With the rapid urbanization speed, the demand for construction of high-rise buildings, apartments, townhouses, industrial houses, road bridges… is increasing day by day. Here is the story Building materials business Sapo to share with you.
Experience in building materials business
1. Trading in construction materials in rural areas
In 2010, with the excitement of the startup story, I put 500 million VND to open a shop to sell building materials in the countryside and hope to become an entrepreneur without success.
I have drawn up a very methodical plan to open a store and business, carefully prepared from the location, acquaintances to introduce customers, to where to import building materials?…
At first, I was quite confident because there is a fairly spacious business location about 100m2. It was originally the grandparents’ house on Quang Trung street, Thai Binh – a developing residential area, with many new apartment buildings sprouting up, the demand for construction is quite high.
According to my research, building materials business in the countryside has 3 basic things:
- Carpentry group: Brick, sand, stone, gasoline, iron and steel…
- Finishing group: Tiles, lime, paint…
- Group of interior and exterior: Electricity, water, furniture, iron, roof, fence…
Read more: Tips for finding cheap construction materials
Because it is expected to invest about 500 million – neither less nor much for the building materials industry, I decided to do it and make it as a group. I analyze like this, with a capital of 500 million, not enough money to cover everything from cement bags, sand and stone to electrical wires, paint boxes.
While, the business location I prepared on the road, near the market will be more suitable as a transaction point – wholesale and retail rather than a warehouse. So I poured 350 million into the carpentry group, completely leaving the finishing group and the interior and exterior group, the rest spent on advertising – marketing and working capital when needed.
Experience in opening a building material store
2. Steps to prepare for trading in building materials
I went online to learn business preparation steps for beginners, step by step to prepare a business, and learned the following:
- Consult the market for building materials., and building materials stores. How about the area you want to do business?
- How to find a good supplier? Contact a company specializing in providing construction materials.
- How to survey distributor prices, agent prices and retail prices of stores around your area, and nearby stores to get competitive prices?
- Organize the opening day and widely announce it to friends and acquaintances.
I firmly believe that with such preparation, my model of selling construction materials in the countryside will surely succeed.
Trading in building materials requires proper preparation
3. Lack of experience in opening a building material store
3.1. Cash flow management
When I entered the real business, I realized that I lacked experience in opening a building material store and had to pay the price with money and tears. The first is not knowing how to manage cash flow at the building materials store. Coming from a Physics person, University of General, I am quite confident in calculating money. But quick payment has nothing to do with a successful building materials business.
After only 6 months of operation, I encountered a big problem of budget deficit, like the feeling of selling a lot but not seeing any money. Later, I found out that people in the core business of building materials call it a store balance. The source of money errors comes from debt and debt collection.
At that time, because it was new to operation, not many people knew the name of Toan Phat Building Materials store, so I had to risk selling on credit to customers, considering it as a baiting strategy. I insist that, instead of pouring money to run ads for building materials stores, I give customers debt to stimulate them to buy more.
But, I was wrong again. Maybe, willing to sell on credit to regular customers is also a way for them to buy more goods, but the important thing is how much credit is sold, and for what time, I have not been able to measure and measure it at all. Those of you who are applying this way, want to manage cash flow, use building materials store management software.
3.2. Shipping Management
As soon as I chose to sell construction materials in the countryside, I had planned that I would have difficulty in managing transportation because I did not have a car, so even though the house was on the road, I did not need to think about buying a big car. or a small car, I still have a more difficult problem than whether to buy a car or rent a car.
At first, I didn’t think about the customer requesting to deliver building materials to their house, so I didn’t set the cost of buying a car when I opened a building materials store. At this time, the delivery of orders depends on the rental car, so it is not active in the transportation. The car is rented, so they are not enthusiastic about their work. There are trips that I personally have to load each bag of cement onto the car.
Inadequacies like that, so later on I decided to buy a pickup. With the capital in hand only nearly 100 million (about 80 million I make up for the amount of goods imported, sold on credit to customers). I decided to buy Tera 230 – a tarpaulin truck, 2, 3 tons, transporting construction materials.
Buying a car is also more active in transporting goods. All orders are delivered to the project or customer at the required time. My business has also improved a lot.
How much capital does it take to open a building material store?
3.3. Lack of marketing strategy
After so many ideas in my head, but I still can’t figure it out and turn it into a specific strategy to develop the market and grow the business. Customers still have but cannot compensate for the monthly car installment payments, money owed to customers and contractors who appropriate capital.
I want to promote the business of building materials, but I don’t know how to sell more goods.
Gradually, I decided to stop the business altogether, just keeping the truck to let the tenants run from place to place.
3.4. Bloody experience drawn
Capital – capital and capital: If you do not have strong capital, it is difficult to build an effective construction business. If using credit to sell goods, determine that they will appropriate their capital. Maximum for customers with 40% debt/one application, and maximum debt of no more than 1 application within 7 days (can be for single-payer debt – pay off the application first + advance 60% of the application later).
Opening a building material store requires the necessary toolsIn addition to the location, capital, and industry knowledge, you also need a car and human resources to carry.
What does it take to open a building material business?
Steps to open a store such as business registration, sourcing, pricing, store management skills.
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Open a building material store: You need to understand the business model of your store. Is the store a warehouse and a place of transactions or is the store just a representative office? This will greatly determine how your store operates. But regardless of the form, the book of revenue and expenditure management is not enough, you need a building material store management tool.
I wish you success with the opening of a building material store.