How to Start an Online Business in the Philippines


For first-time Filipino entrepreneurs, starting an online business in the Philippines is the best option to gain experience in managing an enterprise. It does not require much capital, and the risks associated with running an Internet-based business are manageable. As with all businesses, there is great potential for income, and this directly corresponds with your productivity.

The conditions are perfect if you want to start an online business in the Philippines. In fact, these conditions have significantly maximized the benefits of running an online business:

  1. The Growth of the Internet. The year 2000 was the first jump off point for technology. Accessibility to the Internet grew from 16 Million in 1995 to 304 Million in 2000. Today there are 3.3 Billion people or 45% of the world’s population on the Internet every day.
  1. The Influence of Social Media. 66% of the 3.3 Billion people on the Internet on a daily basis are on some social media platform. Chances are 75% of those people are on Facebook. In a survey by Dimensional Research, 90% of consumers say a positive review influenced their decision to purchase. 44% of those positive reviews are from Facebook.
  1. Business Has Grown Mobile. Since 2014, mobile has been the predominant medium to access the Internet supplanting the PC. Mobile devices particularly the smartphone accounts for 60% of online traffic. It is estimated that there will be 6.1 Billion smartphones by 2020.
  1. Convenience Carries a Premium. In the local scene, Filipinos are getting frustrated with the government’s inability to solve the traffic situation. Businesses lose an estimated Php3 Billion per day due to traffic. Online solutions are becoming more viable to offset the drop in productivity.
  1. This Is The Trend. In the United States, it is estimated that 30% to 45% of the workforce is composed of home-based workers. According to Bejan Douraghy, CEO of Artisan Talent, 33% of their roster is made up of freelancers. Bejan estimates this number will go up to 50% by 2020.

All of these factors and data validate the viability of starting an online business in the Philippines. Demand for online business is fueled by need and influenced by the shift to the mobile lifestyle by consumers. It presents a more efficient avenue for running a business and connecting with customers.

Small business owners are characterized as having limited sources of funding. Managing an online business presents a low-cost alternative for owning a business but carries tremendous potential for high earnings.

Did you know that an online business owner earned Php7.5 Million in one year? That is Php625,000 a month for 12 months!

How many regular office jobs do you know that will pay you that kind of money in total compensation for one year?

Comparatively, an online business owner generates higher net income than a regular full time employee or FTE assuming both workers earn the same amount of money per month:


Item Online Business FTE
Gross Income 18,000 18,000
Deductions 1,800 5,400
Direct Costs 1,300 6,600
Total Expenses: (3,100) (12,000)
Net Income: 14,900 6,000


The reality is an online business can earn higher gross income than an FTE because he/she can manage as many clients as their schedule allows. Secondly, an online business is open 24/7. It doesn’t close shop, unlike a brick and mortar establishment.

Have I stroked the entrepreneurial fire within you? Now, let’s begin.

How to Start an Online Business in the Philippines

1. Identify Your Business Idea

Every business starts out with an idea, and the root of every idea is an inspiration.

Many entrepreneurs find ideas during moments of inspiration but somehow fail to turn these into reality. When inspiration hits you, capture the moment and transpose it to paper. Don’t stop at one idea. If inspiration hits you like a tsunami, write down as many ideas as you can think of.

The next step is to pinpoint the most viable business idea. Your criteria should be as follows:

  • Level of interest
  • Level of expertise
  • Level of experience

Keep in mind that when starting a business, you are not doing this to service yourself but a target market. In other words, just because you like it does not mean your target market will.

Once you have narrowed down your list of business ideas, do Keyword Research to make your final selection. It will give you an idea of how your target market views your business ideas.

Google Adwords is an effective tool for keyword research. Simply type in the business idea and check the keywords that are highly competitive. Choose the less competitive keywords to give yourself a better chance of positioning yourself in the market.

Keyword research will help you identify the product and the brand for your business. Make your final selection and commit to focusing your energies on this concept moving forward.

2. Conduct a Project Study

One of the biggest mistakes entrepreneurs makes when they identify a business idea is not conducting a project study.

They inevitably lull themselves into thinking they just found the “next great thing.” In business, there are no “next great things” or “sure things” for the matter. You have to dedicate time and resources to work on your business idea to make it grow.

But how would you know how to develop your business idea without any frame of reference? The frame of reference is the Business Plan, and the basis for the Business Plan is the Project Study.

In fact, do not proceed with the business idea if the project study indicates a high risk – low reward scenario. Although a project study is theoretical, a well-made one is not far from actual performance. A project study will paint a picture of your business idea and how it would come together.

A project study consists of the following:

  • Market Study – Determines demand for the product or service.
  • Marketing Study- Determines how to reach out to reach out to target market.
  • Feasibility Study- Determines profitability and how to capitalize your business idea.

If you don’t know how to make a project study, outsource it to someone who can. The investment will be worth it.

3. Create a Business Plan

Once you have completed your project study and the numbers, present your idea as a feasible, viable venture, use the data to create a Business Plan.

The Business Plan serves some valuable purposes:

Blueprint for your business. Everything that you need to do to get your business off the ground should be in the Business Plan. The Business Plan should cover from Pre-Planning to Pre-Operating to Official Launch and Maintenance period.

The basis for securing third party financing. If you feel you would not be able to sustain operations from internally generated revenues, then third party financing should be an option. You can secure third party financing through the following means:

  • Bank business loan
  • Venture capital
  • Investors
  • Accelerators
  • Friends and Family

These are potential sources of third party funding. As an investment, they would like to know how you plan to manage and grow their money. Some of the accelerators, investors and perhaps friends and family may want participation in the business to ensure their investment.

The Business Plan will be the basis for their decision to support your venture or not.

Reflects the evolution of your business. Always keep in mind that while the Business Plan is your blueprint, it should never be set in stone. It must remain flexible and open to revision.

As you go through the daily course of getting your business off the ground or maintaining it, changes will be implemented in the original plan. The Business Plan will serve to chronicle the evolution of your business as it grows.

4. Develop Your Brand

Another mistake first-time entrepreneurs make is the failure to build their brand from the get-go. They believe the brand building should only come in when the business gains traction.

The brand represents who you are; what the business is, and it encapsulates your purpose. Contrary to what most people think, building a brand takes time. You have to consider many areas from the logo, the tagline and the messaging and these all have to be aligned with the infrastructure of your business.

Your domain name, website and social media accounts have to be brought into line with your brand. All of these will take time and go through a process of trial and error.

But a successful branding strategy will help your business find and maintain a strong position in the industry. It will create immediate recall and association with your product or service.

If you have difficulty conceptualizing branding strategies, contract the services of a marketing consultant or graphics designer. They can run studies on your branding strategy and give you sample designs on your logo.

5. Register Your Business

One of the most frequently asked questions in my seminars on entrepreneurship is “Should I register my online business?”

My answer is “Yes” for the simple that reason that it establishes your business as a legitimate entity in the Philippines; a legal presence that is allowed by law to solicit business for the purpose of generating income.

Related: 5 Essential Business Permits and Licenses in the Philippines

If you are planning to set up a single proprietorship or partnership, you can register online with the Department of Trade and Industry or DTI. If you plan to set up a corporation, you have to register with the Securities and Exchange Commission or SEC.

As a proprietorship, the setup costs are lower, but your liability extends to your personal assets. If your business should go bankrupt, your creditors can lay claim to your personal assets. As a corporation, the setup costs are higher, but its liabilities only extend to some assets.

I would recommend setting up a corporation as most suppliers tend to give them preferential treatment. Prospective clients are also more inclined to deal with corporations because it connotes scale and size.

6. Invest in a Website

Please take note that the keyword is “Invest”. It may seem incredulous to suggest “Invest in a website” to someone who wants to put up an online business.

After all, the website is your online business address. This is the place where interested customers will find you and hopefully transact. But not many people believe in the value of a website.

Some online-based entrepreneurs think they can manage only with a Facebook account. Social media and other online tools are utilized to create inbound traffic or generate leads. Where do you suppose this traffic or leads will be directed?

The website is where leads are converted into paying customers. But not all websites are created equal. You cannot just set up any ordinary website. You must make sure the website has the following features:

  • Mobile-responsive
  • Fast download speed
  • Accessible via multi-browsers
  • Fully functioning social sharing buttons
  • Relevant content

If you are setting up an e-commerce website, you must have a products and services page and an ordering page. Your images should have the highest resolution with a built-in zoom feature.

You have to open a Merchant Account to accept payment, and you should offer multiple options for customers to pay for the items.

Your website is your primary source of income. It’s the central hub of your business. You have to ensure that it is accessible, fast and convenient for potential customers to use.

The online business industry can be very competitive. Given the size and density of the Internet, consumers have many options to consider for meeting their needs.

There is a direct correlation between page loading time and the rate of page abandonment. Your website should load within 6 to 10 seconds otherwise your risk the consumer clicking out of your website.

Quite many prospective online entrepreneurs are hesitant to invest in a website thinking they can get by with the WordPress website templates. If you are serious about establishing a successful online business, don’t go cheap on your website.

Contract a professional website designer who can design and program a website that would be ideal for your business. If it is difficult for you to find one, then, get my team work on it at the most inexpensive price as possible.

A professional web designer has the experience and the expertise to customize a look and feel for your website that is aligned with your branding strategy.

7. Find Suppliers

This section is for the online entrepreneur who plans to put up an e-commerce website.

If you plan to sell tangible products for sale online, you should find credible suppliers who can promptly deliver quality items. At the same time, you should find the best prices so you can offer competitive pricing to your customers without compromising your profit margin.

The best approach would be to identify the manufacturers of the products and ask them to recommend you to their authorized suppliers.

This is where being registered as a corporation will pay immediate dividends.

Manufacturers and suppliers are very particular of potential distributors of their products. They want to maintain an exclusive list which can easily be managed and controlled. Many of these suppliers and manufacturers will only deal with corporations.

You will be asked to submit business papers:

  • Articles of Incorporation
  • Proof of Business Registration
  • Tax Identification Number
  • 6 Months Financial Statements
  • 6 Months Bank Statements
  • 2 Years Tax Returns

If you are a new online business and do not have a track record, you can show statements from another business you won or statements from personal income.

You should also work out the system of delivery of products with your supplier.

8. Open Social Media Accounts

The statistics are overwhelmingly in favor of why you should run online campaigns via social media. Here are just a few of them:

  • 75% of businesses say Facebook is crucial to their marketing success.
  • Social Media has 100% higher lead-to-close rate than outbound marketing.
  • 83% of marketers say social media is crucial to their marketing success.
  • B2B and B2C businesses respectively acquired 77% and 72% of their clients from Facebook.
  • 93% of marketers use social media for business.

I would define social media as “virtual word of mouth”. Ask yourself how often have you been compelled to action by a friend’s post. But there is more to social media than sharing an image of your favorite cheesecake or rant about Metro Manila’s worsening traffic.

Social media can be used to bridge prospective customers to your online business. Here are a few tips for you to consider:

  • Identify three social media networks you can use for your business and create company pages. I would suggest Twitter for market acquisition, Facebook for viral content and LinkedIn for networking. If you are managing an e-commerce website, use Pinterest and Instagram instead of LinkedIn.
  • Create a social media posting schedule.
  • Blog at least 1-2 times a week with each blog a minimum of 1,600 words. Distribute the blog in social media and link it to your website.

A final word on social media is to be careful about what you post on your personal social media page. Prospective clients may visit your personal account to get an idea of who you are outside business. By all means be yourself but be mindful of what you post.

9. Develop Your Value Chain

Once you have set up your website, signed up your suppliers and initiated your online marketing campaign, it is time to put everything together and develop your value chain.

The value chain is composed of all the components that will ensure potential customers will have a pleasant and convenient experience exploring your online business.

Review your management and operational systems and determine if these are sufficient to support your business. Answer these following questions:

  • Is my website fully supported?
  • What should I do if my website becomes inaccessible?
  • Can I provide facilities to respond to inbound inquiries?
  • Can I deliver content as scheduled?
  • Do I have enough personnel to accommodate expected demand?
  • Should I have backup suppliers as a contingency?
  • Do I have the basic online systems in place to ensure fast, easy and convenient communication?

It is always better to be over-prepared than unprepared. If you believe you need to hire additional personnel, identify the areas and the skills, then contract the services. You can hire virtual assistants and freelancers if you are on a tight budget.

Ask your website designer to go on retention for the first three months after the website has been launched. Instruct the web designer to monitor the performance of the website on a daily basis.

It is expected that you will spend more during your first few months of the business as you are still fine-tuning the system.

10. Market and Promote Your Business

If I mention the names Mark Zuckerberg, Steve Jobs, Sir Richard Branson, Jack Ma, Roy Disney, Col. Sanders and Howard Schultz many of you will quickly identify the companies they respectively founded.

This is because these gentlemen actively marketed and promoted their businesses. Yes they had marketing departments, content writers, and hired ad agencies but the founders were always front and center of their business.

No one else can represent your online business except you. There should be no distinction between who you are and what your business is. You are your business, and your business is you. Embrace being its face!

In your website, your face has to be there. Give customers a glimpse of who you are on your social media accounts. Let people know the person they may transact with. A brand is nothing but a crafted symbol unless consumers know the person behind the brand. No one wants to deal with inanimate objects.

Related: Top 10 Key Attributes of an Entrepreneur to Succeed

Actively promote your online business in social media, community blog sites and through traditional outlets such as business forums, trade shows, and networking events.

Marketing and promotion are a never ending activity. As your business grows and gains traction, you should work and enhance its visibility.

Start Your Online Business Today

There is no better time to start an online business in the Philippines than today. Do not be dissuaded by people who tell you “Don’t start your online business yet; wait for the first six months of the new administration.”

Yes, we have a new President and whether you voted for him or not is irrelevant to your business. He will have no bearing on whether you succeed or fail. And that is the advantage of an online business; you are catering to a global market. You are catering to a global market that wants to streamline costs without compromising quality.

If you think about it, an online business is probably the only business model that is recession-proof!

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