It was the perfect fit. I was running the cafe business for two solid years and was in dire need of management know-hows as my bachelors degree did not provide me such. I enrolled myself in Masters in Entrepreneurship with gusto and passion as i really wanted to understand how should a "real" business run. Of course, with the additional guidance of my father who was a lecturer, guru and of the top 5 aces, i was ready to battle it out in the said "MA" world.
Eighteen months, five days in baguio, innumerable case packs, hundreds of CAN group discussions (or chismis sessions), Ten days in China, a five year business plan and 60 amazing new networks, i was again thrown out in the world of others to face the new phase of this cafe business.
Surely there were alot of ploughs, throws, plateaus and even misletoes in this already 5 year old business. Surely the "baby weight" of my first year of birth pains have been worked out from the change of strategies and even business models.
ME taught me the magic of marketing-- the push and the pull of product life cycles, the branding DNAs, the packaging and slicing for new markets and even the effects of the economies of "kaliskis" linked with my inventory management. ME also provided me the frame of the scattered pictures of my operations-- how you can control your suppliers, how physical layout could affect the outcome and the output of the said holy trinity of business-- Productivity, professionalism and Profitability. Theories on Human Resources taught me to adjust to the strength of people with the needed systems but evolve it with certain characteristics and charisma that will add value and values to your business. Accounting and Finance of course taught me how to read a financial statement. I finally was able to understand the language of my accountant and strategize better with a good and fluid cash flow and maintaining a very stable inventory of goods.
See, i learned alot. I havent even mentioned how ME have fueled my passion to "logify" this business i was running. The course made me realize and rediscover what exactly my passion was to make this life a real living.
But, there are certain things that i wish i learned in ME. Of course those taught in ME were universal truths on making it a success in the business. But there are i guess Philippine realities that one has to understand especially if you are entering an SME (Small-Medium Enterprise) to be able to stay afloat and rise above the ragging waters of the business world. Then again, i think these things are learned by doing and learning both from the learned and the unlearned.
1. BIR JARGONS
So i know how to read my Financial statements.. what bout these... 2550m, 2550q, 1702q, 1702a, 0605, 1902, 1601c 1601e....
THERE ARE JUST TOO MANY BIR FORMS!!!!!!!
Almost every week i sign BIR papers that are either for filing or for payment. The system of this VAT (Value Added Tax) and EVAT (Extended Value Added Tax) and EWIT (Extended Witholding Income Tax) is just too discombobulating that only your accountant would ever understand. There are deadlines on the 10th, then another deadline on the 20th-- sometimes movable on the end of the month if its quarterly . What annoys me with this is that only accredited banks of your RDO (REgional District Office) would accept payments. When you file you go direct to your RDO office. HOWEVER, there are several RDO offices in one district and not all RDOs accept the forms you need to amend of file.
OK just to let it out in lay man terms....but im only limiting this with the forms i do every day
2550m: Monthly VAT that 12% of gross sales you have to remit every 20th of the month
2550q: Quarterly VAT. remittance of the QUARTERLY VAT paid on April, July, October and January.
1601c: the tax you deduct from employees compensation (C for Compensation) and then remit. Though if you are paying minimum wage... you have to file "0.00" every 10th of the month. 0 tax but still you have to file it.i really dont get it!
1601e: EWIT: Expanded Withholding Income Tax. These are for suppliers of services-- Such as rental, janitorial, security guard agencies-- when paying your suppliers you deduct 2% and you remit this 2% to BIR as well. You paid the suppliers already, you still ahve the responsibility to pay their taxes.
2307: This is the output of 1601e. every quarter you have to submit this to the supplier to prove to them you paid their taxes. It those taxes "with held at source"
0605: payment form. usually this is just to register your business every year as a tax payer. all those ledgers, journals and collumnar books goes with this -- for those stamps
1702q: Your Quarterly Income Taxed!:)
1702a: your Annual Income Taxed (does April 15 ring a bell?)
Seriously, this government doesnt really aid businesses to answer opportunities to create more jobs to save the country men from leaving their motherland. There are just too many legwork and paper work! No wonder some just FORGET about these things as you feel you just paid taxes last week.. then another this week.. then another the week after that.. it just doesn't end! Also, no wonder others just, you know, do things under the table to let this just pass and just like magic they're not bound by these taxes.
2.LEGALLY MANDATED SSS, PHIL HEALTH, PAGIBIG
There are THREE kinds of legally mandated deductions in the payroll-- SSS, PHIL HEALTH and PAGIBIG.
SSS and Philhealth: As an employer you do not end with just deducting from the compensation of employees then remitting it. There is also what you call "ER" the employer contribution-- which is like 3 times what you deduct from your employee. You HAVE to pay this (at least to the bank) before the 10th of the month or else.... good luck with undoing those. But wait, it doesnt end with just paying at the bank, the SSS and Philhealth form that shows you've paid has to be received and filed in SSS and Philhealth branches. see how tedious?!
Pagibig: as my staff once said "Buti pa ang payroll may pagibig"... This is a totally different case. no bank can accept pagibig payments, hence you have to pay this on your own at the main office. THe dead line for this is alphabetically done. So depends on the first letter of your company's name, thats when you'll know your monthly due date! oh, they also have Employer contributions!
So can you now imagine what the financial distribution of a 70pesos per cup of coffee is? to start with 12% solely to VAT then all these Employer Contributions and City Taxes!
3. WAGE ORDERS
Aha! This is one thing that can probably make or break you. Did you know that minimum wage is different if your company does not employ more than 15? Im talking NCR here, i dont know what the case is in provincial rates, but there's a different minimum wage for companies 15 employees and below.
4.CITY HALL TAXES
Yes, there is a totally different set of permits and taxes in the local government you are doing your business with. Mayor's permit.. sanitary permit... mechanical permit... signage permit... and the list goes on and on...
What you have to note though that if you are paying your business taxes quarterly, it will take you like 2 days to get an assessment and paying has to be cash or manager's check.... well at least for QC. Im pretty sure other local government does it differently.
5. Dealing with LSMPI
LSMPI? does anyone know what this stand for? IN financial statement there are times this is reflected:) LSMPI: "Lagay Sa Mga.. P.I.. " so do you now understand? With your monthly, quarterly and annual remittance to both national and local government you are still faced with "auditors" "inspectors" and "monsters" from time to time.. tax mapping... sign board check... sanitation check.. fire extinguisher check... DOLE... There are just TOO many AGENCIES.. too many OFFICERS.. to deal with for this day to day life in business that you are either a victim of extortion or a victim of corruption. The system of National and Local Government are just too complicated with red tape! "go to window A" go to window 16b... go to window qrstuv... that sometimes paying for all these makes you think.. where does this tax payment go? to streamers saying "SALAMAT PO SA FOOT BRIGE NA ITO"?
That's just some parts of the cost of business that you have to look into if you are seriously thinking of going into business here in manila. Big Business entails Big problems.. small business entails still big problems.
But i still believe in what i learned of "if you like what you do, success is just a natural consequence"... Turning your passion into a profession is truly answering the call of your life. But understand largely that this passion is the fuel to do all these intricacies of business.. You really have to know and love what you do to surpass all these monsters of business....
There is still so much to learn and this is just part of a whole saga of my 5 years in business. I am hoping to learn more and test the challenges it brings. These that i wrote are solely from my experience and these are just legalities or lagaylities... there's still that "Emotional Human Resource" that you have deal with that no theory could sum up its reality.
So if you're up for real entrepreneurship, you have to really be strong enough to endure all these things and still send off that smiling face to your clients and patrons.
I might be able to write some more on other aspects beyond these legalities... like emotional sides of business. :)
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