Is your business actually ready to grow?

You have been running for a while now. Sales are steady. A friend tells you to boost your posts. Someone else says open a second stall. A supplier offers a bigger order at a better price.

Before you spend a single peso on any of that, stop and check the business underneath.

Here is the reason. Growth does not fix a broken business. It makes the break bigger. If you lose ₱3 on every item you sell, selling twice as many means you lose twice as much. If your kitchen already runs late at 20 orders, 40 orders will not make you faster. It will make you late to twice as many customers.

Spending on growth only makes sense when the machine underneath can take it. This guide gives you five checks. Run all five with your own numbers before you spend.

Check 1: Does each sale actually make money?

This is the first check because nothing else matters if this one fails.

Take one item you sell. Write down its price. Then write down everything it costs you to produce and hand over that one item.

For a food business, that means ingredients, packaging, the plastic bag, the sauce sachet. For a reseller, that means the wholesale cost, the delivery fee to get it to you, and the courier fee to get it to the buyer if you shoulder it. For a service, that means materials and any part you pay someone else to do.

Price minus those costs is your margin per sale. It is the peso amount left over from each sale to pay for everything else.

The mistakes that hide a negative margin

Three things that are easy to leave out.

• Your own labor. If you do not pay yourself, your costing is fiction. You are subsidizing every sale with unpaid hours.
• Platform and payment deductions. If a sale comes through a delivery app or an online marketplace, the amount that reaches your account is smaller than the price on the screen. Use the amount that actually lands in your account, not the sticker price.
• Waste. If you cook 50 servings and throw out 6, the cost of those 6 belongs to the 44 you sold.

If your margin per sale is zero or negative, you are not ready to grow. You are ready to change your price or recheck your costs. Fix that first. There is no advertising budget that repairs a negative margin.

Check 2: Do you break even in a normal month?

Now count your fixed costs. These are the costs that do not change whether you sell 10 or 100: rent, electricity, water, internet, the salary of anyone already working for you, loan payments.

Divide your monthly fixed costs by your margin per sale. That number is how many sales you need in a month just to reach zero.

Compare it to what you actually sell in a normal month. Not your best month. A normal one.

Three possible answers:

• You sell well above breakeven. Good.
• You sell right around breakeven. You are surviving, not building.
• You sell below breakeven. Money is leaving. Growth spending makes that leave faster.

A worked example

Everything below is invented to show the arithmetic. It is not a real business and not a prediction of anyone's results.

Say Aling Vicky sells rice meals from a small stall. She charges ₱85 a meal.

Her cost per meal is ₱52 for ingredients and ₱6 for packaging. That is ₱58. So her margin per meal is ₱85 minus ₱58, which is ₱27.

Her fixed costs each month are ₱8,000 rent, ₱2,500 electricity, and ₱1,800 for LPG. That is ₱12,300.

Her breakeven is ₱12,300 divided by ₱27, which is about 456 meals a month. Over 30 days that is roughly 15 meals a day.

She currently sells about 20 meals a day, so 600 a month. Her total margin is 600 times ₱27, which is ₱16,200. Take away ₱12,300 in fixed costs and ₱3,900 is left for the month — and she has not yet paid herself or set aside anything for taxes.

Now she considers spending ₱3,000 on advertising. To cover just that ₱3,000 she needs ₱3,000 divided by ₱27, which is 111.1 meals. Round that up to 112 extra meals a month, because 111 leaves her a little short. That is around 4 extra meals a day. Whether that happens is a fair question to ask. It might work. It might not.

But now consider the other plan: hiring a helper so she can handle more orders. Say the wage is ₱9,000 a month. Her fixed costs become ₱21,300. Her new breakeven is ₱21,300 divided by ₱27, which is about 789 meals a month, or roughly 26 a day.

She has to move from 20 meals a day to 26 meals a day just to break even again — and at 26 she is only breaking even, with nothing left for herself. To keep the ₱3,900 she has today she needs about 31 meals a day. The helper is not the cost of ₱9,000. The helper is the cost of finding eleven more customers every single day, forever.

And the wage is not the full cost either. See Check 5.

Check 3: Do customers come back?

A business where every customer is a stranger has to buy every sale. A business with regulars — your suki — does not have to win every sale from scratch.

You do not need software for this. Pick last month. Roughly what share of your sales came from people who had bought from you before? Ask your staff. Look at your order chats.

If you cannot say, count it instead of guessing. For two weeks, write a name or a note beside every order and put a mark next to the ones you have served before. Two weeks of tally marks will tell you more than a month of guessing.

If almost nobody comes back, look at why before you spend on reaching more people. A leaking bucket does not get fuller when you pour faster.

Check 4: Do you know where customers come from?

Answer this in one sentence: where did my last ten customers come from?

If you can answer it — walk-past traffic on a corner, one Facebook group, referrals from one barangay, one marketplace listing — you have something to work with. You know which pipe to widen.

If you cannot answer it, spending on growth is guessing. Spend two weeks writing down the source of every order first. It costs nothing but a notebook.

Check 5: Can you serve more without breaking?

Ask what happens at double your current volume. Not in theory. Physically.

Do you run out of stove space? Storage? Hands? Cash to buy stock before payday? You may hit a cash wall before a demand wall — you have to pay for the goods before the money for them comes back to you. Look at your own records for the last few months and see whether the days your bills fall due line up with the days your money actually arrives.

Then think about how you would add capacity, because both answers carry real obligations.

If your answer is "I will hire someone"

An employer has duties that start immediately.

You must register with the Social Security System and get an Employer ID Number. You must have your employees register with SSS and report them for coverage within 30 days from the hiring date. That deadline is in the SSS employer requirements.

You are also obliged to remit your employees' PhilHealth premium contributions, including your counterpart share as the employer, correctly and on time, and to report those remittances so they get posted properly.

Read that phrase again: the employer counterpart share. The cost of an extra pair of hands is the wage plus your share of the payments to SSS and PhilHealth. That is a real line item and it belongs in your breakeven arithmetic, not as a surprise later. The tables change, so get the current amounts directly from SSS and PhilHealth before you fix your numbers. If you are unsure about the registration steps on the PhilHealth side, ask PhilHealth directly rather than relying on a summary.

If your answer is "I will open a second location"

If you registered your business name with DTI, check its territorial scope first.

DTI registers a business name under a territorial scope. The FAQ on the DTI Business Name Registration System defines that scope as the geographical area within which the business may locate its offices, stores, shops, branches, manufacturing or processing plants, or other business structures, or where the business name may be used — and the same definition adds that this is without prejudice to engaging in business elsewhere. The four scopes are Barangay, City or Municipality, Regional and National.

The fees listed on that same FAQ are ₱200 for Barangay, ₱500 for City or Municipality, ₱1,000 for Regional and ₱2,000 for National, each plus a ₱30 Documentary Stamp Tax. Fees can change, so confirm the current amount on the BNRS site before you pay.

Why this matters: if you registered at Barangay scope and you plan to put a second stall across town, that second stall may sit outside the scope you registered under. Ask DTI which scope you need before you sign a lease.

Two more things vary and I will not guess at them for you. Local permits for a second site — barangay clearance, mayor's permit, fire safety inspection — are set by each city or municipality, so ask your own city or municipal hall what a second location needs. And for anything a second site changes on the tax side, ask your BIR Revenue District Office directly.

Score yourself: weak, mixed, strong

This rubric is my own judgment framework from working with owners. It is not an industry standard and there is no published benchmark behind the bands. Use it to sort your own situation, not to grade yourself against anyone else.

1. Margin per sale. Weak: you have not calculated it, or it is negative once your own labor is counted. Mixed: it is positive but thin, and one supplier price increase erases it. Strong: you know the peso figure per item, it survives a price increase, and you can say it out loud right now.

2. Breakeven. Weak: you sell below breakeven, or you do not know the number. Mixed: you hover around breakeven and good months carry bad ones. Strong: a normal month clears breakeven with room, and you have some cash set aside.

3. Repeat customers. Weak: nearly every buyer is new and you have no way to reach past buyers. Mixed: you have regulars but no way to contact them. Strong: a real share of sales comes from returning customers and you can reach them directly.

4. Where customers come from. Weak: you cannot say where your last ten customers came from. Mixed: you have a guess but no record. Strong: you can name the source and roughly how many came from each.

5. Capacity. Weak: you are already stretched at today's volume. Mixed: you could handle more, but only by working longer yourself. Strong: you know exactly what breaks first at double the volume, and you have costed the fix — including the employer share of SSS and PhilHealth payments if the fix is a hire.

If most of your answers are weak, your money is better spent fixing the inside than advertising the outside. If most are mixed, pick the weakest one and work on it for a month. If most are strong, you are in a position to spend deliberately and measure what happens.

What to do this week

Do the first two checks with a pen and one sheet of paper. Pick your best-selling item, work out the margin per sale, add up your fixed costs, and divide.

You will have a single number: how many sales a month you need to stand still. Write it where you can see it. Every decision about growing gets easier once that number is in front of you instead of in your head.