Philippines Books

Are There Business Opportunities To Be Had In The Philippines? We Take A Look Each Month.

So far I know of people who are getting involved in bat guano, tempura cart sales, sari sari wholesale supply and a few other interesting ventures, including real estate development, sea shells, prescription eyewear and more! The common denominator seems to be the desire to get involved in something. However, a word of warning.

A business in the Philippines can indeed be started on a frayed shoestring, unlike something you might try back home. But be aware that the less you invest the less it will produce. This has nothing to do with any law of diminishing returns, it is simply that the successful businesses here are successful for the same reasons a business is successful back in the UK or America.

If you have insufficient capital, or a poor location or no real business plan then just because it is only a few dollars to get Dong going doesn’t mean it has any special chance of success or even survival just because it is started in the Philippines. I was in a Chilli’s franchise tonight. Cost of the meals are over P200 and well into P400 with some even more. Drinks were fairly pricey too, but you can have the buy one take one beer deal for P65 that works out pretty good value. Anyway, the points I am making are twofold. Firstly it took a fair chunk of change to put up a decent business like Chilli’s in the first place and secondly, there is money in this country!

There may not be much to spread around in the province where the asawa comes from but in Quezon City there is a lot of it! I was speaking to a car dealer who brings in “gray imports”. On his lot he had a VW Tuareg, a Dodge Ram, a Mercedes, three Honda’s and so on. Plus a 2004 Range Rover HSE going for P6 million! Given the fact Land Rover pulled out of the country due to the gray import market back dooring them for billions, I wonder where the eventual buyer will get it serviced? Woe betide him if it breaks down or the computer chip needs a zap, nobody has the diagnostic gear to fix it!

So between the gray imports and the authorised importers, there has never been more new car metal on the roads in Manila. And it all costs money because financing here is a joke. I left Chilli’s and walked down T.Morato Avenue and turned into Timog Avenue, part of the South Triangle area of Quezon City. The place is wall to wall restaurants, coffee shops, liquor stores, aerobics gyms and anything else you want. By the time you sweat your way onto Quezon Avenue the giant KTV lounges and nite clubs fill your horizon with their ridiculous prices and lurid neon lies of love and popularity. No money here? Rubbish!

So if you don’t have real chunks of cash, then you are in the realm of the SME or small to medium enterprise, which officially lists a micro business as being worth up to P3 million, not including buildings etc!!!! Small businesses are P3-P15 million and medium sized P15-P100 million. Anything with more investment than that gets to call itself a large, or big business. If you don’t believe me, check the official DOLE figures! So unless you have US$60,000 or more in the venture, it isn’t even a “small” business! 

Getting back into Manila, my old stomping grounds, after a two year hiatus in Cebu has proven more than merely interesting. I have really gone out of my way to get back into the street vibe that oozes from this city’s pores. Everywhere you turn in Manila somebody is trying to turn a peso. Across the street from me every morning at 5.30am a young woman sets up a simple stall selling corn, sits there all day and by nightfall it still looks like she hasn’t sold a single cob.

Every second house has its obligatory sari sari store attached, the barred serving hatch the sign of a micro enterprise in the making. On the street corners, food vendors offer BBQ meat, BBQ bananas, squid balls, taho and anything else you can think of. There are ten million people in this city and it seems that at any one time five million of them are trying to sell the other five million something. Like I said, there is money in this country, it’s just a question of who has it and how much at any one time.

The Biggest Growing Segment Of The Franchise Market Here Today!

I have been watching the steady growth in coffee shops in this country over the past few years with some interest. I do like a good cup of Java and when I first came to these shores 20 years ago it was a hard thing to find. Even today you will be lucky to do better than a sachet of Nescafe Instant, a sachet of creamer and a small cup of tepid water. Why the dumb mongrels don’t put the coffee in to the cup before filling it with water beats me! At least then it would have a chance to blend properly but why am I expecting western standards of civilised behaviour from someone who has never been exposed to such?

The reality is that Filipino’s enjoy a decent cup of coffee too, although maybe more for the fact it sends a message of affluence to others rather than the taste of the brew. At P50-60 and up (my café latte grande is a P100 cup of coffee) not every Dong and Dai out there is rushing to Starbucks, although more than enough are and new stores open all the time.

As well as Starbucks, there are Bo’s Coffee Clubs, Figaro, Seattle’s Best, Moccha Blend, Gloria Jean’s, Coffee Beanery and maybe four or five other franchises to choose from if you want to go into the coffee shop business. They all follow a similar theme, started by Starbucks back in the early eighties and itself modelled on the espresso bars of Italy, relaxed, casual and expensive! I wonder if the first recorded coffee shop, “Kiva Han” in Turkey in 1421 offered a mocchalatte or a frappucino?

In upscale areas they are everywhere and growing. It really is a market niche oriented business, you need lots of A, B and C class Filipino’s willing to spend relatively big money on a drink they really don’t need to get through their day with. At least not the fancy version on offer. Of course most places actually sell more iced drinks than hot versions, although this it is so cute to see Filipino’s wearing coats and jackets and sitting in the (still steamy for me) evening sipping hot coffee and pretending it is cold this time of year.

A decent coffee shop franchise will set you back around P2 million and up. You could get away with less but more will usually be needed. The way things are going though, it looks like a way to print money only a McDonalds franchise could beat. Or a Jollibee!

Are There Business Opportunities To Be Had in The Philippines? We Take A Look Each Month.

Here’s my latest and greatest! This is going to be huge! I have gift baskets full of shells that will sell for US$20 to US$30 in a craft shop back East, all day long! How much did I pay for them? Would you believe a buck? One Dollar! And I bought them retail, remember!

The big expense is shipping, of course. I think you could add US$2 each basket if you shipped them by sea, in say a Balikbayan type box. You could easily fit fifty baskets in and that would price it around US$100, so I guess that is within reason. In fact, smart operators would ship for less, much less.

So you add US$5 to each item, by now they are costing you US$8 each, landed in the USA and before customs duties, taxes etc are heaped upon them. Even at US$2 a basket, the shop is paying ten bucks and making 100-200% on top.

What is the secret? The secret is to have the outlet in the USA or Europe or Australia where you can sell your box of gift baskets. I admit US$250 per box isn’t a lot and maybe it will take the shop a season to clear its stock of sea shell gift baskets. Of course, if you can find one shop to take a box, then you can find two, and three and four….. One day, you’ll get that long awaited call from the giftware buyer at Wal-mart and before you know it…

How You Can Get In On The Growing Dairy Industry In The Philippines!

Dairy produce is taken for granted by most of us; at least until we come to the Philippines! I remember my first trip here in the eighties, I craved a milkshake and a decent ham and cheese sandwich! You could order both from Room Service at the 1 star doss house I was staying at in Manila, but the milk was made from powder and the bread was sugar infested Filipino bread, with strange purple ham and high temperature cheese!

Nearly twenty years later the situation has changed considerably. While you can still get the same bread, ham, cheese and powdered milk, you can also buy a much wider range of quality dairy produce in just about any supermarket. Note the location is the “super” market, not the “native”, “local” or any other kind of market. Dairy products are imported, new to the diet and thus more expensive than the average item on sale at the “merchado” or local market. 

Currently, the Philippines is about only 2% self sufficient in dairy production. The National Dairy Authority is aiming at increasing that to 5% this year with an innovative program called “Palit Baka”, more about that later. Imports of milk from Australia, New Zealand, the USA and Europe in various forms set the economy back nearly US$400 million in 2003. As the acceptance of dairy products grows in the A,B and even C classes, we can expect to see that figure grow.

One thing I have always found intriguing is the total absence of goat’s milk and goat’s cheeses. Given every spare plot of dirt has a ruminant or three grazing away and the market rarely has “Kambing” for sale (usually just a hind quarter, co where does the rest of the beast go?), how come nobody milks them and sells the milk or makes cheese or yoghurt?

I turned to the Asawa for guidance and she simply shrugged and said that no Filipino would buy goat’s milk or cheese. No reason, they just wouldn’t. I have learnt not to argue with her too much, especially on matters like this. Still, it seems pretty strange to me, especially when there are some great goat’s milk cheeses to be had and surely fresh goat’s milk is better than nothing at all in the calcium stakes?

But back to the baka, or cows. The NDA website is full of fascinating information and really should be visited. These people are making a very definite effort to improve the health and diet of the average Filipino. They are determined to bring fresh milk and dairy produce within the grasp of just about everybody.

The Palit Baka program basically has farmers borrowing cows and keeping them for a period of a few years. (They can also buy selected animals and at P70,000 each, it might be worth investigating if your in-laws have a few spare plots of grassy land around their house). During this time the breeding program the NDA sponsors is monitored and new cross breeds are developed that can survive the tropical climate. All milk produced that is not consumed by the farmer is sold to the local dairy center and much of it goes back to the poor of the community through subsidised feeding programs for malnourished children. 

Some of the milk of course ends up in the supermarkets and here in Cebu I can buy fresh milk for about the same as “fresh milk”, ie; UHT long life milk. My Asawa calls the UHT (ultra heat treated) milk “fresh milk” as opposed to powdered milk. Growing up in the province they never had (and her parents still never have) UHT “fresh milk”. Powdered milk was the best they could afford and that wasn’t as often as it should have been. Real fresh milk is a novelty and yet slowly she is getting more used to having it around. I find that you really need to finish the fresh milk off in a day or two, whereas back in Australia, even at the height of summer, fresh milk would last three or four days if refrigerated. Even using the same refrigeration practices, local fresh milk turns a little sour within 48 hours of opening.

If you see a bottle of Cebu Fresh Milk in the dairy department of your Gaisano, SM, Robinson’s, Fooda or Rustan’s supermarket, buy it! Help this fledgling industry get off the ground and help improve the diet of the average Filipino. The more real fresh milk that is produced and sold, the more chance there is that dairy products will become more affordable and more available to everybody in this country.

New Trends In New Business Opportunities!

Last month saw a Franchise Expo at Ayala Mall, hosted by Franchise Agents RK Franchise Consultancy. Rudolf Kotik, the founder of RK wasn’t there, but his Visayan representative Buddy Villasis was. Buddy is an intelligent, personable professional who was very open and forthcoming about the Consultancy and the franchise opportunities they managed and offered to potential franchisees here in Cebu. They have business opportunities going from a little more than US$1000 up to major investments in big name franchises.

I looked at the franchises on offer and noticed how there is a growing number of coffee shop opportunities. To me this proves there is a spreading trend to enjoy what is really a bloody expensive drink when you realise most cappuccino’s and latte’s start around P50 and go up from there! The Coffee Beanery, Indulgence Coffee, The Java Man, and a couple more are all on offer.

Food franchises do take up the majority of those offered but there were also educational and consultancy type franchises offered, as well as service oriented businesses such as massage studios. Wraps!, Rai-Rai-Kan, Kookels’, Ice Castles and others handled the food section. PC Quick Buys were there for computers, House of Praise for religious CDs and lots of other brands on show.

My favourite food franchise that was on offer is Dunkin’ Donuts. Me and the Anonymous Bear both love the Bavarians! We could buy into a franchise in Mindanao somewhere, but sadly everything on Cebu is taken! With Dunkin’ Donuts you can’t just buy a cart or kiosk or open a store, you need to buy the are or regional master franchise and then run things in the region, including setting up your own bakery. Big Money!

Out of all the 20 or so booths on display and the 70 or more franchises RK manage my favourite was the Kuryente Electrical Shop franchise. This is a nice looking concept that really should be looked into further because you could own a shop from around US$10,000 that will do well because light bulbs blow! What I couldn’t believe is they don’t have either a web site or an email address! Now that could be an opening for an intrepid web designer to leap in and make some money. If you want to know more, I would suggest you contact Buddy and ask him about Kuryente, I really think it just might take off! Otherwise, call Daisy Rafal on 0927 916 0565 and ask why they haven’t got a web site in this day and age!

It didn’t take too long to check out the entire expo, but what I saw was promising. There are much larger trade shows I Manila, but it was good to see someone trying something here in Cebu. I would suggest anyone with the intention of getting into a small business, either for themselves, their Asawa or an inlaw, contact Buddy and tell him you heard it here first!

NOTE: This Investment Scheme report was originally published in April 2005 and then followed up in November 2005. The scheme is still going strong, paying the dividends and interest and making money for all involved! You can learn more by visiting Dave Whittal’s Blog: http://hi-interest.blogspot.com/ Tell Dave Perry sent you!

And here is the update from the Investor himself. I have taken the liberty, at his request, to omit specific amounts of money, that are not relevant to the basic news value of the update and of course are the personal details of the Investor. I would like to thank the Investor for his candor in sharing this detail with us so we can all better decide whether this is a viable option for our own investment and retirement plans.

I am well pleased with the deposits in Bank of East Asia  (who arranged to pay into my account with EastWestBank for the Car Loan repayments) and Pilipino Rural Bank (who credit my ATM Account with Land Bank, with withdrawals at HSBC and BPI ATM’s also).

So much so that having received a Pension Lump Sum from 2 of my 3 Pension Providers, I wanted to avail of another 6 year deposit, like I did with PRB.  Trouble is that scheme was closed at PRB and only available in Bacolod.  Marhlan & Nestor of Legacy Group managed to speak to the chairman, and this is what they reported back to me:-

Good news!!! Luckily, the Chairman of Legacy Group has just recently advised this morning to grant the 1 year advance interest of 20%, plus monthly crediting of interest on 6 years CTD for the following banks: PCRB, Rural Bank of Carmen, PRB, and BEA. This will be effective however until the end of October (Oct.31′ 05). This means that after October 31, only Nation Bank Bacolod will be allowed to grant this offer.

So I am closely watching the GBP-USD Exchange Rate to see if it climbs since this seems to directly affect the GBP-PHP Rate (almost exactly GBP->USD->PHP) http://www.dailyfx.com/FinanceChart.html?symbol=GBP/USD is a good free ‘Tool’ to see how the Exchange rate changes during the day.  It has climbed to a peak of 1.778, which is where it was 08:00 on 21^st, and on 7^th October early in the day,  and on 24^th September.  However at 22:00 on 21^st October it was up at 1.8125, or better still 5th Sept when it was 1.8501  – why could my funds not have come through by then!

The Foreign Exchange Rates as quoted by HSBC On-Line Banking seem to be lower, and lag behind what the FOREX Rate actually is.  Trouble is their Buy/Sell spread is 2.5%, so not much chance to capitalize on this lag. All day their Rate for buying Pound Sterling(GBP) has been 0.0103684

(96.447), when that FOREX Chart showed GBP-USD @ 05:00 to be 1.7688 .  So in this basis, HSBC should be offering 97.774, or there about, in the morning?

This might not seem a lot (less than 1%) but when you are considering changing £X,000+,  that’s nearly Php10,000 extra!

I owe PhpX.xM with my HSBC AssetLink loan against PhpXM on Deposit.  My first thoughts were to repay as much of this loan as I could possibly afford and then be able to borrow with less than 24 hours notice again.  Became aware of the needs for fairly large sums when Mama got sick and had to be admitted to Hospital – and more so with Harry Carter.

However, being able to avail of that 6 year plan means putting 4 deposits of PhpxK (A, B, A/B, A/C where A is say Bob, B is Mary and C is Child) means getting PhpxK back as soon as my PhpXM cleared.  Will use that to pay off on AssetLink Loan then use the PhpxK a month interest to repay more of loan each month.  This means I would be able to ‘borrow’ PhpxK in an emergency and this amount increases by PhpxK each month.  I may well be able to pay off more of my loan, especially when funds from my 3^rd Pension Provider come through.  I could of course deposit another xK in the 6 Year scheme and get PhpxK advance and PhpxK a month.

To give you an idea of the amounts: if one was to take in Php1.5M deposit in ‘Cash’, one could get the Php300K advance interest the same day, and use that as a 6 Year deposit and get Php60K cash back from that and be receiving Php25,000 a month interest!

I don’t want to invest more in Rural Banks than I have in HSBC particularly, but the 6 Year scheme is very attractive. The 8.3% I am getting on the 5 Year HSBC Term Deposit is no longer available.

Please don’t quote the amounts I am depositing, but feel free to say I am particularly pleased with the Rural Banks affiliated to the Legacy Group, especially the 6 Year Special Deposit, and will be investing more here in Cebu, by the end of October.  If it were not for the PDIC scheme I would not be putting even Php100K deposit (the old PDIC limit)!  (Editor: Philippines Deposit Insurance Council)

The fact that Joint accounts carry separate Php250K from Single Accounts (* as stated in PDIC web site) makes a big difference also, otherwise I would have run out of Rural Banks here in Cebu and be having to consider Bacolod and other places outside Cebu – not so convenient!

Thanks again, sounds like the investment is paying off. I hope you never have to test the PDIC but overall it seems like a relatively safe yet profitable investment strategy. Nobody has ever gotten rich playing it too safe and risk is relative, I think this is so far a good thing. We’ll hopefully be able to keep tabs on the progress of this investment over the next few years. If you are thinking of following suit, this guy found the deal, so can you. Just check out your local Rural bank and have the goolies to give it a go

NOTE: This Investment Scheme report was originally published in April 2005 and then followed up in November 2005. The scheme is still going strong, paying the dividends and interest and making money for all involved! You can learn more by visiting Dave Whittal’s Blog: http://hi-interest.blogspot.com/ Tell Dave Perry sent you!

There is an old saying that I firmly believe, “if it seems too good to be true, then it probably is”. There are a lot of opportunities in life, however, that may seem to some too good to be true. Their lack of experience with that particular opportunity may make it seem almost surreal and far too good to be kosher. Meanwhile others who may have more information or previous experience recognize the opportunity for what it is and make the proverbial killing. How do you know which is which then?

Recently a friend of mine posted how he had looked into a scheme to invest a lump sum on a time deposit with a local Rural Bank and he would earn 20% p.a. interest on his money. His first deposit was for a modest P100,000 and if it played out, he was planning on investing several million in different accounts, different banks and in his and his wife’s names. Spread the risk so to speak.

On the surface his actions seem prudent and sensible and he would be looking at bringing in around P50,000 a month in interest as a form of income, and all without touching his pension and other savings! Brilliant! But is it too good to be true?

Firstly, I don’t think my friend is easily taken in by scammers. He has lived overseas for most of his working life and has been around the block once or twice. He is also an engineer, a technical type who is pedantic, even anal, in getting all the details sorted out, weighing up each nuance and really squeezing the decision of every drop of “if” before committing. One of those “show me” types who don’t accept someone else’s’ word for things unless they have seen it for themselves. In other words, unlike me, he isn’t the type to leap in boots and all on a whim! If I asked him to research an item and find out the best value for money example on the market, he would bore me to death with all the details but I would buy the model he recommended because I trust his judgment in those matters.

But this investment scheme doesn’t sit right with me. I know the deposit would be protected by the PDIC, the government body that insures deposits in member banks, and it appears the chosen Rural Bank is a member. I don’t like Rural Banks here because they have a history of going squishy on depositors. There are three basic types of banks here, Thrift, Rural and Commercial. Each have different areas they can supply services in and also different degrees of difficulty (i.e. protection for depositors) they must comply with when being set up.

I knew a German in Danao who ventilated his skull with a pistol bullet after losing P5 million when his Rural Bank went belly up and the CEO went on holidays with the cash! In those days the PDIC only covered P100,000 per depositor per bank. Now that amount has risen to a more respectable P250,000 per depositor. With my friend making (less than) P250,000 deposits in several participating Rural Banks and in his and his wife’s names he is indeed spreading the risk and also utilizing the protection of the PDIC. Providing there isn’t a problem somewhere should he need to make a claim. Sounds like he has it covered but I still hear those alarm bells!

I can’t think how a bank in the Philippines can legally loan money at such a rate they can afford to pay investors/depositors, 20%? Are they getting into the 5/6 business and lending money at extortionate rates to high risk borrowers? Heaven forbid! No business can borrow money at 20%, pay it back and stay in business unless we are talking drugs or prostitution so how can a small Rural Bank pay that kind of interest on time deposits?

What if the CEO’s of the Rural Banks have every intention of doing the right thing but they fall into a cash flow shortage problem and can’t make the monthly interest payments? What if they are intentionally defrauding the investor, or misleading them as to the risks? What if they put aside enough of the deposit to pay the first year’s interest payments, then bug out? They take the rest of the principle with them and are long gone before the lack of funds to keep making interest payments is discovered. Meanwhile, buoyed by the regular interest payments you not only invest more, you urge your friends to share the good fortune.

How about they get to the end of the five years, have made every interest payment due but the principle is no longer in existence due to “unforeseen circumstances”, honest or otherwise? What if this is similar to the SEC Share Float scam? A company genuinely releases a float to raise funds but then misuses the money to pay whopping salaries and dividends to managers and board directors and fail to reinvest in the business, which soon goes under. It can be totally above board, the request to SEC to raise capital with a float, the raising and then the board voting on how to utilize the money, despite it not being in the best interests of the shareholders per se. It happened here recently with the first owners of a Master Franchise with an internationally recognized fast food brand.

For me, there are not enough guarantees and too many iffy details. It does sound too good to be true but I hope for my friend’s sake I am wrong. Very wrong. If I am, then I am perfectly happy to not only pass on the news to the Dreamers, but to apologise for ever doubting his judgment. I do hope I am wrong, I just really don’t think I am. What do you think?

Are There Business Opportunities To Be Had in The Philippines? We Take A Look.

The concensus of opinion is that the Philippines are totally bereft of decent business opportunities for Expats. Or, there is money to be made here if you have the right contacts. Or maybe the truth for most of us lies somewhere inbetween. If I was a multi national corporation looking to invest in a third world country I wouldn’t choose the Philippines. Not when other countries are more investor friendly. Agreed, when you hit the dizzy heights of multi-million dollar investment life here gets amazingly easier for those with the cash and the clout. Try “investing” just US$50,000 and the best they will offer you is a spurious SRRV, or special residents retirement visa. If you are thinking even less money, just something to get the family off your back but maybe provide you with a few bucks and something to do, then it is even more difficult.

You see, at the top end the oligarchy have it sewn up tight and enough political and commercial influence to keep things going their way. Down the bottom end of the scale they have no personal interest in the micro economy so they are happy to legislate against any non-Filipino involvement in most areas of business. In the middle, the small percentage of the population with the education and capital to fight over the remains have enough local clout to keep foreigners running around like headless chickens for years to come just trying to abide by the rules. In other words, it is pretty much a closed shop.

Or is it? Like anywhere else in Asia, there are always loopholes and exceptions and ways and means. Never take anything at face value and always believe there is another way. For some that is to operate in the name of the wife, or to bring on board tame locals even though this practice starts to dip into the posion jar known as the anti-dummy laws. Basically, anyone with the money to run with the big boys isn’t reading this newsletter and anyone who is looking at competing for a few peso’s a day won’t last long here anyway. What I’m looking at are business opportunities for the average expat and his kith and kin.

Firstly, you can set up family in business, or simply give them a few bucks and tell them to blow it, the end result for many is often the same. Cynicism aside, many family members do actually succeed in small business ventures. At first glance you might think the Philippines is a haven of natural entreppeneurship but the reality is that there is simply insufficient employment. If there are no jobs to be had then the only alternative other than begging is to create your own job by running a small business. The smallest of these I would say would be the cigarette vendors that walk the streets selling single cigarettes amongst the traffic. Opportunity Number 1: Buy up bulk cigarettes and gum and then onsell to these vendors at a mark up but less than what they buy their stock for from Prince and other warehouse outlets. The best deal for the customer would be to have the stock out on consignment, they only pay for what they sell each day. Hmmm, perhaps not the best business opportunity, lets move on.

Notice how every second or third house has a small opening in the grill around one of the windows. From this the goods are dispensed from the family Sari Sari store. If you peer inside you see the fridge with the coke and beer and ice chilling away, sachets of shampoo hang from the ceiling and the shelves have jars of candy and bags of junk food and cigarettes can be had singly or in packs. How does anyone expect to make a living when everyone sells the same products for the same price and there are almost as many stores as there are customers? The answer is that nobody really makes a living, everybody just scrapes by until the stock is consumed by family members and there is no cash left to buy more. What sales were made are on “utang” or credit and you won’t see that money in a long month of Sundays! Opportunity Number 2: This one was suggested by Ronald Turley on one of the Yahoo Groups. Set up a wholesale distribution service that supplies numerous stores with their basic staples, but at a better price than what they already pay.

I think it would be a workable venture but you would have to be good at stock control and have a decent inventory program on your computer. Plus you really have to stay abreast of prices and what sells and what doesn’t but it could be a going concern. I have always said one of the two ways to make money in the Philippines is to sell lots of little stuff for little prices to lots of people. There are lots of people here, they have small amounts of money and so they buy small amounts of stuff. Where else have you seen sachets of shampoo, ketchup, shoe polish and snacks?

Another idea I once had is Opportunity Number 3: Taking it to the streets! I suggested a variation of this to a Yahoo Group member who had a banca and was looking for things to do with it to make money other than fishing. I said why not stock up with lots of stuff and go visiting the small islands where the people have a hard time getting to a supermarket or big store. Another version of this would be to outfit a vehicle, even a tricycle but ideally a multi cab, fill it with goods and cheap clothes and such and head into the hills. Of course your first visit might not be a huge success but people might have saved some cash by the time you come around again. Of course you would have to refuse the utang and deal strictly cash. I think it might be a lucrative business and you could develop runs and even territories which could be sold off or franchised.

If you used a larger vehicle you could even start a mobile beauty shop or hairdressers. I just imagine a converted jeepney rolling along a provincial goat track with half a dozen Bayot hairdressers whistling at every Dong they pass! You might design a mobile disco truck and go from barangay to barangay and hold discos’ charging P10 each to enter. Or better still, combine the disco with the beauty parlour and have your own mobile beauty pageant! The mind boggles! Time for a Tanduay and a lie down while I think of more opportunities!

Is This The Way To Go For Those With The Cash?

There are over 400 Franchises in the Philippines that the budding entrepeneur can choose from.  Some of these are international brands or franchises known in the USA like McDonalds, KFC, Pizza Hut and so on. The majority though are home grown and that really isn’t all that surprising.

Firstly Filipino’s love to do things in groups so being a frenchisee means you are one of a group operating the same, identical business as many others.  Comforting to anyone brought up in a culture that promotes the group at the expense of the individual in so many ways.

Yet the individual, or couple, may still want the independence and financial benefits of being one’s own boss and running your own business.  It is a statistic that 95% of franchises succeed whereas
only 5% of new, start up businesses last as long as 5 years.  More than half will collapse within the first twelve months and the main reason is under capitalisation, usually followed by poor location.

The beauty of a franchise is that you are given a model to follow that is working for others and providing you follow the guidelines your business should prosper, too.  All of the expensive trial and error has been finished with a long time ago and by the time someone prepares their business for franchising, you can be fairly sure it will work. When starting abusiness from scratch, nobody plans to fail, but many fail to plan or plan sufficiently and buying a franchise erases a lot of these risks.

A good franchise will have a comprehensive operations manual, pre-selection process and a good marketing plan.  Many franchise agreements have you paying a monthly fee for the adverising and
marketing so make sure the franchisor is doing the right thing by the business in the local media.  On top of that there could be ongoing Royalties that are paid monthly.  Make sure you are getting something in return for these!

There are good franchises and bad ones, same as anything.  The bad ones take your money and give you a badly written operations manual and prety much leave you to get on with it.  The good ones will usually charge more as the franchise is worth more and will earn more) and they will also give you more.  More assistance with location sourcing, staff trianing, ongoing training and supervision, innovative marketing and advertising and lots more.  You will get some thing in return for you fees.

When choosing a franchise you should ask the hard questions, although there is no harm in asking them politely.  Really investigate what you get and what the franchiser will do for you and for how long.  Make sure you fully understand every aspect of the franchise agreement, before you sign and hand over your cash!

Buying a franchise can cost as little as Php27,000  (US$500 approx) (NachoKing Taco cart!) or well into the millions, McDonalds go for around Php15-30 million, which is serious money in any currency.
Anyone looking at investing that kind of money is probably not reading this newsletter, so don’t be surprised if we keep to the under US$30,000 mark when we look at individual businesses and franchises in future issues.

If you want to know more about this great way to get into business, visit www.filfranchisers.com the website of the Association of Filipino Franchisers Inc, or try the RK Franchise Consultancy site at
www.franchise.ph   Here are some other links to franchisers you may want to surf into and check them out:
www.nachoking.com  NachoKing, carts starting at only Php 27,000!

www.figarocoffee.com Figaro Coffee Shops

www.metropole.com.ph Laundry and Dry Cleaners

Philippine Dreams does not endorse any of these specific franchisers but includes them here for information purposes only.

A Simple Solution To An Often Asked Question.

If you are married to a Filipina then the odds are that you will have at least one brother in law, possibly several.  Some of them may be hard working and industrious, some may be loafers and lazier than a dead possum.  At some stage you may be approached to fund his latest business venture and there is merit in helping him develop a business rather than rely on handouts.

What I am about to outline is a simple business I feel has a good chance of success in the Philipines, in both rural and urban areas.  I suggested this business model some years ago on a Yahoo Group I no
longer belong to and it was canned by all the experts.  The majority of them telling me that the product just won’t be bought by Filipinos. Funny how the largest selling single item in supermarket meat freezers today in the Philippines is the very product I had in mind!

That product?  Hot Dogs.  The freezers are chock full of them, numerous brands and row upon row of hot dogs.  I have seen hot dog kiosks spring up in the malls and long lines of people queueing up to buy one of these items so many “ex-pat experts” assured me would never sell here.

Why do I like the Hot Dog business?  Firstly it is cheap and easy to get into.  You need a stand that you can carry around yourself, I envisage two boxes slung off a pole carried over the shoulder.  One box can have the supplies and the other the hot water to cook the dogs in. It can be a straw box, that is insulated with straw to keep the water hot, or it can have a small stove in the bottom for heating the water.

The other box carries the dogs, buns, cheese, sauces and tongs, knapkins etc.  It is a simple business to run.  You buy your hotdogs, buns, cheese and sauces and cost each one out, I figure on P5-7.  You then set a price, I like P10-P20 for plain and add P10 for cheese, sauce is free.  If your box holds 100 hot dogs, then selling out when they cost P5 to buy and sell for P10 means you should have P1000 turnover, or P500 net profit.  If Dong comes back with no more dogs or buns and less than that, he is ripping you off.

He will either be eating them himself, giving them away free to his friends or selling them and pocketing the cash.  Whatever is happening to the cash, this business model allows for early detection of fraud or poor operations and so you can minimise your shrinkage or losses.

A good pitch, as we call a place to stand and sell doggies, should see him sell the whole load of 100 and be heading back in for a resupply. If you clear P500and give him P250 for his efforts, that isn’t a bad days wages for a Filipino.  If your hot dog stand (mobile) cost you P5000 to build and stock, then you can see your investment returned within 20 operating days or so.  Time to make a stack more of them and hire more staff or give Dong his unit and let him keep the whole of the profit.

I would envisage him lasting a week without supervision, someone to ensure the ingredients are freshly bought and the unit kept clean and so on.  It would be far better to maintain the units yourself and hire them out to sellers for a daily rental, say P700 fully stocked with the seller able to earn P300 in just a few short hours if they find the right pitch.

Setting up outside a major school or college takes up a tiny amount of sidewalk and can easily see the load being sold out in an hour or two. If you were to ensure the cleanliness of the sellers and also perhaps fit them out in a simple but clean uniform of logoed t-shirt and cap, use plastic surgical gloves and so on, I am sure the consumer confidence would have them buying repeatedly. 

Of course you can make a more elaborate stand based on a trisikad or even a tricycle, but the object is to keep things simple and costs down. Even if you were clearing only P100-200 per day, yet had ten or more sellers out there, you could easily bring in P30-40,000 a month, a very nice little earner while still giving others a job.

Whenever you look at business opportunities in the Philippines, especially those designed to keep a relative in business, you need to keep certain criteria in mind.  Firstly it should be cheap to set up,
cheap to run and easily monitored to ensure honesty.  You need to be able to supervise yet not get too involved and of course, it needs to make money.  One of the secrets to making money in the Philippines I have found, is to make lots of little amounts from lots of little people, lots of times. 

If you try to make too much too soon and run the business by western standards or expectations, you will soon be pulled back down into the basket with the other crabs!  Give it a whirl, but not in Cebu, ok?  My guys are going to out on the streets in no time!