Divisoria

We had the construction going and it's about time for us to start buying stuff for the store. We needed a weighing scale, a kartilla, a candy container, boots for selling as well as other items. And there's only one place to get everything we needed - Divisoria.

We spent the whole day circling the whole of Divisoria to find most of what we need and we spent almost P10,000 there. We might have gone a little overboard but it might not all be a waste.

I did take note of some key takeaways from our trip.

1. Go to Divisoria on a weekday - too many people during the weekend
2. Dress down - it's more comfortable and there's a better chance of not getting overcharged
3. Haggle - all peddlers expect buyers to haggle and are often willing to give in especially for bulk orders
4. Make a list - it's pretty tempting to give in to impulse buying, having a list helps
5. Scrutinize each product - quality is not guaranteed so each item has to be checked
6. Plan the route - identify where each item on the list can be found then go through them strategically
7. Eat first - never go shopping on an empty stomach because decisions get affected
8. Beware of pickpockets - we weren't victimized but it's known to everyone that Divisoria is full of pickpockets so keep valuables close

Lesson 4: Put things in black and white

We asked a few people to give us a quote regarding the construction and though we settled on the cheapest one, our mistake was that we didn't define everything before we finalized everything.

He looked at the proposal and the space and made an estimate and gave us a price. The price sounded reasonable and we agreed to it. Problem cam mid-way through construction when there were some materials that needed to be bought or some person that needed to be paid. There were some proposals that were not on the original plan that were brought up.

To cut the long story short, we ended spending a little more than we planned to spend for construction which affected the rest of the budget.

If I would have to do it over again, I would define everything that needs to be done and I would declare that nothing should be done differently from what is agreed upon. Also, once the price is set, it should not be changed. Both parties have to agree and should abide.

Step 5: Construction

At the same time the previous documents were being secured, we were also busy finalizing the plans for construction. We wanted to make sure we thought of all possible scenarios and made adjustments before everything was made. This allowed us not to get stuck with shelves that are to tall for us to reach or desks we would keep banging our knee against.

We only had enough money for the bare minimum, 2 shelves, rice boxes, desk, 1 coat of paint and electrical; and we made sure that we wouldn't spend unnecessarily.

Once final, we needed to find people to do it. We went through several quotations and we settled on the cheapest one.

Step 4: Secure lease contract

Next step is crucial as all other steps depends on it. The landlord has to provide a signed lease contract as proof that your business will be in it.

How fast the landlord operates dictates how soon the lease contract is made. It won't be dependent on anything and it can actually be done as the first step; except that the lease contract also states when the rent starts. It's prudent to try to have the contract start as late as possible to save on paying rent when the business is not yet operational.

Step 3: NFA certification

After getting the barangay clearance, the only other paperwork that can be done without the lease contract, is the NFA certification. In our case, since we're a rice retailer, we needed to be certified by NFA. Because our store is going to be located in Mandaluyong, we needed to go to the NFA office near FTI in Alabang.

When we arrived at the NFA office, we were surprised how easy it was. There was no queue and we didn't have to wait before someone entertained us. The people were amiable and accommodating. 

The only negative thing I can say about the experience was that at one point, we needed to have a document photocopied but we had to wait because those who were assigned at the photocopier just had lunch and they had to pray after. Not sure if it was the rosary or something else but it was a little long and I personally think that religion and the workplace should be separate. That's my opinion.

In the end, we were still able to do what we had to do in a lot less time than what I expected it to take.

Step 2: Secure barangay clearance

The next step in our goal to set up a rice dealer business was to secure a clearance from the barangay. This was a lot cheaper than the DTI registration. It was also fairly easy to secure.

The only feedback I have about this is that a lot of the barangay employees talk a lot. The lines were just a few people long but since they talk about neighbors and do small talk, it made the wait time extremely long.

And also, they still use typewriters. It's like they were cavemen.

Beware of fixers

In our search of how to start a business, we chanced upon some who offered a specific service. They would take care of all the paperwork while you sit back and wait. Of course there's a cost for their service.

We talked about it and we decided against using these "fixers" for the following reasons:

• We did not have the budget for it,
• We don't have an idea if the price for their service is fair,
• We don't know if they're legit (how could they be)
• We have not tried to take care of all the paper work ourselves so we don't know if we actually need their service.

For these reasons, we opted not use these people and it looks like we made the right choice.

Step 1: Register business name

One thing that has stopped me from starting a business was the paperwork involved in having a business. I didn't know where to start.

Fortunate for us, the internet is great place to know everything. We just Googled how to start a business and it gave us information on what we can do. They weren't all accurate but at least we weren't as blind.

The first thing we did was to register our business name. It was the only step we can do which was not dependent on anything. It was a choice between registering with DTI as Sole Proprietorship or with SEC if we wanted to register as a partnership or as a company. We wanted to keep things simple so we chose to be registered as a Sole Proprietorship. It was cheaper (less than P500). And it allowed us to be flexible with having only 1 person sign all documents and not wait until all partners are available. However this may not be the best solution for everyone as it also assumes that all partners trust everyone completely.

We also needed to come up with a name for the business. We had several choice for the name of our rice dealer store but what we didn't know and what we didn't find in the articles that we read in the internet was that the business name should not include the word rice in it. Therefore we couldn't use some of the options we shortlisted; Rice Rice Baby, Rice and Shine, etc.

Lesson 3: Choosing the right location

Now that we've decided on what business to put up, we needed to find a location for it.

We wanted our store to be just within walking distance from where we lived. This would allow us to easily monitor the store and it would stretch the limited manpower we have since 2 out of 3 partners have full-time jobs.

One of the first commercial spaces we found was a former internet cafe. It was pretty big and rent was pretty reasonable. Down-side was that it was facing one of the side streets instead of facing the main road.

The second commercial space we saw was in the same building but was being rented at a slightly higher rate but it was facing the main road.

The third space we checked was a very small converted space in someone's house. This was the least appealing when it came to location and the aesthetics but it had half the rent of the other 2 spaces. On our first visit here, the owner made it easy for to decide. He appeared like someone who was very difficult to get along with. We didn't want to be stuck with him so it became a choice between the first 2 spaces we found.

Each of the first 2 locations we were considering had their own pros and cons. We were set on choosing the less expensive one as we were on a budget. Fortunately, in one of our visits, it was raining; and it showed some flaws in the walls where water seeped through. The cost of the repairs would be equal to what we could've saved from choosing the less expensive unit.

Lesson 2: Choose the right partner/s

A few years ago 4 friends of mine went into the furniture business together. They had a falling out and now they don't talk with each other. They can't even be in the same place together without everyone around them feeling uncomfortable.

I also heard stories of my father being in business with his own brother. They had an argument and when he went to the office one day, there was a wall of hollow blocks where the door to his office used to be.

This was exactly what a lot of people say; business will undo friendship and in some cases even family. Although these seem like extreme cases, I'm well aware of the risk I'm putting myself in partnering with someone.

Nonetheless, I've realized that I will not be able to have a business on my own. I have a full-time job which I'm not comfortable leaving anytime soon. I still lack some skills which are necessary to make sure the business becomes successful. It's important that I partner with someone I completely trust and who trusts me as much.

It was only logical that I partner with my best friend from high school (I've known him for 19 years) and his girlfriend. I'm confident that the foundation is there and we won't argue so bad that we can't fix it in the end. It's scary to think that misunderstanding in business might cause me to lose the closest friend I have. But I'm prepared for it and that makes me accept that friendship is more important than business.

We've never had a major argument ever, so we'll just see how it goes.

What kind of business?

We've toyed with a lot of ideas for a business. Some more serious and feasible than others. But we'd always throw ideas and see what would make sense.

In the end, it came to what the community needed. We wanted a business near where we live and we tried to think of what we lacked. There were a lot of small sari-sari stores and we didn't want to add to it. We needed something that would set us apart. Upon studying the market, we saw that there wasn't any rice retailers.

Everyone was in agreement so we decided on putting up a rice retailer. It couldn't stand alone so we added some dry goods and we're planning on adding school supplies to the store.

This in spite of not knowing a lot about rice. Whether it's a good idea, only time would tell. We'll see in the next few posts.

Lesson 1: Just jump

I've often toyed with the idea of having my own business. But every time I think about it, reality kicks in and I remember that 1) I don't have enough extra money to start a business and 2) I don't have any idea how to start and run a business.

These reasons stop me from moving forward and doing or trying what I really want to do. The problem is that I've been hiding behind these reasons for more than a few years and I'm no closer to solving any of them now than before.

So I decided that I need to do something about them. So without consulting anyone, I applied for a personal loan from a bank. It was probably one of the most compulsive major decision I've done in a long time. But I believe it was worth it. After my loan was approved, it put the right amount of pressure for us to get things done and to bring us closer to having the business realized. I will need to pay for the monthly amortization and I found that the real reason that stopped me from being an entrepreneur was procrastination and not the reasons I earlier stated. This time, we were forced to act.

Failed attempt

Several years ago, when my friends and I were just learning to drink alcohol, we had a dream of opening our own bar. We were under the influence and it wasn't a surprise that the dream never came true.

A few years after that, when we were in college and still with a little alcohol in our system, we decided that we wanted to have a t-shirt business. This time there was a bit more planning involved. The 5 of us chipped in P2,500 each and we bought plain shirts from Divisoria and silk screening materials from National Bookstore. Then when we couldn't think of designs, we took ideas from Wing Dings in MS Word. We diligently silk screened all of the shirts we bought and shared a bazaar with other friends so we can sell our product. The bazaar was a flop and we ended up with a lot of shirts which eventually got lost. needless to say we did not get to recover our capital.

I should've just started sooner...

I've been an employee for 10 years in the same company and I realized, I've very little to show for it. The money I have in the bank certainly doesn't show it. I'm afraid that if I don't do something about my situation, I'll have the same realizations after another decade.

Though admittedly I was very irresponsible with money. I only saved what's left of my salary instead of saving first. I splurged on wants instead of just buying what I need. I've gambled every so often even when I knew it was not the prudent thing to do. I probably haven't learned to deal with most of the bad habits I've picked up along the way.

Nonetheless, I can't waste any more time. I have to start now if I'm going to be young and strong enough to enjoy the fruits later on. Or perhaps, I need to start early enough so there's still time in case I fail and have to start over and rebuild.

Intro

I've always been fascinated with success stories of self-made millionaires. I want to have my own rags to riches story and this blog aims to document just that.