Starting a Business in Rice Retailing or Bigasan

Rice Retailing is a profitable business because rice is the staple food in our country. There are many rice varieties that
consumers can choose from at low cost The preferred varieties for daily meals are white, long grained, and aromatic.
Glutinous or sticky rice (malagkit) are used for native sweets.

Estimated Investment Cost (based on 2009 prices)

A. Basic Equipment

o Rice boxes, 6 pcs – 12,622.50

o Scooper – 250.00
o Pushcart – 600.00
o Weighing scale – 900.00
o Sub-Total – P4,250.00
B. Basic Weekly Supplies (from rice farmers/producers)

o Sinandomeng, 450 kilos @P28.05/kg –   P12,622.50

o Dinurado, 400 kilos    @34.00/kg -13,600.00
o Wag-wag, 350 kilos    @25.50/kg -8,925.00
o Milagrosa, 250 kilos    @25.05/kg -7,012.50
o Long Grain, 350 kilos    @25.50/kg -8.925.00
o NFA Rice. 700 kilos    @21.25/kg -14,875.00
o MalagkH, 50 kilos    @34,00/kg -1,700.00
o Sub-Total – P67,660.00
C. Packaging

o Sando Bags,  3000 pcs  –  P450.00

Estimated total investment cost – P72,360.00
D. Cost of Goods Sold

o Merchandise Inventory Beginning (20%) – P13,622.00

o Add: Purchases (80%) – 54,486.00
o Total Goods Available for Sale – 68,110.00
o Less: Merchandise Inventory, Ending – 13,622.00
o Cost of Goods Sold – P54,488.00
o Add: 15% Mark-up – 8,173.20
o Sales – P62,661.20
Estimated Weekly Income

o Sales – P62,661.20
o Less: Cost of Goods Sold – 54,488.00
o Gross Sales – P8,173.20
o Less Operating Expenses:
o Labor (P200 x 7 days x 1 worker) – 1,400.00
o Water and Electricity (weekly) – 350.00
o Transportation/Delivery – 500.00
Estimated total weekly income – P5,923.20
Assumptions:

o 80% of the items are being replenished weekly.

o 80% of Cost of Goods Purchased is considered sold weekly.
o 20% of the rice remains In the inventory per week.
o 15% is the mark-up per item.
Tips:

o Storage – Bukbok or weevil is a natural enemy of rice because it Is 90% starch. They make rice powdery so make sure the
storage or warehouse is managed properly.
o Observe First-in, First-out Inventory method – Inventory of rice stocks should be kept track. The quality of rice will
deteriorate if the storage exceeds three months.
Registration Requirements
o Business name registration (www.bnrs.dti.gov.ph)
o Mayor’s/Business Permit (check your local municipality/city)
o BIR TIN (www.bir.gov.ph)
o NFA (www.nfa.gov.ph)
Financing Facility
o People’s Credit and Finance Corp (www.pcfc.gov.ph)
o NLDC ([02] 914-7290 to 97)
Technical Assistance (Training and Seminar)
o DOST-STII ([02] 837-2191 to 95, www.stii.dost.gov.ph)
source: dti.gov.ph, photo from untvweb.com