In order to earn big margins in their small time business ventures, sari-sari store owners are advised to learn proper accounting and financing methods.
During the Prince Warehouse Club Sari-Sari Store Society Festival 2008 held at the Cebu International Convention Center recently, owner Robert Go stressed the need for sari-sari store proprietors to handle their financing well to earn significant margins in their operations.
“During these difficult times, sari-sari store owners need to know how to keep their finances well. They have to work on handling proper inventory of their products,” he said.
In terms of stocks, Go advised sari-sari store owners to purchase fast moving products because customers often buy these products anytime during the day.
“You should always have stocks for basic merchandise such as food and beverage, sardines, noodles, soaps, toothpaste, shampoos, milk and other daily essentials so that your customers will not go somewhere else because if they do, they might no longer come back,” he said.
In terms of finances, Go said that it is very important that proprietors will not include their capital from their daily consumption so that this will keep on rolling and will be distributed back to the business.
“Finance is a very important thing in a business so they need to know how to hold their money. They have to budget their salary for themselves and not include the capital of the store because that is one of the main factors that can dampen the success of the business,” Go pointed out.
As for credits, Go said that store owners should come up with a strategy that will limit abuse.
He said that credit collection should be done during pay day so that borrowers will be able to pay.
“You should impose a credit limit and make sure that they can pay for what you will let them borrow. Another common factor for losses in a sari-sari store venture are credits that are not paid,” he said.
Go also suggested store owners to access micro financing institutions for their capital lending needs and not succumb to the traditional “five-six” lending schemes because it has higher interest rates.
“You should not resort to “five-six” because you get to pay around 20 percent of interest per day and what you earn for a day is sometimes enough only to pay for your credit whereas for micro financing institutions, you get bank rates around 10 to 12 percent per annum or around one percent a month,” Go explained.
Now on its third year, Prince Warehouse Club Sari-Sari Store Society Festival 2008 around 1,500 sari-sari store owners coming from outside Cebu City and as far as Minglanilla, Liloan and Danao took part in the event.
Retail store chain Prince Warehouse Club currently has four branches located in North Reclamation Area, Cebu City, Danao and Minglanilla.
Formed in the 1990s, the store serves over 7, 000 members mostly composed of sari-sari store owners and patrons from the grassroots level of the community.