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Portaz

Need advice from a business owner who has made it work

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Portaz

Hi guys and girls,

My wife and I are leaving our home in australia after selling our successful business here to pay off our debts. I always love being in Cebu and have noticed a more western change each time I have gone there. Anyway I have an idea for a business in either it park, one of the sm's or ayala , I've read all the doom and gloom but wondering if someone could contact me on a positive side. I've done my research and have a concept that is new to cebu, the business is food orientated and I have worked out I need an average of 140 customers a day with a 250 peso spend over a ten hour period to get the projected profits that I would like. Clearly there are busier and quieter days but from my research myself and my wife think it's quite achievable in the right location. I am willing to risk 200k aud on house (with mortgage) car and business for a few years and if it doesn't work at least I tried. I'm aware all these things will be in my wife's name which I am very comfortable with, any constructive comments are much appreciated.

Scott

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Paul

Here is my best advice, concerning opening a business in the Philippines. 

If you want to make a small fortune, arrive with a large one. 

 

Brother, it is HARD to make a living in a business in the Philippines. 

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SomeRandomGuy

here here.  With so many guys out there to take what is yours and so many rich filipino's that will love your idea and steal the concept and charge half of what u have.... I wish u good luck. I really do.

 

u are almost better off putting that 200 grand into an interest bearing account and living off that interest... that will give u the best profit.

 

In saying all that the reason people are all doom and gloom talk about business here in the philippines is u are competing against 100 million locals that in my view like us when we spend money hate us when we start a business.

 

Out of all the people I have met that do business here I would say 1 in 20 make it work

 

200 grand is a hell of a lot of cheddar.  If I was u I would buy a few houses and live of the rent... atleast if shit goes bad u can always sell them.

 

Good luck to u

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jtmwatchbiz

hiya scott,

 

welcome to the forum! aside from starting the business here, if you are planning on coming to cebu anyways then perhaps once you arrive you can scout around the city and talk in person to foreigners who are in the same type of biz as you are interested in and get a better feel for the market and any problems you may face in the day to day running. that may be the best research you and your wife can do before taking the plunge. i'm involved in business in cebu city but unfortunately it's not at all similar to what you want to do. good luck in your plans and keep posting to build up your post count and then you can also private message members in business to do some brainstorming.  

 

fred

 

guadalupe heights

 

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Portaz

Thanks guys, doesn't sound very positive :-( I actually wouldn't really be involved only in the background it's a shame because employing ppl and at least improving their standard of living was one of my aims, it's funny how things work I mean mc Donald's and KFC are foreign owned and very successful in their own right, maybe I should stay here I don't know but I really don't like the way australia is heading and my gut tells me there is opportunity in cebu I guess my gut may be wrong again. Recently I have had brain surgury and have been through hell with my current business and just surviving is a good thing. My plan was my wife to run business with staff as she is from Cebu with the usual huge amount of degrees in many different subjects including business and accounting but maybe that's not enough.

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mactanfamily

I don't know anyone who has made food work in Cebu. Even the expat owned and successful Gustavian went bankrupt.  I would never attempt it in Cebu, ever. I don't see how you could NOT just invest the 200G's in Oz and live off it in Cebu. 

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panther

with that amount of money I would build a nice pension house somewhere much safer if you ask me.I have a house in the u.k that I could sell and invest here but even my g .f said no and that I would lose it all now thats coming from a fillipina so go figure

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senseless

One word for you.. Bitcoin..

 

It's in a market correction now and can be bought up cheap.

Edited by senseless

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spooks

A well balanced portfolio in OZ would be the best option unless you really want the hassle of dealing with each ad every government agency that will try to ensure that you pay overheads that your pinoy competitors will not be paying, yes it will happen they will try to follow your unique concept even if they cannot. they just make sure the level playing filed is level their side and a mountain range your side.

 

Yes I was in Food and beverage business here and an employer we did very well I will not be doing it again.  root canal surgery without pain killers first on each and every tooth!!

Edited by spooks
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Chris24

If you're interested in starting a food-oriented business, maybe a good exercise in prior diligence would be to get a job for 6-12 months as a manager of as similar a business as you can find, work for cheap if need be, and use the time to refine and localize your business plan as you gain real experience on the ground in the actual environment in which you are contemplating risking a substantial sum of your own hard-earned savings, all while building a network of local contacts.

 

You're bound to learn some things that will help reduce your odds of joining the 19 out of 20 (or whatever the stat is, for sure it's the vast majority) who fail.   Worst case, you delay your start by 6-12 months.  More likely you'll learn about some important mis-steps to avoid or even learn things that will cause you to abort your plan (and associated losses) entirely.

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SomeRandomGuy

yeah i pulled that 1 in 20 out of my ass it is probably a lot higher in the loss category....  no idea where u would get those statistics.

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roadhaze

I lost. Won't do it again. Good luck with your adventure.

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spritsail

Buy a small beach resort,  with space for expansion. Think of it as your living space, afterall what would 200k  aud buy you in Oz when you could buy 1 hectacre (10,000) sq mt in the Philippines. Just make sure you and your wife are into it. I have seen so many ozzie/filippino couples split coz the husband likes the Philippines and the wife wants to stay on the Gold Coast.

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Davaoeno

The OP says that he has done his research .  So had I - or so I thought. Little did I know that being overeducated, [ including an MBA],  with lots and lots of experience running my own businesses did little to prepare me for the reality of doing business in the Philippines !! 

 

But I do wish him luck - he will certainly need it !!!

Edited by Davaoeno
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Baywak

If anyone here has a nice huge nestegg-why the hell would you want to invest in anything here.......would you like to invest-NO- PERIOD

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Ozbrum

Mate

Australia is one of the most competitive countries on earth and for good reason.

Unlike the US and Europe, we have a relatively small population so even very successful businesses work extra hard to gain market share , if you have succeeded there, you are in with a chance here

Having said that, you have been given some great advice here at LIC, you would be well advised to come here , rent a house take a break and then meet plenty of people who have had a go and for whatever reason failed , their stories can help lead to your success,

 

By its very nature, the restaurant business is high risk, last time I checked, 4 in 7 failed in Australia, very few made real good profits.

Apart of course From major franchises....

 

Wish you all the luck in the worlld

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smokey

each person has their own thoughts .... the worst thing i ever did was assume if i could run one type of business i could run any...... second mistake was having partners ... . third was thinking i could hire family and we could all work hard ... together...   IF i was to try i would and might be doing it as we speak ... buy land thru my wife of course and  title it and re sell it .... or if i had the desire to go all out open an assisted living home but to do that will take an easy 300 to 400,000 us ..... not including the land... 

Edited by smokey
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thebob

Invest your money in rent paying property in Oz. Use the income to live here and slowly start a business.

 

Don't consider a lump sum investment to start a business and then calculate the ROI. Do it the other way round, start small plow back any profits and aim for the size you want. At least this way you will keep your losses to a minimum.

 

I've been involved in the food trade here, indirectly through my GF, for a decade, and it is a very, very low profit proposition.

 

You are at the mercy of constantly changing rules, and your whole lively hood depends on if the mayor is going to let you have a business permit or not. Different requirements are dreamt up on a whim, and you have no recourse whatsoever.

 

If you aren't successful, the taxman will still want his pound of flesh, that is paid on outgoings not profit. If you are successful then obstacles will appear, in favor any competitor with political clout.

 

Waste $3,000 and start a small scale business first. Very soon you will understand why you don't want to invest anymore.

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arentol

This post is spot-on. The lack of creativity here is a double-edged blade that will initially help your business thrive but will, ultimately, cause its demise.

 

The easy part: Coming up with a successful business idea here in the Philippines. Anything different than the norm will initially be successful here. Starting a successful business is painfully easy... simply think of a new twist or a new type of product. Often this may be something commonplace in the West. Customers will flock to your business. In other words, don't do what everyone else is doing. We have opened two businesses here that followed this formula, both of which were extremely successful for the first 3 years of operation.

 

The hard part: Stopping others from copying you. In reality, it's impossible. There is very little creativity and originality here. New ideas are just copied and produced. The copycat stores are often poor imitations of yours... not matching your quality and definitely not matching your customer service standards. The problem, however, is that the average customer cannot tell the difference. They lack the knowledge to appreciate how "good, unique, exceptional" your product/service is. The mindset here is strictly "cheap = good".

 

So there you have it from someone with experience. Both of our businesses followed this pattern to a tee. We brought a new product to Toledo City about 5 years ago -- the first 3 years were amazing. Tons of customers. Then, over time, copies of our work started showing up... at first it was sporadic and then commonplace. The copies were exceedingly poor, but that was moot in the eyes of the ignorant customer. Five years later revenue has decreased by 60% and the city is littered with copies of our product.

 

We also started a food business... very American concept: traditional 1950s ice cream parlour. The pattern repeated itself. The food business is particularly cut-throat... lots of work and, in the end, not much to show for it.

 

My apologies for being so negative, but that's the reality of doing business in a country devoid of originality.

 

 

Cheers,

Aren

 

 

 

here here.  With so many guys out there to take what is yours and so many rich filipino's that will love your idea and steal the concept and charge half of what u have.... I wish u good luck. I really do.

 

u are almost better off putting that 200 grand into an interest bearing account and living off that interest... that will give u the best profit.

 

In saying all that the reason people are all doom and gloom talk about business here in the philippines is u are competing against 100 million locals that in my view like us when we spend money hate us when we start a business.

 

Out of all the people I have met that do business here I would say 1 in 20 make it work

 

200 grand is a hell of a lot of cheddar.  If I was u I would buy a few houses and live of the rent... atleast if shit goes bad u can always sell them.

 

Good luck to u

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OzGuy43

Land with an income, and houses with an income, don't consider anything else mate. too competitive, too risky and too bloody dangerous if you are successful. My misses and I have looked into every business conceivable here in the last two years and all are risky. Become a farmer or a landlord, that is the only way to make money in asia IMO.

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Monsoon

No matter what you do - know your market. And a strange one it is indeed.

 

Filipinos, even those with money, like to get good value. There is a chain bar/resto across from my condo in Fort Bonifacio that does very well because they are cheaper than the rest of the places around there. Personally I cant stand the place, but a lot of locals like it. Cheaper means less margin. Filipino owned establishments seem to always tolerate low margins.

 

Then you have places like TGI Fridays which represents one of the worst values overall and in my neighborhood it is packed every night.

 

Then you have the wild cards. Places started by wealthy locals as a hobby who arent hard pressed for a huge profit. I know of a lot of these places. Places where the owner is quite fine with just breaking even.

 

I see a lot of sucessful businesses around. Most were started by owners with deep pockets.

 

I also think location is everything. Filipinos are brand whores. If you establish a brand you will be minted.

 

Good luck to you.

 

 

 

Sent from my GT-I9505 using Tapatalk

 

 

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Davaoeno

I strongly recommend what some others have said- and that is income property .  Find someplace  close to a university, college, training school etc and build a boarding house.

 

That said, I have looked at maybe 20 of them in the next month as my gf is about to build one . Some of them i wouldnt let my dog stay in . However kids come from the provinces and they have very little money and finding a place to stay for between 1000 and 1500 a month gives them the opportunity to go to school.   Again you have to compete against the locals - which in most things means forget quality  and space and go for cheap , cheaper and if possible cheapest !

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SomeRandomGuy

and if u are going to build a boarding house remember anything that is not bolted into place will go missing. Plus most of the stuff u have bolted into place.

 

then U have to collect rent from however many tenants...in my opinion as I have looked into this. U are better off building units. Higher rent less people to chase down or kick out.

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Alan S

All the businesses I have been involved with have been exporting goods and located on Export Zones.

 

Whilst some have worked out OK, others closed often when the owners found that there were other locations in SE Asia that gave them advantages.

But, in every case, things didnt go as planned.

The problems that cropped up were unimagineable, and things that one couldnt ever think might happen.

 

If major companies spending many $millions have problems, then the chances for the rest  of us arent good.

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