Setting-Up a Videoke Machine Business

” alt=”” />After six years working as a shipping clerk in a Japanese firm in Hong Kong, Conchita Zurita returned in 1997 to distribute personal computer boards for video games. Five years later, she started assembling videoke machines for videoke bars. She then applied for a loan to go into the business full time. It costs her P30,000 to P50,000 to produce one videoke unit. She assembles the wooden cabinets in her warehouse in Lucena City, and then ships them to Manila to install the player and CDs. She says the market for videoke machines is large. And the profit sharing is 70 percent for the owner of the machine and 30 percent for the renter.

“You can’t go wrong in this business because the minimum you can make is P1,000 a week,” she says. “There are times when I can make up to P12,000 a week on just one videoke machine.”

She suggests you start by producing one machine first. When you’ve saved enough money renting it, you may assemble your second machine and also rent it out. “The return on investment in this kind of business is really fast because in eight months, you’ll be able to get back your capital,” she says. “The most important thing here is you get a good location.”

Videoke machines are equally good for the renter. “The money I earn from the videoke is additional working capital,” says Eduardo dela Cruz, owner of Section A bar and restaurant in Bacoor, Cavite. “But I’d like to buy my own videoke eventually because I can earn so much more. Sayang talaga ang kita because there was a time when the owner made about P6,000 from the machine and I only got P2,000. The money could have been all mine.”

If you’re serious about going into the videoke business, it’s important to have a technician on standby 24 hours a day to repair any broken machine as quickly as possible. Zurita has thirty. “In Lucena City, my technicians go around in bicycles so they can reach our clients as quickly as possible,” she says. Her advice:

Don’t compromise on sound. “I can come up with a videoke machine for about P23,000, but it won’t sound good,” Zurita says. Filipinos are serious about their music, and you can’t make them sing their favorite tunes if you karaoke squawks like a parrot.

Come up with good designs for your cabinet. “That is what makes me proud of my videoke machines,” says Zurita. “I have someone in charge of designing the cabinets.”

Look for suppliers who can give you after-sales guarantees. “This way, you know you’re getting the best that money can buy,” says Zurita. She gets her good from Hong Kong from reliable suppliers.

Look for the best deal if you’re renting a videoke machine. Bar owner Eduardo Dela Cruz looked around for the best arrangement before deciding on a partnership with his supplier. “The others were offering me 30-70, but my partner was the only one who offered 35-65,” he says. “That was an opportunity not to be missed.”

Be up to date with your song selection. Competition is tough in this line of business because the ability to supply clients with the latest songs will make you stand out from the rest. Dela Cruz says he was among the first to get the song Bulaklak in his videoke machine. “The customers in the neighboring bar started frequenting my place when they found out that I had the latest songs in my machine.”

Pick the best location. A place near a bus stop or a mall will be great for your business. “These areas have the potential of earning a lot of money for your videoke machine,” says Zurita.

Look for other ways to earn from your machine. “If you want to hire a videoke machine for your special occasion, I will charge you P1,000 per hour per machine,” says Zurita. “That is extra money with no added effort on your part.”

Look for trustworthy technicians. There was a time when Zurita lost a lot of money because she trusted her technicians too much. Since then, she has tapped her children to help her out in the business. “I got my sons to train at the Meralco foundation so they’d know what the technicians were doing with our machines,” she says. “Now I’ve trimmed my losses, and I monitor my people more closely.” – by Anne Ruth dela Cruz of Entrepreneur Magazine

By owning your own machine and placing the machine in your own establishment, you will be able to keep 100% of your profits.

  • 1 Machine P60,000 (Includes the Use of a USED TV for P10,000)
  • Divided by 12 Months = P5000 per month
  • Divided by 30 Days = 166 pesos per day
  • Average song 3 minutes x 33 songs = 99 minutes per day
  • 166 pesos per day divided by 5 pesos per song = 33 songs per day
  • 99 minutes per day Divided by 60 minutes per hour = 1.5 hours of usage per day to recover your investment.

By owning your own machine and placing the machine in someone elses establishment, you will be able to keep as much as 70% of the profits.

  • 1 Machine P60,000 (Includes the Use of a USED TV for P10,000)
  • Divided by 12 Months = P5000 per month
  • Divided by 30 Days = 166 pesos per day
  • Average song 3 minutes x 33 songs = 99 minutes per day
  • 166 pesos per day divided by 5 pesos per song = 33 songs per day
  • 99 minutes per day Divided by 60 minutes per hour = 1.5 hours of usage per day to recover your investment.

Just operating your machine 1.5 hours a day will return your investment in on full year. However, if you have a good location, your return can happen much quicker and you can start enjoying a nice profit.

If you own more than one machine, you simply multiply the following figures by the number of machines and you can make a very nice living for you and your family.

source: www.philippinebusinessstartups.com

 

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