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PLAYING AT BUSINESS EPISODE 20 – How To Successfully Start & Build A Toy Company

PLAYING AT BUSINESS EPISODE 20 – How To Successfully Start & Build A Toy Company (Transcript)

To listen to this podcast episode, just click here: https://playingatbusiness.libsyn.com/how-to-start-a-successful-new-toy-business

 

INTRO

  • Hi, welcome to Episode 20 – Playing at Business podcast.
  • I’m your host Steve Reece.
  • Today I’m going to be talking to you about starting a new toy business and how to set it up for future success so you can keep on growing and growing!
  • Before we get onto that though, If you’d like to find out more about the toy & game industry
  • You can get news, analysis and insights via our toy & game trade blog sites:
  • You can sign up for our Free email newsletter on those Blog sites, sent out most Fridays with link to our latest published content including notification of new podcast episodes
  • If you find this podcast, or those Blog sites interesting or insightful, please do share them with your friends and colleagues in the business – we want to provide free to as big an audience as possible.
  • And if you need help to grow your toy or game business, you can check out our Consultancy services – we have worked with more than 100 companies to date, delivering $tens of millions in revenue growth and more than $10m in manufacturing cost savings additionally. To find out more about what we do and how we do it, please check out KidsBrandInsight.com/services
  • That’s the initial blarney out of the way, now onto our talk about how to successfully start a new toy business.

 

PODCAST SCRIPT

  • OK, so first let me outline some experiences we have in our company which are relevant to being in a credible position to advise on how to start a toy business successfully and to position it for future growth and success.
  • Two start up journeys, delivering $tens of millions – cumulative total revenues from these 2 ventures would be in the region of $60m USD.
  • We’re now heading into our 10th year of Consultancy to toy & game companies.
  • We have helped more than 100 companies to grow, and over half of them were fairly new companies.
  • We’ve seen lots of companies succeed, and we’ve seen far more companies not make it.
  • There are a number of key recurring elements we have observed in both failure and success, and that’s what we’ll be running through on this podcast.

 

  • Research the market, have a strategy showing you are delivering clear differentiation versus the million+ other toys out there
    • Research – visit stores (when possible, trawl online stores).
    • Think through your plan.
    • How are you different/better than everything else out there?

 

  • Develop a compelling company story to tell & get awesome at telling/selling it.
    • In the end you have to sell a product but telling a compelling story can be a powerful way to influence even the most cynical of retail buyers.

 

  • This is a product driven business, so whatever else you get right or wrong, make sure you develop compelling play experiences with a motivating commercial proposition for retailers & distributors.

 

  • Please, please, please – test your products with children & parents of the target age before you spend big money or start trying to sell.
    • Answer some really basic questions:
      • Is your product conceptually appealing to the target audience?
      • Is there already some other product they know like yours?
      • Can children use the product/do they find it fun?
      • And so much more – I ran over 1,200 focus groups with children and parents on toys, and never once ran a group where I didn’t discover something new.

 

  • Create effective sales collateral:
    • Catalogues which clearly show the products, benefits, functions, and key data e.g. age target
    • Videos which bring the products and brand to life when you can’t be there to present in person.
        • Sell!
          • A start up is not really in business until you sell something, and you need to grow the sales revenues to have any chance of building a successful business.
          • The most important department/function to begin with for a toy company is SALES!
          • Be realistic though, most people don’t sell to Walmart, Carrefour or Argos in Year 1. To grow international distribution, or to hit all key retailers in any one market takes time – usually 3-5 years minimum!
        • Finance/cashflow
          • Annual selling process = nearly constant cashflow strain & takes a long time until the next time money comes flowing in.
          • Be cautious on sales forecasts, actual sales are normally far less than sales projections for start-ups, because it’s freaking hard to sell, especially when there are thousands of other established toy and game companies out there already.
        • Be cautious on inventory
          • Excess inventory kills toy companies.
          • Cash tied up in stock is not helping your business.
          • It’s better to be just out of stock than massively over stocked.
        • You need a really strong team, with no weak links (especially at the beginning), and you need a good communication dynamic which blends strengths to balance out individual weaknesses. Finding good people you can trust is not always easy, but it is critical for creating & sustaining success in this business.
        • There is a lot more, but that’s enough to consider to begin with!

 

  • We’ve worked with a lot of toy and game start-ups, and seen many succeed and go onto big things, and also many fail, effectively managing the areas we discussed in this Podcast usually defines the level of success you can achieve.

 

OUTRO

  • Well, hope you enjoyed this podcast looking at How To Successfully Start A New Toy Business.
  • If you did, please give us a good review or rating on the podcast platform you are listening to, and a reminder again to check out our Blog websites: toyindustryjournal.com and www.boardgamebiz.com
  • Please share the podcast with your friends and colleagues in the industry and stay tuned for new episodes coming soon!
  • If you’d like to work with us on a bespoke toy and game trade marketing campaign, or if you would like to find out more about our Consultancy services, which we have delivered for more than 100 companies around the world at this point, please visit KidsBrandInsight.com/services
  • That’s all for now, I’ve been your host Steve Reece, this has been the Playing At Business podcast and we’ll see you next time.