The majority of businesses in the Philippines are small and medium-sized businesses which open up a fantastic opportunity for investors who wish to diversify their portfolios. But how to invest in a small business in the Philippines as a beginner? Today we will be exploring five options for investors who wish to invest in a startup business in the Philippines.
How To Invest In A Small Business In The Philippines
1. Use Angel Investment Platforms
Angel investment platforms have been increasingly popular across South East Asia in recent years, extending to the Philippines. We even covered a full guide on Angel investing due to its increasing popularity. When looking at how to invest in a small business in the Philippines, what is for sure is that investors need to go where entrepreneurs go, including to angel investment platforms.
Most small businesses that use these platforms in the Philippines have already started their business and wish to grow. However, if you are looking to invest in a brand new startup, seed funding in the Philippines would be more suitable than angel investing.
2. Find Entrepreneurs On Social Media
Social media usage in the Philippines is a well-documented subject. At the time of writing, the Philippines is second in the world in terms of total social media usage on average. This opens up fantastic opportunities for entrepreneurs, business owners, and investors that wish to invest in a small business in the Philippines.
Several business groups and entrepreneur groups on platforms such as Reddit and Facebook can be used to find unique business connections. But, naturally, business and investment scams are increasingly popular in the Philippines, so it’s always best to be cautious as an investor.
3. Seek Word Of Mouth
Word of mouth is incredibly powerful in the Philippines, which is certainly true when it comes to business and investment topics. In other words, one of the best ways how to invest in a small business in the Philippines is to network with friends and family on upcoming startups and business investment options.
In my experience, word of mouth in this regard is often highly effective in smaller cities and provinces. But if finding a small business to invest in is not possible through word of mouth, another option includes contacting businesses directly.
4. Contact Small Businesses In The Philippines
During your journey to find small businesses in the Philippines to invest in, you will come across several different types of businesses. One of the best ways to decide which business is right for you is to contact the business directly. However, performing this task may require some careful planning and investigation.
Naturally, it is best to focus on privately operated small businesses where you can speak to the owner directly. It’s often best not to overstep the boundaries during the first discussion, but you may find that after a few attempts, you find a business looking for an investor.
5. Attend Start Up Events
Attending an event is one of the best ways to network in the Philippines. On most occasions, you will find that business seminars in the Philippines are full of entrepreneurs and business owners looking to expand their businesses or launch their startups. However, due to the advancement in technology, another option is available.
This option includes online events. Online events are becoming increasingly popular across the Philippines. For example, as an investor, you could meet a Filipino entrepreneur in 10 different cities, all from 1 online event. The Internet offers several benefits for investors looking to invest in small businesses in the Philippines.
The Process Of Investing In Small Businesses In The Philippines
When investing, there are several steps, but this can depend on what type of business you are investing in. However, below we have covered the process of investing in a small business in the Philippines for beginners.
- 1. Find Your Investment (The Business & Owner)
- 2. Research The Investment
- 3. Make An Investment Proposal (Bussiness Owner)
- 4. Agree On The Terms
- 5. Official Ownership (Shares & Registration)
Each of these large categories can be broken down into several mini steps. For example, the research could include researching the business history, cash flow, industry, market threats, etc.
Investment and business scams are common worldwide, so it’s best to research the investment and complete legally binding documentation before investing any capital.
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