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From OFWs to Entrepreneurs

WHAT businesses do overseas Filipino workers (OFWs) invest in once they decide to resettle back in the Philippines?

Food franchises, according to sources, in the form of inexpensive fast-food stalls are almost always the first business ventures that OFWs go into, in the hope of making a quick profit at minimal capital.

Following in second, as of recent years, are the manufacture and production of soaps and/or detergents. Third place goes to the making of bead accessories. Also in the running is the propagation and sale of potted plants.

Ultimately, though, the success of these homegrown businesses depends less on their market appeal and more on the passion, patience and knowledge, present and potential, of the OFW-turned-entrepreneur.

Points out Pinoy ME Foundation president Dan Songco: “OFWs need to go into a business that they can be passionate about. One phenomenon about start-up businesses is how entrepreneurs lose interest after a while. A business usually takes two to three years before it becomes profitable. If entrepreneurs do not believe in the business they’re engaged in, they might give up before the business turns a profit.”

Songco elaborates: “The stories about successful businesses that we’ve heard are those where entrepreneurs engage in something that their parents, relatives, or former employers were involved in. They learned the ropes through their past exposure to the business. The most successful entrepreneurs are those who speak passionately about their business. They enjoy what they do so they put their heart and soul into it.”

In short, OFWs thinking of putting up a siopao stall or hotdog stand should do some serious soul-searching and ask some pertinent questions: have they ever been inclined to the culinary arts even as a hobby? Are they good at cooking and take pride in it?

Elena F. Baluyot, marketing officer of the Center for Small Entrepreneurs (CSE), gives the brass tacks when it comes to putting up a small food business or becoming part of a mini-franchise: “The initial outlay is P120,000, which includes royalty fees and training for approximately three months. Profits will depend on the product and location. Or you can just add the products to the stocks on your shelves if you have a sari-sari store. The franchise owners will check your location and the traffic around it and give you an estimated time for your return on investment (ROI).”

Baluyot continues: “The P120,000 is starting capital for two months. Small franchises usually take six months to regain it. For the next four months starting on the third month, expenses will be about P4,000 a month. Profits are normally rolled back into the business. If successful, after six months, a food cart can earn like P1,500 a day.”

Small products usually start with minimal capital that, when handled with expertise, can be the start of something big. CSE provides a kit worth P500 that can produce a liquid detergent that can be sold up to P2,000 in bazaars, stores, or directly to consumers. Other enterprising souls can manufacture a leather jacket at the cost of P35 each and sell it for P200 each.

One former OFW who was able to create her own brand of soap with the help of a chemist now manufactures it in large quantities and markets it to hotels in Dubai, her former city of employment. The cost per soap bar is P30, but she can sell it for as much P200 per piece.

Baluyot uses this to point out the advantage of an ex-OFW’s network: “You can see the needs of your potential market. If you’re a nurse in an establishment, you can inquire about the material that they use in their beddings, for example. What are the needs of your fellow OFWs? If they’re living in the UK, what are their clothing needs, and can you send them material from the Philippines that can help them deal with the cold? Your friend has a friend who has a friend who has a friend.”

One potential business that has a growing market and a lack of suppliers has to do with herbs and potted plants. Edsa Garden House sells at reasonable cost to Filipino garden lovers, plants that are rich in vitamins and minerals, such as rosemary, wheatgrass and stevia. They do this for two reasons: to educate them about greens that can keep them healthy, and to encourage them to propagate these in their own backyards as a hobby or business. To date, Edsa Garden House sells 101 varieties of herbs.

Michael Caballes, Edsa Garden House’s horticulturist and consultant, describes the various opportunities:

“You can start with pots, and you don’t necessarily need a hectare of land. You can work with 500 square meters, which can be occupied by 25 pots. Buy a mother plant and then plant this directly in the soil. Cut the branches from the mother plant and replant the cuttings to make them root and grow in pots, and then sell the individual pots in the markets, bazaars or supermarkets that are now beginning to sell potted herbs.

“Some of our customers used to buy in retail, sell in the weekend market, and end up propagating plants for their own business. One guy would buy 100 pots of stevia, plant them in his land in Baguio, and then resell them.”

Edsa Garden House usually sells their potted plants at P30 a piece, with discounts for volume sales. Would-be farmers who can plant, grow, and sell plants can find a welcome market in restaurants and hotels that need a steady supply of herbs for their dishes.

Caballes elaborates, “Chefs need something like a kilo of rosemary a day. The problem is consistency of supply. Luzon is visited by typhoons six months in a year. During rainy season, they can’t get supplies. They either get herbs from abroad or resort to processed goods in the absence of fresh ones.”

To assist would-be farmers, Edsa Garden House also provides information to buyers on the plants they’re buying. They usually hold workshops on the basic methods of propagation, the growing of herbs, the selection and nurturing of the soil, pest and disease control, and the profitability of certain herbs. Initial investment for potted plants on a 200-square meter plot of land can be as little as P20,000.

Pearl Banaag, Edsa Garden House’s marketing consultant advises patience for the would-be herb and plant grower. “Like any other business, the regular supply of herbs can take two years to become profitable,” she says. “You also need a caretaker to look after your plants.”

Caballes gives other guidelines: “Propagation and finding a market can be difficult initially. You also need time to learn about the plant, to study what it needs, how it grows, and so on. Study the plants’ behavior, understand the pests and their possible diseases. Plants are also affected by different weather patterns. Individual growers should first focus on the top three selling herbs. Do that for a start, and when you are confident, expand and venture to other herbs.”

Understanding the product and the market, along with record-keeping, are fundamental in starting and growing a business. Baluyot continues: “We also teach basic marketing, which means understanding the trend and what people want. It’s about knowing functionality, the traffic, the need, and the location of people. Record-keeping is fundamental in keeping track of what goes in and out of your business as well as the supplies that should be ordered.”

Finally, Baluyot says, being a businessman means separating the personal from the professional, which makes record-keeping necessary: “Don’t mix family expenses with business earnings.” •

By Cora Llamas
Philippine Daily Inquirer
First Posted 16:59:00 01/16/2010 

Filed under: Livelihood, OFW Corner,

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