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Opportunity in Jamu Business: Benefits, Tips for Starting, and Challenges

Admin BFI
13 June 2024
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Opportunity in Jamu Business: Benefits, Tips for Starting, and Challenges

Jamu, a traditional Indonesian herbal drink, presents a significant business opportunity as people increasingly favor natural and healthy products. Known for its various health benefits, jamu has been an integral part of Indonesian culture for centuries. The term "jamu" is derived from the words "Jawa" and "ngramu," meaning a concoction made by the Javanese people. If you are interested in starting a jamu business, either traditionally or with a modern twist, this article will guide you through the process.

 

 

1. Benefits of a Jamu Business

1.1 Can Be Marketed Anytime, Anywhere

Jamu can be marketed at any time and place. This flexibility allows you to sell it both offline and online, reaching customers from various locations and backgrounds, thus significantly increasing your sales potential.

 

1.2 High Demand

Despite the emergence of modern health products, jamu continues to have a strong following due to its reputation as a natural and safe remedy with a long history in traditional medicine. Its appeal as a natural and eco-friendly alternative ensures its sustained popularity.

 

1.3 Low Initial Capital Requirement

Starting a jamu business requires relatively low initial capital. The basic ingredients for making jamu are usually easy to obtain and inexpensive, making it accessible for those with limited capital. This affordability opens up the opportunity for many people to start a jamu business.

 

1.4 Support from Technology and Social Media

Utilizing technology and social media can greatly aid in marketing jamu products. You can set up an online store, use social media for promotion, or collaborate with influencers to boost sales. Leveraging these digital platforms allows you to reach more potential customers and build a strong online brand image.

 

1.5 Numerous Health Benefits

Jamu is known for its numerous health benefits, making it popular across various demographics. Some of the health benefits include:

  1. Pain Relief: Certain types of jamu, such as ginger and turmeric, have anti-inflammatory properties that can reduce pain.
  2. Immune System Boost: Jamu like turmeric tamarind and turmeric ginger is believed to enhance the immune system, helping to prevent illnesses.
  3. Cholesterol Management: Natural ingredients in jamu like turmeric and ginger help regulate cholesterol levels, promoting heart health.
  4. Appetite Stimulation: Jamu beras kencur is often used to increase appetite, especially in children with poor eating habits.
  5. Antioxidant Source: Ingredients like turmeric and ginger contain high levels of antioxidants, beneficial for maintaining health and preventing cell damage.
  6. Digestive Health: Jamu containing turmeric and ginger also supports digestive health, preventing issues like constipation and bloating.

 

2. Challenges of a Jamu Business

Besides the benefits, there are challenges or risks in running a jamu business that should not be overlooked:

 

2.1 High Competition

The jamu industry is quite competitive, with many players ranging from large to small-scale businesses. The main challenge is how to stand out in a crowded market. Innovation, product quality, and effective marketing are crucial to differentiating your product from others.

 

2.2 Weather-Dependent Raw Material Availability

The availability of jamu raw materials is often influenced by weather conditions. Seasonal changes, such as prolonged rainy or dry seasons, can significantly impact production. For example, key ingredients like ginger, turmeric, kencur, and temulawak may become scarce during certain seasons. This requires jamu entrepreneurs to have contingency strategies in place for managing raw material supplies to ensure smooth production amidst market fluctuations.

 

2.3 Limited Capital

Many jamu entrepreneurs, especially small and medium-sized ones, often face capital constraints. Limited capital can hinder business development and product innovation. This constraint also limits the ability to compete with larger businesses that have access to more resources and capital. Therefore, effective capital management strategies and seeking additional funding are essential steps to expand and develop the business.

 

Generally, if your jamu business is small-scale, it requires an initial investment of around 1 to 5 million IDR. For medium-scale, it usually requires 5 to 10 million IDR. This capital covers more comprehensive equipment and business location rent. Meanwhile, if you decide to run a large-scale jamu business, it may require a minimum investment of 10 million IDR.

 

2.4 Lack of Knowledge in Making Jamu

Producing high-quality jamu requires deep knowledge of the ingredients and the production process. Lack of understanding can be a serious challenge for new entrepreneurs in creating safe and effective products. Therefore, proper education and training in this field are crucial to improve production capabilities and ensure adherence to food quality and safety standards.

 

Also Read: Fruit Juice Business: From Business Tips to Monthly Turnover

 

3. Nine Tips for Starting a Jamu Business

jamu business

Image Source: Freepik

3.1 Market Research

Market research is a critical initial step in starting a jamu business. Decide whether you want to market traditional or modernized jamu. This research includes competitor analysis, pricing strategies, identifying raw materials, and understanding potential customers.

  1. Competitor Analysis: Study the competitors in your area, both large and small. Note their product offerings, pricing, and marketing strategies.
  2. Pricing: Set competitive prices by considering production costs, distribution, and profit margins. Ensure the prices are reasonable for potential customers.
  3. Raw Materials: Find sources of high-quality, affordable raw materials. Ensure your suppliers are reliable to maintain consistent production.
  4. Potential Customers: Identify your target market. Is your jamu aimed at the general public, homemakers, office workers, or other groups?

 

3.2 Choose the Type of Jamu

Select the type of jamu you will produce. Popular types include turmeric tamarind, beras kencur, temulawak, and herbal remedies for muscle pain. Your choice should be based on market research and the preferences of your target customers.

 

3.3 Prepare Capital and Permits

Capital and permits are essential for starting a jamu business. Initial capital estimates should cover raw materials, equipment, and marketing costs, including operational expenses. For small and medium businesses, mandatory permits include the Trade Business License (SIUP) and Food Product Handling License (IOP). These permits ensure your business complies with regulations and health standards.

 

3.4 Choose a Business Location

Choose a strategic business location. You can opt for mobile sales or a fixed location. Mobile sales offer flexibility to reach various locations and more customers, while a fixed location should be strategically chosen near markets, shopping centers, or tourist areas to attract more customers.

 

3.5 Use Quality Ingredients

Selecting high-quality ingredients is crucial for producing effective and beneficial jamu. Fresh, chemical-free ingredients will determine the taste, aroma, and health benefits of your product. High-quality raw materials enhance the benefits of your jamu and build a good reputation for your business. Choose raw materials from reliable sources and inspect their physical quality.

 

3.6 Ensure Hygienic Production Processes

The production process must be hygienic to ensure product safety and quality. Maintain a clean production environment free from dirt and pests. Clean and sterilize all tools and equipment thoroughly before use to prevent cross-contamination and ensure product safety. Conduct regular quality control checks during production to ensure the product meets established quality standards.

 

3.7 Experiment with Jamu Recipes

Conduct various recipe trials to achieve optimal taste and benefits. Involving potential customers as testers can provide valuable feedback. This helps understand the preferred taste and benefits desired by your target market. Repeated recipe trials also ensure product consistency, maintaining desired quality standards. This process allows for innovation and creating unique and appealing jamu varieties.

 

3.8 Build Strong Branding

Strong branding is essential to attract customers and differentiate your product from competitors. Start by creating an appealing and memorable business name, as a fitting name leaves a lasting impression on customers. Additionally, attractive and informative packaging plays a crucial role in attracting customer interest. Professional packaging not only enhances the perceived quality but also provides necessary information about the benefits and composition of the jamu you offer.

 

3.9 Use Competitive Marketing Strategies

Effective marketing strategies help expand market reach and increase sales. Set competitive prices that match the product quality and target market, as the right price attracts more customers. Utilize social media and e-commerce platforms to broaden market reach, making your product known to more people. Provide friendly and responsive customer service to enhance customer loyalty.

 

4. Estimated Capital for a Jamu Business

4.1 Initial Investment Capital

  1. Monthly rent: IDR 700,000
  2. Jamu display case: IDR 3,000,000
  3. BPOM registration: IDR 1,500,000
  4. Cooking equipment: IDR 1,000,000
  5. Thermos, ice cubes, and blender: IDR 600,000

TOTAL: IDR 6.8 million

 

4.2 Monthly Operational Costs

  1. Raw materials (kencur, ginger, temulawak, etc.): IDR 7,000,000
  2. Packaging: IDR 2,000,000
  3. Rent (for a fixed location): IDR 1,000,000
  4. Employee salary (1 employee): IDR 750,000
  5. Electricity and other costs: IDR 800,000

TOTAL: IDR 11,550,000

 

4.3 Estimated Monthly Revenue

Average sales of 120 packages @ IDR 5,000: 120 packages x IDR 5,000 x 30 days = IDR 18,000,000

 

4.4 Estimated Profit

Revenue - Monthly Operational Costs

= IDR 18,000,000 - IDR 11,550,000 = IDR 6,450,000

 

Here’s what you need to know about the business opportunities in jamu and the estimated capital required. Starting from just IDR 25 million, you can begin your jamu business and attract customers to buy your jamu.

 

If you face initial capital constraints, BFI Finance can be your solution. BFI Finance offers multi-purpose loans with collateral such as motorcycle BPKB, car BPKB, and house or shop certificates for various needs. With competitive interest rates and flexible terms, BFI Finance can support your jamu business capital. Apply for financing only at BFI Finance

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