MANAGING CASH FLOW FOR SMALL BUSINESSES-Accounts Receivable

The success of a small business greatly depends on efficient cash flow management. When I talk about cash flow here, I am referring to the movement of cash from the collections to the payments and the maintenance of a "safe" cash balance for operation. So small businessmen should analyze the cash flow of the businessmen. One does not need to be an accountant to do that. A working knowledge of where the cash comes from and where the cash goes are all what the businessmen need. This means understanding the components of business that affect the movements of cash like: 1. Accounts receivable- How long does the company collect its receivable? What are the terms of sales? n/30 days? n/60 days? The next question is what's the actual collection period? Is it really after 30 days or more than that? Is it really 60 days or it stretches out to 60 or more? The next question is why the prolonged collection period? With this question in mind, another set of questions should be answered. 1. Does the business send the invoice promptly? There are businesses where invoice or statement is sent only upon the delivery of services. But as to how long it is done depends on the person in charge of the billing. Sometimes, the billing is delayed due to incomplete data or miscommunication between people in the organization. The problem could lie on the inefficient record keeping of the business.When the billing comes, the person in charge of this function has no basis for the charges. 2. Do the business make follow up of the collection? It is not enough to send the statement or the bill. The business has to make sure that it was received and a payment is being prepared. 3. Does the business continue to render service to delinquent clients/ customers? If it does, it's time to review the accounts of this client. More about accounts receivables in the next blogs. Business,marketing,Entrepreneur,Entrepreneurship,Accounts+Receivables , Accounting for Small Business,

Handling Cash Expenses

My friend is complaining that he can not organize his receipts and monitor his expenses especially those which were not paid thru check--little expenses that when summed up together will make a dent on the profit like, office supplies bought in cash, taxi fare and other petty expenses. I come across this website shoeboxed which offers organization of receipts for free. Precisely, that's what I suggested to my friend who has his day job to attend to while managing his on-line business--a box-type of organizing his docs while waiting to be sorted out. Instead of a box however, there is an expandable folder/envelope which come with labels which he can use to store the receipts, notes and other small papers evidencing payments. To handle the cash expenses, he can make use of a small box where he can put a fixed amount of money, say for example $ 100.00. Everytime, he spends out of the fund, he should put back the change, a receipt of a small paper noting what kind of expense it is. When the fund is running low, say for example, it is only 15.00, he can replenish the fund by adding $ 85.00 to make it $ 100 again. The 85.00 represents the expenses for the period that can be itemized as follows: 20.00 taxi fare- Transportation Expense 35.00 bond paper and paper clips - Office Supplies 30.00 parking fee penalty - miscellaneous If you have question, you can post in the comment. Business,marketing,Entrepreneur,Entrepreneurship,Accounting for Small Business

Understanding Cash Flow Part 3

Sources of cash flow: The major source of cash comes from the customers or clients. Either they are paid in cash/checks/or by credit cards. Some sales are on account which are known as *accounts receivables so that cash will only flow to the business when they're collected. Cash can also come from the owner or owners. When cash is tight, the owners may increase their capitalization. This is not considered revenue but as increase in their equities. The business may also borrow from the bank which proceeds can be credited to the account of the business. But these two types of transactions are not regular done by the business. Where do these cash go? They are used to pay *liabilities such as suppliers, utilities or loan amortizations. Salaries also have to be paid regularly and taxes may be paid on a quarterly or monthly basis. The owner or management must be able to forecast its cash requirements for the next succeeding months in order to control the receipts and the payments functions. Too much receivable uncollected will not only contribute to low cash position but will also increase the risk of bad debts. Terms: *Accounts Receivables-refer to sales made on account and are collectible at a certain period of time. ** Liabilities are accounts payable to vendors/suppliers or other agencies where services acquired are not yet paid. *** Equities refer to the owner or partners or stockholders share in the business ownership. Related Articles: 1. Understanding Cash Flow Part 1 TAGS: Business,marketing,Entrepreneur,Entrepreneurship,Accounting for Small Business,Cash Flow,Deposit in Transit,Bank debits,Bank credits,Outstanding checks

Understanding Cash Flow Part 2

Many people equate cash flow with profit. This is not so. Profit is the accounting term for the difference between the revenues and the expenses. Expenses are not necessarily cash and revenues may not have been received yet such as receivables. In small businesses, cash basis of accounting is preferably used i.e. only actual receipts are reported are revenues and only payments made in cash are deducted as expenses. Let me illustrate: For example a total sales of $ 5,000 has been made which is 2,500 cash and 2,500 in receivables. Expenses amounting to $ 3,000 was paid for the same period. Using the cash basis of accounting, the business will report a loss of $ 500. Sales.....................$2,500.00 Cost and Expenses..........3,000.00 Net Loss................... 500.00 If the accrual basis is used, there will be a net profit of $ 2000 excluding non-cash expenses such as depreciation. Sales.....................$5,000.00 Cost and Expenses..........3,000.00 Net Profit.................2,000.00 What is the cash flow in this example. Cash flow amounted to $2,500 while net cash inflow is negative $ 500.00. Cash outflow refers to the expenses paid. Related articles: 1. Understanding Cash Flow Part 1 2. Understanding Cash Flow Part 3 TAGS: Business,marketing,Entrepreneur,Entrepreneurship,Accounting for Small Business,Cash Flow,Deposit in Transit,Bank debits,Bank credits,Outstanding checks

Understanding Cash Flow Part 1

Cash in the Bank When I was working as an accountant, my boss asked me why we don't have cash in the bank while the business seems profitable. He did not know that cash flow is different from profit or revenue; neither is cash in the bank is equivalent to cash position. Even if the bank statement shows $15,000 balance at the end of the month, it does not necessarily mean that it is the amount available for business to use for payments. Between the cut-off period of the bank's last entry item and the date when the cash balance is being determined, there are payments which checks are not yet presented in the bank for payment. There may be loan proceeds that have been credited in the bank account and or there were charges that were debited from the bank's balance. This is why a bank reconciliation is required at the end of the month to establish how much really is available for business as of the end of the previous month and is carried over at the beginning of the following month. A simple proforma of a bank reconciliation is as follow: Balance per bank ..................... XXX Add Deposit in Transit*............ XXX Less Outstanding Checks**...... ( XXX) Adjusted balance per bank.....XXX Balance per books.................. XXX Add Bank Credits***...............XXX Less Bank Debits****..............(XXX) Adjust balance per bank......XXX *Deposit in Transit are deposits made at the end of business day after the cut -off period of the bank statement. **Outstanding checks are checks which disbursements have already been recorded in the books but payments are not yet made by the bank. *** Bank credits refer to additions made by the bank to your account such as collections from your on-line payments remitted directly to the bank; loan proceeds and other adjustments that will increase the balance which are not yet recorded in the books. **** Bank debits are deductions from your account such as bank charges. Related Articles: 1. Understanding Cash Flow Part 2 2. Understanding Cash Flow Part 3 Tags: Business,marketing,Entrepreneur,Entrepreneurship,Accounting for Small Business,Cash Flow,Deposit in Transit,Bank debits,Bank credits,Outstanding checks

Reasons why small businesses fail 4

Having been in business and a business consultant myself, I feel that publishing the small businesses that an OFW may engage into is not enough. The manuals and the articles do not discuss the whole shebang of putting all your hard earned money in a business that spells SUCCESS. Although there is no such thing as guarantee in getting into business, the risk of loss is minimized when there is adequate planning before the first peso saved rolls out from the pocket. 1. Verifiying if there is really a market demand or demand is not yet fully satisfied--in short the market is not yet saturated. You do not need to hire someone to conduct a survey. For example, you like to put up a beauty parlor. Easy. Wear your walking shoes, start from the point where you plan to open the business, count the number of beauty parlors that you can find within the next few kilometers. Same with fastfood or restaurants eateries, not unless it is located in a food court in a mall. But even then, the kind of food served in that location where you compete with a lot of food stalls will make you stand out from the rest. If you see that beauty parlors are more in number than the street blocks that you have passed by, forget the business. Not because your relative can cook and or you learned the " how tos" in some seminars or manual, you can already put up a sign and say welcome to my business. That's dealing only with one aspect, the technical. The market demand is the most important factor in considering a business. Not because, you have some hobby that makes your friendslashrecepientslash of the custom made or handmade stuff as gifts encourage you to start producing in quantities, you will already start arranging for a loan. Honey, try looking at your products and your friends. Are they only patronizing you, then keep the gifts in their closets --never used or displayed. Were your gifts recycled like the fruit cake that goes around the neighborhood or offices that if you're lucky, you get it back in a different cute wrapper? There may be success stories about how hobby turned into multi-million business but the writers may have omitted the part where the successful business owners learned the nuts and bolts of the businesses the hard way before they saw their "bottomlines" with profits. 2. Starting a business without adequate capital Okay so there is a market. Allelujah. So you dance the dance of joy and start registering the business, getting the place and buying the equipment and other fixed assets. Honey, the word CAPITAL does not refer to the size of the letters or the fonts used in writing. In business, there are three kinds of capital that you need. Kung baga, magkakamag-anak sila. Fixed Assets Capital- Does your business need big capital outlay before you can even open your door to start the business ? Does you business need some special equipment like oven, stoves, kitchen utensils, tables, chairs and other minor machines to operate a restaurant? Does your business need a lot of chairs, computers, need renovations for the rented office or place to operate an internet cafe ? Inventory Capital- Does your business require you to stock up some inventories of the products to be processed or sold or to be used in the day-to-day operation? You can not start a beauty parlor with just one color of nail polish or one bottle of nail polish remover. Iirapan ka ng beauty counsellors ninyo or ni Parloristang si Tanya aka Tonio. You cannot start a boutique with all goods that are on a consignment basis. Working Capital- This is the capital that "works" for you while you are waiting for the revenues to be adequate to roll over. Salaries for employee if you have one, rental payment, utilities, replenishment of inventory stocks, transportation and other unexpected expenses. Dapat mahaba ito as in if you estimate that the business will pick up only after six months, then your working capital should be more than six months. Ganiyan dapat kalalim ang bulsa ninyo. We had this experience in the business that we put up here in the US. Our fixed assets capital were merely office desks and chairs and a reliable phone system. What we did not expect was that in a matter of days, we were able to deploy nurses in hospitals. After a week, they need to receive their paychecks. That's industry practice. Violate that and you will see them moving to another registry. The hospitals and nursing homes pay only after six weeks. Others issue their checks more than six months especially of it is a hospital system where the parent company is in another state. The bank would like to see our profit and loss. Actual not the projected one. So what did we do? I include that in my discussion of tapping sources of capital. Related articles: 1. Reasons Why small businesses fail part 3 2. Reasons for the Failure of Small businesses Part 2 3. Reasons why small businesses fail Part 1 Business,marketing,Entrepreneur,Entrepreneurship,consignment

Hapinoy Store Program

The easiest business to put up is a sari-sari store; the difficulty is maintaining it. Good news is there is a new project in town called Hapinoy Store program. The target participants are the SAHMs or stay-at-home-moms who are going to be trained about inventory management, credit management and other stuff. (This is close to my heart because these were the types of seminars that I conducted in the Philippines when going to the different regions sponsored by foundations that help marginalized sector of the population). According to Salve, Microventures will take a chance on these stores by giving sari-sari stores a makeover with bright paint and the huge Hapinoy smile plus additional capital from CARD. The stores will have direct access to manufacturers resulting in a bigger margin, the nanays can qualify for trainings under sari-eskwela where they will learn about inventory management, credit management and other stuff. For more of the concept go to inquirer.net.blogs. microfinance,travel agency, tour package ,Boracay,Philippines

Reasons why small businesses fail part 3

This is the continuation of the discussion of causes of failure of businesses put up by OFW/OF. 2. Poor inventory management This pertains to businesses that stock inventories. Even service businesses like restaurants, beauty parlors and motor shops carry inventories of supplies. They say that restaurants or anything about food is "tubong lugaw"( porridge) . Yes, you're going to eat nothing but porridge when your business goes bankrupt because of poor inventory management. Are you aware that there may be people in your business who's doing their grocery shopping in your restaurant's food storage? This is what we call pilferage. And how do they do it when you got your security or they are being checked before they leave the premises? The easiest way to bring the items out is thru the trash can. The dressed chicken or kilos of prime beef or pork are wrapped in thick waterproofed plastic and then put in the trash cans. The pilferers do not operate alone. Another individual or individuals retrieved the pilfered goods from the trash bins. They know the shedule of garbage disposal. Then they sell these to small rstaurants or to public market stall holders who sell them in chop-chop. The easiest to pilfer are the beauty parlor supplies. The owner cannot exactly monitor the consumption of the acetone, the nail polish and the cotton swabs. I remember the conversation of a friend with her sister working in a big-time beauty parlor. She said that she had an appointment the following and she did not have time to go to the parlor for retouch of her manicure, so if the sister could please bring the color that she needed. Pilferage does not only happen in big businesses. Office supplies are the common items which are easily taken home by employees.Ouch does it hurt? In the grocery store where I do my food shopping, I noticed an employee dropping some good fruits in a cart full of soiled vegetables as he went about restocking the vegetable and fruit sections. Last Friday, I noticed that the exit going to the back side of the grocery was padlocked. There is just one exit open for customers and employees. One of the experiences I had when I was an auditor was the discovery how new unauthorized copies of books were sold in small second hand books at a price of used books. The employees were subjected to body search. Both men and women and yet the pilferage problem never abated. The books were being taken out chapter by chapter. Then they were compiled, bound and sold without the signature of the author. Inside the printing room, parts of a book were just lying down in every corner because no one suspected that these could be put together as long as they know the sequence of the pages. Related articles: 1. Reasons for the Failure of Small businesses Part 2 2. Reasons why small businesses fail Part 1 3. Reasons why small businesses fail Part 4. Business,marketing,Entrepreneur,Entrepreneurship,pilferage

Promotion and ads

Come to think of it, those ambulant vendors of dirty ice cream and popsicle outside our school were already practising innovative promotion for their products. When I bought a popsicle, I was in a hurry to eat the topmost part of that icy thing. I looked for the word FREE in the popsicle stick. O di va, di another popsicle yon. Yong iba naman, mayroon silang garapon ( a wide mouth-bottle) filled with water. Inside the garapon was a smaller bottle which catches the coin that you drop from the mouth of the garapon. If it goes inside the smaller bottle, ice cream and or popsicle is free. I observed that these promotion practices were only done near schools where there were several competitors. Those who were getting by our house did not have free stuff. But they knew when to make "kling kling" of their bells. After our afternoon siesta. Now, ads are very sophisticated. Billboards are most often used to reach more consumers. So what kind of ads do you think attracts the consumers? photo forwarded by Trosp. For more of the photos, go to innovative ads. promotion,ads

Reasons for the failure of small businesses

Subtitle of the blog: Why the businesses of Overseas Filipinos and or OFWs fail. After working abroad, the OFWs/OCWs dream of putting up their own businesses so that they can make their savings last without having to go back abroad. The overseas Filipinos aka permanent residents of foreign countries set up businesses back home to provide employment/sources of revenues for their dependent relatives. I read somewhere that ninety per cent of these ventures fail. The news did not mention the causes of failure. So here I am enumerating what must be the causes. 1. Lack of experience- Most of the wannabe entrepreneurs are enticed by the relatives to go into a type of business which they think are making money. One of them is internet cafe. The first time, I made a balikbayan, I went to an internet cafe near our place. The per hour rate was 50 pesos. And I still have to go to Alabang. That time, the internet cafes are not yet dime-a-dozen. The second time I went home, I found many internet cafes closer to where I was temporarily staying. The charge was 30 pesos per hour. There were only 10 units that obviously are home assembled pcs ala Frankenstein. Malaki tipid than buying the finished branded. I thought that the guy knows the business. A friend here in the US asked me if I know somebody who want to partner with him in the internet cafe that he is buying from a friend who's also here in the US. First question, I asked was, why is the owner selling? He said something about misappropriation of funds by the trusted relative who managed the business. He did not say, it is "bloody bleeding" at the bottom. translation: losing. It was a principle of instead of giving fish, teach them how to fish that made the overseas Filipino financier/owner to set up the internet cafe for his relative in the Philippines. The relative's knowledge about computer is only the distinction between a pc mouse and that little rodent that run on the keyboards every night when the lights are out. Read more »

Reasons why small businesses fail Part 1

Sub-title: Why my mother was not cut-out for business. My mother was a lousy businesswoman. She was more of philanthropic, "sobrang honest" and "sobrang pakikisama" type of "trying hard entrepreneur". For a small plastic bag of pan de sal that she baked herself with all the necessary ingredients followed to the smallest measuring cup, she'd delivered it for free. Good marketing strategy perhaps but the pricing was just too low to recoup the investment. Nakakahiya naman daw kaseh kung mataas ang presyo. Pero sabi ko nga premium quality ang kaniyang ingredients kaya tama lang na high quality, high price. Kaya lang, she would not be able to compete with unscrupulous businessmen who cheat on ingredients. Yon ba yong ang pan de sal ay malaki tingnan pero pag kinagat mo, hangin lang ang laman. After several months, the oven bought for the small business venture became a good repository of plastic bags. Bad location too. Our house was inside a private subdivision where no sari-sari stores would thrive because most of the residents do their groceries for weekly provisions. She was damn too trusting that our passenger jeepney which had a route in Cubao became a good source of beer money for the hired drivers. They complained of engine trouble, brought the vehicle to their favorite machine shop, changed the good spare parts with bad recycled ones, sold them to spare parts stores and left us when almost everyday, the jeepney was close to having major repair. The vehicle was sold for a measly few thousands. She tried raising tilapia at our backyard. The small pond was constructed with few hundred fingerlings of tilapia to start the tilapia-raising project. Sa awa ng Maykapal, hindi lumaki ang tilapia bago nakakita ng frying pan. Either namatay sa init o kaya kinain ng mga pusang gala na nakakatalon sa aming mataas na bakod sa Tandang Sora. Paggabi, marami ring daga ang nangingisda. Moral of the story, "do-it-yourself business kits," do not tell all. Why are business consultancies flourishing? After several business attempts (just so she will not get bored), itinaas ang bandilang puti at pabalik-balik na lang sa Estados Unidos. My grandmother was the shrewd businessman in the clan. Siya yong tipong ipabenta mo sa kaniya ang buwan, pati planeta-na-hindi-na-planetang Pluto ay maisasama niya sa deal. In our few months of stay in the ancestral home by the sea, I witnessed her hands-on-management of what was left of her "business empire". She was kinda semi-retired that her business of wholesale-retiail in that small island was merely to keep her active. She would travel via small motorboat to get to the metropolis, bought sugar, soap and other basic necessities in bulk. Back to the house cum store/watering place during the night for tuba/wine lovers, she would repack them for the "TINGI" Filipino system of selling basic goods consume everyday. The sales can be cash, barter or credit. I did not see any listahan on the wall or posts. That' s not the way my grandmother conducted her credit transactions. She got pieces of paper were the names of the customers were written. She may have been disoriented once in a while with regards time or day because of her age but she would never forget the faces of those people with "utang". Related articles: 1. Reasons why small businesses fail Part 4. 2. Reasons Why small businesses fail part 3 3. Reasons for the Failure of Small businesses Part 2 Business,marketing,Entrepreneur,Entrepreneurship, marketing strategy,pricing

Not all that shines is a star-he is an enterpreneur too

Fun in commercials By Ellen Desear-Espiritu Actor Albert Martinez invested P300, 00 in a production house to start making audio-visual presentations, TV commercials, and marketing campaigns. He found it was right up his alley. Albert Martinez enjoyed acting so much that he never saw himself doing something else-until he started producing audio-visual presentations, TV commercials, and marketing campaigns and found out he liked it. Eventually, he invested P300, 000 to put up his own production house, APM Events Specialists, to start the business and give his eldest daughter, Alyanna, something to look forward to once she finished college. "My daughter is taking up marketing and advertising in Ateneo, so I set up this company to have a partner when she graduates," he says. He credits his wife Liezl, herself an actress before she became a full-time homemaker, for awakening the entrepreneur in him. "Liezl always sees the business side of what I do," says Martinez, who set up APM in his house in Quezon City before moving it to Timog Avenue, also in Quezon City, last March. Read the rest of the story here. Business,marketing,Entrepreneur,Entrepreneurship,Ogie Alcasid

THE BUSINESS OF WEAVING

The business of weaving THE women of Tubigon, Bohol have proven that there are other ways to help their families than just by staying home and being full-time mothers and wives. The Department of Trade and Industry organized Tubigon’s women, mostly wives of farmers and fishers, in 1989 under the Comprehensive Agrarian Reform Program. The group had an initial capital of P5,000 from the 30 founding members. It was four years later that the women decided to become a cooperative. The trade and industry department did not push the Tubigon women to organize themselves formally into a cooperative. But the department provided assistance in other forms, including training on basic skills and weaving. The group, which is known as Tubigon, Bohol Loomweavers Multi-Purpose Cooperative, was also trained to participate in trade fairs and exhibits. A small and medium enterprises counselor also helped the cooperative on organization, work simplification and safety measures. The group’s products are mostly made from raffia, which is fiber extracted from the unopened young leaf of the buri palm. The products include placemats, table runners and beach and prayer mats. The cooperative’s clients include exporters, interior decorators, tourists, events organizers and traders. The Tubigon cooperative is now the second largest producer of raffia woven products in Bohol. The group’s 30 original members has expanded to 100. The cooperative is now a P1.5-million enterprise. Each of the women earns an average of P4,000 a month. The members have acquired properties and these are shared with other community members. The group’s members also sponsor civic activities. The cooperative’s plans for the future include buying two additional lots to accommodate a second production center and acquiring more handlooms. Business,marketing,Entrepreneur,Entrepreneurship,cooperative

Ogie Alcasid 's recipe for sucess for his foodcart business

Ogie Alcasid's advice to celebrities planning to go into business: 1. Be passionate in what you do. You must believe in your product. "When I eat our hotdog or sausage, I honestly say to myself, Wow! This is good! I really like this!" 2. Surround yourself with people you can trust. The best way to run a business is to manage it yourself, but if you can't, have someone with who's trustworthy and dependable. 3. Set the example. "Kung alam ng mga tauhan mo na 'yung may ari really cares about the business, everybody will care about the business too." 4. Take care of your customers. Serve them well and listen to what they say. 5. Be flexible with your system. Each branch has its own culture, so you have to adapt your system to it. A long as it works in a particular location and it's efficient, do it. 5. Don't take the downside of the business too seriously. There will be days when you feel, "Ano ba 'to? Bakit ganito, ang daming problema?" A little rain must fall every so often. Cheer up! Business,marketing,Entrepreneur,Entrepreneurship,Ogie Alcasid

Ogie Alcasid-Foodcart Magnate

Oggie's Foodcart business is the usual hotdog stand. Named OGIE DOGGIE, he opened his first cart in Global City last September,another one at the Ali Mall and at the SM Southmall in Alabang. He put an investment of P200,000 which he was able to recover in less than a month. Although he used his name and popularity to break into the choice place for his first outlet, he did not leave the preparation to someone else but himself. He tasted personally the brand of hotdog that he is going to sell as his main product. So is the bread. Per advice from from friend, he consulted a food specialist and sought the advise of a friend who is into food business. He projected a sales of P 3,000 on the first day but he earned P26,000 instead. His sales fluctuated from P 16,000 to 34,000. He is planning to open more carts but he confessed that he is not ready for franchising business yet. Ogie Doggie Telephone: (02) 687-1377 Business,marketing,Entrepreneur,Entrepreneurship,Ogie Alcasid

Food Cart-The Recipe for Success

The recipe for the success of the foodcart business is summarized in the four P's of marketing. Product The choice of the product should match the chosen location. If it is school, then the products to be sold should cater to the students' taste and budget. Should the school allow the cart inside the premises, it could be required to observe strict rules in handling,packing and cooking the food for the students' protection. Pricing The pricing should be competitive with other products sold in the same location. The targeted customers' affordability should also be a factor in pricing. High price may lead to slow moving inventory which could result into a loss especially if the shelf life is short or is highly perishable. Place The choice of location determines not only the pricing but the product and packing as well. If the foodcart is to be stationed near trasport depots, the products should be ready to go and reasonably priced. The mall is a good place for foodcart if the cart assembled is for the class of people that consist the foot traffic in the shopping centers. It requires more sophisticated and more expensive equipment. Supplies for packing and keeping the food fresh are also pricey. Rent can go as high as 25,000 a month depending on the location. Schools are very strict in choosing what foodcart to allow inside their compound. Only one or two are given the contract after bidding. Market is captive especially if the school does not allow students to go out of the gate during short breaks. Promotion The promotion should be an on-going activity of the business. The signage should be attractive and brand name allows instant recall. Flyers are effective in promoting the product to the area where it is going to do business. A special offer of discount may do the trick. Those who are interested in this business may contact: Foodcart Association of the Philippines Telephones: (02) 789-8937, (02) 729-4449

The Food Cart Business

I remember when I was young, my mother buying from a certain Aling Gare whose cart was a rolling store of meat, fish, vegetables and other stuff that a housewife would buy in the market. I knew that she was making a lot of money, since she got the meat wholesale from some butchers who ply their trade illegally. Besides, she was selling on credit. Wives who were hard up with money just can't refuse the unlimited credit line, payable at the end of the month. But of course, there is the favorite "sa malamig", bananacue, fish ball, squid ball and other foodstuff peddled near schools, churches, hospitals, parks and markets. According to Josm Rosuello,the President of the Food Cart Association of the Philippines, the food cart business is easily the top choice of people who want to make money fast for the following reasons: 1. Easy to set up 2. Low Capital Requirement 3. Cash transactions 4. Portable 5. Fast recovery of investment 1. Easy to set up The business does not require as much as like a restaurant or a fastfood that require spaces for dining room, office, kitchen or storage which start up costs include the renovation, furniture and equipment and some months advance lease payments and deposits.All the aspiring entrepreneur have to do is to contact businesses that manufacture the cart and the raw food suppliers. 2. Low capital requirement The capital requirement depends on the kind of cart and intended location for the food cart business. The low is about 40,000 and the high can be a guestimate of 250,000. The cart can be assembled at a minimum cost of 10,000; cooking equipment and other accesories at 10,000 and food inventory and non-perishables may eat up the remaining balance of 40,000. The projected cost can be lower depending on how much is the projected sales and the intended inventory level of the food and non-food supplies. 3.Cash transactions Customers pay cash so that money would not be tied up with receivables. The working capital in the succeeding business days will be provided by the cash inflow from business. As to supply of food materials, after a credit line has been established, suppliers can provide the raw products payable with different terms. 4. Unlike the businesses which have fixed sites, the food cart business can be moved from one place to another where there are more prospective customers. 5. Fast recovery of investment With the projected sales of 3,000 pesos a day and assuming that profit margin is 25 per cent (low estimate, normally food can be at 35 per cent to 50 per cent profit margin), the investment of 40,000 can be recovered after two months assuming with 25 days a month operation. 3,000x .25x 25 days=18750.00 40,000/18750=2.13 months or 2 months and 3 days source:http://www.entrepreneur.com.ph/byob/its_in_the_carts.html Business,marketing,Entrepreneur,Entrepreneurship

Applying for a Business name

1. Choose at least three business names so that in case one or two are already taken, there is one more left. The system allows the applicant to search on-line if the proposed business is available. The final determination on the availability and suitability of the name will be made by a DTI Examiner. 2. Information required when completing a registration on-line. 2.1. Tax Identification Number (TIN) 2.2 Email address 2.3 Zip code If the business being registered is a branch, a franchise or was acquired from previous business there is a need to provide the exact business name of the franchise, main office and/or certificate number and date of registration of the acquired business. 2.4 Other information required to complete the application form : 2.4.1 Nature of business activity/ties 2.4.2 Product/s or Services 2.4.3 Philippine Industrial Classification System (PSIC) code for the nature of the business 3.0. After the submission of the application, it is going to be reviewed by a DTI Business examiner for completeness. A transaction Reference Number acknowledgement Form has to be returned to DTI so that registration is completed. 4. Pay your Application The completed application and correct fee is paid at the DTI office indicated in the transaction reference number (TRN) acknowledgment form.

Registration and Business Licensing

The first step in putting up a business is to register the business name for the purpose of creating an identity. In the United States, fictitious names are registered with the county as well as the State Department if the business is going to be incorporated. In the Philippines, registration is made at the Department of Trade and Industry thru its Business Name and Registration System. The following are the services offered by the system: 1. Business Name Search A search of the business name database can help reveal any registered or pending business names which are identical or similar to your proposed business name. Until the processing is completed, the name is not guaranteed to be available. 2. Application for a business name 2.1 The business name should describe the nature of the business. Ex. ABC Restaurant, Libro Book Store, MYR Manufacturing Co. 2.2 It should be comprised solely of any or all of the letters, numerals and punctuation that are part of the English and Filipino Language. Ex. ARC Veterinary Equipment Co. Inc. 2.3 There are names which are not acceptable and these are the following: 2.3.1 Those which are or whose nature of business are illegal, offensive, scandalous, or contrary to propriety. 2.3.2 Those which are identical or nearly resemble business names already registered with the Department of Trade and Industry, the Securities and Exchange Commission (SEC), Cooperative Development Agency (CDA), Department of Labor and Employment (DOLE) or any other government office authorized by law to register names, because these are likely to cause confusion or mistake in the minds of the public and prejudice the interest of the owner of the registered business name or firm name taking into consideration the following: 2.3.2.1 nature of the business ex. Jollybee for a fastfood restaurant 2.3.2.2 product/service handled ex. National Books and Magazines Store for a bookstore 2.3.2.3 location/place of the business ex. ABC Internet Cafe which is going to be located near SBC Internet Cafe 2.3.2.4 capitalization *Frankly, I do not see why this should be a basis. 2.3.2.5 general appearance, spelling, sound and meaning Ex. MACDONALDS which sounds like MC DONALD'S 2.3.2.6 use of dominant/descriptive words and Ex. BICTORIA LYPOSUCTION CENTRE 2.3.2.7 such other factors as maybe determined by the BTRCP Director 2.3.3 Names composed purely of generic words; Ex. RESTAURANT CO. 2.3.4 Names which by law or regulation cannot be appropriated; 2.3.5 Names, words, terms, or expressions used to designate or distinguish, or suggestive of quality of any class of goods, articles, merchandise, or service; 2.3.6 Names or styles used by the government in its governmental functions; 2.3.7 The names or abbreviation of names, of any nation, inter-governmental or international organization unless authorized by the competent authority of that nation, inter-governmental or international organizations; 2.3.8 Names which are deceptive, misleading or which misrepresent the nature of the business; 2.3.9 Such other names which in the opinion of the Director are undesirable or analogous to the above.