This Blog Post is for people which are interested to open a Restaurant or Pub in the Philippines.
At first a warning – if you have never worked a substantial time in this business, stop dreaming and better forget about it. because if you have not done that in your home country, how much more difficult it will be in a foreign place?
Having said that, I will keep it short and make a small list for more seasoned entrepreneurs.
1.) Know your target clients !
Since Gastronomy (with the exception of multi million $ ventures, but those do not need this blog) is a highly personalized business in the Philippines (and not only there) you may have to think about yourself and the people you can and want to attract. This is important also in the hindsight, that you may feel uncomfortable in the surrounding of wealthy or intellectual clients and vice versa. Although Filipinos are very friendly and welcoming by nature, they still seek the companionship of “equals”, so one needs to do a little “soul search”. The good news is, that Filipinos are not too discriminating in that matter,unlike their western counterparts, but still. It is also important that your wife (99% of Restaurant Business is licensed by the wife of a westerner and of that most have active participation in the business, if not playing a major role) fits also into the “target client” group. If your wife comes from a provincial background with a simple education, she will not feel comfortable among the “upper class” and vice versa ! And lower class customers don’t fill your cash register! In the harsh reality of this business you then end up with foreigners and their spouses as only clients. A prospective which is not very promising due to the huge competition in this market niche!
2.) Once you have established that, you can go on to the next step, the location !
Logically the location needs to be adjusted to your target clients. Go where your targets live or frequent. This can be near their residential areas or near the favourite ‘hang out spots”. The latter case is a sure bet, but often also the more expensive option. Going near the residential area (High class Subdivisions etc.) is sometimes good, but more often one one will fail, because when people “go out”, they often do not just want to go to one spot, but rather go a bit of a number of outing, i.e. Restaurant, then a pub or disco, etc. So if you are a “lone spot”, you may stay lone, or require a lot of marketing (flyers etc.). A good take out and delivery/catering orientation can help then.
Good, but expensive bet would be to open in one of the “Shopping Malls” in big cities, but one has to compete with the often very organized Franchise Places, (TGI Fridays, Moons, Lemongrass etc.) which dominate there. Do not think you are better then them, just because they use franchised “prefab” diners and the like, for some unknown reasons people often do not seem to care about that. On the other hand, all those places started as a single outlet as well…good luck.
3.) Which Product you want to sell?
As mentioned in the opening, you need a strong professional background in this business. if you have worked as a Chef before or owned a certain Restaurant, you may want to stick to those products. But beware- adjust your product to the local eating habbits and do not try to be “over authentic” as it may not work at all. The Reason for this is that the vast majority of Filipinos are more accustomed to the US variety of foods, meaning, ‘Italian” or “French” is not really the original, but a US derivation. (The ‘Hawaian” or “Ground meat” Pizza is an example, in Italy one would never find pineapple or ‘Ragout” on a Pizza ever ! Or stuffed crust and other deviations come from the land of the free) Other problems may occur that some Northern hemisphere food may actually be ‘too heavy” for the tropical climate, and your patrons may end up being over indulged and feel completely “stuffed”, which is not desirable on the long run. Although in the Philippines itself there are a lot of “heavy” foods, try to keep it light.
Also- the Palate changes in the tropical environment, as well as other factors, so food prepared here may taste completely different, despite of actually using the exact same ingredients. This has to do with humidity, over exposure of your nose to strong smells, body need of more liquids and more.
So test a lot and be critical.
Last, but not least, if you keep importing every single ingredient, you may end up with too high production costs, so try to think about “fusions” and be creative. Stubbornly sticking to “your” cuisine does not help at all. And if you think about it, do Thais or Indians in London or Los Angeles cook exactly as (spicy) as at home? (No, they don’t and they don’t even eat that spicy themselves after a while of living outside of their own country)
4.) If you are sure about the Who, Where and What, you can plan for the “How and Which”. Most likely you will choose a “Themed” place, like an “English Pub“, “Italian Pizzeria” or a “German Restaurant”
Tip- Stay with the clichés people have about those places. There is no use in convincing your patrons that Germany consist of 15 different states, each unique in its cuisine and cultural heritage (or what little is left of it in an Ultra modern High Tech multi cultured nation), they expect “Lederhosen” and ” Beer Music” as well as a kind of rustic “Alpine environment”. Go with it and do not be stubborn. Similar with the food, they expect German sausages and Sauerkraut, even though those foods do not exist in real German Restaurants except for Bavaria, where sausages are served in Pubs as beer snacks. (Sausages are actually German street food! In fact, a German cook (who trains 3 years before becoming a “young cook”, Chef is after 5 years further education and exam, never even learns how to “cook” sausages, as it is not part of the curriculum.)
Same with Italian Restaurants, one CAN try to present the fantastic specialities of his region, but one MUST also offer the all time ‘US Italian” favourites, even when it “hurts” the heritage feelings. (Most US Italian food originates from Sicily, and Sicily is not Italy according to the other Italians) One has a bit more freedom in the decoration though, at least your staff don’t has to run around in short leather pants. 🙂
And so on, try to stick to the clichés and you be fine. if you are still too “proud” to give up your heritage, then don’t name it a “”German, Italian, English” Restaurant or Pub, but call it ” Schleswig Holsteiner”, “Lombardian” or “Walsh” Restaurant and see how far you get with it. With a few million spent in marketing you may open a new trend 🙂
5.) So you got your target customers, your location, your product, your decoration and feel ready to open…what did you forgot?
The Customers, or better the base !!
No place has ever opened from scratch without people and was successful with the exemption of diners in a small US town, but even this already HAD the customers. In a large city one has to compete with many other places and therefore one has to build up a customer base. This can be done with several ways:
a.) Friends and acquaintances. You may have already a lot of buddies from your new city, and you have most likely met them in the watering holes on the weekends. So you can engage them to visit and promote. be aware that you may loose many of them, if you also open a watering hole, as you take away clients from the original place and most likely their loyalty will remain to the original pub…(you been warned!) With a Restaurant this is less likely to happen though.
Your wives friends and relatives (see how point 1 now plays a role). This can be your major sources, as Filipinos are your #1 target customers in any case. To base solely on foreigners is not a good idea
b.)If you are a gastronome, you most likely are already a member (or former) of a civic club at home, such as Rotary, Lions, Kiwanis and others. If not join them ! But be also active in their civic activities, joining them for the sole purpose of advertising your place will not work very well. You can also offer them a cheap or free venue for their meetings, plan that when you build your business. Function rooms are a hot and desired item in the Philippines anyway!
c.) Advertise, promote, go around yourself to waterholes and create new friendships and acquaintances. Go to public gatherings such as promotion events, openings of hotels etc, and distribute your calling cards. if this isn’t for you (too shy maybe?) then don’t open a Business.
d.) Unneccessary to mention, but you must also always promote and create new gimmicks, even the most trivial “buy one,take one” helps. Have a space on your building where you place a streamer weekly with your latest promo. Since those cost now almost nothing at all (php 10 per sq/ft) and can be created even on a smartphone App, it would be silly NOT to use them. Don’t display them too long, you can always rotate them.
It works on the long run, guaranteed!
e.) other events such as Karaoke Contest, Live Bands etc may work initially, but be careful not to turn into a “multipurpose place” without concept, as they don’t really function on the long run. Better create a reliable and constant Image.
f.) If all seemed to have failed(and you will need a year to get conclusions) you still will see some things which sell well, some promos which worked and some customers which were loyal. Refocus on those and concentrate your efforts on them/those. If you dreamed about having the number one cocktails venue for wealthy artists, but ended up with a load crowd of Yuppie beer guzzlers, then be happy. At least you make money, others don’t. If you have good loyal paying customers, you can even carefully and discreet involve them what else they would like and maybe attract others, but don’t change a running system too much.
However, the decisions and choice are all yours, but one thing you will always need :
Enough money to sustain the fixed costs for 1 year (Rentals, Salaries, Power etc.) if you do not have or can finance this, never ever go into any business.