How Many Is The Ideal Amount Of Basic Capital Investment To Start A Toy Business?

 

Note: Tulisan ini adalah terjemahan Basa Enggres bebas dari artikel ini

I have a business discussion page and a toys community group on Facebook. Until now, the discussion page has received likes as much as 3.922 clicks. And the buying and selling community group already has 22.557 members.

A discussion page and the selling groups that are very active, among the members often discussing each other and making buying and selling transactions between them.

In addition to being an admin, I also become an active contributor to that community group. I often share information, share articles, and try to answer questions about the toy business from the members of that page and group.

Well, of the many things they ask, some questions are the same and most often asked by them. Therefore, then, the idea arose in my mind to write an article that answers their question thoroughly.

What are the questions?

Let us both see.

Question # 1: "Brother Izal, can you please tell me, how many is the ideal amount of basic capital investment to start a toy business?"

Question # 2: "Brother Izal, I have very little primary capital investment, which is only 5 million rupiah. Is it enough to set up a toy store business?

Question # 3: "Brother Izal, if I have very little capital investment, is there a solution for me to get business funds, but without going through a bank loan?"

Three pretty complicated questions right ?! Hehehe :)

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Okay, I will try to answer all the questions above one by one, and provide the solution according to my perspective and business experience.

First question: "Brother Izal, can you please tell me, how many is the ideal amount of basic capital investment to start a toy business?"

The order of the above question is not quite right. A more fitting question should be like this: "Brother Izal, What are the supporting factors that should be prepared before starting a toy business, and how many are the ideal basic capital investment?"

There may be some of you (readers) who ask: "Why is the composition of the question changed and part of the supporting factor placed at the beginning?"

I'll answer: Because that part is the most important! After that capital factor!

So, what are the most important supporting factors?

In my personal experience, the most contributing factors to success in building a toy business are the following:

1. Skill Factor.
2. Factors Business experience.
And then,
3. Capital Factor.

What is the reason a skill level ranked located in first?

The answer is because this skill factor is the most important if you want to pioneer toy business successfully.

Well, try to ask yourself: "do I already have a basic skill in this toy business?"

Perhaps you will again ask: "What is, are the necessary skills?

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Well, I'll give you an explanation.

Which includes the basic skills of the toy business include:

- Knowledge of the cheapest supplier of toy products.

- Knowledge of accessible and easy to sell types of toys.

- Knowledge of how to attract customers. (customer service)

- Knowledge of promotional techniques.

- Knowledge of how to handle toys broken.

And many other essential skills that I can not write everything one by one.

Well, have you had the necessary skills as I mentioned above?

You do not have to master all the necessary skills I mentioned above, but at least you have to learn some of them. Especially basic skill/knowledge about where to the supplier the cheapest toy product.

This skill is mandatory you should know!

What is the cause?

Because, if you do not know this field, so you shop to suppliers that cost more, of course, you will lose with other competitors who already know where to buy cheaper toys!

Is there any the correlation?

Yes, there is! If your competitors get cheaper product prices, of course, he can also resell the product at a low price. And you can lose in competition because you have the cost of authorized capital is more expensive.

Well, now you can understand the correlation? Remember, it's for one skill (knowledge), but the effect it's so incredible. Not to mention other skills that are also required for you to know.

That's why the skill factor located in the first order.

So, if your skills and knowledge in the field of toy business not enough, then keep learning.

How?

That is with a way to establish good relationships with other people or your friends who are more experienced and thriving in the field of the toy business. From them, you can gain knowledge and get information about the ins and outs of the toy business.

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Is the material capital factor (money / financial) less important?

Ohh... not like that,,,,

Money capital factor is essential, but actually, the function of money is as a 'tool' only. If you are smart and good at using that 'tools' (because of your skill support), then your success will be easier to achieve. But if you do not have the skills (knowledge) to manage the 'tool' it, then the success will be difficult to get.

So not necessarily a person with a lot of money will guarantee he will also be easy to succeed. And not necessarily too people with minimal capital cannot succeed. The key is in their skills and experience.

People with lots of money, they can go bankrupt if they are not good at managing their business.

Similarly, people with little capital can have a chance to succeed if they have a lot of skill, experience, diligent and have a hard work ethic!

Perhaps some of you are surprised and asked: "Why is it that people with lots of money can go bankrupt?" Would not if have money make everything easier? "

Hmmmmh,,,,, This is an interesting question. Now give me a turn to ask you:

For example, there is someone who has money that is up to tens of millions, but he has no skills at all.

Then,,,,,

Does he know where to start?

Does he know how the stages?

How to solve a problem related to the business? Did he know about this?

Well, if he does not have the skill and experience at all, then significant confusion will come soon. Certainly!.

You might say:

"The solution is easy, namely by looking for employees to undergo my business."

Hmmmm,,,,, you sure all will run 'okay' only?

Well,,,, I hesitate,,,,

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What is the cause?

Because if you do not have adequate skills and knowledge in the field of business, then your business is potentially 'cheated' slowly by your employees. And you are hard to control them because you do not have the capacity in that field of business!

A case like this happens a lot in reality. How many businesses are built with significant capital, finally go bankrupt because they do not have good management!

So, very it is clear that skill and experience are the most crucial factor in business. If starting a business we analogy like building a house, then the expertise and experience lie in the base of that building. After that, it is filled with various tools and household furniture, which we can analogy as part of the content of the product your business (necessary capital investment).

Maybe some of you want to know, and ask: "what is the minimum amount of basic capital investment to start a toy shop business, brother Izal?"

I will answer:

In my opinion, the minimum amount of necessary capital investment to start a toy store business is 75 million rupiah. (Approximately 5600 US Dollars, with exchange rate 1 Dollar = 13.500 rupiahs)

Money worth 50 million rupiahs I assume for toy product contents.

Money worth 20 million rupiahs to pay the cost of store rental per year.

And the remaining 5 million rupiahs for the cost of making a shelf and a toy store display.

Capital 75 million rupiahs including very minimal. If you can fulfill it to 100 million rupiahs (about 7.420 US Dollars), certainly better. :)

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Question # 2: "Brother Izal, I have very little primary capital investment, which is only 5 million rupiah Is it enough to set up a toy store business?

I replied firmly: Yes, of course, you can!

As I mentioned above that people who have minimal capital still have an opportunity to pioneer toy business. You are also have a chance to succeed! Provided that you meet the requirements, it must have the skills, experience and willing to work hard. Yes! The key is in your skills and knowledge!

If you have very little capital, for example, you only have a capital investment of 5 million rupiahs, then do not be discouraged because you have the same opportunities as other people who have more significant capital.

How to? Well, here I will disassemble one the 'secret key'. And you should be able to 'take' that key.

So, if you have a business capital that's minimal, then you can start to pioneer the business by crawling slowly from the bottom. You must be willing to start a business from the smallest scale first. And this way requires a lot of patience. Maybe when you start it, this way feels very heavy. But if you are brave and consistent in living it, over time, you can get through it.

That is what is called a process!

And does not man have to go through a process in every course of his life? Even a baby will not be able to walk right away, but he must learn to crawl first, then learn to stand, then learn to walk, then he can jump and run fast!

Similarly, when you build a business, it will go through the process.

If you have minimal capital, then you can start by selling in e-commerce. 

In Indonesia, there is some significant and famous e-commerce, among others: Lazada, Bukalapak, Tokopedia, OLX, and others. In your country each, of course, there is also popular e-commerce, well you can start selling your product in all that online store.

Why is e-commerce is one of the best choices to pioneer businesses for people with minimal capital?

Because if you sell and have an online store in e-commerce, then you do not need to rent a place (which requires significant capital) like a physical store. Your only need the internet quota and the product you are going to sell.

Even if your first capital investment is not sufficient to provide the complete product type, you can outsmart by selling other people's products (in Indonesia this way be termed 'dropship'). If someone else's product is successful you sell, then you will get a fee of a percentage of the products sold.

Above is a way of pioneering the business through the online (internet). Well how do if you want to pioneer the industry through offline? Can it? Oh, of course, you can! The trick is, selling at bazaar events, or it could be by trading at the night market.

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Illustration of a bazaar.

The bazaar or night market is one of the potential pathways to grow your business. Especially for those of you who have a first capital investment is minimal. Why do I say this way a potential?

There are two factors, namely:

Element 1:

Trading in bazaar or night market events does not require a significant operational cost. Usually, you will only pay a place (usually a table) size of 3 x 2 meters, paying electricity costs (for lights) and pay the cleanliness fee. Bazaar or night market in Indonesia is usually charged 30.000 rupiahs per day/night. (about 2 US Dollars more).

The operating costs above are much more cost-effective than you are renting a toy store (which is expensive and requires a lot of capital). So, with the business build method like this, you still have the opportunity to be able to build your business from below (with minimal capital).

Factor 2: 

Bazaar and the night market are the concentrations of people gathered. Well because many people who pick, of course, make your product very likely to be bought by them. Thus, you can expand your business and capital base faster. :)

Illustration of a night market.

So the conclusion: online stores, bazaars and night markets are the most suitable route for beginner entrepreneurs with little capital to pioneer and build their businesses.

Question # 3: "Brother Izal, if I have very little capital investment, is there a solution for me to get business funds, but without going through a bank loan?"

Questions like these come up usually for two reasons.

First cause: Because the questioner has no assets to be collateral to apply for a loan to the bank. Of course, you all already know, that if you want to borrow money (for business capital) to the bank, you must have a guarantee. (in the form of assets such as houses, land, vehicles, etc.). If you do not have all that, certainly your loan will not be granted by the bank.

The second factor: The questioner has assets, but he feels worried if he can not afford to pay off his loan (because his business is unsuccessful or because of other factors), thus making the asset is seized by the bank. So he asked me a question: "Is there any other solution to get business funds other than through bank loans?"

Well, how is in my opinion?

I emphasize, that: answer to this 3rd part point is based on my own perspective and opinion. This view is also built on my personal experience (as well as my family) who can successfully create  a family business from the bottom without ever borrowing money from the bank!

You do not believe? Please read the full story in the following article:

- MY MOTHER, A SUPERWOMAN AND A VERY PERSISTENT MERCHANT

- WANDERING TO THE CITY OF PADANG (My Story)

- MY BUSINESS JOURNEY IS LIKE DAVID FIGHTING WITH GOLIATH

- MY COMPETITORS IS MY INSPIRATION!

So, here's my opinion on this:

If you want your business to run safely, then try (do not) build a business with too much money from bank loans!

There have been so many examples that happened in reality, that people whose business is bankrupt because they can not pay the installment to the bank.

The problem is, they are too brave to borrow money to fund business capital to the bank, while his business has just been built. He did not yet know how the company progressed in the future.

How dare he. Can he guarantee that his newly initiated business will be successful with ease? Can he pay his loan installments smoothly? 

I'm sure nobody dared guarantee it, right or not?

Thus, eventually, are many loans that stalled because the business is not growing. Wrong speculation! Finally, the asset collateral is confiscated by the bank, and the company goes bankrupt! How very pity.

Therefore, as a way out, I give the 'secret way' with very complete on points 1 and two above. Try to start the business from scratch. Dare for to start crawling business from below. Dare to work hard, just as a baby has to crawl first before he can finally stand up, walk, run, even end up jumping high!

Yeah! Everything needs a process!

And behind all that process saved a kind of 'wisdom'. What is that? If you are finally able to build the business from the bottom (and ultimately succeed), then you have become a trained and expert in that field of business. Because you already have the skills and experience tested, the result of forging the building of that business from below !.

Well, after the effort you build from below it has been successful, usually, slowly but surely, will many of your partners who offer business cooperation like planting a stake in your business with a profit-sharing system.

This is how best to get funding for business capital other than through bank loans! 

Well, What do you think? Very interesting is not it? :D

This method is very safe, 100% without risk. The only challenge to this method is: You Must Work Hard! Hehehe :D

Thus, the article this time deliberately I write very wholly, the goal to be able to answer all the questions thoroughly frequently asked by the members (on my business page).

Note: This article is written based on the context and barometer of the toy business in Indonesia. Therefore, there may be differences in the standard value of prices with other countries (due to differences in economical rates and currency values). But in general, the contents of this article is universal, meaning it can be applied by people/toy business people who come from anywhere.

If you feel this article is useful, then share it. Hopefully, it can be helpful for your other colleagues.

Best regards.