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How to Open a Building Materials Store: Tips and Business Capital

Admin BFI
20 May 2022
63847
How to Open a Building Materials Store: Tips and Business Capital

The building materials store is one type of business that has promising opportunities and is classified as a type of business that is timeless. Because, this business is proven to be able to generate a turnover of hundreds of millions of rupiah every month, depending on how big your business is. In addition, considering the need for infrastructure and housing development that always exists every year, making the building materials store business opportunity not to be missed. Indeed, this business requires a large enough capital. However, it is possible that these obstacles can be closed with a fast cash flow.

Here, the BFI Finance team presents the advantages and disadvantages of running a building materials store business and details the range of capital required. Don't forget, we also provide tips to start your business! Let's see together!

 

Advantages of Building Materials Store Business

  • The need for a provider of materials for project construction is high
  • The profits are relatively large
  • Extensive market share and opportunities
  • Does not require special skills or skills
  • Easy to run even for new entrepreneurs

Disadvantages of Building Materials Store Business

  • High competition
  • Fluctuating material prices
  • The capital required is quite large
  • Monotonous marketing activities
  • Some old materials to sell

Solutions to Overcome the Lack of a Building Materials Store Business

  • Considering that this type of business requires a large amount of capital, it is better to apply for a business capital loan from a financial institution such as a bank or finance company.
  • Selection of strategic business locations so that they are easily accessible by customers.
  • To overcome the material that takes a long time to sell, you can give it a discount so that it can be a fast income and the usability value of the item is not eroded.

Tips for Starting a Building Materials Store Business

Pay attention to these 8 tips for starting a building materials store business so that the continuity of your business can run smoothly.

1. Determine a Strategic Business Location

The first tip in running a building materials store is to choose a strategic business location. You can choose a business located in both urban and rural areas depending on the target customer you have set. Choose a location that is easily accessible such as near a highway. This location will facilitate the mobility of transport vehicles in and out and your building shop can be easily recognized by people. Try also, the location of your building materials store business has a large parking area to facilitate customer access and large transport vehicles.

You can rent or build your own place of business, depending on your budget. If you are renting, the option of renting a shophouse may be the right choice. If you choose to build your own place of business, it may save you more money in the long run.

2. Determine The Goods and Facilities to be Offered

The second tip is to plan what goods and facilities will be offered to customers. Here are the materials that can be sold in your building materials store:

  • Brick
  • Concrete brick
  • Stone
  • Sand
  • Steel bar
  • Triplex
  • Paint
  • Cement
  • Wood
  • Nails
  • Pipe
  • Ceramics
  • Electrical equipment
  • And others.

Also prepare a cupboard or shelf to place small materials such as nails, ceramic samples, and paint. Large materials are usually placed outside the shelf or on the floor in a neat arrangement.

Next, you can consider what facilities can be enjoyed by customers. Such as a large yard for parking and loading and unloading materials, toilets, free drinking, and others.

With the complete range of materials provided and facilities that make customers comfortable, you can be sure that it will be an added value to your building materials store.

3. Prepare the Business Capital Needed

The building materials store requires no small amount of business capital. The business capital needed can reach hundreds of millions of rupiah depending on the size of your building materials store. The amount of capital comes from goods or house materials to be sold, such as sand, ceramics, paint, cement, and others. The material is also prepared in large quantities.

To get this large amount of business capital, you can get it through business capital loans from financial institutions such as banks or finance companies such as BFI Finance. If you apply for a loan through BFI Finance, you can simply guarantee your Vehicle BPKB or Home Certificate to get various loan ceilings. Complete information can be accessed via the link below.

 

Information on Application for Home Certificate Guarantee Loans

Information on Application for Car BPKB Guarantee Loans

Information on Application for BPKB Motor Guarantee Loans

 

Although the capital required is quite large, the Break-Even Point or return on investment for this type of business can be considered fast. Calculations regarding the range of required capital and BEP are described at the bottom of this article.

4. Cooperate with the Best and Trusted Supplier

The fourth tip in running a building materials store business is to choose the right building material supplier. The right supplier is a building material supplier who provides quality materials and a good reputation. You can ask for recommendations from fellow building shop partners who are more senior to get reliable supplier information. In addition, you can also take advantage of relationships with contractors and foremen to obtain quality building material supplier information.

5. Determine an Affordable Selling Price

Determining the selling price will determine whether or not your business income is high, and this building materials store business is no exception. Even though the price difference is small, it also determines the buying interest of potential customers. Again and again, you need to research competitors' selling prices in detail.

Another factor that determines the selling price is the selection of building material suppliers. Choose a supplier who is able to provide low prices but with good quality. If you have found a suitable supplier, you need to maintain that relationship so that your business continuity lasts a long time. Usually, suppliers who have been invited to cooperate for a long time will provide special prices for their customers.

6. Provide the Best Service

After all the business support equipment is complete, it's time to focus on your building materials store services. Usually, there are prospective customers who are unfamiliar with the materials used to build houses. For example, what type of sand is suitable for making house foundations, what paint is ideal for wood-based materials, and so on. This is your chance to show a friendly and solution-oriented service. The thing that should not be missed is of course the honesty of your service. Honesty here means that you can objectively provide information such as the advantages and disadvantages of building materials and not bring down competitors.

7. Do Incessant Promotion

Tips that are no less important are to keep promoting offline and online according to business needs. If you do promotions offline, you can do this by placing a banner or banner for building materials store in a strategic place, such as at a crossroads. You have to prepare a budget for making promotional media as well as the cost to rent an advertisement or a place to place the promotional banner.

You can also use social media and websites to introduce your building materials store. Because now everything is digital, there's nothing wrong with using these promotional tools. Through social media and websites, you can inform about ongoing discount promos without having to pay any fees.

Another way of promotion is to give a special promo when the grand opening arrives. The grand opening is the right moment to start introducing your product to various circles. You can provide promos, for example with special discounts or free shipping within the city for a certain period.

8. Submitting Bids to Development Projects

This last tip relates to the networking you have or can also be a means to add new networking. You can submit bid proposals for ongoing development projects, such as housing developments, offices, and others. Your job is as the main supplier of materials needed in the construction of the project. You can contact the contractor who is responsible for the construction of the project directly for further discussion.

Details of Building Materials Store Business Capital

After knowing the tips that can be done, it's a good idea to know the range of business capital needed. The following is a breakdown of the range of capital required to build a building materials store:

Beginning Business Capital

No. Item Quantity Price/Quantity Total
1. Pick up Car (for delivery) 1 Rp 100.000.000 Rp 100.000.000
2. Building materials (cement, sand, paint, bricks, nails, wood, plywood, iron, etc.) 1 Rp 250.000.000 Rp 250.000.000
3. Storefront 1 Rp 2.000.000 Rp 2.000.000
4. Wooden wardrobe 1 Rp 2.000.000 Rp 2.000.000
5. Computer 1 Rp 3.000.000 Rp 3.000.000
6. Tables and Chairs 1 Rp 2.000.000 Rp 2.000.000
7. Others 1 Rp 3.000.000 Rp 3.000.000
  Total     Rp 362.000.000

Monthly Operating Cost

No. Item Quantity Price/Quantity Total Cost
1. Rent a place per month 1 Rp 1.200.000 Rp 1.200.000
2. Shopping for raw materials/materials per month 1 Rp 60.000.000 Rp 60.000.000
3. Employee salary 3 Rp 2.000.000 Rp 6.000.000
4. Transportation 1 Rp 500.000 Rp 500.000
5. Electricity 1 Rp 300.000 Rp 300.000
6. Water Supply 1 Rp 300.000 Rp 300.000
  Total     Rp 68.300.000

Turnover per Month

Assume the income per day is IDR 3,185,000 with the following details:

No. Item Kuantitas Harga/Kuantitas Total Biaya
1. Sand 5 Rp 230.000/meter kubik Rp 1.150.000
2. Cement 6 Rp 50.000/sak Rp 300.000
3. red bricks 1.000 Rp 700 Rp 700.000
4. Wall paint 5 Rp 135.000/5 kg Rp 675.000
5. Nails and small building tools 1 Rp 100.000 Rp 100.000
6. Ceramics 4 Rp 65.000/box Rp 260.000
  Total     Rp 3.185.000

Total turnover per month = IDR 3,185,000 x 30 = IDR 95,550,000

 

Net profit per month = IDR 95,550,000 – IDR 68,300,000 = IDR 27,250,000

 

So, BEP or length of payback for a building materials store business is Initial Capital: Net Profit per month = IDR 362,000,000: IDR 27,250,000 = 13

For a return on investment, it takes 13 months or approximately 1 year.

 

That's an understanding of how to run a building materials store business, starting from the advantages and disadvantages, the capital needed, as well as tips that can be applied. Hopefully, this article can help BFI friends who want to start this building materials store. If you have trouble getting working capital, you can always apply for a business capital loan through BFI Finance. BFI Finance has been registered and supervised by OJK and is the oldest financing company in Indonesia, so you don't have to hesitate to apply for financing and fulfill your financial needs. There is always a way with BFI Finance!

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