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Business Experience From a Non-Business Minded Guy

Helmet01 · 7 · 6702

Helmet01

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Hi everyone,

I'm here to share my experience in the business that I am in, which is a food kiosk inside a mall.

MY BACKGROUND:
I'm employed, senior operations management level. No experience in business, especially food business. I also have a sideline, earning extra during the weekends. So all in all, my family lives comfortably (but definitely not luxuriously). So why did I bite the bullet and get into the food business? My goal was to stop doing the sideline work, and replace it with passive income. Also, I've always wanted to help people, and so me and my wife started this journey.

THE BUSINESS
It's a lugaw franchise. We serve lugaw variands and sides with drinks. We are currently situated inside an 8-month old mall. The vicinity has been turned into a development area, both having residential and commercial buildings surrounding the place. Moderate foot traffic.

THE GOOD, THE BAD, AND THE UGLY
2017 - We got the idea of franchising a food cart/kiosk, so we went to the Annual Franchise Expo in SMX. We were just shopping around, thinking that "dapat paglabas ko dito may idea na ako sa gagawin or kukuning franchise..."

Next thing you know, we are already signing franchise agreements, paying the fee of Php300,000, and reviewing locations. The franchisor insisted we get the mall location because of the opportunity, because not everyone can operate inside a mall, unless they trust your brand, and your track record. It was an opportunity that we couldn't resist. While it's true that operating inside a mall is a great experience, it has its own complications, and that was something I hope saw then; story of it later. We were scheduled to open in November of 2017. Days have passed, and the mall was not even finished yet. Grand Opening was moved to February...then finally April.

2018 - So we've been reviewing the offer sheet from the mall:
Monthly rent: 30,000
1 Month advance: 33,600
Construction bond: 30,000
6 month deposit: 180,000
Aircon: 3,000
Area maintenance: 3,000
Pest control: 100
Electrical deposit: 2 months theoretical consumption

Business permit expenses: 8,000

(quite a table of expenses, heh? but it did not stop there)

You see, the mall only provides the space, and that's all you're getting. You need to have ducting, electrical, plumbing, smoke detectors, sprinklers, etc. done, so you could be operational (even tiles! for God's sake). Construction will need to be approved by the mall too. And these are just some of the costs that you won't see anywhere.

Be very smart and meticulous in choosing a franchise. Some franchises do not have inventory support, like where you get supplies or food costs. They only give initial inventory that would last for 2 days, and after that, you're on your own. Although our supplies are easily found in the grocery or market, this is still cumbersome for me because I don't have the time to source and look for the cheapest, good quality items.

So before we opened, I was scrambling to complete some of our deficiencies. I was cashing out, looking for kitchen tables, refrigerator, cash box, water filters, disposables, etc. My capital ballooned with another 80,000 including the additional construction (ceiling and ducting is not yet finished as of now).

We started with 3 people, trained for one week on-site. I may have had the worst store-opening experience, but I swear, I got the best people in the business.

And so, the opening day came...

TOTAL COST: 647,000
TOTAL EARNINGS: 0

----To be continued----



julz2006

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Up!
Any update sir?I hope the opening day's been great and it's on its feet by now..and more power to you for taking the plunge and candidly sharing here. :)


scout

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I would really want the TS to give an update on his Food Kiosk experience.. This would help us and others who are in the same boat as him.. I mean clueless on the intricate details of setting up and the hidden cost of a start up business.  considering that his was a Franchise, it does seem like he did all the legwork with very minimal support from the franchiser. Imagine from 300k balloning to more than 600k and counting.


julz2006

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Hi Helmet01! I hope your gamble has paid off. Still waiting for any news regarding your plunge. More Power! :)


Spellstalker

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This thread is very important for anyone aspiring to start a business with no business background. Thanks to the OP for sharing his experience in starting a business. Every entrepreneur should take caution to consider all the hidden costs before embarking on any business venture.


Borat38

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Two probable outcomes to this story:

a) OP's business became a hit and he's so busy he can't post here anymore (Congrats in that case)

or--

b) OP's business died and all his investment and efforts were for naught (Aray!)  :help:


 


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