Grow Your Business

In business, your target market is everything. You can either serve an existing market or create a product or service that will, in turn, create a new one. You may not have to look very far, however, to find a viable market.

Requirement: visibility

For Red Hanger, a laundry shop located on Vito Cruz Extension in Makati City, the target market was clear from the get-go. “It was actually my brother-in-law who found this place,” says Red Hanger’s Christine Dee, referring to their 50 square meter space fronting a condominium.

“It was ideal for a laundry business because it’s within a residential area. Plus, it’s along the main road. It’s visible not only to the condominium residents but also to the people who pass by the road on their way to work or going home.”

Noting the importance of location for this type of business, Dee says: “This is the first step in making it work—people need to see where you are for your marketing efforts to bear results.”

The venture became a family event with Dee’s siblings, parents, and brother-in-law pitching in to form the company. With P1 million in starting capital, Red Hanger opened in 2005 with eight washing and drying machines, a renovated shop with a full inventory, and four laundry attendants working seven days a week.

“Our main customers are yuppies and expats who live across the street in the condominium,”  says Dee. “However, since we have a pick-up and delivery service, we have been able to expand our clientele to people living in the Makati central business district. We also have several corporate accounts, and among them, schools.”

Red Hanger washes about 4,000 to 5,000 kilos of clothes a month—which translates to more than P120,000 in monthly sales with their per-kilo laundry charge of P33.

To foster repeat business from her customers, Dee strives to make her services cost-effective for them. “For example, we buy back the hangers that our customers have accumulated from doing laundry with us. We help save the environment by recycling the hangers, and it also saves our customers money because we credit it to their bill. Other than that, we have the usual free kilo of clothes on your birthday and customer-loyalty card.”

In similar fashion, Buck Saver Mini Grocery planted itself right within its target community, a low-cost housing subdivision in San Mateo, Rizal. The 40 sq m community grocery owned by Lionel Javier actually started as a course requirement of his Entrepreneurial Management program at the University of Asia and the Pacific where he is student.

“Since I already had some experience in running a small sari-sari store when I was young, I chose to set up a mini-grocery,” says Javier, even if he initially did not have a specific market in mind.

At that time, Javier would accompany his father to San Mateo, where the latter was considering buying a piece of property. It was then that Javier saw his market. “The subdivision we visited had around 840 low-cost housing units, and no grocery store in sight,” he says.

“Many of the people who live there have at least one parent who is an overseas Filipino worker. They have the money, but you can see that many of them don’t own a car. It would then be difficult for them to travel long distances to do their grocery shopping.”

Javier found out that the nearest grocery store was about three kilometers away from the main gate of the subdivision. “A tricycle ride costs about P40 to get to the grocery—that’s just one way. But what if you had a lot of things to buy? Hassle, ‘di ba? (Difficult, right?),” he recalls thinking back then. “So I thought of putting up a small grocery inside the village where the residents could buy their groceries with ease.”

Using capital borrowed from his parents, Javier bought a two-story 70 square meter house located just a few meters from the main gate, and converted the first floor into what would become Buck Saver Mini Grocery. He spent about P200,000 for his initial inventory, but the cost of the house and renovating it added up to around P1 million. The store opened in November 2010.

“Currently, my target market is all 840 houses in the subdivision,” says Javier. “But I’m planning to expand my business by having a delivery service to serve the other subdivisions in the area.”

Noting that his closest rivals are the small sari-sari stores in the area, Javier has dedicated a small corner in his grocery that operates like a sari-sari store. Here, people can buy items sari-sari style: cigarettes can be bought per stick, shampoo per sachet, etc. Buck Saver also closes later than most of these small neighborhood stores.

The young entrepreneur is also very careful when it comes to pricing his goods, since his market is very price-sensitive. “Even if you’re just 25 centavos more expensive than other stores, they will not go to you,” he says. “I have customers who come from outside the subdivision because they know that I sell grocery items at very affordable prices.”

Residential areas like subdivisions and condominiums aren’t the only communities your business can target. Try these areas of opportunity:

> Schools

> Offices

> Tourist spots

> Transport terminals

> Sports venues