Entrepreneurs who want to legally do business in the Philippines should start with exploring some viable options. A businessman just cannot jump into a business without familiarizing its technicalities. There are some things you need to take into consideration before you can operate your business. 

You need to start with knowing the types of business ownership under the Philippine law: 

1. Corporation 

This type of business structure has five owners or more and they are referred to as shareholders. There are two types of corporation: stock corporation and non-stock corporation. With stock corporation, the capital is divided into shares and distributed to the investors. In turn, investors receive allotments and dividends, which will be based on the numbers of shares they have within the corporation. 

A non-stock corporation is intended for public purposes and issuing shares of stock is already out of the picture. This corporation’s purpose is usually cultural, educational and charitable. 

2. Partnership 

There are two or more individuals involved in this type of business structure. This is why they are called partners according to the Civil Code of the Philippines. The partnership can either be a general partnership or a limited partnership. Partners in a general partnership only have a limited liability for the financial obligations while a limited partnership requires one person to have unlimited liability while the rest have liabilities based on their capital contribution amount. 

3. Sole Proprietorship

As the name implies, this business structure is fully controlled and owned by an individual, which will also enjoy the profits and handle the liabilities of the business. For a sole proprietorship to be in effect, the owner must apply for a business name. It is also the proprietor’s obligation to register with the Department of Trade and Industry (DTI). 

Important Things To Consider For The Business To Run Smoothly: 

Your business cannot be considered legal without registering it with the Bureau of Internal Revenue. Make sure you register your business to the Revenue District Office (RDO) where your business is located. You will also need to secure a Certificate of Registration (COR) and Authority to Print (ATP) for your official receipts to be printed. You should also keep in mind that only printers accredited by BIR will be acknowledged. The official receipts should show that it is BIR accredited. Even books of account must bear BIR stamp. 

Aside from BIR, you should also register your business and employees with the Social Security System (SSS), Home Development Mutual Fund (Pag-ibig) and Philippine Health Insurance (Philhealth). These government entities will also require you to submit reports. It is imperative that you register newly-hired employees with these government agencies as well. 

It is a brave move for anyone to decide on starting a business and giving up a job routine they have been accustomed to for years. While being your own boss is such a dream come true, there is more to running a business than meets the eye. Before you consider taking that huge leap, arm yourself with knowledge about business principles. Otherwise, you will be doomed to fail.

No one can really predict whether a business is viable or not because it solely depends on how you manage it. If you do not have any business background, you may feel as though a business is a total alien landscape. Everything seems foreign to you and it is like going to a battle unarmed. While establishing a path may seem very challenging, learning the business principles will lead you to the road of success.

Create A Feasibility Study

The most common mistake that people make is investing their hard earned money into a business they are not even familiar with. This is the kind of risk that is the hardest to take because if things don’t go as planned, you have to start from scratch and this means spending vast amounts of money. In a feasibility study, you will cover the following areas: products and services, target market, suppliers, competitions, pricing and marketing techniques. With all these in mind, you are slowly putting things in their proper perspectives. The main purpose of creating a feasibility study is for you to determine the nature of business that suits your skills. You can also learn more about your target audience or potential customers’ needs and wants with feasibility study. If you already have a competition before you start your own business, you have an idea how you can stay ahead of the game.

Formulate A Business Plan

Once you have identified viable products and services, the next step is to create a business plan. If you do not have a strong background in business management, find someone who can help you with drafting the plan. The business plan should include essential information on the nature of your business. Aside from the summary of the product, readers must also obtain details of your product. A business proposal must also be kept in mind and each section must outline the strategies you have developed for your business. Don’t forget to include your competition and budget in your business plan as well. Your projections must be realistic and it should the cost of the product, projected sales and even the financial requirements.

Analyze The Availability Of Cash Flow

A steady cash flow is going to be necessary if you want your business to be smooth-sailing. However, when cash flow becomes unavailable, there are still other financial institutions that will provide you assistance in fulfilling your business needs. You just have to see to it you have a sound financial projection or your objective of making a profit will be defeated. Prepare a financial report so you can keep track of your finances. Hire accounting or bookkeeping professionals for this task so you can keep your budget in check. Major business losses are usually due to financial mismanagement and if you want to increase sales and make your business more profitable, you should always keep a record of your financial activity.

Seek All The Help You Can Get

Some entrepreneurial hopefuls end up bursting their tiny bubble due to the lack of business knowledge. You may have the funding and a viable product to set up a business but do you really have what it takes to increase your chances for success? Investing your money in a business is a game of survival and those who manage to keep up with the competition win. Get expert advice so you will know how you can make your business more profitable.

Secure All The Necessary Permits

As an entrepreneur, it is your obligation to follow business rules which include securing a business permit. There are several steps involved in getting a business permit and you are not allowed to operate your business if these have not been secured. For this process, prepare all the essential documents such as notarized documents, certificate of deposit, clearance, receipts and other requirements you need for your business permit.