Toy Inventor Needs Financing for Inventory

The business is a 100% woman-owned business which was started in January 2004 to wholesale toys, which she designed, to catalog companies. The toys are made in China. The client came to the SBDC after attending a “Starting a Small Business” seminar. The client needed assistance in formulating and evaluating the projected operations and cash flow of the business, in evaluating her marketing plans, and in helping with the logistics of warehousing inventory. She also sought assistance on how to finance the business.

The counselor assisted the client in deciding at what level of business to conduct her first year of operations in order to minimize risk of loss and, if possible, operate profitably. The counselor also assisted in the type of financing that could be obtained and helped the client to define her target market and prepare for product presentations to the catalog buyers.

The client obtained a home equity line of credit for $65,000, imported one container of toys, sold out with sales of $144,000, and realized a profit of approximately $30,000. The line of credit was repaid as agreed from cash flow. The client is now in the process of expanding her sales for 2005 and has attained several more catalog clients.