How to Start a Business in the Philippines with Little Capital

Gibson Perez

Business Business Loan Tips

Feb 01, 2021

Filipinos should throw away the mindset that starting a business is viable when you have lots of money – and lots mean humungous numbers. The truth is there are many businesses that you can run with small funds. It’s not the lack of money that prevents us from starting a business but the lack of willpower and knowledge.

So, if you want to bring out the entrepreneur in you, you have to learn how to start a business in the Philippines with little capital.

1. Create a solid business plan.

A good business idea doesn’t necessarily translate into a successful business without preparation and studies. It’s not about wanting to run one today and build it tomorrow because it will certainly fail. The very first thing to do is conduct market research. This means you have to match your idea to the current business situation in your community or the consumption habits of your target customers.

What are the types of businesses that can be found in the area? Which sells the most? Which doesn’t? What services or products are missing but people look for? By leaning into these questions, you will discover opportunities to start a business and what you should sell to people.

These data will also guide you in drafting a business plan. The essence of the plan is to create the foundation of your business – the procedure of how it will run, handle pitfalls, earn, and grow. A good business plan retains employees, attracts investors resulting in good sales numbers and client patronage.

2. Learn more about business management

If you are quite new to the world of entrepreneurship, it’s best to get equipped with the concepts and processes involved in the business. Before you enhance your acumen through experience, feed yourself first with lessons necessary to run a business. There are many resources online and offline, be it paid or free, including books, e-books, seminars, podcasts, streams, and short courses. The Department of Trade and Industry (DTI) also offers entrepreneurial programs such as:

In the process, you get to learn what legal structure does your business should have. Business registration, taxation, personal liabilities, location, and whatnots affect your business journey that they must be handled carefully.

3. Capitalize your chosen business

Once a business plan is made, it’s easier to determine the funds needed upfront to start the business and the working capital to run the daily operations. Since you are starting from a little capital, you may need to raise more. One option, which small business owners usually do, is to borrow capital. There are various ways to fund your business, and two of these are:

  • Taking a business loan

A business loan can be sourced from different private lenders, whether banks or non-banks. One good thing about this loan: as long as you can pay the loan in time, you have all the right to decide on how it will be all spent. It will be inapplicable though if you have a co-owner whom you should consult first.

Taking a business loan helps you launch your venture and kickstart the journey in reaching your goals. Since the repayment plan is evenly distributed, it allows you to control your cash inflows and outflows which is beneficial in keeping your business operational until all the debt is paid.

  • DTI loan and other government-funded MSME projects

Another option for funding is applying to business loans from government projects directed to micro, small, medium enterprises (MSMEs). DTI and Small Business Corporation (SB) usually spearhead these initiatives, releasing programs such as Pondo sa Pagbabago at Asenso (P3) and Enterprise Rehabilitation Financing (ERF).

4. Start with a clean business profile

Opening a business does not only begin with having a well-thought name. You have to establish that your brand is legitimate and free from any legal trouble. Register your business to the related government agencies such as DTI/SEC, BIR, LGU, etc. It is recommended that your business have a bank account to handle these monetary obligations with the government, suppliers, and clients.

The key concept is to prevent you from fund wastage in repairing the business image in the future. It also establishes credibility, especially that you are new in the industry and that people are now smarter to verify your business via online platforms.

5. Leverage online platforms to build clientele

Paid advertising is an effective means of brand exposure, but it can be expensive. Although affording this kind of campaign should be one of your goals, you can start small with all the available resources to establish your brand. Word of mouth is a traditional yet still useful factor in building influence, but you can go the extra mile by utilizing social media.

Facebook, Instagram, YouTube, LinkedIn, and other online platforms have become part of business platforms because almost all people are users of these platforms on a regular basis. By strengthening your online presence, you reach a wide range of audiences who will be your potential clients and loyal customers.

So, if there’s a business idea that keeps calling you all day or doesn’t let you sleep at night, waste no more time. Put it down on paper and write everything about what can be your next empire. Don’t worry about having little capital because big names in the business industry also had humble beginnings.