"Business as Usual" as the Filipinos Define It (Vulcanizing Shop, Sari-Sari Store, Bakery) – Part 1

I asked the shop owner about these old unused tires on what are they doing with it. The Vulcanizing shop owners says, “Oh, someone will pick up those tires and pay us 5 or 10 pesos each. Sometimes they just take it for free”.


Vulcanizing Shop - A Classic Example of Filipino Business
You’ve most probably seen and been into a local, typical vulcanizing shop like this one in the photo. The business concept is very simple. Here’s a customer with his flat or deflated tire and the vulcanizing boy will repair it using a rubber compound patch, a heating tool, and an air pump. If it’s a regular car or van tire, repairing one may only take 10 minutes the cost of which is around 30 to 60 pesos. If it’s a tire from a truck or bus, it could be around 30 minutes and the repair would cost the vehicle owner around 100 to 150 pesos.


Here’s the thing. A shop like this one could potentially earn a revenue of 1000 up to 2000 per day just by repairing a flat tire. Why? Well, with thousands of vehicles like jeepneys, tricycles, and trucks passing by this shop each day (obviously it's on the side of the highway), it is likely that 10 to 20 of them will pull over on this shop and get their flattened tire vulcanized. This shop have 3 crews waiting to serve customers and they’ve been here for quite a number of years already.

But here’s the question: Why vulcanizing shops like this one are this ugly? Earning say a conservative average of 500 pesos, can’t those roof, walls and doors be constructed into something sturdy (looks like typhoons will blow them away)? Maybe, since it is a dirty job, moreover that it is situated on the side of the road, there is no need to make the shop presentable. What’s more important is the service it could offer. Another reason could be is that overhead cost is too high that the revenue is just good enough to give the shop owner a small profit. Nice business idea, anyway.

Well, it is good to start this post from this example. There is something deeper you need to know about how Filipinos define business and I am about to discuss them here.

Sari-Sari Store - a Variety Store
Now, here are the so-called “Sari-Sari” stores. Sari-sari means “variety” and yes, a store of this kind speaks for itself. It sells a huge variety of products. From candies to junk foods, canned goods to frozen meat, softdrinks to beer or wine, laundry soap to shampoo, rice to livestock feeds, name it and the store has it. Well, maybe not all, but a Sari-Sari store has those typical household’s basic needs in stock. On the flip side, there are lots of Sari-Sari stores competing in one zone or barangay. They sprouted there like mushrooms. This can be good for the consumers but a problem for most store owners. Imagine having ten stores in a barangay with only about 100 households. The best store keeps the loyal customers. Those that can’t compete well have to close down.


On this photo, you can already see 3 stores in a row. Still not included here are the stores a few meters away on the left and on the right. What do you think; why Filipinos are these aggressive in opening a Sari-Sari store given the reality that there’s a big competition in front of them? The simple answer is: It is so easy to open one!

So what happens is that those stores that cannot compete end up in low revenue and then to nearly zero profit and then they decide to close in just a matter of months. Yes, setting up a Sari-Sari store is easy. You can have one right in the front of your house, on your garage, even in tricycle or push cart. How much would it cost you? 2000 pesos startup capital is enough and there is no business permit needed considering that it is just within your home. Also, local government gives consideration to store owners on not to pay taxes if their sales income is not that big (we’ll go over on this subject later on). It would be a different case if you will build a store in the town or city commercial area. You will have to abide by the business registration policy by all means.

To reiterate, almost everybody likes to open a Sari-Sari store, unknown of the fact that there’s a big competition ahead of them.

Pandesal in the Bakery
I often buy hot pandesal from this bake shop or bakery. They only sell 3 kinds of bread – pandesal, monay, and bonete. Their pandesal is tasty and this “malunggay pandesal” they sell seems a healthy option for many. There is no question about the flavor quality of their bread products. If it comes to location, the shop is along the road and near the intersection where people used to come and go. If you will notice, there are papers posted on the wall of this shop. They are the business permits, sanitary permit, and clearances required by the local government (I will also go over these business requirements later on).


Good business in general but if I am to compare this shop with other bake or bread shops nearby, the cleanliness is not that good. And the way crews are serving customers is also not that impressive. Yes, customers like their breads but I observed that the number of customers started to go down when another bread shop, which is cleaner and more organize, opens just three blocks away.

As I wander around my place, I took photos of storefronts, signages, and products offered by those stores. Have a look on these Filipinos stores.

From this photo angle, you will see a small food shop named Jumborger. Despite this small, it is in a strategic location where it potentially earns a good revenue.


These signages looks very detailed. However, it would take you about a minute to read all the information published on each of these signages.




Owners of these shops prefer to use small signages some made of tarpaulins, even of plane plywood.






Business as Usual
If you will examine, it appears that Filipino business owners have their own ways of promoting their respective businesses. From a standard viewpoint, we know that the quality of products and services customers will get depends on the quality of business they are running. In the Philippines, however, this does not always hold true. Let me expound on that.

Many Filipino small business owners actually have no formal training on business management. The moment they start to sell and customers buy from them, that is the start of everything. And here's the truth. Customers will prefer to buy from these small stores for this one obvious reason: it is more convenient.

On one hand, this is great idea considering this business-minded characteristic we have on the land. On the other hand, most businesses who started this way did not even last for half a year. Those who implemented good planning, consistency in execution, and embraced innovation made it to survive for several years.

If I am to summarize my observations on how most Filipinos defines business here in the country, I would put it this way:
  • With life this hard these days, income is first and foremost the most important above anything else.
  • Who needs business training? Not us.
  • We sell because we want it. It’s our right.
It is “business as usual” in many places here in the country. It is engraved in the culture. What you’ve just read is the tiny portion of the entirety of the Philippine business landscape. While small businesses struggle at the bottom, only a few big businesses thrive at the top. There is a deeper reason we need to understand behind this reality. I will get to explain that on Part 2 of this post.


Related Posts

"Business as Usual" as the Filipinos Define It (Palengke, Business Permits, Illegal Vendors) – Part 2

Filipino Job Seekers: Here are the Practical Tips on How to Get a (Good) Job in the Philippines – Part 1


About the Author
Noriel Panganiban is a Filipino blogger who's like any other ordinary Filipino, has experienced the real way of life in the Philippines. Noriel has a mission and that is to bring positive changes in this beautiful country. With blog posts like this, he believes that he is able to carry out that mission even in little ways; that if someone has read his post, that triggers the start of an awakening. You can read more posts about the Filipinos and the Philippines from this blog site. For more information about Noriel and his vision in life, you may also visit www.knowriel.com.

Comments

Most Popular Posts of the Month