Can a business be started with 500,000 pesos?

indiana16

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Jan 5, 2006
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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?
 

Importer

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Jan 28, 2008
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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.

Importer
 

NALs

Economist by Profession
Jan 20, 2003
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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?
Whatever you do, always keep in mind that anyone can start, but only the thoroughbred will finish!

-NALs
 

dv8

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Sep 27, 2006
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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...
 

Manzana

Member
Jan 23, 2007
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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.
 

Matilda

RIP Lindsay
Sep 13, 2006
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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.
 

daydream

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Sep 19, 2004
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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.

Hi Matilda

If you don't mind me asking, what kind of profit can a colmado make per month?

Thanks
Daydream
 

Dolores1

DR1
May 3, 2000
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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.
 

Matilda

RIP Lindsay
Sep 13, 2006
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Hi Matilda

If you don't mind me asking, what kind of profit can a colmado make per month?

Thanks
Daydream

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.
 

Chip

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Jul 25, 2007
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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.

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.
 

Matilda

RIP Lindsay
Sep 13, 2006
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Yes that is gross profit before electric and wages and of course tax!!! No, my husband has nothing to do with it now, just the legal stuff. We have a full time Dominican/Haitian staff. I and my partner (another Brit lady) do 3 afternoons a week between us and the market shop twice a week. Yes I am afraid you need to sell beer and liquor. We do well as we open at 7am for coffee (5 pesos) and sandwiches and bread (5 pesos - 6 with mayonaise!) for the construction workers and close at 10pm. We also have a meat freezer which is useful as there are no butchers in Juan Dolio. All of the Dominican staples - rice, bread, platanos, rum, beer have very small mark ups and the more European things have a larger mark up. Need to know more then just pm me
 

suarezn

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Feb 3, 2002
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Chip: In another life I worked in a small Colmado owned by my family. I can say I don't like this business at all nowadays (specially in a small town) because you'll have tons of people asking for credit (fiao) and you can't really say no, as they won't buy from you when they have the cash and encourage others to not buy from you either.

Now Colmados have changed a lot and are more bars than anything else. You make very little money from staples (as mentioned above). Your better margins are on liquor, so If I was going to setup one of these nowadays I would just sell liquor and maybe some snacks, but not the usual salt, sugar, sopita, etc...(Colmadon)...Even better just a liquor store where you're not expected to give credit to anyone and is pretty cut and dry you buy your liquor and go drink it somewhere else (even if it is next door).
 

Chip

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Jul 25, 2007
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Chip: In another life I worked in a small Colmado owned by my family. I can say I don't like this business at all nowadays (specially in a small town) because you'll have tons of people asking for credit (fiao) and you can't really say no, as they won't buy from you when they have the cash and encourage others to not buy from you either.

Now Colmados have changed a lot and are more bars than anything else. You make very little money from staples (as mentioned above). Your better margins are on liquor, so If I was going to setup one of these nowadays I would just sell liquor and maybe some snacks, but not the usual salt, sugar, sopita, etc...(Colmadon)...Even better just a liquor store where you're not expected to give credit to anyone and is pretty cut and dry you buy your liquor and go drink it somewhere else (even if it is next door).

Thanks for the info - if I did it it would really only be for una chiripita to supplement other income. I had planned on having some family members work there.
 

Matilda

RIP Lindsay
Sep 13, 2006
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Just got back from an afternoon in the colmado. To be honest the liquor is not the main thing. This afternoon it was phone cards (6-8% mark up), toasted sandwiches (our biggest seller) and stuff for cooking (platanos, tuna, chops, salads). We also supply some of the other bars, restaurants and hotels. Ice is also a big seller and that is a 50% mark up. As we close at 10pm we are not such a big bar. We are a big cinema as we have cable and have a lot of people watching TV, and people just hang out and chat. I love it!!!