cottage”.  Cottages are nothing more than a table and bench with a roof over it.  Mama Alice didn’t want to spend the money on something we really didn’t need, so we were “roughing” it.

The girls had gone into Daanbantayan earlier and bought pork, chicken, fish and pancit noodles.  The local jeepneys were on strike so they had to grab a “Habal-Habal” motorcycle taxi to get home.  The rice and pork and pancit were cooked before we left and Papa Jusing handled the BBQ for the chicken
and fish.  I went for a swim with my two daughters. After we enjoyed the water, it was time to eat, so everybody just hooked in with their fingers and enjoyed the sumptious repast.  I sipped a few bourbon and cokes while the others drank soft drinks or beer as the want took them. The kids played on the waters edge and collected more shells than they would be able to carry home in a month of Sundays. Life was good.

It’s the simple things in life like a family picnic by the sea that makes living here so worthwhile.  I never have to worry about some psycho abducting one of my kids and abusing them, it just doesn’t happen here.  At school they may have to learn the National Anthem and salute the flag, but nobody
frisks them for firearms or checks their bags for drugs. We lit a fire on the sea shore and nobody came along to tell us to put it out or to move on.  We minded our business and everyone else minded theirs. Driving back to the city we passed no radar traps, no speed cameras, no highway cops.  Nobody to tell me how to drive, how to live, how to enjoy my life.  Common sense rules.  If someone oversteps the mark, it gets dealt with sooner or later, usually permanently.  Few step over the mark, we all know what is right and what isn’t, nobody has to play Big Brother.

Back home we are legislated into a false sense of security.  We think we are safer because there are rules, regulations, ordinances, standards.  But are we really that much better off?  Workplace safety is definitely better back home, but most regulations just save the stupid from their own stupidity. When there is no social security safety net you tend to look after yourself a little more.

Where I came from if there was any risk, we screamed until the government legislated against it.  Then we relaxed and felt safer, knowing there are laws and rules to protect us; mostly from ourselves.  We lost touch with the reality that life is an inherently risky undertaking, even in this modern age. The Filipino’s haven’t lost that sense of reality.  They live with it every day, they just choose not to let it get them down.  How they keep on smiling, day after day with little of what we would consider hope for the future, is an inspiration to me.  Life here is at a slower pace.  It is a pace where you can take the time to smell the coffee, the roses, the buwad, the garbage, but also take the time to enjoy your life, and your family.  OK, it might not be paradise, nowhere is.  But since happiness is a choice, I choose to think it is, indeed, a paradise. At least for me and my own.