3 OFW Business Mistakes You Should Avoid

When an overseas Filipino worker decides to enter a business to augment his or her income instead of relying on salary, it’s a step in the right direction. Success depends on the execution of a business plan and its sustainability. But such an entrepreneurial spirit should be borne out of the realization that being an OFW is not forever, and one day, he or she will leave the job for good. But there are still many OFW business mistakes that one has to be careful in entering the world of entrepreneurship.

Citing opportunities back home, many OFWs attempt to invest in business directly or through partnerships while working abroad. Many of such initiatives have been proven successful. But there are those that flounder and don’t survive the challenging early years of operation. This article aims to identify the common mistakes OFWs investing in a business in the Philippines make.

They enter the business without prior knowledge about it.

Lured into pouring capital money into a promising venture by a trusted friend, an OFW has hoped for quick returns for his or her money. He or she then invest hastily without prior research. Some such partnerships may thrive, but in many cases, it’s doomed to fail; the operative phrase in the previous sentence is “quick returns.” All businesses almost always need time to get exposure in the marketplace, distinguish themselves from the competition, and proven value to attract loyal customers. Entering a company with a vague idea of how it works is a recipe for failure. The business might be operating illegally, entering a saturated market, or deprived of required skill locally to sustain its operation.

When an OFW, for instance, invests in a money lending business that turns out as unlicensed and unauthorized to impose such interest rates, it receives order to cease operation. Or if a delinquent customer fails to settle his or her financial obligations, the OFW business mistakes falls squarely on the operator of an illegal business. The OFW now fails to pursue legal means to chase the customer and stalls the growth of business. Worse, he or she fails to sustain its operations, leading to its ultimate failure and shuts down the shop.

They fail to capitalize and apply their knowledge and skills to the business.

Experience abroad can be a great tool to kickstart a business back home. For example, a baker abroad might want to open a pastry shop or an engineer establishing a construction company. But some OFWs fail to apply their knowledge to bridge between their careers elsewhere and intended business as they instead embrace a wholly different industry. Embarking on such a diverse sector won’t be a problem as long as the OFW checks item #1 above. The problem sometimes is that OFWs-turned-entrepreneurs manage their business in the Philippines remotely without really knowing how things work.

Sure, it’s possible for a baker working abroad to start a car repair and detailing shop or an engineer franchising on a Jollibee outlet. But it takes more than just capital money to make it work, especially if the OFW remains employed abroad. Partnering with knowledgeable and trustworthy people is essential to get the business moving in the right direction.

Otherwise, when problems arise — managing an army of staff on strike seeking pay rise or mechanical breakdown of machines — operations will come to a halt. In the absence of a proper solution, the business will then reverse its earlier gains.

They partner with people who are incompetent and/or inexperienced.

A brother-in-law in the Philippines asks for capital money to buy a tricycle unit to ferry passengers around town. An excited OFW may then say, “finally, I can have a business while my relative gains a livelihood income.” The intentions are good, but the outcome isn’t always what we desire.

When the tricycle unit breaks down, or fuel rates increase, the brother-in-law seeks additional funding to buy spare parts or provide extra lifeline to the livelihood. The same usual cycle of asking for money from someone abroad becomes a common scenario. So instead of creating a stable income, the relative elsewhere needs to continuously support the business in the Philippines without gaining anything but remittance receipts and wrinkles in the forehead.

When the wife asks for funding to set up a sari-sari store in the backyard, the husband has no qualms about sending seed capital. The problem is that the wife has no prior experience in managing a shop and no knowledge in accounting, inventory, and dealing with customers. As a result, the capital money quickly vanish as the wife decides to give up the business less than a year after setting up the sari-sari store.

The scenarios above are some of the common reasons businesses OFWs abroad try to establish will likely fail. Without their direct supervision or hands-on knowledge, the OFW is compelled to rely on the fate of the business to someone else. Coming home also doesn’t ensure the company will prosper without prior research and planning.

To address such problems, government agencies such as the Department of Trade and Industry‘s Negosyo Center and TESDA has programs to assist aspiring entrepreneurs in the business. Whether gaining valuable business skills, connecting with suppliers and target markets or acquiring funding for capital outlay, these agencies are tasked to provide such assistance, whether OFWs or not.

OFWs are aware earning money abroad is not an easy task, so they’re likely more cautious about investing it. The same attitude of prudence should also apply when investing money into a new business venture.


OFWs deciding to enter businesses should be supported as prior experience at work may contribute little to their skillsets. Avoiding OFW business mistakes requires plenty of research, patience, calculated risk, and perseverance to earn success.