Can a business be started with 500,000 pesos?
I have a business question for those who know the DR well.
What type of business can be started with 500,000 dominican pesos?
Do you feel that it can be more profitable to invest in a cerficate of deposit in the central bank or investing it in a business?
For 500000 pesos you could well start a shop.
A kiosk (colmado) for example, selling liquor and things that people need daily.
The basic rules are probably the same all over the world. Especially important here is that you never ever may give something away in credit. The money is 100% lost here, no matter what.
You will need to have experience with latin american mantallity for that (people begging you to give you someting in credit, difficult customers, people trying to collect money and many other perils).
Also working: sell products to the thousands of colmados and small shops. You only will need a reliable car and some merchandise. A car for 200,000 and products for 40000 will do. Keep the rest in the bank for all cases.
With some of the products I can help you (affordable perfumes of high quality, Gilette razors, underwear and some other stuff).
Also what will work (but I do not do): Sell acrillic nails and accessories to the many small nail shops. The products you will get from chinese importers in Santo Domingo.
Of course it is not easy, but works as long as you do not start to give something away in credit.
Investments in Dominican Banks: not recommended, and inflation works against you. If anything is sure here it is that promises are not kept.
If you invest in international growth stocks (not from the D.R.) you will probably get 15% over the years if you follow the rules of masters like Warrent Buffet. Not bad after 20 or 30 years. Buffet made 23% over his lifetime, if you make 15% it is realistic.
If you calculate 15% of 50000: 6250 pesos a month the first month.
If you are activly selling 25 days a month and sell for 10000 a day: 250000 a month. 1/3 your margin: 83333. Minus gasoline, repairs, accomodation: 2000 a day or 50000 a month. Difference 33333 . Reduce 1/3 to be on the safe side: You can make 20000 pesos the first month to be realistic. Of that money you have to put something in the bank to be on the safe side.
Just try it out with a rental car and products for 2000 pesos.
Whatever you do, always keep in mind that anyone can start, but only the thoroughbred will finish!
Originally Posted by indiana16
well said NALs. a business may be started for 500k pesos but it's not likely to bring you profit you are searching for - will give you enough to live on but not to have gring lifeltyle and enable you to travel to USA/europe for holidays.
it all depends on what you do - are you a computer dude? you can start a business building your own computers (from parts). you have retail experience? you may have enough to start a small shop, etc...
one can start a "business" with 50k pesos (hotdog/hamburger cart) and live on it (maybe 10-15k month profit) so your question will only be relevant if you know what you want/can do...
Importer, that sounds like a very informed and practical response. When I started to read the thread I didn't expect any response that detailed or novel (to me). It does make sense that the vast numbers of colmados and small retailers are supplied by a vast informal wholesale market.
I run a colmado, and we have a whole range of suppliers. On the one hand the large companies such as Induveca, Rica, Coca Cola, Presidente, and then a whole army of small suppliers. The important thing is to give no credit, and to be reliable. Those who come on the same day every week are the ones who get our business.
Originally Posted by Matilda
If you don't mind me asking, what kind of profit can a colmado make per month?
dr1 was started with much less. This is the knowledge era. Find a niche for what people need that you can provide. Look for an area where you will have less competition.
Depends on so many things - size of colmado, electric bill and number of staff. We probably have a gross profit of around 60-80,000 RD$ a month. That is before paying electric and staff. And we own the building so do not have to pay rent.
Originally Posted by daydream
I assume you meant to say that the cost of the merchandise you by is already taken out of this, right? Not to shabby. Also, who runs the register, you and the hubby? I have thought about opening up one at some point here, but seeing that my wife's family is mostly evangelical it would look bad to sell beer and liquor. However, everyone tells me that a colmado that does not sell those will not fly, but I have seen a very few exceptions.
Originally Posted by Matilda