STEPS ON HOW TO START A SMALL BUSINESS

                  FIRST SMALL TIME BUSINESS 

                          FINANCIAL ADVISE

           REPUBLIC OF THE PHILIPPINES SETTING

STEPS ON HOW TO START A SMALL BUSINESS

(THIS EXPLANATION IS BASED ON THE ACTUAL EXPERIENCE OF UNDERSIGNED. ANY OTHER OPTION OR IDEAS YOU WOULD ADD, WHICH WOULD BE ADVANTAGEOUS ON YOUR END, WOULD BE FINE. THIS MAY JUST BE SHORT AND MAY, LOOK AN EASY TASK TO DO, BUT THINK TWICE, IN BETWEEN ARE LOTS OF THINGS TO DO AND MIND SEARCHING.)

1. PLAN - Questions that will crop up when you start a business, usually are just simple questions at the beginning. But, as you go along and continue to move from one question to another, you will be creating a maze of what you were imagining.

You may ask, what is to plan about? I am just thinking of a small business? Why is there a need for it? Can I not just start the way I am thinking now? I had been working in this kind of business for long and I know the ins' and outs'. What is important here is the capital and nothing else? My friend started without any plan and has been there for more than I could think of.

• Well, fine, if she succeeded in the business without any plan. If you had the knowledge on how the      business functions, that is a big advantage on your end. If one succeeded without any plan at all, as what you might had thought, be glad about it. Whether your friend tells the truth or not, bear in mind that she still was planning all about it.
• But,  lets not put ourselves on a hit or miss situation. Just like anything else, there should be something, an idea, or steps that needs to be programmed. If your friends business is still working, then that is fine. What we need to do is, we need to think where we want to  go. We just don't go out, hail a cab and point to any directions we want or just let the driver take us anywhere. Right, it should not happen that way. And the plan needs to be focused to avoid going anywhere.  If you believe you had another idea which is much better than the earlier planned, have a thorough evaluation of which is much better option. It might be time consuming, but it is the worth. 
• Now, do not forget that there are government regulations that need to be addressed too.  Too many offices and too many departments that you have to submit documents and pay fees. Bear in mind it is a hassle and frustrates you often. You might be advised that you should put signs for the business, but you don’t had the intention as it is just a little space. Or, you maybe advised that you should have your electrical, sewage, garbage be properly put in order. These things not part of the plan at times frustrates you as you don’t had the idea what to do about it.  

2. EVALUATION - The plan is now clear. Your are now focused on how to get it started. An idea cooked up by burning midnight candles. Most probably you also had the needed cash to start whenever , whatever you want. Cash at your own disposal. But, beware, do use your cash wisely. The available amount that you will use, will never be there, once you had used it. If business failed, then it is so hard to find that money again.  It will not be so easy to replenish what was used. So, first things first.

• How big the business will be?
• It is not nice to look at a big business going small. Meaning to say that the area used to be this big and you opted now to lessen because the business was slow and would like to lessen rent, too. In a customers point of view one reason why you failed is you do not have a product that customers really need or they may think also, that your price is high. When people start to think negatively it is not so easy to turn it the other way around. So, start slow or start small as it is easy to go big once your business grows. 

•  How much will I rent?
• These days you need to pay a down payment of at least three months. So, this now eats up a bigger chunk of your capital. Worst, if after a month you want to vacate the place for whatever reasons, be advised that you can not just get back the deposit you made at any time you want. A contract is necessary to avoid getting into trouble with the lessor. So start at a place where the rent is small and  just do some make-over to have the place also look attractive. Remember, we are talking here of small business. 

•  Where will the place be?
• Where and what should be the ideal place  that I will rent? I would like a unit at a mall so my friends could visit there and see that I had already started a business? Besides there are lots of people going to the mall so I will definitely be able to recover or have at least a break-even.  Business basically is created to earn. If you would like to take pride on the success that you had made, it is not advisable at the  start. Have it on a later part. You can start the business at a sidewalk where the traffic is high. Please bear in mind that there are several  businessmen that live on posh subdivisions and had sidewalk business. But these people are creative enough that they do not interfere on the flow of people. Small spaces that look odd can be repainted to look  beautiful or do some little make-over. Be sure the human traffic is high.

• How much will I earn?
• I would like to earn this much so I will be able to recover the expenses made in just a matter of time. As per computation made with my accountant friend I will be able to recover everything in due time. This was what we came after properly evaluating the possible trend. Computations on paper is so very easy against reality. But, be sure that you have several computation based on the, WHAT IF scenario. So, the computation should be like this;  WHAT IF this is the number of customers I get?. WHAT IF a new business besides me and is offering a much lower price? WHAT IF  purchase price suddenly increases? WHAT IF I will suddenly increase the price? If you have this information then you will be ready for the big thing. Once there, you are now ready for any eventuality.

3. FINANCIAL - How will the business start with this capital only? Will these be enough if in case something goes wrong? How much really do I need?           

• There definitely are a thousand questions when to start a business. The most common on them is the financial aspect. You, wanting to put up this business but your capitalization is not enough to start it up. Then what will you do now? Well, let us just focus on the basic things to do when you START A SMALL BUSINESS. If you were advised, that you can start a business without any capital, bear in mind that you still need cash even though a company provide supplies. Companies have terms and they want you to pay on the designated date to be in good standing.
• THIS IS JUST THE AMOUNT OF CAPITAL I HAD - You want to have a business and do not really know where to start or you do not know what kind of business you would like. This should depend on the status of your life. But, bear in mind that any small business as long as it earns, should be fine. Your mind or your personality should be able to modify, divert, change when the need arises. It is a must if you want to go into business. So, if your      mind will be able to accept something different from the personality trait that you had, then go for it. If otherwise, then next option.
• THIS IS JUST MY CAPITAL BUT I REALLY WANT THIS KIND OF BUSINESS - This is now a situation when your capital is not enough for another style of business and you really want this kind of business as it is the one really fits your way of thinking. How will you get the additional funds? First, you can try to get in touch with your relatives and request for loan. Relatives, are relatives by blood, but when it comes to lending money it may not be easy to shell out for your purpose. In the event you will be turned down by one relative, don't take other relatives the same way. Another way I prefer, is talk to your relatives  who are also in business as they understand the situation well. Second, friends are also a source of financial assistance. They may not be able to lend you, but, they can refer you to someone who lends or knows anyone who can refer you to somebody else. Third, if you are an employee either a government or private you can apply for a loan with the GSIS or SSS. Fourth, You can also apply for a loan with selected banks provided you had complied all the necessary requirements. It may entail procedures where you may not have the necessary documents that they need. Banks nowadays lessen the requirement because they had more cash. If in case that you have properties as collateral, then try to talk with your bank.
• I DO NOT HAVE THE NEEDED CAPITAL - Whether we like it or not, we need cash to start up a business.  You need it to build, beautify and purchase needed equipment. If others says that you can start a business without any capital, I truly doubt it. There could be someone that will provide you the materials on credit, but somewhere along the way you still need to shell out cold cash. Otherwise, your carpenter will never back the next day if he can not request an advance payment for his fare the following day. Simple things that also need your attention. You need to broaden your mind now. Cash is needed to start up a business for short term or for long term. If there are no available options, on how to avail of cash kindly check on the law BARANGAY MICRO BUSINESS ENTERPRISE or Republic Act  9178.

BE REMINDED THAT LOANS NEED TO BE PAID. IF YOU WILL BE ABLE TO USE THE LOAN WISELY AND PAY IT PROPERLY YOU WILL BE IN GOOD STANDING WITH CREDITORS .

4. GOVERNMENT REGULATIONS - (For step by step guidelines on how to start the registration of your business, please click on Government Regulations tab) The things that you should have knowledge of is the Department of Labor, this is the government agency that takes care of the welfare of the employees. The Social Security System, that takes care of the monthly payment contribution of each and every employee and takes care of employees hospitalization too. Then the Bureau of Internal Revenue, the office that computes the taxes that you need to pay. (If you are Barangay Micro Business Enterprise certified you will not pay taxes)

• DEPARTMENT OF LABOR AND EMPLOYMENT:

In the 1986 Constitution it provides: "The State shall afford full protection to labor, local and oversea, organized and unorganized, and promote full employment and equality of employment opportunities for all. 

• You need to submit to the DOLE the names of the employees , the date they were hired and position.  Whatever day to day activities that employees does should also be reported to the DOLE for their information. An example is, if an employee is absent, without any advisory, habitual tardiness, taking home company properties. The bottom line here, if in the event that there will be future investigation that will be conducted you have your record that such infraction and the employee concerned was informed and had signed the memorandum. Do not take for granted simple things as in the long run it may eventually help you. Be sure also that what you had reported to the DOLE was also informed to the employee and received by the employee and he properly signed the acceptance of the letter. 

• You can also visit their website at:  http://www.dole.gov.ph/

• SOCIAL SECURITY SYSTEM:

"It is the policy of the State to establish, develop, promote and perfect a sound and viable tax-exempt social security system suitable to the needs of the people throughout the Philippines which shall promote social justice and provide meaningful protection to members and their families against the hazards of disability, sickness, maternity, old age, death and other contingencies resulting in loss of income or financial burden. Toward this end, the State shall endeavor to extend social security protection to workers and their beneficiaries." (Section 2, RA 8282)

• All employees should be covered by the Social Security System whether temporary, casual or permanent. There is a table on how much each employee need to pay and how much is your share or you can visit:

https://www.sss.gov.ph/sss/index2.jsp?secid=167&cat=6&pg=null

• Non coverage of the Social Security System is punishable under the law.
• Remittance to the SSS should punctual to avoid any penalties or if case failure to remit employee contribution will result in you being charged in court.

• BUREAU OF INTERNAL REVENUE:

It is hereby declared the policy of the State to promote sustainable economic growth through the rationalization of the Philippine internal revenue tax system, including tax administration; to provide, as much as possible, an equitable relief to a greater number of taxpayers in order to improve levels of disposable income and increase economic activity; and to create a robust environment for business to enable firms to compete better in the regional as well as the global market, at the same time that the State ensures that Government is able to provide for the needs of those under its jurisdiction and care. (Section 2 of RA 8424)

• Be sure that part of the income you generated you should set aside an amount for taxes. How taxes is to be computed, please refer to any BIR office. 
• To avail of income tax free please refer to BARANGAY MICRO BUSINESS ENTERPRISE tab.
• For BIR registration online like TIN you can go to:  https://ereg.bir.gov.ph/ereg/welcome.do
• For the minimum wage kindly go to: http://www.nwpc.dole.gov.ph/rtwpb.html

• LOCAL GOVERNMENT REGULATIONS:
• Barangay regulations - you need to refer to your barangay;
• Municipal regulations - kindly check out municipal ordinances at your respective town.

5.  SALES CONTROL OR MONITORING  - Now, at long last the business that you had been dreaming of had finally started. The business started with just a simple opening.  Day one was eventually good as customers come and go. Sales was brisk. Excited now but, dumb-founded or confused. How will I know if I earn or not.  Were there any lost items? The problem now is how will the sale now be monitored and how to make a constant monitoring of all the items. We need to tackle this on a step by step basis, so kindly proceed to MONITORING tab.

6. SELF-CONTROL - You have now seen the in and outs of your finances. It shows most of the time that you were earning. So, you now have the cash that you had been dreaming of. At long last everything is going fine. But wait, it will not be bed of roses all the time. There will come a time that sales won't be that brisk or some untoward incident may happen. In the event that this happens, there should be enough amount of savings come rainy day. It should be a must to avoid the situation going worst, after hard work.

 If you had nurtured all the fine points, there is no other way out but had a good business. 

7. GOAL ATTAINED - Now, at last, after two years, I can see the business doing well. I can now think of putting up another business again. CONGRATULATIONS. . . . . . . All these were possible because of your HARD WORK, PATIENCE, and PERSEVERANCE. But most of all your never wanted to understand DIFFICULTIES.