10 Questions to Ask Yourself Before Starting a Bigasan Business

Starting a bigasan (rice retailing) business may seem simple at first—after all, rice is a staple food for every Filipino household. But behind the steady demand lies a complex business model defined by thin profit margins, high logistics costs, and shifting government regulations.

Before diving in, entrepreneurs must assess whether they’re ready to manage the realities of a low-margin, high-volume enterprise. Below are 10 critical questions every aspiring bigasan owner should ask before launching their rice retail business.

1. Am I Fully Compliant with All Required Permits and Regulations?

Before selling even a single sack of rice, you must ensure regulatory compliance at every level:

• DTI or SEC Registration – For business identity and legal recognition.
• Barangay and Mayor’s Permits – For local authorization and operation.
• NFA License (if selling NFA rice) – Not required for commercial rice, but mandatory if you plan to sell subsidized rice.

Even though the National Food Authority (NFA) has relaxed rules for commercial rice retailers, future regulations may tighten again. Preparing your store to meet NFA inspection standards from the start—like having calibrated weighing scales and white-painted rice boxes—ensures your business stays future-proof and inspection-ready.

2. Is My Chosen Location Optimized for Both Sales and Logistics?

The right location balances high foot traffic with low delivery and handling costs.

• Public markets bring constant buyers but are often difficult for bulk deliveries.
• Residential or roadside stores are easier for logistics but may attract fewer walk-ins.

A smart entrepreneur analyzes both the cost of accessibility and customer proximity. Also, ensure your store has enough dry, ventilated storage to prevent spoilage, mold, and pest infestation—since even a 1% spoilage rate can cut deep into profits.

3. Which Rice Varieties Should I Sell to Match Local Demand?

Filipinos buy rice by price, aroma, and texture. Start with 4–6 varieties across the main categories:

• Regular Milled
• Well-Milled
• Premium
• Special

Budget-conscious consumers drive the highest volume and usually buy Regular Milled rice—the grade with the widest markup flexibility. Meanwhile, a few premium options help attract high-income buyers. Striking the right product mix ensures fast turnover without locking up capital in slow-moving stock.

4. Do I Have Reliable and Cost-Efficient Suppliers?

Your supplier relationship determines your margin. Since profit per kilo is only ₱1–₱3, even a small discount in sourcing can dramatically improve income.

To maximize savings:

• Buy directly from farmers or millers to bypass middlemen.
• Partner with trusted wholesalers who offer consistent quality and fair pricing.
• Choose suppliers who provide traceability and transparent quality checks for consumer trust.

Strong supplier partnerships also help buffer your business against price volatility and rice shortages.

5. How Will I Prevent Spoilage, Pilferage, and Pest Infestation (Bukbok)?

Rice typically lasts only 2–3 months, so every sack must sell before it spoils. Implement strict controls:

• Follow the FIFO (First-In, First-Out) system to sell older stock first.
• Maintain clean, dry, and well-ventilated storage areas.
• Use pest repellents and inspect regularly for bukbok or rats.

Remember: even 1% inventory loss can wipe out your slim margins. Treat pest control and storage upkeep as necessary investments, not optional costs.

6. How Much Capital Do I Really Need—and How Long Until Profitability?

You can start small—but working capital is more important than startup capital.

• ₱50,000–₱100,000: Basic home-based or market stall setup.
• ₱100,000–₱300,000: Small-to-medium store with steady inventory.

Keep at least 1–2 months’ worth of operating expenses as a cash buffer. Expect to reach profitability only after achieving consistent turnover and efficient inventory management.

7. How Should I Price My Rice Amid Volatile Farmgate Costs and Price Ceilings?

Your pricing strategy must adapt to market volatility and possible government-imposed price ceilings.

For example, when Executive Order No. 39 set caps at ₱41/kg for regular-milled rice and ₱45/kg for well-milled rice, retailers operating above those costs faced guaranteed losses.

Thus, rice retailers must:

• Maintain small high-cost inventories during unstable periods.
• Focus on fast turnover to minimize exposure to regulatory changes.
• Keep markups within the ₱6/kg suggested maximum for consumer fairness.

Profitability hinges more on volume efficiency than price markup.

8. Have I Accounted for Hidden Costs Like Logistics and Handling?

Logistics can consume up to 40% of total rice cost—often more than the profit margin itself.

These expenses include:

• Transport delays and traffic congestion
• Loading/unloading labor costs (₱1.50 per bag movement)
• Re-bagging, spillage, or pilferage

To stay profitable, invest in efficient delivery systems, minimize double handling, and ensure your location allows easy truck access. In rice retail, logistical efficiency = profit.

9. Do I Have Clear Operational Workflows for Procurement, Sales, and Staff?

Low-margin businesses demand precision and consistency. Document and standardize every process—from ordering and receiving stock to weighing and recording sales.

Train employees to:

• Follow FIFO inventory rotation.
• Use calibrated scales.
• Maintain hygiene and pest control.

Also, comply with labor and social security laws (SSS, Pag-IBIG, PhilHealth). Non-compliance can lead to fines that erase months of earnings.

10. How Will I Build Customer Loyalty Through the Suki System?

In a market where price wars are unsustainable, relationships are your strongest asset. The Filipino suki culture thrives on trust, familiarity, and mutual support.

To build lasting loyalty:

• Treat every customer warmly—“Ngiti at konting malasakit” goes a long way.
• Offer small perks for repeat buyers or bulk purchases.
• Create a Facebook Marketplace page or offer home delivery for added convenience.

Combining traditional suki relationships with digital marketing ensures a steady stream of loyal customers and consistent sales volume.

Conclusion: Turning a Low-Margin Business into a Sustainable Venture

Running a bigasan is not about chasing high markups—it’s about discipline, efficiency, and relationships.

To thrive, entrepreneurs must:

1. Choose logistics-efficient locations to minimize the 40% transport burden.
2. Stay fully compliant and inspection-ready to avoid costly disruptions.
3. Hedge against political risk by managing stock and liquidity wisely.
4. Focus on high-turnover rice varieties to protect margins.
5. Build deep customer loyalty through personalized service and suki trust.

With the right preparation and mindset, a bigasan business can become not just profitable—but resilient and recession-proof.