Dangers of Setting Up a Business: Paano Nga Ba ang Tamang Paghahanda?

Roger Fritz once said, “Nobody gets rich working for somebody else”.  Sure, majority of Filipinos dream of starting their own business enterprise and although there is some truth to what Mr. Fritz said we will not be diving into that abyss, instead we will discuss the dangers of setting up a business.

BIR Fines and Penalties (Real story)

A restaurant owner in BGC Taguig approached an accountant and was ranting that he needs to close his ‘almost bankrupt’ restobar.

The accountant’s first step was to check any pending BIR filings. He was quite shocked upon seeing that there was an under declaration of VAT payment. Apparently, when the owner-client was asked, he did not know anything about all these tax mishaps and was simply trusting his prior accountant who happens to be 50+ years old. The total computed penalties, interest and surcharge reached almost 2 million pesos.

Poor owner went on to the crazy and costly process of dealing with such a dragging case.

We have to know that taxes are inevitable and final, hence we have no choice but to comply. If you are not a “tax field” expert, it’s okay! You’re going to be fine! All you need to do is find a highly reliable and reputable accountant whom you can trust.

Overflowing Debt: Loss of Savings, Properties and other Assets

Who’d set up a business and prepare for bankruptcy? Truth is 90% of start-up businesses fail, and expert and serial entrepreneurs are aware of this.

The real deal is that these seasoned entrepreneurs are highly prepared and are ready to face business losses before they lead to personal indebtedness. They know when to stop, how to stop and where to stop – leaving them with capital loss to an acceptable extent. They don’t experience gambling or that scenario where one places more bet and turns into more losses.

Mere optimism will not make any business successful, therefore, objective preparation is the key.

Discuss with your business partners “how much the business is willing to lose” and what actions are expected to build sufficient and effective strategies before the business loses its funds. Strong strategies of increasing sales and reducing cost takes time, hence, every business must be prepared of its “kick off” phase. Assessing if a business is worth a second chance of funding will depend on the movement of sales trend.

Read books, find mentors and get as much training as you can, because serious decisions must be paired with serious preparation to reduce risk of fatal downfall or devastating failure.


The entrepreneurship journey is all about solving problems from client needs, to employees’ demands to capital requirement and the list actually NEVER ENDS. Find a stable entrepreneur and ask him about his breakdown moment, then you’ll realize how important it is to be mentally prepared.

Entrepreneurship is a mental torture for the business addicts, and to them they convert problems into drugs that keep them high.

There is an understatement in the word depression, so at this point, before you even start your first journey, find a stable and long-term entrepreneur and seek early advise on the possibility of dealing with extreme depression.

Be prepared by being very selective of your circle and avoid as much toxic people as possible. No matter how busy you may be, find time to relax, recharge and reboot.

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Link to the original article here.