Interview with an entrepreneur:
How to make money by minting coins
The site clogicsecure.com, as part of a joint project of the Community of Information Portals Promoting the Development of Small Businesses, continues a series of interviews with successful entrepreneurs who are ready to share their own experience in creating a business and help newcomers take their first steps in business.
“On average, the first mini press, supplies and all the necessary equipment cost us 50, 000 rubles”
Moreover, precisely because of the small prevalence of coinage services, information about the specifics of running this business is almost impossible to find.
But thanks to the frankness of the founder of the company "Coin Attraction" Dmitry Yuryevich Starodubtsev, you get a rare opportunity to learn about all the features of the coin business first hand.
Tell us a little about your company.
Our company has existed since 2008. At first we were engaged in the sale of original gifts and souvenirs, for example, we were one of the first to certify and began to sell a neocub in Russia. Then we decided that it would be nice to start a small production ourselves, then the idea came up of creating a mini press for cold coinage of souvenir coins. Within a couple of months we had ready-made equipment in our hands, and a month later, this equipment worked for its intended purpose, to the delight of us and tourists. And a few months later our service was already offered by advertising and event agencies. I think that by August we will launch a new type of equipment - a vending coinage machine.
Tell us more about the technology of coin minting business?
The technology is extremely simple. Money is made on three main things:
Coin minting service for people. Development of your own network.
Sale of equipment. Package for a ready-made business.
Sale of consumables. Blanks for coins, cliches and more.
The secret of success lies in the fact that a fairly free market niche is selected, high-quality equipment is used that does not break, income is several hundred percent, which is very attractive for building an affiliate network.
How did you come up with the idea of starting this particular business? The idea of souvenir coinage is not new. A similar business has existed for a long time abroad, there are points for minting coins in Russia, businessman Sergey Panshin organized the company “Monetnaya Zabava” in St. Petersburg. Did you come up with the idea of doing such a business by analogy with existing companies offering coinage as an original souvenir?
The idea of such a business came after participating in a theatrical performance, which was organized as part of the “Night at the Museum” campaign, which I visited in Yaroslavl. There was an exposition in which a man in ancient clothes offered everyone to pick up a hammer and mint a souvenir coin for himself - and since the price of the tickets included the entire entertainment program, I received a coin absolutely free. My first coin is still on my desktop. I liked the idea so much that I decided to try to organize a similar service in my region. Later I learned that in St. Petersburg there is a similar service that came there, in my opinion, from Finland.
How did you implement your idea? How long did its implementation take?
To implement our idea, first of all, it was necessary to design and manufacture equipment. Therefore, it was necessary to find people who, in a short time and for a moderate fee, would agree to develop all the necessary design documentation, make a test sample of the press, as well as all the necessary consumables. After a long search, we finally settled on several companies, among which we assigned the main tasks for creating equipment, and after a couple of months we had a ready-made test sample in hand, the tests of which were crowned with success. By the way, our technical education was very useful, which more than once saved when communicating with developers. Several original design decisions came from my own head. On average, it took a little more than 2 months to implement our idea.
How much did the start of the project cost you? What are the main expense items? How much did the purchase and installation of equipment cost you?
The main expense items:
Equipment manufacturing: mini-press, stamping, development of the stamping design
Production of copper and aluminum coin blanks.
Purchase of items necessary for minting coins: anvil, sledgehammer, mounts.
It should be borne in mind that at the start of our project we manufactured everything in a single copy, so the prices were much higher than the prices at which we manufacture our equipment now in larger volumes. Particularly high were the prices for coin blanks, which are made using special technology from soft grades of copper and aluminum and undergo annealing and polishing procedures to improve the quality and appearance of the minted coin. The price of one such blank reached 60-70 rubles.
On average, the first mini-press, supplies and all the necessary devices cost us 50, 000 rubles.
As for the installation of equipment, it must be said that this procedure is practically cost-free - the equipment is quite mobile and does not require assembly-disassembly. The only thing that had to be paid for during the placement was rent payments, which are often paid without any official accounting documents (roughly speaking “on the paw”). The first rental cost us 5-6 thousand rubles a month.
How long have you paid back your initial investment?
We paid for our first mini press for about 3 months, it should be noted that at this starting stage the technology of our business has not yet been debugged, and the first set of equipment cost us much more than all the subsequent ones. Now 1 set of equipment with us pays off on average 1 month. In general, business requires constant injections, so dreams of buying a new car and other things have to be postponed in order to continue continuous development.
What can you say about the profitability of your business?
In order to show clearly the profitability of a coin attraction, I will give specific figures:
Rental price 1-2 sq.m. land in a passable tourist place: about 4000 rubles. per month
Operator salary: 10, 000 rubles. +% of sales
Price of a coin blank for partners: 30 rubles.
Average coin production time: 5 min.
Minimum number of clients per day: 10-15 people
Price of the service for customers: 200-300 rubles.
Full payback of equipment occurs in 1-2 months
Thus, after a full payback of the equipment, that is, after 1-2 months, the “Coin Attraction” starts working with a profitability of about 500-600% (simple arithmetic: income minus expenses).
How many people work in your company? How did you select employees?
Today in our state there are 8 people. In addition to the director, the staff includes 1 marketer, 1 technical specialist and 5 plant operators. As for staff recruitment, I can say that key specialists are my good friends - there were no problems with recruiting - you just had to look at your environment a little differently. But as for the operators for the installations, we have 3 seasonal specialists, as a rule, these are the students whom we find by advertisement. We also have 2 specialists who work on the road - promos, holidays, exhibitions and more. They put on the uniform of a blacksmith, take in an armful of equipment and go to order in a company car.
What difficulties did you encounter in the initial stages of doing business?
The very first barrier was related to the transition from the usual trade, which brings money in an understandable way to the production and provision of services. There was a lot to learn for this. First of all, it was difficult to find adequate people who understand the intricacies of a new non-core area for us. Many of them turned out to be my good friends - the stage has come when I recognized many of them not just as good guys whom I have known for a hundred years, but also as first-class specialists. One friend of mine developed excellent design documentation, another design of the first coins.
One of the problems turned out to be to receive your order for the production of the next component of the equipment on time. For example, this happened when we ordered the first stamping from strangers to us.
Initially, we agreed on two weeks, and this period was given with a good margin. In fact, we waited almost two months, while they called several times a week and received an apology and the absence of any specifics. The same thing is happening to this day, although during the development of the project we minimized the number of components produced on the side. Unfortunately, if you work in Russia, you have to get used to some features: dishonesty of the business, lack of business ethics.
Which clients are you targeting?
For us there are several groups of potential customers:
Firstly, these are, of course, tourists who come to the resort for a certain purpose - to relax, have fun and take a piece of vacation with them, spending a certain amount of their savings on this.
Secondly, we offer our services to people who want to bring a twist to their anniversary, wedding or other holiday. Indeed, you will agree that the minting of souvenir coins with the name of the hero of the occasion and the date of the memorable event will not only entertain guests who, by the way, will not leave empty-handed, but will also perpetuate the memories of the holiday in an original souvenir. To promote services in this segment of customers, we attract event agencies.
Thirdly, we propose to install our mini-presses on minting coins to owners of restaurants, cafes, hotels, amusement parks, water parks, etc. Visitors, for a moderate fee, mint coins with the symbols of the establishment. People carry these coins with them and show them to their friends, acquaintances and colleagues. Thus, the owner of the institution makes a profit from minting coins, and also provides advertising for his institution.
Fourth, we offer our services to advertising companies. "Coin attraction" is an original, memorable, and most importantly effective method of advertising. Man himself is involved in the process of manufacturing promotional materials. A coin, with an advertisement minted by one's own hands, certainly does not go to the nearest ballot box, as is often the case with leaflets. Most likely, a person will put such a coin in a prominent place at home or in the office and will show it to other people, saying that he himself minted it. Therefore, such advertising certainly will not go unnoticed.
Fifth, we offer our services to various companies and organizations. Chasing branding is an excellent solution for exhibitions, presentations and corporate events.
Does seasonality exist in your business?
Of course, there is a seasonality moment in this business, but at the same time it cannot be called completely seasonal. As mentioned above, for us there are 5 groups of potential customers, only one of these groups are tourists, that is, seasonal customers. But even here it’s impossible to speak unequivocally about seasonality, because our points for minting coins are set in the Altai mountains: in the warmer months, tourists are attracted by picturesque mountain views, rivers and lakes, as well as various tourist routes; in winter, the ski season opens.
Only in the off-season (autumn, spring) the number of customers in this segment is markedly reduced. Birthdays, anniversaries, weddings, corporate events, promotions do not depend on the season.
How do you promote your services? What are the main promotion channels?
Speaking about promotion, I always share two directions: our own points for coin minting, as well as the promotion of coinage equipment itself in other regions of Russia and the CIS.
Attracting customers at their own points is built very simply - an attraction, as a rule, at the height of the tourist season they are placed in the most passable places - people pass by, see the crowds and are suitable to try it for themselves. In addition to tourist points, the coinage service is promoted with the help of:
Event-agencies that offer our services for organizing various celebrations to their customers. To do this, we ourselves provide them with all the necessary advertising and presentation materials.
They started working with agencies quite simply - they made up the base of all the agencies in our region, phoned them and sent them our commercial offers. As a result, we managed to agree with many at once, with some after a certain time.
Advertising agencies that offer our services for organizing advertising campaigns and promotions for business representatives.
As for the promotion of equipment, here the main channel for reaching customers is the Internet. We are still learning how to better build an advertising company on the Internet, but we already have some experience. As a rule, we promote business ideas through websites. The undisputed leader here is the portal www.clogicsecure.com. We also use banner advertising on specialized resources, SEO, mailing lists and more.
In what direction do you plan to grow your business?
We have identified for ourselves several areas of development.
Firstly, we are constantly improving our equipment, expanding the collection of stamping dies, improving the quality of consumables and more.
Secondly, we are increasing the number of mobile points for minting coins.
Thirdly, now we are actively working to promote the Coin Attraction equipment set as a package for a ready-made business - the main “trick” is that everything is already included in the package for organizing a business for the production of commemorative souvenir coins in any region of Russia and the CIS.
Well, the last, perhaps the most important thing in terms of growth and survival in the face of growing competition in the future, we are developing new types of equipment.
Specifically, a vending machine for minting coins using special rolling shafts is being prepared for release. Such devices are wildly popular in the United States. We saw, and also wanted to launch such an interesting direction, which also lies within the framework of our profile, in Russia.
The essence of the new device is that a person places a 5 kopek coin and a ruble coin in a coin acceptor, spins a special drum, which is connected with a rolling mechanism. As a result, the coin is flattened at the output, the old image is erased, and the new one is applied. Some of our partners are already expecting the release of these devices and are ready to buy them. So there are a lot of prospects for development, the main thing is to do everything sequentially and have an even plan of action.
What advice would you give to beginners who are just thinking about starting their own business?
I can give some tips:
Do not be afraid to take on what seems unfamiliar and incomprehensible to you. Any activity that I showed during my life in business was unfamiliar to me, it seemed that it was all complicated and no one needed, but in practice it turned out quite the opposite.
They are not afraid to open their own business and become independent from their employer. I used to think that almost all normal people have the dream to open their own business, but over the years I realized that just the same, most do not aspire to become entrepreneurs and learn to independently bear responsibility for their business. Moreover, the idea of building a career, working "for uncle", over time, only takes root in the brains of office plankton. I decided to try myself in my business instantly, only the start process took a long time, quite a long time I had to combine two work (in the office and on myself), it is psychologically easier to overcome yourself and go to a new level.
Always be very frank in front of your partners - sooner or later, a lie will come up, and people will turn their backs on you. Unfortunately, in Russia, many people in business often cheat, you need to get used to it and know how to behave in such situations. But at the same time, one must try not to be like these people and conduct a clean business.
Pay taxes on time ...
The process of making a souvenir is very simple, for this a coin blank, the size of a five-ruble coin, is placed in a small steel press, inside which a special embossing stamp is mounted with a three-dimensional image applied on it, which will be minted on the coin. After that, the press surfaces close together, and the buyer can only pick up a hammer and forcefully hit the top cover of the press. As a result, the buyer is satisfied with the process and receives his commemorative coin.
We offer you a turnkey business that does not require large financial costs, special qualifications, expensive equipment, or labor. Everything necessary for a quick and successful start is already included in our business package: a mobile installation for coinage, special supplies, advertising and presentation materials, as well as free technical and consulting support.
The cost of a business package is 48, 200 rubles. The income from the implementation of the starter pack is at least 90, 000 rubles. После реализации всех расходных материалов входящих в стартовый пакет "Монетный аттракцион" данный бизнес начинает приносить прибыль 500-600% (закупочная цена монетных заготовок для наших партнеров 30-40 рублей, рекомендуемая продажная цена 250-350 рублей).
634012, г. Томск,
ул. Сибирская, дом 111 «Б»
Сайт компании: www.coins-business.ru08/18/2019