Many ask how to make business in the Philippines with a small capital. luckily I witnessed the start of such a project. I noted all the steps from the early beginning of the project til opening and running it. It is a promising business that may have a good income. But , it is not as that easy! There are conditions for success, what are those conditions?
The project I’m talking about is a canteen or a small restaurant. I will explain all the details how to start , as well as details of the required government permits. That canteen is located in Virac city in the province of Catanduanes. Please note that cost of permits may vary from a province to another.
The difference between canteen and restaurant?
One of my followers asked: Why would I call it (Canteen) and not (restaurant)? From my point of view, the canteen is smaller than the restaurant. Canteen only offers pre-prepared cooked meals and dishes, and does not receive requests made to order meal. Canteen usually has its meals ready and displayed , and the customer has to choose. Sometimes things overlap so you don’t know if you eating in a canteen or a restaurant. I just follow the name used by the Filipino owner.
Steps to start a canteen (canteen in Virac)
1- Rent the place
2- Fixing the place and preparing all equipments and tools
3- Getting the required permits
4 – Hiring workers and start of operation
1- Find the place of the canteen
The first step is to rent the place. The owner found a place in a good location along the highway, it was also equipped with most of cooking utensils. Amount of 200,000 pesos cash was paid for the site, including equipments, which could be in excess of 400,000 pesos if everything would be prepared from the start. The shop was equipped with dining tables in good condition, and some glass tables, each can accommodate up to four persons. The shop can accommodate more than 30 persons at one time. The area of the place is approximately 80 square meters, the front is about 8 meters facing the road, as seen in the pictures below.
2- Fixing the canteen
Wall paintings and tables were good, little repairs were to be done and to add some new cooking tools, more lights, arrange the facade and make the banner with the new business name. All this was done by approximately 100,000 pesos, which means the capital reached 300 thousand pesos till now.
3- Required Permits for the canteen
1- The Barangay clearance
2- Trade Name (DTI)
3- Mayor’s Permit from City Hall
4- Sidula from City Hall
5 – Fire Department permit
6- Tax file (BIR)
Permits required to start a canteen in Virac are similar to those required in any other province in the Philippines, but the prices vary from region to region. how much the cost to register your project depends on where you are trying to register it. For our canteen in Virac, the permits details are explained below:
1- Barangay Clearance:
This is the first step to do. You have to get a certificate from your Barangay. It is required to file an application for DTI for business name. It costs 100 pesos in Virac, while in Manila it is about 500 pesos
2- Business Name (DTI)
She did registration of business name in DTI branch located in Virac city, for a cost of 380 pesos. The fees for business name registration differs according to the regional scope of the business.
In Manila, for example, prices are as follows:
At the level of Barangay – PHP 200
City / Municipal Level – PHP 500
At the province level – 1000 PHP
At the state (country) level – 2000 PHP
An additional PHP 30 for documentary tax is payable while you register with DIT.
Since registered business name is valid for only five years, do not forget to renew it with DTI before it expires. Requirements and procedures to apply for a business name are described in another article.
3- Mayor’s Permit (from City Hall)
Requirements to apply for a permit from the Mayor: a certificate of clearance from the Barangay (No 1), and a business name certificate from DTI (NO 2). It is obtained within one day after submission, at a cost of approximately 4000 pesos from Virac city hall.
Keywords: This certificate is called (Business Permit or Mayor’s Permit)
4.Cidula from the City Hall
This is different from the personal Cidula, it is a business Cidula, called the certificate of community tax. It costs 130 pesos.
Cidula is a document issued by the Philippine government to individuals and businesses after the payment of community tax. The cost varies in each city, municipality or Barangay, from 60 to 200 pesos.
5 – Fire Department permit
What is a Fire Safety Inspection Certificate?: A prerequisite prior to the issuance of an operating permit, which means that the owner / administrator has complied with the standard requirements recommended by the fire safety plan monitors at the facility.She got it in Virac at a cost of 1,000 pesos.A fire extinguisher approved by the fire department is also required, the price is 3800 pesos.
6-Tax Registration in (BIR)
It is not done time writing this article, they said can be obtained later on. Just follow uo updates for this article.
4- Hiring staff and start the canteen operation
The owner of the canteen is a good cook, but she decided to appoint another cook for her to have time to manage the canteen. She appointed a cook (salary 600 pesos per day + free accommodation and free food). She also hired two ladies one for washing in the kitchen and one for the front counter (salary for each is 250 pesos per day + free accommodation and free food).
The total salary is about 1,100 pesos per day + free accommodation and free food.
Buttom line
It is possible to make a project in the Philippines with a small capital of less than half a million pesos (about $ 10,000). The project can be successful and yield a sufficient return for a decent living.
For example if you want to start a canteen project, there are conditions for success:
1- Find a good location
2- The owner of the project must have cooking skills
In addition to that , you must stay and monitor the operations and have good control.
After 2 -3 months , I will make another article about that canteen with details of earnings and additional expenses. Please follow up