7 Steps to Start a Small Business in the Philippines 2019

The Philippines is a picturesque island country, situated at the heart of southeast Asia. Apart from being a tourist destination, it also serves to be a business podium that attracts potential investors from all over the world. It provides great investment opportunities for both local and foreign investors. Apart from dealing with MNCs, the location also provides numerous opportunities for small businesses. If you are planning to set up a business in the Philippines, this is all you need to know…

Small Business Industries in the Philippines

The micro, small and medium enterprises (MSMEs) have an important role in developing the Philippine economy employing less than 200 workers or those with an asset size of not more than 100 million pesos. Let’s look at the various sizes of an enterprise in the Philippines:

Enterprise

By Asset Size (in pesos)

No. of Employees

No. of Enterprises

%

Micro

Upto 3 million

1-9 employees

820,795

89.63%

Small

Between 3 and 15 million

10-99 employees

86,955

9.50%

Medium

Between 15 and 100 million

100 – 199 employees

4,018

0.44%

Large

Above 100 million

Above 199 employees

3,958

0.43%

 

The sheer number of MSMEs in the Philippines makes it very important for the economy of the country and thus the government is also focusing on the growth of the MSMEs in the Philippines, which makes it a lucrative option to invest in for both local and foreign investors. Let’s proceed towards the core steps that you should keep in mind before establishing a small business entity in the Philippines.

Benefits of Starting a Small Business in Philippines

The economic upsurge during the past few years has made the Philippines a flourishing nation which is among the fastest-growing economies in Asia. It continues on the path of development by attracting foreign investment. Some key benefits of doing business in Philippines are:

1. Domestic and Regional Market Opportunities

The domestic market provides many business opportunities with its consumer-driven population of 90 million and can also serve as a lucrative position for further Asia-Pacific business expansion.

2. Favourable Economic Conditions

Since the early 1990s, various incentives have been introduced by the government, which are lucrative for foreign business investors.

3. Ease of Travel

The places are well-connected, and the people are willing, able, and happy to assist you in moving from one location to another.

4. Business Conducted in English

English is the major language used to conduct business worldwide which makes this to be a major benefit for anyone who is from a country where the native language is English.

These are the a few of the main benefits of conducting a business in the Philippines and thus make a lucrative option for foreign investors to start a business in the country.

How to Start a Small Business in Philippines?

In order to initiate a small business, all you need to do is follow the below-mentioned steps:

1. Figure out a short list of business ideas

Initially, you need to list a few ideas on a place and try to find out which idea would work the maximum and will be a good option to pursue.

2. Conduct a project study

In order to proceed ahead with the project study, a market study needs to be done so as to figure out the viability of the options.

3. Draft a business plan

A business plan consists of an executive summary, SWOT analysis, Goals and objectives, framework, summary etc. It basically acts as a guide map for our business.

4. Highlight funding sources

If we are fully confident about our business plan, the next step would be to acquire funding from the various sources.

7. Finalise a business structure

You have to decide as to which structure will suit our business. Each of the business structure has their own advantages and disadvantages.

8. Give your business a name

Your business name or trade name should represent the brand. The name is important because it identifies your enterprise.

9. Register the business

Once the business structure is decided and the name is finalized, you need to register the business.

So, by now you have got an idea regarding the necessary steps that are to be taken. The Government of Philippines is equally focusing on the growth of small business industries. Let’s have a look at the initiatives taken by the Filipino Government to boost small businesses.

Initiatives by the Government to Boost Small Businesses

MSME Development plan was drawn which plans to aim and address the important challenges and provides a guideline to which would lead to its further development. They are:

1. Improved Business Environment

  • The establishment of Negosyo Centers in all provinces in the Philippines to promote ease of doing business and facilitate access to services

2. Access to Finance

  • Enterprises, whether public or private, shall set aside at 8% and 2% (for micro and small enterprises and medium enterprises respectively)
  • ASENSO is a government initiative aimed at creating an SME friendly environment
  • P3 program encourages MSMEs to shy away from informal sources of lending

3. Human Capital Development

  • SME Roving Academy which provides continuous learning for the development of MSMEs
  • Also, the Kapatid Mentor Me Program aims to help MSMEs scale up their businesses through the weekly coaching and mentoring
  • The Industry Clustering strategy enhances industry competitiveness to develop and expand exports, generate investments and create jobs

4. Productivity and Efficiency

  • The Shared Service Facility (SSF) promotes the sharing of all skills, tools, knowledge among the various entities in the Philippines

5. Access to Markets

  • The market development programs include trade fairs aiming to increase the exposure of SME products in domestic and foreign markets

Thus, we can see that the location turns out to be way beneficial for investors. Now, the process of incorporation turns out to be easier if you have a helping hand. We at Business Setup Worldwide strive to provide the same. We are a global network of business consultants providing business incorporation and support services in the Philippines. Our business experts are well-versed with the legal laws in Philippines and will help you in setting your business entity. To know more, do contact us, we’d be glad to assist.