Home-Based Businesses in the Philippines
A few weeks ago, fellow LiP columnist Klaus Döring brought up the topic of home-based businesses in a comment on my article “Location, Location, Location”. Indeed, more and more expats in the Philippines are opting to open home-based businesses. This weeks’ column tackles the subject of home-based business in the Philippines and why, how, and under what circumstances you too might take this route in setting up your own small business.
There are a number of advantages to running a home-based business as a foreigner in the Philippines. First off, a home-based business allows a great deal of flexibility in balancing many aspects of your life. Most of the time you will be able to work the hours you prefer. Furthermore, you will definitely do away with any morning and evening commutes in traffic. Home-based businesses allow you to reduce a number of your expenses as well. Aside from transport costs related to getting to/from an office, you’ll save on other things like office rental and office utilities, you’ll probably need to budget less for work-clothes, buy fewer snacks and bought lunches, etc. You’ll also be able to spend more time doing things you may want to do in your house, like stay on top of home maintenance, or spend more time with your family. You may also find you now have time to balance a work schedule with a hobby you enjoy because you’re not always tied up in an office somewhere far from where your other interests are located. In most cases ‘office politics’ is eliminated because home-based businesses are generally very small in nature, and formal staff-meetings and company decision-making procedures are streamlined because, well, there’s probably only one or a handful of employees in total.
Now before you decide running your small business out of your home is the best option for you, remember that depending on the type of product/service you offer, there may be some serious disadvantages to running a home-based business. Some products and services really require a more formal office/commercial environment. And if your staffing needs are higher, you will likely determine pretty fast that unless you have a separate office or commercial space, then your house will become overrun by your business! But even if you intend to keep your business small and run it out of your home, there are several disadvantages to consider. By isolating your office in your home you will have less opportunity to socialize with others like you would be able to in a regular office environment. You will lack support systems that you would normally find in a traditional office, like colleagues who understand your dilemmas and can offer support or advice. You will encounter different sets of distractions you would not normally encounter if you were in an office or commercial setting. You may be tempted to put off some work to take care of something needed in the house, and this could pull you away from the time or attention you need to complete a specific business-related task. So, as you can see, there are certain disadvantages to running a home-based business. If you think these disadvantages could be a problem, you may want to put in contingency plans to offset potential problems. This is a serious consideration, because you may also decide it is best to not engage in a home-based business and opt for a more traditional off-site location for your business.
So, if a home-based business seems right for you, what are some important tips to remember? A good place to start is to fully examine your office space requirements and other physical needs. You will need to dedicate a special room to your office/workstation. Keeping a separate space or zone is important, because even though it is a home-based business, you need to treat your work area as an office or commercial space. You need the physical separation so you can differentiate ‘work’ from ‘home’. You need to make sure you will be comfortable in this area, and also make sure the area contains most of everything you need for your business like office equipment, furniture, supplies, etc. By keeping your work area separate from your home, you can retain the focus you need to run your business and not get distracted by things going on in the home.
A friend of mine who runs his environmental consulting business out of his home suggests a few other ‘tips’. First, he recommends you obtain a post office box for formal communication purposes. Many clients prefer dealing with a business that exhibits a certain degree of permanence or formality, and these clients can be turned off if your business seems too ‘small’, especially if they are offering a large corporate account to an outside firm. A residential address can cause some clients to eliminate your company from being in contention for a big contract. In these cases it may not seem fair, but image is important, and if you rely on a handful of ‘big’ accounts, this could mean the loss of a major sales opportunity.
Similarly, you may want to establish an email address from a ‘company account’ that has a corresponding web-address/presence. The free Yahoo!, G-Mail, and Hotmail accounts people use for personal communication is not recommended for people wishing to portray a more ‘corporate’ image. Even if you are a small, home-based business, it may be worth your while to develop a proper website that comes furnished with a distinct set of e-mail addresses that are unique to your web-address. Again, this is done to portray an image that may help you gain an advantage over rival competitors that are also ‘small’ but seem less ‘corporate’ in the eyes of a large company looking for a suitable sub-contractor.
My consulting friend also suggests another way to maintain the professional image you may be trying to portray. He suggests you may also want to try and set up meetings with potential clients at their place of business, or at a restaurant/coffee shop that is convenient for the client. This tactic is good on two levels — you are making an impression by showing up at their convenience, and, if you take them out, you have the opportunity to show them some hospitality and discuss issues with them in a neutral setting for both parties.
Lastly, what are some kinds of home-based businesses well suited to expats in the Philippines? Businesses related to training or instruction can be easily set-up as home-based businesses. Fitness training, language instruction, picture painting or music instruction can all be set up in a separate portion of your home. Photography services like taking and developing passport photos and developing employee ID’s can be a main source of supplemental income, but a good photographer can also do more specialty work like photos for promotional materials or being the official photographer for special events. Catering is a very lucrative business for a number of expats. Specialty baking, gourmet foods for banquets, or special set meals for unique occasions can all be organized in a home-based setting and delivered on request to the clients preferred location. Consulting services are also well suited as home-based businesses. There are lots of very talented Filipino researchers and consultants, but sometimes a fresh set of outside eyes helps bring a new focus on old or difficult issues. I am an economic policy analyst by training, and when I undertook economic development consulting jobs for different provinces here in the Philippines I was often working out of my ‘home’ or ‘hotel’ with a laptop. Finally, e-businesses are well suited as home-based businesses. Web-design, desktop publishing, e-sales of local products — all of these and others can be done in a home-based office setting. One important thing to remember in all of the above examples is that even if you opt to develop a home-based business, you will still need to undertake the same planning activities as any other business. So don’t forget to develop a detailed business plan, make sure you obtain all the necessary permits and licenses, and always remember to treat your business with the same degree of seriousness that you would with any other traditional business venture.
I hope this covers some of the more interesting issues related to home-based business in the Philippines. Any comments or insights from home-based business entrepreneurs would be greatly appreciated!
Excellent points, Martin. I’ve been working in my home for 4 years now & agree with everything you said (even that email address rule that I don’t do).
Your comment about the lack of socialization is very true. I myself sometimes wish I had someone who could give me input at work. self-critiquing can be tricky.
I’m not sure if you mentioned this, but I would recommend a set schedule for work. Since clocking out is not an option, it is tough to mentally “switch off” when living in your place of work.
There are times when I am relaxing after a day’s work & maybe watching tv, that I tempted to go back to work just so I could get ahead of schedule.
That set schedule can be whatever the person pleases. For me, I like to work through the night because things are less busy (it’s quiet, no phones & distractions) & I am able to free myself to enjoy the day.
Hi Macky,
Thanks for your comments. I was hoping to get responses from people who do run home-based businesses like yourself, and I appreciate your feedback.
You make a very important point on scheduling that I did not bring up in my column. You are indeed correct that scheduling is just as important for a home-based business as it is for a more traditional business. You need to devote the appropriate time and energy to not only make your business work, but to grow your business as well. Everyone with a home-based business will have a unique set of circumstances, but the point is still valid — you need to make and stick to a schedule that works best for you.
Thanks again for your valuable comment. Cheers!
I agree with Macky. It is difficult to switch off when you work from home. This was one reason why I did not like working at home. I would rather work very late in the office, and when I lock the office doors, I also lock my brains from thinking business. The drive home helped me unwind so that when I reached home, I am already relaxed and ready to enjoy home life.
Hi Ellen,
I think you and Macky are providing some really good advice to people contemplating a home-based business, especially in regards to just how hard it is to create an appropriate work-life balance.
I think a person’s physical and intellectual health can be affected adversely if that balance gets out of alignment. I like your example as to why you found having an office away from home was important to you. You made a clear choice to put all your efforts into work when you were at the office, and all your efforts into the house when you were at home. The drive was your way of easing in and out of the two worlds. People in a home-based business need to find a similar mechanism to help them ease in and out of the two worlds. Does anybody out there have any suggestions or tips on how they overcame this issue?
Thanks for sharing your experience Ellen.
Macky, do you have any tips on how you keep a healthy balance between the two?
Cheers!
Hi Martin - Unfortunately, my commute is a few steps from my bedroom door. Not much time to switch off.
I have to say that it’s been a struggle to keep those boundaries that we’ve mentioned.
In my case, when a rash of deadlines are bunched in together (I work with multiple clients who are not aware of my work load), it becomes even more difficult to make free time for myself.
What I have consistently done is to make sure I to have one hour to go out exercise or get some fresh air.
Maybe 3 times a week in the gym & 2-3 times in the park. At the very least, I take my 20 minutes to walk the dog (or he walks me, as I sometimes say).
Or just go to your favorite cafe & read something (on paper - no laptops. disconnecting is a must in my opinion)
I say this because in the past my health was being compromised by being too focused sitting in the chair for a prolonged hours. Hence, a bad back & I am actually in ok shape (by the way, invest in a quality chair if you work at home, you’ll thank me)
taking care of one’s health is important & sometimes is neglected. By taking scheduled breaks to go outside, you will be able to relax & get out of that mental trap.
Think of it as a work investment.
Hi Martin, excellent article. Really very informative. My “main office” is in my house. I have everything there, what I need. Especially my library, which I took from Germany to the Philippines. I feel comfortable and nobody disturbs.I also can do my translations at home. If I am hired as interpretor in court - of course, I go out. Some clients will visit us in the house. Others, as you mention in your article can be meet in their places or in a restaurant or coffee shop. Since I am also teaching German language in an university, I even get the chance to meet some people in a conference room. Of course I have my regular sked at home, and I CAN SWITCH OFF even working at home. SWITCH OFF means also: ignore a ringing phone in my office or even turn off my cellphone. - Hi Macky - it also happened to me, that’s why…
Hi Macky,
I agree 100% on the need to take breaks. No matter what the job is, there is a need to take ‘mental breaks’ from what you are doing. A person can only concentrate on something for so long before their work begins to suffer.
I also agree on the need to get physical exercise and fresh air! I think it is an area just about everybody underestimates but sure pays dividends when it comes to productivity, not to mention adding to your life expectency.
Lastly, your tip on getting a good chair cannot be underestimated for people who work at a computer or similar work-station. Ergonomics as a field of study has made huge discoveries regarding work and proper posture/body alignment, etc. A proper chair does wonders in preventing a great deal of physical problems that creep up on people like sore backs and shoulders, forearm soreness, etc. Thanks for the great suggestion!
Hi Klaus,
Thanks for sharing your ideas. Like you, I’ve turned a room into a private library/study as well. It’s a place where I can feel comfortable, has everything I need close at hand, and most importantly it is a place where I can get some quiet time to think and write.
You make a really important suggestion on how to ’switch off’ — you actually switch off those items that could drag you back to work when it is home time. Good for you in being able to do so, and hopefully others can follow your example! It’s tough but maybe worth a try!
Cheers!
After 14 years in our last business location, my landlord decided to sell the building – “they’re getting old”, they said. My husband had his consulting engineering business on the second floor while I had my retail and service business on the first floor. When the move became apparent, we decided to take both businesses home to see if it’ll work. He took one bedroom for his office while I have a pleasant corner of the living room. My clients like the more intimate sorrroundings so it actually helped my business. Being only two people living in the home, and gated helps a lot too.
Our agreement: We don’t disturb each other during work schedule. I meet my clients at home and he meets his in a coffee shop. One thing we decided to maintain is the habit of getting ready in the morning … breakfast, shower, and dressed by nine in the morning and stop work at 6 pm. He takes care of his own lunch, but we always have a wonderful home made dinner together – something I did not have time to prepare before. A break time for me consists of spending an hour in our backyard full of blooming plants and the birds and butterflies with a magazine to read. And yes… personal phone calls are returned after workings hours.
It was a big adjustment for both of us to conduct business at home in the beginning but we both enjoy it now, especially the huge savings on commercial leasing.
Cheers!
Hi Marcelina,
Thanks for your very interesting post! You’ve illustrated how a home-based business can be born out of the need to adapt to outside forces. I like how both you and your husband made the choice after having first been located at a commercial location. I bet you’ve saved a BUNDLE of money that would have gone to rents and I’m sure you have cut your utilities in half as well. People sometimes forget that commercial utility rates are higher than residential rates, so I bet you noticed that as well.
The really big lesson is that you were able to make the transition work in such a way that your customers actually liked the new environment over the old environment — what a nice bonus! And you’ve also demonstrated how you can incorporate healthy breaks into the day AND maintain a schedule of set work hours. I hope others contemplating a home-based business can take inspiration from people like you and know that it can be done if you set things up right!
Thanks, Marcelina, for a really informative post!
Cheers!