Are you thinking of starting a business in the Philippines? Do you know where or how to start?
Today, there are so many business opportunities available from almost any type of industry in the Philippines that it’s easy to lose focus on what’s really important.
So you want to be in the food business? You say you love to cook. And they say Filipinos love to eat. From Jollibee and McDonalds to those little food carts you see in the malls, there’s no end to the number of franchise operations available in the market. That’s just for the food industry. There a couple more: water refilling, ink refills, schools, laundry shops, salon and spa, and many more… you name it.
In any of these lines of businesses you can either venture on your business starting from scratch, or take over an existing business, or buy a franchise from established brands. These are basically the three options available to you. Let’s discuss each one in the succeeding paragraphs.
1. Start From Scratch
A lot of businesses are started this way. That is, the founders came up with the business idea, setup the plans, raised the necessary funds and so on.
The new business venture is typically unknown in the market. And naturally, it is still struggling to carve a name for itself.
From ideation to launch and then finally running the operations, all these entail a lot of hard work for the owners and his team. It’s even more tough especially if the venture is trying to break into a market dominated by well-known brands.
On the positive side, unlike buying an existing business, which is discussed next, the owners can take comfort in the fact that there is no negative history to overcome. That is, there’s no bad press to haunt you down.
And unlike a franchised operation, which will be discussed later also, you can be creative in the way you deal with the changes in the market conditions by offering discounts and incentives as you see fit, without getting an approval from the parent company (the franchisor).
If you have done your homework well, you have probably identified the weaknesses of your competitors. You can even exploit those areas where they fail to satisfy their clients and customers.
2. Buy An Existing Business
In the Philippines, this is the business road less traveled… and for good reasons. Buying a business from someone else is very complicated and should be avoided by first-time entrepreneurs who can’t even interpret a financial statement.However, buying an existing business at the right price also presents a lot of advantages, among them are the following:
- It’s less work on your part. The start-up stage is one of the most challenging parts of a business operation. If the business has been in the market for quite some time, you are lucky for skipping this part. It’s like adopting a three-year-old kid. You skip the pregnancy part and you don’t even experience the painful process of delivering the baby from your tummy.
- If the business is already profitable, that spares you from having sleepless nights.
- You already have a list of established clients and vendors.
- Machines, equipment and other tools necessary in the operation of the business would probably stay and you can use them right away.
- You can learn some lessons from the experiences of former owner. That is, if he can provide you with honest information, stories and data.
But then again, this option should be approached with extra caution. There are a lot of factors to consider when taking this option. You have to know such things as Business Valuation, Financial Statement Analysis, and other similar skills.
3. Buy A Franchise
The International Franchise Association has defined franchising this way:
Franchising is a method of distributing products or services. At least two levels of people are involved in a franchise system: (1) the franchisor, who lends his trademark or trade name and a business system; and (2) the franchisee, who pays a royalty and often an initial fee for the right to do business under the franchisor’s name and system.
Essentially, you as a franchisee can run your own business and leverage on the resources and experiences of the parent company. No more re-inventing the wheel. This is far less risky that trying to start from scratch and venture on your own.
It’s been demonstrated by a number of studies that franchised businesses have much greater chances of success compared with businesses started from scratch.
So basically, when it comes to real business opportunities in the Philippines, you have three options available. Should you start from scratch, buy an existing business or get a franchise? Whatever your choice is, remember that success is never guaranteed. You still have to put in the required work, strategies and creativity in your business.