February 9, 2008: I posted this entry on the Living in Cebu Forum:

"My girlfriend's family lives in a rural part of Carcar (South Cebu.) Her father is a tuba gatherer, climbing trees to collect the sweet palm wine produced from the sap of coconut trees. At 41 he's starting to have some health problems and I can see it's time for him to find another way to earn a living. Climbing trees is a young man's job.
So, I'm thinking about helping him and his wife to start a small business. Maximum capitalization P40,000 ($1 dollar = P40), hopefully less. They are poorly-educated but reliable folks.
The usual possibilities include motorcycle driver, sari-sari store, shell-jewelry production, candle-making, carenderia, knife-sharpening, shoe-repair, home food production, vendor, etc. etc.
Suggestions? Advance thanks.

Rodelio Navasquez pours fresh tuba from a sogong into a metal can while his wife Jocelyn holds a strainer to collect contaminants.

Rodelio Navasquez


February 10, 2008: I spent the afternoon in Carcar with Honeymae and her parents, Rodelio and Jocelyn Navasquez. I had given them the assignment of coming up with five business ideas, and here's what they decided on:
1. Sari-sari store at home.
2. Sari-sari store at the market.
3. Baking and selling fancy cakes.
4. Piggery.
5. Carenderia.
We discussed each idea at length. Their first choice is #2, sari-sari store at the market, which would be at "Parking" near the rotunda in Carcar. We went down to the market for a look, and although there were a few locked-up stalls which appeared unoccupied, other shop-keepers said there was nothing available at this time. The market office was closed (of course.) They will need to find out the inside story on how to get a market stall: getting on a waiting list; or "greasing a few palms" would be my guess.
This time I gave them the assignment of coming up with a complete business plan for each idea that they are serious about: concept, location, capitalization requirements down to the peso, staffing and transportation requirements, and how they plan to survive until income surpasses expenses. I told them I will capitalize their idea if I like the plan they eventually devise, but if and only if. They said that sounds reasonable.


Feb 28: I went to Carcar with Honeymae again this past weekend and her parents presented their completed business proposal. Their 'final' proposal is to build a small sari-sari store, attached to their existing house on land they own. The proposed building will have a six-foot by eight-foot footprint, with waist-high hollow-block walls, then upper coco-lumber walls with a tin ("sin") roof. They consulted with a carpenter on building materials, whom they want to hire for the construction (Rodelio will be his 'laborer'.)
All construction materials are to be purchased in Carcar. They also plan to buy their initial and then replenishment stock in Carcar, as they say that sari-sari goods can be sold for enough profit to justify the slightly higher costs of buying goods there versus coming all the way to Cebu City to buy wholesale.
(At the bottom of the page are links to downloadable spreadsheets showing the original proposals for construction and stocking of their sari-sari store.).


March 2, 2008: We went to Carcar and delivered construction funds for the sari-sari store:
P15,345 Materials
P1500 Carpenter, 1 week
P655 Transport of materials
P17,500 Total
It was a funny scene: I handed the money over to Jocelyn and had her count the bills. No sooner was that completed than she and Rodelio started getting ready to go to the store to buy the materials. This was 6:30pm. I suggested that it would be better to wait for daylight so they could inspect the materials, esp. picking out clear, straight coco lumber. OH NO... lola had told them they have to build the store on March 3 (tomorrow), a propitious day. Buy tonight!


March 2: The Sari-sari is gonna be... RIGHT HERE.

Sarisari location


March 5, 2008: I went to Carcar alone to take pictures of the sarisari-construction-in-progess. Wow, very fast: they bought construction materials on Monday, put up a wooden frame and roof Tuesday, then today Wednesday they already finished building two-waist-high hollow-block walls by the time I arrived at noon.
I did my token part by carrying hollow-blocks for the next pieces of wall, and helped to dig a shallow trench for a cement footing under the walls. By the time I leave at 4pm, the four walls are almost complete.
Tomorrow, Thursday, they will build the plywood upper walls and then start a door.


March 5: Framing is finished and two walls are up.

Framing is finished


March 5: Jocelyn, Rodelio and son Hesrael.

Family with their new building


March 5: Carpintero John.

Carpintero John


March 8: The store is almost finished, so we went down to Carcar again to deliver funds for stocking. We also brought along a bookkeeper, Gigi, to give the family a short tutorial on simple bookkeeping. I returned home to Cebu City in the evening, but Honeymae stayed in Carcar to help her parents buy stock the next day so they could open the store.


March 8: Rodelio, Jocelyn, ChrisMark and Honeymae.

Sarisari is almost finished


March 8: Carpenter John finishing the floor.

Carpenter John finishing the floor


March 8: Gigi gives a bookkeeping tutorial.

Bookkeeping tutorial


March 9: Honeymae says they all got up early and went down to the 'Parking' downtown market to buy stocks. They spent almost P19,000: 50 Kg sacks of rice, corn, and gamefeeds; cases of beer and soft drinks; and quantities of canned goods, junkfoods (snacks), shampoo, cigarettes and even a few medications. They hired motorcycle drivers from the market to haul everything back to the house, and by the time they started carrying stocks inside the sari-sari store, customers were already asking for cigarettes, etc. So, Sunday night they officially opened for business.


March 21: We returned to Carcar again to spend Holy Thursday night with Honeymae's family, then hung out at the house during Good Friday.
Everything seems to be going fine. Honeymae's mom Jocelyn gets up at 5am to clean the house and make breakfast, then works in the little store all day, and finally turns the sari-sari lights off at about 11pm. A very long day, but she seems happy to be running her own store.
After checking in with Jocelyn, I asked to look at the books. They have documented every single sale to date, from March 9 up to yesterday, March 20, which covers about 20 pages in the 8-column ledger: a lot of writing. They have written down every sold items name, unit price, selling price, and profit. But interestingly, they never calculated the daily profit for a single day since they have opened. So I asked Honeymae to total up the profits for the first seven days of operation. This took her about two hours and here are the results:

March 9   Total sales P678, Profit P118
March 10 Total sales P670, Profit P132
March 11 Total sales P471, Profit P107
March 12 Total sales P644, Profit P115
March 13 Total sales P560, Profit P122
March 14 Total sales P914, Profit P142
March 15 Total sales P959, Profit P44
First week Total sales P4296, Profit P911

I think this represents a markup of 21%. Much higher than a grocery or convenience store in the US, but actually lower than nearby sari-sari stores in Carcar.
We showed these numbers to Jocelyn and asked if the information is useful: "Sure."
I explained that knowing the profit each day would allow her to determine exactly how much she can take out for family living expenses. Profit for the week was P911, divided by seven equals P130, thus:
Taking P150 per day would result in diminishing the stock;
Taking P100 per day would result in increasing the stock;
Taking P130 per day would be an-even sum game.

She easily grasped this but was actually ahead of me. They have until now only taken out a couple kilos of rice and a few snacks from the store, for a total value of P137; while the rest of the sales income has been put right back into buying more stock. So they are already 'growing their stock.'

I asked about other expenses: paying for transport of stocks from the market, and the electricity for the refrigerator and overhead light fixture. The answer is, they are making ice and ice candy for sale, and all the profit from these has been going into a small jar just for electric bills. They already earned enough to pay one electric bill.

So I'm pretty satisfied that the sari-sari store is off to a good start. I'm sure there will be plenty of problems, but so far they're doing a great job.


I suppose not a single leaf falls in the forest without ramifications. Since Jocelyn and Rodelio opened their little sari-sari store, there's been fallout in the neighborhood: selosa (jealousy), libak (back-biting) and crab mentality (pulling down of successful achievers):
There are a few other, very small sari-sari stores nearby, and the owners have reacted negatively to the opening of Jocelyn and Rodelio's store. According to Honeymae, the other stores were opened by resorting to traditional Philippine 'five/six' loans (borrow P5, repay P6 within a month = 16% monthly interest) and they generally need to sell at 40 to 50 percent markup in order to meet their loan repayment obligations. So, the neighbor stores are jealous about the much lower markup at the Navasquez sari-sari.
One of the neighbors also wanted to buy the used refrigerator that Jocelyn bought; but the neighbor was only offering to buy it on credit whereas Jocelyn, the successful buyer, offered the seller cash. The losing bidder is reportedly resentful.
So even though this isn't exactly a case of Wal-Mart coming in and undercutting all the mom-and-pop stores in town to drive them out of business, that's probably exactly how the neighbors see it. Every act in the universe has consequences, and I guess time will tell how all this plays out.


March 21: Sari-sari customer at the window.

Customer at the window



1. My expenditures on the project:

  • P7345 Construction materials
  • P1000 Carpenter 1 week
  • P8000 Refrigerator
  • P560 Calculator and office supplies
  • P320 Bookkeeping instruction
  • P19360 Stocking capital
  • P270 Transport stocks from market
  • P725 Scale (for weighing rice, maiz, gamefeeds)
  • P4000 Capital reserve
  • P41,580 Total (US $1,040)

2. Construction Proposal   (spreadsheet with original construction proposal)


3. Stocking Proposal   (spreadsheet with original stocking proposal)


October Update

October 18, 2008: Honey Me and I visited her family in Carcar, my first visit in about five months. It's obvious the store is not doing well: at my last visit in April, the little store was jammed with sacks of rice, fighter pellets, canned goods and bottled drinks. Now the sacks of grain are gone and there are thin supplies of junk foods, soft drinks and personal care items.
One of the big problems is that due to the sagging economy in Carcar, the income from Rodelio's (Honey Me's dad) work as a tuba-gatherer has plummeted from P200 per day to around P50 per day (tuba drinkers have cut back on consumption); so the family is now extracting most of their living expenses from the store, thus consuming their re-stocking capital. I mostly think Honey Me’s mom has done a good job, but extracting daily living expenses from the tiny store makes it non-viable as a stand-alone solution. So, I need to decide whether to intervene and help them out more.


October 18: Honey Me, Jocelyn and ChrisMark at the sari-sari.

Honey Me, Jocelyn and ChrisMark


November 12: Making a decision

As above, the store is not doing well, it's pretty empty. I've been thinking a lot about whether I should intervene, and if so, how. After several discussions with the family and in an Internet discusssion forum (Living in Cebu Forum) I've finally decided to buy them a motorcycle. The family thinks a bike would make a big financial difference:
1. Carry two children (AprilRose and ChrisMark) to and from school every day (savings: P40/day);
2. Rent the bike out to a driver six days a week to earn a steady income (projected income: P100/day);
3. Errands and delivery of stocks to the sari-sari store one day a week (saving P100 or more per week.)


November 18: Bought a motorcycle

November 18, 2008: I bought the family a motorcycle. I was sick today so I couldn't go to Carcar to help, so I gave the money to Honey Mae and she went with her dad to buy it.
Honda Wave 100cc, 2007 model, 13,000 km on the odometer, Price P31,000.
Registration: P1,900, at Carcar LTO office.
Purchased from a Carcar policeman, who supposedly was in a rush to sell, to raise money for an upcoming fiesta.
The bike according to Honey Mae is in excellent condition. I'm looking forward to seeing it.


November 21: Re-capitalizing of sari-sari

As noted above, the store is not doing well and according to Homey Mae is virtually empty of stock. I sent down P10,000 to re-stock the store. This is less than the original stocking capitalization in March which totalled P19,360, but I figure with the additional daily income from renting the motorcycle they won't be so tempted to "consume the principal" (store stocks.)


Christmas Visit

December 25, 2008: Honey Me and I went to Carcar on Christmas Eve, then spent the night. Next morning I sat and watched the kids line up to buy their Christmas morning snacks and get free gifts from Jocelyn.



I finally got to see the motorcycle. This is Beboy, who has been driving the bike on a daily contract with the Navasquez family. The arrangement is that he shares his daily income 50/50.
For the past ten days of driving he has claimed a daily income of P100 from customers, and the family has thus been getting P50 per day from him.


January 2009 Update.

January 31, 2009: The family had a misunderstanding with Beboy: he reportedly broke one of the rear-view mirrors on the bike and then didn't mention it to the family. As a consequence he was fired.
So, Honey Mae's brother Hesrael has taken over driving. The financial arrangement is 25/75: Hesrael is keeping 25% of each day's receipts, and then his mom gets the remaining 75%.