Biyernes, Disyembre 21, 2012

Purchase your initial stocks



Basic Construction Materials

Let’s start with structural materials.

1.       Gravel and Sand
2.       Cement
3.       Steel
4.       Lumber

Let’s leave the gravel and sand sand for now because that a whole different game.

Cement


Everything to do with concrete building and construction needs this. And this is what you must have if you’re planning of going with selling structural materials. Before we started the store I knew that this is what I need to have first. I thought I could just get 30-50 bags here and there. I was wrong. Get this, at the time I was writing this book for you to get factory or even dealer’s supplies the minimum order is a staggering 600 hundred bags of cement costing from 195php to 213php per bag. Now do the math.
600 bags x 215 = 129,000php 

With our capital 350000php and that much cement that would leave me with still 233,000. I figure I’m still fine but after so much thought I realized I don’t have market yet. Who would I sell that to?
So I opted to be conservative. I budgeted for 100 bags instead initially. The trick is where to buy only that much. And that’s where you perseverance and ingeniousness needs to come into play. It’s easy to buy the items what’s hard is where to get the lowest price possible. So haggle and for you to get the price you wanted you have to know what’s the running price in the retail business is. So go to the nearest you and ask their selling price because most likely that how much you’re going to sell your goods too. Most hardware store has a markup of 20% so if the selling price of cement is 220php most likely they got it for 20% less. 

Steel


A rebar (short for reinforcing bar), also known as reinforcing steel, reinforcement steel, rerod, a deformed bar, reo, or reo bar, is a common steel bar, and is commonly used as a tensioning device in reinforced concrete and reinforced masonry structures holding the concrete in compression. It is usually in the form of carbon steel bars or wires, and the surfaces may be deformed for a better bond with the concrete.

Like what I said earlier I thought I knew what I was getting into. I asked around what the usual rebars being used to build a house.  These are the initial stocks I ended up buying.

12mm deformed bar
10mm deformed bar
9mm deformed bar

Watch out for these items because there are many low graded undersized rebars. But of course I didn’t know the difference then, I just relied on the goodness of my supplier (I’m laughing my ass off right now on how naive I was then). Needless to say I was conned but hey all I’m concerned about then is getting this business started. Countless purchases and sales later I learned the basic difference and established a reliable supplier.My advice ask your friends, engineers, construction workers, search the web like I did.

Getting Started



Finding a good location

The first thing you need to do to start just about any business is to find a commercial building of at least 65 sq. meters situated on a good location. Ideally look for where there are lots of people coming and going like near a marketplace or a center of trade simply put. A location near a bank is also good. When people go to a bank there’s two purposes one is to deposit and the other to withdraw. When people take out money from banks most likely reason is to spend it. Now consider a banker needs to take out a loan or withdraw funds for a project, let’s say a house and your store is just a stone throw away.  That’s where the action is and that’s where you need to be. You also need to consider the development in the area when there’s so much construction going on supplies is needed.  What you need to look for is where there’s plenty of development going on in terms of construction, like housing, resorts, etc. You also need to make sure that the location you select is accessible a good example of this are commercial buildings located on main roads, highways. Make sure that your prospect location is easily seen from left to right. Here’s how you know that you can be seen. 

1.       When you find a nice place to rent or to build your store try standing across it from 50 meters away from left to right. If you can see the building and where you want your signage to be on then that’s an ideal place for you.

2.       Look for anything that may be obscuring the view. Decide if it can be fixed, if not you may need to look for other spot.

Now that you found the ideal location it’s time to consider:
1.       Rent
2.       Renovation
3.       Permits
4.       Employee
5.       Initial stocks

Rent

Rental fees depend on where your location is. Usually for a 65 sq. meter  provincial rate varies from 5,000-2,0000 a month while urban areas would go from 15,000-45,000. Renting a place would require a month in advance and 2 months deposit. So let’s say you got a place for 30,000 that would total to 90,000 out of your capital fund.  So if you got 450000 like ours that would leave leave you 360,000 and you’re still in good shape.

Renovation

For renovation what you need to consider is a display shelf, a stock room, desk, lighting, display. Include also signage expenses. In our case because we need to be conservative I allotted 25,000 php for  renovation because the place we got was already painted

Permits

DTI registration cost 300php for the application and 15php for documentary stamp. You would need to register at a DTI office nearest your area and takes at least 5 days for processing. Think of a name that would best suite your business. Trading or general merchandise are the two options you have. You will be engaging in buying and selling of hardware and construction supplies and it would be best that it’s indicated in the DTI form for the nature of business. Minimum capital that can be declared for this type is 350000php.
Mayor’s permit

Your fee will be determined by classification of the municipality where you plan of doing business. It would be best to consult a bookkeeper for this. It also depends on what quarter of the year you start. So as a piece of advice say you plan of opening sales on September, it would be best to process your mayor’s permit on October because if you don’t you will end up paying 2 quarters instead of just one if you waited till October. Same principle applies on earlier months. 
 

Requirements for mayor’s permit are as follows

1.       SSS
2.       BIR clearance
3.       Community tax clearance (cedula)
4.       Zoning fee
BIR Registration

BIR registration requires an 1901 accomplished form  which requires proprietor’s

1.       Birth certificate
2.       Marriage contract if married
3.       Lease/rent contract



What is Hardware and Construction Supplies Store?



What is Hardware and Construction Supplies Store?

This a trading business selling from structural to finishing materials for just about any residential, commercial and even industrial building construction. Think of a house being constructed from the ground up and what are those things needed to construct it or simply look around your own home. Those are the things you will be selling but you need to accept the fact that you can’t have everything and if you’re starting with a capital like ours, its  good if you could have even just the basic. Also think if you want to engage on just the structural or finishing. You can also concentrate or specialize (i.e. Lumber supplies, Electrical supplies, paints). Or you could do both structural and finishing like what we did.

Hardware and Construction Supplies



A Leap Of Faith


Before we started our hardware and construction supplies business I thought I knew at least half of there is to know about the business but when it was time to really start the store I found out I knew zit.  Why I decided to go through with the plan is probably due to my unwavering stubbornness almost to the point of stupidity. I call it guts which many people disagree. As it turned out guts paid off, we are now a proud owner of a successful hardware and construction supplies business.


Before me and my wife started the store of course we consulted a wide range of people about it. From friends to relative, to people engaged in the same business, to construction workers and even sidewalk vendors in our area. The consensus said you need a capital starting at 1,000,000php and that’s a lot of zeros. My wife and I is hardly making ends meet with our salaries working as call center agents. Needless to say we don’t have that much of a capital all we have is our burning desire to start our own business. We dreamed, on our bed, when we go out for groceries, when we eat, when we take our daughter to school almost to the point of obsession if it’s still isn’t. Every day we talked about it. Our main reason for starting a business as we said is for the kids. Working night shifts is not acceptable.  


How we get the start up capital was a big question mark but if you got a wife like I have, the answer is inevitable. Needless to say we secured a loan. Where? I’m afraid it not part of the subject matter here. I can only tell that it’s not a million or half of it. It’s just 450,000 pesos and here is where my stubborn personality comes into play. 


Of course it’s better to have more to start with than what we have. There were doubts and countless fights with my wife. Even my mother discouraged us, almost everyone. There were other ideas of course like a water refilling business which I’m already familiar on how to operate. We also have a family owned pharmacy. Why not one of the two or both? Again as I said I was stubborn all I have is gut feel that we could do it.