Three Small Capital Businesses and Large Profits in Indonesia

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

Hello friend.

Do you know?

In my country (Indonesia) there are currently three types of small businesses that are popular. So that many traders try luck in this business.

Illustration of a car kiosk (soft drink seller)

The third cause of this popular business is:

- Because the prospect is pretty good. One of the signs; every time I happen to see these three businesses anywhere (in schools, markets, or roadside kiosks), there are always crowded buyers.

- One other factor, because these three businesses only need small capital. That's why almost everyone can join in this business. So it is not surprising if this business mushroomed everywhere (in Indonesia).

That three small capital businesses are:

#1. The 2000 rupiahs all-round snack business.

Try to see the photo above.

It was a 2000 rupiahs (about 15 cent US Dollar) all-round snack shop located right next to my toy store. ☺

That's why I chose this business in the discussion of the first part because I pretty much know about the ins and outs of this business.

Why can I know?

Because I often talk about the prospect of this business with snack traders and that my neighbours (Note: location in Kalisari sub-district, East Jakarta). The name of that snack entrepreneur is Mas Sani.

According to Mas Sani, he has been running this snack business since 2010. A result of undergoing this business, Mas Sani has been able to build a permanent house with an area of 100 square meters in the Kalisari area (not far from the location of the shop).

Pretty successful right?

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According to Mas Sani, the initial capital to start this business is not large.

In the past when he is starting a business, only with the capital of 3 million rupiahs (for snack product stock), and 5 million rupiahs for the cost of renting a kiosk. So the total initial primary money is 8 million rupiahs (about 600 US Dollar).

Before moving to the side of my shop, Sani used to sell in another place (kiosk). The kiosk was in the inner Kalisari area (about 500 meters from the current shop). A small booth is measuring 2 x 3 meters, whereas the current shop is much larger (3 meters wide, 10 meters long). Because the shop is quite long, so Mas Sani can store stock in the back of his current shop.

So, what are Mas Sani's tips and secrets, so that this 2000 rupiahs snack business can overgrow?

The first tips are to find the location of kiosks/shops in areas that are crowded with residents and close to the school area. (Note: the location of Mas Sani's shop itself is also close to Budhi Warman Kalisari High School).

Well, what's the reason to must find locations in densely populated areas and near school areas?

The answer is clear==> because of course, the crowded area is a strategic area, so buyers are very likely to come to buy. And choosing a business located near a school is another smart strategy because we all know that school children generally like snacks.

Maybe you ask me; "Then, what the secret of the business Mas Sani, Mr. izal?"

Well,,,,,

I meant by 'secret' here is Mas Sani's tricks and strategies in managing his business, namely to get optimal results.

Several things are of particular concern to Mas Sani, namely how to manage snack products so that not too many are expired.

The method is as follows:

For snacks that are still fresh (the latest), Mas Sani makes snack packs at prices for 2000 rupiahs all-round. The profit margin for each snack 2000 rupiahs package this, ranges from 60% - 75%.

Well, Mas Sani knows exactly that snack food must have a specific time limit for consumption. So if the snack product doesn't sell too long, then the snack will become expired. The snack will smell 'rancid' and 'chewy' when eaten.

So how the trick of Mas Sani, to outsmart it?

The trick; by 'marking' which snack products often don't sell for long periods (expired). Well, then that less salable product is made in a larger package and sold cheaply, for 10,000 rupiahs per package. For this 10,000 package, Mas Sani only takes thin margins, only around 25% - 30%.

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Maybe you will be a little surprised, and say: "Wow, it's so thin the margin is, sir?"

Yes! No problem! It's okay only to get thin margin, at least still get profits and the capital can return. Instead of making a late decision (because it is too calculating), finally the product is expired and smells 'rancid' so it cannot be sold at all, aka loss. Right? (Said Mas Sani).☺

This snack business is quite promising because it generally can sell every day. Especially; if we are smart to choose the right location. As I said earlier, this business is most suitable if it located in schools and densely populated settlements.

The harvest period of this business is during the holidays, especially when the fasting month and before the feast of Eid Fitr.

The most common obstacles in this snack business include:

- The product will expire if it doesn't sell long enough.

- Currently, the competition this snack business is quite tight. Because this business requires relatively small capital, while the prospect is quite promising so that many people try their luck in this type of business, therefore, need hard work to be able to attract as many customers as possible. Namely by of friendly service, and often sell cheap on snacks (that have been long enough but still worth eating). 

As Mas Sani did, he makes the sale package 10,000 to each snack which is somewhat less salable (that I mentioned above). By applying this trick, Mas Sani gets two advantages. The first advantage is that it can minimise the number of expired snacks, and the second advantage is; his shop became known as a cheap snack shop.

#2. Fruit juice business.

A merchant is making fruit juice

This business is quite promising opportunities for you who have minimal capital. Only with the money of around 8 million rupiahs (about 600 US Dollar), this business can already run. 

Details of the capital include: 

- The cost of making a juice outlet is around 3 million rupiahs. 

- The kiosk rental costs around 5 million rupiahs. 

If you have smaller capital, you can rent a stall in front of the minimarkets (like Indomaret or Alfamart in Indonesia). Rent of stalls in the minimarket varies, depending on how strategic the location is. But according to information from my friend (a fruit juice trader), he rented a kiosk in front of Kalisari Indomaret at the cost of 1 million rupiahs a month (not including electricity costs).

- The cost of buying supporting equipment such as blenders, plastic cups, knives, etc. is around 500 thousand rupiahs. 

- The capital to buy fruit is around 500 thousand rupiahs. 

This juice business trading strategy is more or less the same as the snack business above. Because the type of this business is easily expired (read: rotten), then you must be smart and observant in managing it. 

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What this means is: apply a fast sales system!

Therefore, you should not be stingy providing (fruit) ingredients when making the juice concoction. Make a thick of juice and do not runny (because of lack of elements). Thick juice tastes better than watery juice (because it's too much water)

Which makes me often buy juice (subscription) to my friend (the juice maker I have mentioned above), because the juice concoction is always thick. He was never stingy in making concoctions. So that me (and my wife), are still loyal to buy juice to him. 

One day that my friend is not trading for two weeks (pre-wedding event) so that I cannot buy juice. Finally, I tried to purchase juice elsewhere, namely the inner Kalisari area. 

How does it feel? 

Oh no! Very bad! The juice is runny and less sugar too! 

As a result, only once did I buy juice at that place. I prefer to wait for my friend a return from his village and open his juice business again. 

Well, sometimes the strange thing, in this case, some juice entrepreneurs incorrectly implement the strategy. Namely too stingy when making concoctions of juice. 

Remember one thing; The characteristics of fruits will are be decaying if they are stored too long (or too much is left over). If it's rotten, it will undoubtedly, be wasted! 

Finally, they even losses.

That's right? 

So, why are we must too stingy when making concoctions? 

Instead of finally being rotten, we better make it the best juice for customers. 

Make juice that contains a lot of fruit, so the liquid is thicker and feels good when the customer drinks it. If the customers are happy, so your sustenance is always smooth. Logical right? ☺ 

So, if a juice trader is smart, surely he understands this. One of them is my friend who is a trader of fruit juice. ☺ 

My friend's fruit juice business is always sold out and makes a big profit. According to my friend's confession, he can get a net margin of up to 50%, if the fruit juice is always sold out (nothing wasted due to rot).

How do you think friend? A promising business opportunity right?

In the difficult conditions of finding jobs (at this time), this juice business is one of the business opportunities that are worthy of trying. Because; this business does not require too much capital and is also many enthusiasts. On average everyone likes to drink juice, including my wife and me. And including you, right? ☺ 

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#3. Skotlet Business (Scotchlite).

(Local language; Skotlet, English; Scotchlite), is a kind of elastic plastic sheet (sticker) that has adhesive glue on its inner side. 

The function of this skotlet is to enhance the appearance of the vehicle body, both motorised and two-wheeled vehicles. 

Another function of the skotlet is to minimise the effects of any scratches the vehicle. So by installing a skotlet, the results of scratches will not be too severe. 

This skotlet business is up-and-coming. 

Really! 

Because many of my fellow traders (when I was still trading on the sidewalk) were this skotlet service business actors. This business requires a small capital, but with a large profit margin! 

What is the cause? 

Because this includes businesses that sell skills (services), and skilled experts in the field of installing this skotlet are not all people can have. So, the higher your ability in installing this skotlet, the more expensive the rates you can set.

The capital for the raw material for this skotlet sticker is very cheap. According to information that was mentioned by one of my friends (in this business), the capital for one sheet of the skotlet sticker is only around 20 thousand rupiahs (about 1,5 US Dollar). 

Usually, he sells for 35 thousand rupiahs, that is the selling price for one sheet the skotlet (not including the installation service fee). 

Installation fee also adjusted to the size of the skotlet sticker. So if the more extensive the sticker size, the more expensive the installation rates will be. 

The minimum tariff for one time installing a skotlet sticker on a motorcycle is around 50 thousand rupiahs. If it mounted on a car, the installation costs could reach 150 thousand rupiahs, that's the price for one car! 

Within a day there is a skotlet (professional) service businessman who can reach a turnover of 1.5 million to 2 million rupiahs (about 150 US Dollar). 

A promising business opportunity right? ☺ 

Indeed the profit is very 'tasty and promising friends. In fact, according to the info I got directly in the survey, the scotlet service business that has many customers can reap a net profit of up to 25 million per month (about 1.850 US Dollar). WOW! 

A merchant is installing a Skotlet/Scotchlite

Maybe you feel a little amazed and ask me; "How come the profit is huge, Mr. izal?" 

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The reason is very logical. As I mentioned above, that they sell is their skills. That's what is expensive.

The price of the skotlet product is cheap. If you have 20,000 rupiahs (around 1.5 US dollars), then you can get to buy a skotlet at the West Jakarta Asemka market. But can you install it correctly on your vehicle? Of course not! Hehe. ☺

Well, that's why you need a skotlet expert service. And you have to be willing to pay some money (which is big enough) for that: the more skilled the expert, the higher the price.

So this business is a promising opportunity and also a challenge for those of you who want to try a skotlet business.

Why do I call a challenge? 

Because if you want to become an expert skotlet, then you must continue to study, and practice hard to find a way to install the right scotlet.

And you are also required to have a high artistic and creative spirit. Because the knowledge in installing this skotlet is not standard science so that between one skotlet practitioner and other experts must have different ways, styles, and 'tastes' when installing skotlet. 

That's why when you first learned about installing this skotlet, you needed a teacher. But when you have begun to become proficient, then the development of the next skill depends on yourselves (to develop ways, styles, and characteristics of yourselves). 

All the above are three types of businesses that are popular in my country, Indonesia.

Hopefully, you like unique stories related to my country. See you again in the following article about Indonesia. I am coming soon.

Regards.