Received a recent email from "Monty, The Ice Man" who wanted to contact a fellow contributor to PhilippinesPlus.com, Tom Ramberg. Since it deals with business opportunities in the Philippines, I thought it would be helpful to reprint them as a post. Tom has some good advice that he shares. Here are their emails that I'm posting with their permission, and thanks to both of them:
I would like to get a message to Tom Ramberg. Perhaps you could forward this for me. Thanks!
Tom, I would like to know where you get merchandise for your hardware store. I am thinking of adding hardware to our store in Nueva Ecija, but ordering wholesale from the U.S. can be difficult. Since we are at opposite ends of the Philippines, I won't be competing with you, but will understand if you don't want to share the information.
The hardware store I normally do business with near Talavera isn't very friendly and they charge too much. I think they need some "friendly" competition!
It is 5 am here and I am freezing my butt off here in my sky kubo. I am surprised at how chilly it is this morning. I pondered your question and the best way to answer it is by telling you about my experience rather than acting like a know it all.
When I arrived back here to live I had many ideas rattling around in my head. Most of the ideas that I had became impractical or risky after held under the microscope for further analysis. The lighting must be different in the US because they looked like feasible ideas from there.
We live in a barrio about fifteen minutes away from the city. My initial instinct was to engage in a small business in the city. I was encouraged to do so by friends and family but not the wife. She knows how demanding running a business is and she saw the amount of time that I had to devote to mine in the US.
We were here for a while before we started our hardware. There is no hardware store anywhere near us. That is why I decided to start one here that caters to the needs of the local market. The local market here is mainly items like cement, roofing, nails, and native products like African panels, cow ropes, and charcoal cookers. In my market quality items would be admired but not purchased.
We purchase our items for resale through a Chinese hardware in the city that we befriended during some of our projects. Our hardware store is on property adjacent to our home so we have no rent on the structure. It also has a housewares section, motorcycle parts, general hardware like paint and adhesives, and a small Internet cafe. The Internet cafe was put there to draw foot traffic and to offset some of my 4k per month Internet cost.
The business is up and down depending on factors like the weather and holidays. Just recently we built a bakery and are working on a boarding house. The bakery is a lot of work but is kind of fun. We are working hard to increase capacity so we can distribute to the sari sari stores on consignment. We purchased a multi-cab truck to serve the hardware and bakery.
It is crucial to have your own way to transport materials because delivery costs eat into the small profit margins here. The profit margin for the hardware is about fifteen percent while the bakery is probably around fifty. I have to admit that I had it good in the US business wise since my profit margin after expenses was around eighty.
The most sound advice that I could offer is to wait until you get here before you research your business idea. We were here for a year and a half before we started a business. One business that we also started was a dedicated trucking business. We bought a ten wheel drive military truck that has a contract to haul pineapples for Dole. This gamble is about a million peso investment that I hope will provide a good return. I am curious to know about your ice business. If you would please share the details about that.