GROCERY

Having the goods and enough space does not guarantee the success of a grocery business. Keep a close eye and a
steady hand on operations and supplies to make it work.

Filipinos spend a big chunk of their money on food. According to the 2006 Family Income and Expenditure Survey
conducted by the National Statistics Office, 41.4 percent of household earnings was devoted to food, while 3.7 percent
goes to personal care and effects. Alcoholic beverage and tobacco products account for 0.7 and 0.9 percent, respectively.

These figures alone say a lot about the prospects of a neighborhood grocery or a supermarket. A grocery sells food and
non- food items, and it has a bigger inventory than a sari-sari store. Its like a supermarket, but it needs a smaller area,
less staff and fewer check-out counters.

You may not have the capital to open a full-scale supermarket, but you can definitely save up or get a bank loan to
finance a modest grocery. Heres how to go about it:

FUNDING. You would need at least P150,000 as working capital to stack up on initial inventory. Another P150,000 may
be required to cover the top three operations-related expenses: rent, salary of personnel, and fees for utilities.

Dont expect gains within a year; it usually takes two to five years to recover your investment in a grocery.

LOCATION. Do you plan to open a grocery near a school, a hospital or an office? Find out the demographics of the
people in your desired area, and then decide what items your store should carry. Welcome Supermart in Quezon City, for
example, is located near a hospital, so it offers infant formula milk and water, which are usually needed by patients and
other people who go in and out of the hospital.

The countryside can also be a good location for a neighborhood grocery, especially in the absence of a full-line
supermarket, says Robert Go, owner of Prince Warehouse Club. His business, which began as a neighborhood grocery in
Cebu, is now a wholesaler with multiple branches in Cebu and Leyte.

Go says you should also know the following about your market: average grocery expense per household, their livelihood
and sources of income, and their shopping habits.

STAFFING. You need at least 10 to 20 people to operate your grocery smoothly.

Cashiers: They man the check-out counters. If you have three counters, hire more than three cashiers, ensuring
smooth operations even when an assigned cashier is unable to go to work.
Store manager or supervisor: He assists the owner in store operations. When you have more than one branch, you
can hire a supervisor to oversee the operations of those other branches, plus a store manager to coordinate with other
stores and share Operating Hours some of the owners responsibilities.
In-house merchandisers: Distributors dont usually send promotional staff to grocery stores. Instead, in-house
merchandisers are assigned to arrange stocks displayed on the store shelves, and even encourage people to buy them.
Backroom personnel: This includes buyers and purchasers, as well as accounting and HR staff. Theyre the ones who
run your back office.
Support staff: They usually function as porters in the warehouse, responsible for loading and unloading of deliveries.
Baggers: They help pack grocery items. Depending on the availability of resources and the size of your operation, you
may or may not hire baggers.

Prepare for incidents of theft and shoplifting committed by shoppers and staff alike, advises Go. Hire in-house detectives,
which most groceries and supermarkets usually have, to watch over shoppers. You must also be visible in your store so
you could watch over your staff, he adds.

STOCK KNOWLEDGE
Once youve got the numbers and people concerns down pat, you also need to pay attention to these matters:

SPACE MANAGEMENT. You have to ease the flow of people walking inside your store and browsing merchandise. If all
the needed items are arranged on only one or two shelves, then shoppers will cluster in that area. Spread out these items
around the store so people can move around.

Think like a customer when you are organizing merchandise. Dont put mustard in the seasonings section simply
because its made by a company that manufactures seasonings. Put mustard beside the ketchup bottles because people
who typically use ketchup also use mustard, says Cua. You may also want to place a new brand of juice beside a popular
sandwich spread brand, so customers notice the new item.

A grocery usually has an over-the-counter section. Here, you can place items that are either high in value or require sales
people to dispense them. Examples include infant formula milk, personal hygiene products, and liquor. When a customer
buys milk, he may not know which one to buy and therefore wants to ask questions about the products, says Cua.

PRICING. Price items according to their categoriesyou cannot put the same profit on all kinds of items.

Offer some products at prices lower than the competitions; this is one way to attract customers into your store. Once they
are in your store, it is likely that they would buy more goods from you.

Fast moving consumer goods (FMCG), or items that people often buy, should not be sold at prices higher than the
competitions. Allow 2 to 3 percent mark-up on FMCG.

Items not considered daily essentials could be priced higher. You can add even bigger margins for imported items.
Some stores impose a 15 to 20-percent mark-up on their goods, but people still buy from them because of additional
value and conveniences the grocery gives them. People are willing to pay a premium price for premium servicewider
aisles, brighter lighting, cooler air-conditioning, and convenient and abundant parking.
Competition keeps us in check. If you price your product outside the market, you stand to lose your market, Cua
explains.

INVENTORY. To manage cash flow, a grocery store owner should be able to control the flow of inventory. Which items do
you buy and how much are questions you need to answer. Every grocery owner must have a good purchasing system
and ensure that goods arrive on time.

If your stocks of basic items are low, shoppers will complain and may not come back. However, if you overstock, this will
tie down your money to pay suppliers, says Go. If your cash position is not liquid, you will not be able to pay your
suppliers. Eventually, you will run out of merchandise to sell.

PIGGERY
Starting a piggery is a great business that you can start in your own backyard.
[related|post]For this workbook, we solicited the help of seasoned pig farmer Rolly Bautista, who helped Entrepreneur
Philippines with some basic know how for people who want to get into this kind of business. Rolly, who maintains a 200square meter pig cage in his backyard in Apalit, Pampanga, has been in this line of business since 2000.
KEEP IT CLEAN
It is not true that pigs are filthy animals. In fact, they can easily catch diseases if their surroundings, and even the people
who take care of them or approach them, are unclean, he said.
So for those who want to use their backyards for a small-scale piggery business, Rolly said the first emphasis should be
on the pig cage or pen. He said that a drainage system and a septic tank are musts. Through this, every time the pigs
urinate or defecates, the area can be cleaned immediately. The pigs defecate twice a day and the cage will only become
smelly if they get mixed with the urine.
If you will immediately clean the cage, it will not smell bad and your neighbors will not even notice that you have a
piggery in your backyard because it will not emit a foul smell, he said.
There should also be a steady source of water because the pigs need to be washed at least once a day. They also need
to drink clean water regularly. The roofing of the cage should be high to help it have proper ventilation, because the sow
will easily suffer a miscarriage if the area gets too hot.The pen should have regular anti-bacterial sprays. Bautista said a
200-square meter pen can accommodate up to 10 sows (inahin) and 50 fattener piglets.
For those interested in starting a piggery, there are two options to choose from.
1. Grow so-called 'fatteners' and sell them when they have reached at least 90 kilos in weight.
A fattener, Bautista says, is a pig with an age ranging from one month to 45 days. They can be bought at an average of
P1,600 t P1, 800 each, depending on the prevailing market price. They consume an average of one sack of feeds per
month at P1200 each sack. They are ready to be sold after three months.
As a sample estimate, if the prevailing price is P100 per kilo for live pigs, then a 100-kilo pig will sell P10,000.
Slaughtering the pig and selling it to neighbors might net you an additional 30-percent mark-up.
2. Pig breeding
Another option is breeding and selling pigs wholesale. Bautista says a 120-day-old sow (Dumalaga) can be bought for a
minimum of P12,000 each. It will then take an average of four to six months for the sow to give birth.
Make sure that you keep the sow thin so it will not have more piglets and will not have a hard time giving birth. It is best
to limit to one kilo the feeds that it will eat for one day, he said.In doing this, Rolly said the sow can give birth to more than
20 piglets. A fatter sow, on the other hand, can only have up to eight piglets.
After taking care of the piglets for one month, he said they can be sold already for at least P1,000. In receiving buyers,
Rolly said you must make sure that they will not get too close to the pigs. This is because there is a possibility that they
have been to other piggeries and they may have brought some diseases with them.
While in the business, Rolly said the seminars usually given by the suppliers and manufacturers of feeds are a must. The
feeds producers also dispatch their veterinarians once a week to the piggery owners. You should be well-informed
especially with the new kinds of diseases that are coming out, he said. Rolly said the business will continue to be
profitable as long as cleanliness will emanate from the owners themselves.

Tip: Pigs usually cost higher after the holiday season because the supplies have run out by that time. Rolly said you
can adjust your mating schedules according to this.
Years ago I dabbled into (very) small-time cattle (e.g. cow) raising, with me providing my uncle (some) capital to purchase
(just) one cow (for trial purposes) while he takes care of raising it, feeding it and selling it afterwards (once grown into
marketable size). Were supposed to split whats left of gross sale less other expenses (vaccines, medicine if necessary,
etc). Food is not a problem for cows since there are vast grasslands (still) in Batangas. Unfortunately, I was forced to sell

my share of the cow just after a few months to augment my emergency funds. Now, Im raring to invest once more in
cows. Target timeline: 2 months.
In the meantime, Im trying a small-time piggery. Basically same set-up, I provide the start-up capital to purchase piglets
while relatives take care of raising and eventually selling them. Caveat here is that they already have an existing piggery,
as such permits and pigpens, waste management and supply chain are already established. I just come in as a small-time
capitalist, to give them opportunity to raise a few more pigs for lesser cash out from their end.
Piglets
According to reliable relatives, normally, mother pigs (inahin) or more formally, a sow, can give birth to around 8 to 10
piglets at a time. Some as high as 16 if sow (and the sperm-producing boar/hog (bulugan)) are healthy and the owner is
lucky. After 2 months of breastfeeding and weaning, the piglets are now ready to be separated from the sow, and at this
point, are now ready for sale to potential pig growers. Given the number of piglet-siblings, sellers usually sell them as one
group (hence around 8 to 10) so its more difficult to find sellers who are willing to sell just one or two or five piglets (in
case your budget is only for that quantity). Also, mixing piglets from various mothers is not advisable as this causes
quarrels and bullying among the piglets, against the minority (especially if they will be sharing the same pen). How do they
know whos the odd pig? Hog raisers say the piglets can tell via the bodily scent if the pig is from another mother.
Price
How much does it cost? As of this writing, the trade prices in San Jose, Batangas is at Php235/135 for piglets. For the first
10kg, price per kilo is Php235. The excess to 10kg is priced at Php135 per kilo. The piglets we got averaged at 19kg
(some as low as 16kg while one weighed 20kg), so at this average, each piglet costs Php3,565. Estimated cost for feeds
is at Php1,050 per pig per month, and usually, pigs are mature and big enough for sale in 4 months time after
purchase (which started at month 2, so total of 6 months). Estimated total cash out is Php7,765.
Except for the gilt (grown female pig with no offspring) which takes a bit longer to be ready for breeding /impregnation and
eventual giving birth (as a sow) to a new set of piglets. Usually growers leave one gilt and prepare it for multiple cycles of
pig-bearing. Per Google, one gestation period or pregnancy cycle of a pig is 114 days or additional 4 months). With this,
a new set of piglets may be raised at minimal cost (e.g. retainer/performance fee of the bulugan, or payment for its (fertile)
blood donation).
Profit
Say a grown pig averages 90kg upon sale. Trade price as of this writing is at Php120 per kilo of live pig. Per kilo of pork
meat (essentially a dead sliced pig) is higher given the mark-ups (butchering plus transportation costs, and less the weight
of inedible parts). Anyway, if you sell a pig of 90kg at Php120 per kilo, that translates to Php10,800 gross sale. Less
investment cost of Php7,765, net income is Php3,035.
Split into two between financier and raiser, thats Php1,517 or 19.5% ROI on the part of financier (=1,517/7,765). Note
that labor cost of hog raiser is not accounted for here. Also, water and electricity costs (if any) are usually borne by the
raiser. Php1,517 may seem peanuts to you but %-wise, that is a high ROI. And imagine if you have 10piglets, thats
Php15k in 4 months of passive income, your money (and relatives) working for you. Price per kilo of live pigs tend to
fluctuate with the season, with Christmas season and Fiesta seasons commanding a slightly higher price per kilo given
the higher demand.
- See more at: http://www.investmentjuan01.com/2014/05/how-start-up-piggery-business-model-works-piglets-livestockinvestment-batangas-philippines.html#sthash.rHRtqi7u.dpuf