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Business In The Philippines

Ricardo and Don's Post About Business in the Philippines

Ricardo wrote June 2003

I would like to know a good business I could start in the Philippines

Thanks Ricardo

And then Don Herrington wrote:

Dear Ricardo,

I would too, if I wanted to stress myself out. But since I don't want to take the plunge and don't have to, I can only give you my perspective on the successes and failures I have seen here, over the years.

This is a capital starved country. You can start a business on a shoestring. And you profit can be very high, because the risks are so high and the capital so scarce. But if you don't have or get a loyal Filipina wife who is smart, business minded and supportive, you are at a disadvantage, but not an insurmountable one. If you have not lived here for a few years you must go very slow. If you don't know the culture of your area of the Philippines and at least some of the language, things can be frustrating and hard. You need to do a lot of research and home work to insure success. You have to do a lot of homework, but the rewards are worth it, if you are money motivated.

Don't expect to come into the Philippines with your money and hit the ground running. And if you have never succeeded in business in your country, trouble is more likely. Even if you have succeeded in business in Mexico or other counties, be aware this country is a different breed, Asian.

You must understand that you can't trust a foreigner or Filipino in business, with exposing yourself to additional unnecessary risk. Sometimes you must take that risk. Just be aware of it and be careful. Know your associates.

Watch out for people in authority and professionals who want to "help," you, friendly people who ". . .only have your best interest at heart."A key phrase to listen for, is, "Trust me." If you hear that, run! "I have a friend in a very powerful position who can guarantee we can . . ., "is cause for immediate flight, too."

Business here is a do-it-yourself affair, but with a loyal, intelligent supportive wife. And the wife must be one who can't be manipulated by her family. Or she must have a family who does not try. It may be going on and you may not know it until it is too late.

Now as I write this, off List, you may be getting business offers. They are not endorsed by this List. If they say,” I am on the LINP3 list and . . . That means nothing. Most are well meaning. Almost everyone believes theirs will work. They truly believe it is in the best interest of the Filipino the foreigner and the world at large.

Some are just plain scams. If it sounds too good to be true. . . We try to ban those who send the get rich quick scams. Most are just ignorant of the hurdles involved in doing business in the Philippines for a foreigner and even a Filipino who is not well connected to a family he can count on without reservation, one with resources.

Here if you get rich, you get rich slow and by working 24/7, by putting your heart and soul in it like in most counties. You can make just enough to support your self, quicker, but be prepared for at least a one year wait until you have money to support yourself. And unless you are going to peddle sunglasses on the street, don't count on a profit the first day.

You can do very well if you mind the store and don't let anyone else have enough control to topple you. Keep in mind even though you are making a profit, you employees, may be sealing you blind. If you get a business offer, check their track record, carefully. Be careful, *go slow; learn what is going on, copy success. But do so only after you have you island legs here. It takes time. I you are in a hurry to make money, forget it. Get a job where ever you are. Or if you know how, do business there.

If you can't take the heat of corruption, don't come. Corruption is in every country, but in developed ones, well hidden, and big time more so than the petty stuff that gets foreigners here. They don't even attempt to hid it here. The last I hear only Cambodia, Thailand and Indonesia had a higher corruption rating than the Philippines. What we see as corruption is part of the system here, accepted and expected by many, and dealt with very effectively by those who know how. I am not one of those and don't intend to be. I do know those who are.

One hand washes the other is a way of life here. Absolute loyalty to the family dictates nepotism, further breeding corruption. If you think you are going to change the culture, trouble. Who else can you trust but your family? Make a family member your main man/woman, though the other guy/gal is much more qualified. At least, though s/he may be incompetent, you may be able to trust him/her not to steal from you. (I find women to be more loyal than men in business as employees, but not always. I have a friend who has a business in the States and had a Filipina managing it successfully for years. She recently almost wiped him out.)

Foreigners are neither fish nor fowl: bird with gills, fish with feathers. We are marginal men. We are out of our culture. And though we may acculturate, the will never be Filipinos, nor accepted as such, no mater what we hear or would like to believe or how we well we are treated. I only know one foreign man who has been accepted into a *barkada.* (A barkada is another form or family, usually classmates and guys you grew up with. They and are totally loyal to one another as they are to their family.) And this group he belongs to, resides outside of the Philippines. Now if you cater to expats almost exclusively, you can dismiss some, but not all of the above. Do not dismiss the almost mandatory loyal wife, a joy not a burden. And be aware it is still is not easy and takes hard work. Staying focused is hard, especially after the first two years of business. This is a country where there are many attractive compelling distractions, things vastly more fun to do than run a business.

As always, only in my opinion. . .

Very best always,

Don A. Herrington
Cebu City, Philippines
Where the Mountains Meet the Sea
In the Land of Smiles
Home of the Living, Retiring, Traveling and Doing Business in the Philippines Mailing

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