8 Reasons That Discourage Filipinos From Starting Own Business

Filipinos must have heard from their parents, professors or neighbors that very few people got rich through income derived from employment. So trying out a business might be a worthy alternative. After all, reading the success stories of folks like Mang Inasal’s founder or the rags-to-riches tale of Filipinos working abroad are relateable to many of us.

But despite that promise of prosperity through entrepreneurship, many Filipinos are unable or unwilling to make that pursuit. Let’s try to explore the possible reasons why many of us chose to being employed than put up our own business.

Tepid attitude from schools to encourage entrepreneurship among students

Despite TV shows that highlight successes among business-minded people — startups, family-owned businesses, and accidental entrepreneurs — that’s as much information readily available to inspire us as we can get. School may teach us how to do business but less on why we should do business. Students are generally trained to become employees and less as employers. If ever we embark on a business, we Filipinos are content on doing side projects and small gigs, and devote more time on our full-time jobs.

Business ideas may be taught but they are often confined to theoretical concepts and less on making them happen in real life.

The tide has changed and schools have recently become more vocal in encouraging students to think outside the box and explore business opportunities. But without support from stakeholders — government agencies, corporate partners and organizations — it remains a big challenge to get students switch from attending job fairs to seeking seed capital to finance their ideas.

We prefer a stable, regularly paying jobs

Who doesn’t want to get paid regularly for doing the same job and less exposure to risks? Those who simply want to get by on a daily basis. We have our expenses: utilities such as electricity or mobile phone load, food, rent, clothing and entertainment. Having a regular job ensures that we don’t go past the bill deadline and look forward to receiving our monthly sustenance. We are happy to receive our salaries every month and occasional bonuses during the middle and end of the year. Fixed income earners may be getting the same amount every month, but they also need to be careful with their expenses.

We think business requires more effort and resources

Yes, that’s correct. We have lower appetite for business risks, yet may be more willing to gamble in lottery tickets which gives us lower odds of winning. We think that with business is tedious and requires more than just financial capital. Indeed, setting up business can be tough, especially in the Philippines which is hounded by fixers, corruption chronic red tape. While there are evidence to its existence, some of our beliefs might just be coming from word of mouth and less on research.

Environment did not encourage entrepreneurship

Growing up, our career choices might be influenced by people around us. We have a cousin who works abroad, an uncle who works in the government, or a neighbor who is a well-paid white collar working for a multinational company. Our decisions in choosing what course to take up in the university, what kind of careers to pursue, and ideal companies to work for revolve around getting a job. Our friends in school might also think the same way, and no subject about entrepreneurship is ever taught so being a businessman sounds like a big deal and we are skeptical about us trying our the idea.

In the country, promoting the entrepreneurship isn’t so popular. Job fairs are more frequent than free business seminars. We might want to play safe and stay in that same job until we find a better opportunity — a higher paying job or opportunity to work overseas — but not to build and grow a business. If an “investment business” is promoted, it might be a multilevel marketing that involves selling of beauty products while recruiting members to be part of someone’s “downline”.

Less reliable facilities are still widely observed

For a business to grow and thrive, half of it is won with sound business plan and capital. But the other half of it is the associated facility to support growth. For example, if someone wishes to establish a coconut water business, it might be best established close to source of raw materials. But if within that location, power interruption is a common occurrence, putting up a generator could be more costly for the business. If the roads linking to source of fruit and vegetable plantations are not well-paved, if they ever exist, that’s a huge logistical challenge that could drag sales down as an inefficient supply chain drags adds to overhead costs.

Financial support is not readily available

Financial aid from the government may be difficult to obtain especially if a business is just taking off and struggling to break even. Loans from government institutions and private banks often require collateral and topped by prohibitive interest rates. Financial capital is readily available to more established businesses who don’t need to borrow. The government, especially in the agriculture sector, is starting to initiate loans for small scale businesses. But the offer must be made available across different business sectors.

In the end, some businesses resort to onerous deals with lenders, making the businesses more vulnerable to failure.

Entrepreneurs not having enough marketing skills

Business people need to wear multiple hats at the same time: package and sell the product, provide great customer service, handle finances and take care of employees. Sadly, this is not a forte among many Filipinos who need to learn by experience. Lack of interest, training and opportunities are often the roadblocks to acquiring enough traction to get the business going.

For example, when selling biko and puto in the neighborhood, the focus is often on quality of product and customer relationship. There may be less attention on scalability to grow the product line or expand production and innovation in packaging. Without getting assistance in handling the business, it can stagnate and may not be sustainable in the long term.

Failure to find a suitable business partner

While many entrepreneurs are visionaries with locked in mindset to drive success to the business, they can also suffer from tunnel vision. They may lack passion for managing resources such as business partners and employees. For those who are riding their vision, this can be a temporary setback that can easily be overshadowed by later success. But once employees or suppliers feel shortchanged in the name of rapid growth, their productivity suffers and eventually leave the partnership.

For businesses founded by two or more partners, this can be a contentious affair especially if there is no clear definition of roles besides sharing the title as co-founders.

Conclusion

There are many challenges businesses will face as they try to establish presence in the Philippines. While others have managed to get rid of the obstacles, many have failed miserably. And as more Filipinos see businesses falter, it adds to the build up of skepticism around the difficult role entrepreneurs play.

Having these challenges identified is a good first step which should hopefully lead to addressing each of these issues.

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