Before running your business, let us deal with the basics.
Decided on the business name? Check. Made sure products and services are topnotch? Done. Built a customer management system? Finished. Hired the right people to work with? Fulfilled.
It is expected that a businessperson has to run a long and detailed ‘to-do list’ before D-Day. But aside from those mentioned above, an entrepreneur must also set aside time to obtain the necessary government documents to be able to operate legally. Regardless of company size and scope, all entrepreneurs are subject to getting legal requirements in order.
Here in our country, it is not a secret that getting business permits can be really challenging. The Philippines’ processing can last up to days or can even stretch to weeks- what with the long lines and inter-agency interactions. Waiting in line and filling out forms is not the sexy side of starting a business, but keeping close tabs on legal documents is one of your major tasks as an entrepreneur.
Getting the permits would need a healthy balance of brainwork and legwork. It can be tedious, so much so that it is common practice among entrepreneurs to send a representative to finish the task. But mompreneur Des Ong, the owner of a Hello MNL, a Manila-based crafts store that is now in transition, advised that entrepreneurs do the work themselves to really know the ropes.
“An entrepreneur must be involved in the process. If they know the permits—what they contain and how to get them— they would not be easily deceived,” she said.
If you are a new entrant who does not know where and how to start, fret not. We have rounded up some tips on how to navigate through the maze to get the golden tickets, also known as the business permits:
- Be proactive in researching and inquiring.
Before anything else, do your research. Read about local laws that can be applied to your company. For example, determine your business’ scope so that you can determine if you can be tagged as a micro, small, or medium enterprise. This is important because you have to be consistent in your business type in all the forms that you would fill out.
It is best that the entrepreneur calls or personally visits the city mayor’s office, where you would be registered, to get the list of requirements. Usually, the list contains the Department of Trade and Industry business name certificate; Securities and Exchange Commission (SEC) certifications; barangay clearance; authorization letter of the owner with ID; contract lease; land title; and location sketch.
Other documents include the occupancy permit; locational clearance; public liability insurance; community tax certificate (cedula); fire permit; and sanitary permit.
Getting the permits can take some time, so make sure that you set aside ample time to complete them. It is also important to be organized to avoid the risk of losing any document. Remember, the Mayor’s office would not release the permit if you lack any requirement. Re-applying can be time-consuming, as normal clearance takes about three days.
- Be ready with the fees.
Ong said that an entrepreneur should be prepared to spend a certain amount for the permits. The mayor’s office would base the fees on business type and products and services, and assets, to name a few. There are also other charges that might not be included in the list so there should be funds allocated solely for this purpose.
It would be best to ask other entrepreneurs with the same business model so that you can at least have a ballpark figure of the expenses. This way, you can go to the mayor’s office truly informed about the amount range of payments to be made.
- Be patient and anticipate the next steps.
Getting the business permits can take quite some time. From the mayor’s office, you now have to go to the Bureau of Internal Revenue (BIR) to have your company registered. Again, this would entail paperwork but it would be worth it. Take a breather and do not give up because once you have the BIR certification, you can now print official receipts, register books of accounts, and obtain a separate taxpayer’s identification number (TIN).
Because taxes are now involved, an entrepreneur is now responsible for the monthly filing of taxes. In this case, seeking the guidance of a trusted accountant would help so that you can understand how the process goes.
If you have employees, you also have to enroll them in agencies such as Social Security System (SSS), Government Service Insurance System (GSIS), Department of Labor and Employment (DOLE), Home Development Mutual Fund (HDMF), PhilHealth, and Pag-IBIG for the employee contributions. This can be finished within two weeks’ time.
- Learn, learn, learn.
Ong said that being well-informed is important. She shared that entrepreneurs can attend the seminars offered by DTI and BIR for first-time entrepreneurs. In her case, Ong said that she was able to gain knowledge from these workshops and had the opportunity to widen her network as she was able to meet other entrepreneurs along the way.
If attending seminars is not possible for you, Ong said that doing a feasibility study would help. Ask an owner with the same type of business and offerings about the whole experience. This is so you can manage your expectations, and start the planning.
Business permits are important in running your business. Once you have them in place, you can focus more on growth and expansion– knowing full well that you run your operations with nothing to hide aS you were able to pass government requirements. This also sends a message to clients that you value honesty, integrity and compliance in your operations.
Make sure that you prominently display your permits on the wall—they are your first accomplishments as an entrepreneur, after all.