Planning to start an outsourcing business in the Philippines? Consider these tips

Mike Larcher

The Philippines clearly is an optimal place to start up your BPO, but there may be complications you need to keep in mind

Before reading on, I need to stress to you the most important factor when it comes to starting up your own BPO company: the level of hard work it requires.

Entrepreneurship, as I’m sure many people understand, is not something that can be accomplished (successfully, anyway) haphazardly. It takes commitment and dedication. At times, it will absolutely shred you to pieces and rip you of your very being (and that’s a sugarcoated explanation). But, if executed properly, it can also bring you a very favourable outcome.

If you are contemplating on starting up your own business, it’s not unlikely you’re considering heading down the BPO route. With the ongoing growth and expanse of rapid globalisation, people are becoming increasingly similar when it comes to jobs and marketable skills — no matter what country or region they’re from. Hence, people look to start up in countries where the cost of living is comparatively and overwhelmingly marginal. That’s how I came to develop Outsourced.

Why do so many IT focussed BPOs startup in India?

The answer is: because it’s safe. With a population of over one billion people and a large IT professional market, it’s not that hard to understand. However, because it is such a popular destination, usually the first people think of when the idea of outsourcing comes to mind, there is an ever-growing competition and wages are steadily moving up (set to grow faster than the rest of the Asia Pacific region).

Essentially, opening a BPO in India isn’t as cost-effective as it once was.

That’s why looking to other areas in the Asia Pacific Region isn’t such a bad idea – specifically the Philippines. The country is a consistent supplier of low-wage workers and are highly appealing to large companies growing their operations overseas.

Also read: Outsourcing, education and innovation in a post-Trump world

Why the Philippines?

For one, Filipinos are known to speak English fluently. This is important when it comes to handling any clients. It also ensures that any internal communication isn’t lost in translation.

Secondly, the Philippine political environment has improved drastically over the recent years. The country’s economy has shifted from one that was once predominantly focussed on agriculture, to one that is now highly concerned with services and manufacturing. This is seen with the pursuit of legislative reforms to improve the scope of entrepreneurial opportunities and broader-based employment windows. For example, they’ve recently imposed new taxes to sin laws, which help boost money for redeployment with the said infrastructure.

The Philippine economy was ranked the 39th largest in the world in 2015 by the International Monetary Fund statistics, as well as being listed as one of the ‘emerging markets.’ Over the past five years, the national economy has been on a steady incline at an average annual growth rate of 6 per cent. The World Bank and International Finance Corporation (IFC) named the Philippines as the 138th place (out of 185 economies) due to its ‘ease of doing business.’ In addition, it also has the 12th largest population in the world.

The Philippines major trading partners include:

  • USA
  • Japan
  • China
  • Singapore
  • South Korea
  • The Netherlands
  • Hong Kong
  • Germany
  • Taiwan
  • Thailand

In 2013, The Philippines grew its gross domestic product by 7.2 per cent. It’s taken over India as the leading destination for call centres.

What do I need to consider?

The Philippines clearly is an optimal place to start up your BPO, but there are complications to bear in mind. This is where caution needs to be taken.

While the government has taken many steps to expand business opportunities, there are still many strict regulations to adhere to, administered by Filipino Law. Plus, finding this information can be equally as difficult.

Filipino regulations you need to be aware of:

  • Foreigners cannot form a solely owned business in the Philippines without heavily investing. For a large corporation, a legitimate investment would approximate to around US$200,000.
  • Foreign investors can have a maximum of 40 per cent ownership in the corporation.

That being said, there are ways to bend the rules. For example, it is possible to be married to a Filipino who owns full proprietorship of a corporation. You also have the option to become a part-owner with a Filipino business associate – whether a friend or partner. However, you would only own 40 per cent, whereas they would own the majority which is 60 per cent. This does raise some risk, as you would not have control over the majority of the shares, nor the decisions — so make sure to choose a partner wisely.

But there’s got to be another way …

Actually, it is possible to be a 100 per cent owner of a corporation if the majority shareholder is your spouse — and they become deceased. As their heir, you are able to retain 100 per cent ownership of the property. In saying that, I hope this never happens to you …

Personal considerations

As I previously mentioned, starting up your own BPO or any entrepreneurial project doesn’t come without a price. Being available at all hours of the day and working long shifts at a time with an ongoing commitment is an absolute must. Additionally, knowing how to hire and whom to hire, to continually provide value to the customer, is also crucial. This is done while trying to simultaneously manage operations while keeping up-to-date with your emerging competitions; with the hopes that one day your business will provide you with some ROI.

Have I lost you yet?

It’s really not that tough — you just need to know where to focus your energy to ensure that you get the maximum results that you desire while knowing when it’s time to give yourself a break. Balance is key in everything you do.

You should place importance to your physical and mental health as this will play a big role in the success of you BPO.

Also read: Mindfulness matters: Why every entrepreneur should invest in good habits

Treat your physical and mental health as a vital role in the success of your BPO. Don’t negotiate it out of your schedule. Take a small window of time out of your day to perform (literally) any sort of fitness activity. It’s also a tried and tested fact that taking a few minutes out of your morning every day to de-stress with meditation is worth it. This will help you to organise your thoughts and plan out your day efficiently.

Don’t undervalue time spent with family either, (95 per cent of parents believe the key to happiness comes from spending quality time with their families). Just because you may not be tracking any billable time, doesn’t mean it isn’t a crucial factor in you BPO’s success. It also gives you a reasonable excuse to disengage.

Stick to a routine

Maintaining an organised routine has incremental long-term benefits. If carried out effectively, it will provide you with invaluable advantages not only to you, but your business too.

A few simple steps to follow:

  • Arrive at the office at the same time every morning.
  • Plan out your day by highest priority to lowest. Workout tasks appropriate to your level of energy. You’re going to be at your peak in the morning, so use that time you tackle the most grueling tasks
  • Leave the evenings for meetings and progress reports.

Establish yourself

No matter how many man-hours you put into your new BPO, success simply won’t come overnight. So, make sure you and your team create a strong marketing plan. Create innovative and smart ways to get the word out. Ask yourself, what is your business’s niche? How can it help potential clients facilitate with their day-to-day business operations?

After all, building solid relationships (especially from the start) is a quick, convenient way to guarantee repeat business, as well as future referrals.

Remember: Be sure to keep track of the smaller milestones, they may not seem all that big in the long-run, but it’s the smaller building blocks that eventually come together to create some damn beautiful infrastructure.

The takeaway

Starting a BPO in the Philippines has its many advantages, as I explained above. Not only is there such a heavy feel for Western culture. Filipinos are some of the nicest, driven and committed workers you can employ. The average wage is US$400 per month and over 80 per cent declare that they’re extremely happy with their lifestyle and livelihood.

Setting up your BPO in the Philippines is very cost-effective and once you get past the nit and grit, your outsourcing business will flow more steadily and smoothly, which includes the maintenance and management of your staff and operations.

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Mike Larcher is the Founder & CEO of award winning companies namely acidgreen, outsourced, and academ.

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