On saving and food cart success
Can you make millions and earn your financial freedom from running a food cart?
By: Jimbo Owen Gulle | Jun 25, 2012 14:00 pm
His friends don’t believe him, but Angeli Valenzuela swears that he built his present wealth on being a humble food cart franchisee. An architect by profession, Valenzuela owns three Potato Corner outlets—two at the Festival Mall in Alabang, Muntinlupa City and one at Robinson’s East in Cainta, Rizal—while holding down a 9-to-5 job as an operations manager with a top department store chain.
With the combined income of his flavored French fries carts, his paycheck, and several other investments (more on that later), Valenzuela has built a modest nest egg, bought several condominium units, and is ready to jump into his own business of property development using capital he raised by himself.
So how did he amass his wealth? The lessons may be familiar, but Valenzuela’s story is uniquely his own. Here are the highlights:
Save, then be prepared to spend more than your savings
To put up the P250,000 he needed to gain a Potato Corner franchise (this was over a decade ago, in 2001), Valenzuela diligently set aside a portion of his salary for that. “Personal savings, usually you’ll have to start from that,” he says. “Just save up some money. From there and my regular job, I was able to set aside a certain amount of money. Then when I turned 35, I decided I wanted to go into business.”
His savings went to paying the franchise fee, fees for business registration and permits, and the rental deposit for his cart, but Valenzuela—who’s “almost 50” now—cautions aspiring entrepreneurs to be ready to spend more than what’s required.
“For example, if you go into a franchise business, and somebody tells you it just costs P200,000, you can’t think that you’ll spend just P200,000, just the cost of the franchise,” the architect adds. “Sometimes 50 percent or 100 percent of that amount will go to acquiring the franchised store’s location; at the same time you have business registration and some other minor expenses.”
So when someone says a franchise costs just P200,000 “add another P100,000 to P150,000 and that will be your initial cash outlay,” says Valenzuela. Personally, he adds, “I really don’t consider rental expense and deposit as an outlay; it’s money that’s just there, it’s still yours, it’s not spent, it’s just out of your pocket.”
But how exactly did he save up for the business? By putting “small amounts” into a time deposit account, “to get into the habit of setting aside money” that couldn’t be touched or withdrawn instantly, says Valenzuela.
Invest wisely, and set a budget for any venture
Usually, when his friends ask him what’s a good business to put up, “they expect me to tell them or give them a business format or template to start with,” he says. “But I would ask them in turn, ‘Do you have the money now?’ because you need to have money to put up a business,” Valenzuela adds. “So they ask me, ‘how do I save money?’ It’s not easy to save money, but you have to think of innovative ways to save.”