15 September 2019

Australians - Starting a business in the Philippines

I think many Australians like the idea of starting up a business in the Philippines. They love the idea of being the ex-pat living the good life in Asia and having something small and cosy to earn a living off. Something laid-back and low-pressure compared to how life was back in the rat race!

Australian expats running a successful business in Philippines

And I think a lot of the illusion comes from the time that this Australian has spent here on holidays in Philippines and enjoying the romance. Travel.....new places....comfort and cuddles....leisure. Plus seeing money go further here than it does back in Australia. Cost of living is maybe a 1/3 of what it is in Australia, so the assumption is that one can live well in Philippines on 1/3 of the money and effort of life before.

And it is a good life, that's a fact. Weather is great. Filipino people are friendly. The ladies are lovely. And Philippines life has a stress-free vibe about it. I still remember my first month or so living here. I felt no stress at all! The household was me and Mila, three kids, one helper. We soon bought a car and hired a chap to drive the car. We spent a lot of time touring around exploring. I also discovered the joys of sitting outside with a San Miguel beer and watching the kids goof around.

And there's a way of life here, where it's OK to just do nothing if you feel like doing nothing. No one makes you feel guilty if you're not productive every minute. If you're a tambay then no one will ever criticise you for a sedentary life. If you wish to take a nap during the day, you take a nap. Goodness me! Do that in Australia and everyone thinks you're lazy! The ol' Protestant Work Ethic means you need to work hard and don't complain, and never be caught napping!

So yes, there's a strong impression and assumption that life is easy therefore business will be easy. Filipinos generally appear relaxed and appears not to be in a hurry, therefore so will be a business in Philippines.

Can you live the easy life in the Philippines?

Well, yes. If you're independently wealthy, then sure. Again, no one will criticise you and there's no culture of looking-busy. And yes, you can employ staff at affordable rates to do all sorts of things, whether domestic or in your Philippines-based business. No one will expect you to do hands-on work when you're the boss. Those who've owned bars in Philippines have soon realised that their job is largely on the other side of the bar drinking on talking $#!+ with customers.

However, you will find that if you want a business to be successful you will have to put a great deal of work in especially maintaining standards. Many a business owner has found to his horror that his trusted employees are stealing from him or just generally providing shoddy customer service when he isn't around to supervise. These are the businesses which lose money rather than making it, and will definitely lose customers.....more so if you're targeting Australians and other westerners.

Showing the locals the right way to do it!

This is probably the biggest mistake of all. Many an Australian expat comes to the Philippines loaded with business experience (or just a sense of overall superiority) and thinks he'll show up these Filipinos with western acumen. Serve the good stuff that Aussies like. Do it Aussie style. And the locals will all go "WOWWW!!" and shift their business across. Welllllllll, not likely.

If you target Australians and other westerners? Sure. If you can reach them and the market is large enough, sure. But getting out there and trying to compete with locals in their own game? Think again!

I brought Australian mangoes here a few times to show the locals what the good stuff is. Guess what? They didn't like them! Do they want pies and sausages? Yes, the westerners do. My mate Roy at Welsh Deli makes a great array of English-style sausages and meat pies. I got him doing a beef, bacon and cheese and they're excellent! Asked him the other day if he ever sold to Filipinos? Never! They don't want them.

Had a former client tell me he thought there would be a market here for trailers like we have in Australia. He just assumed they would like them. Suspect they would not. And if they did, they would only make them cheaper.

And my poor ol' mate Ross the Aussie builder (RIP) who tried to compete with locals found that (a) he couldn't work so cheap and (b) they were uncomfortable dealing with him. Plus, his workers only took advantage of him. We're just realising why a roof his men did years ago always leaked, and it was because he couldn't get up there to see they'd left it full of holes when trying to screw it down!)

Big issue, the first point above. How cheaply can you live or do you want to live? Are you OK living like your competitors live? Can you survive on the amount of calories a 5'2" 48kg Filipino can live on? Are you OK washing under a tap in the yard and sleeping on a thin mattress on the floor with a number of others? Have you ever seen how tradesmen on building sites live? Aussies would want to be put up in a motel and have pub meals. My mate Ross ended up dying because he couldn't pay for proper health care.

Successful Australian business in Philippines

Can it be done?

Yes, definitely! Look at amazingly successful and high-quality Registered Migration Agency practice Down Under Visa! Apart from the brilliance (and good looks) of Jeff Harvie, we're successful because our target market is Australians! We have something unique we can offer to Australians which is hard to find in Australia or even elsewhere in the Philippines, and that is an Aussie RMA with a Filipina wife and a Manila office.

Now, if I was targeting work visas and student visas to Filipinos? Maybe not so successful! Maybe they would prefer to deal with one of my Australian Filipino colleagues who specialise in that area. Maybe easier for them to deal with them, eg speaking in Tagalog.

Yes, there are Aussies who do really well here. I'm not talking about the superannuated and investment-weighted retirees. I mean those who set up shop and make some good money. And I'll include my pie-man Roy here, and a few others. They found something westerners want and will pay for, then went and did it really well. Look for what the marketers call a "market window". An unfilled area of the market where you believe you can do well in. Generally, like me and Roy, it will be to your "own people". Not in any way being racist. Just that business success means knowing your target market intimately.

For example, could I run a fashion outlet? Hairdressing salon? Nightclub that plays rap "music"? Not a snowflakes chance in hell could I do any of those, because I know NOTHING about those things and I suspect I couldn't relate well to the clients! Anyone who has met me can see that. Not a fashionista with a cool hairdo, and I detest rapping. With Aussie Filipina couples? Obviously I'm in my element. I don't handle student visas from India, because any Indian RMA will do it better than me and their clients will be happier talking to them. Not racist. Just about finding your ideal place. And it is NOT in competing head-to-head with locals.


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