Start Investing On The Starting Capital

So I asked Ramil what a starting capital means in the fishing business...

Here's what I found out...

Starting capital. Photo credits

Just like in any business, for it to start, you need some money to get it off the ground - a starting capital. This capital is also referred to as the seed money and, in a typical brick and mortar business, this is used to pay rent for office space, permits, furniture, equipment, and professional fees of your employees.

Slabs of ice.

Same is true in when you own a fishing boat. It needs to have a starting capital to be used to purchase supplies for the fishermen. This includes sacks of rice, canned goods, potable water, and charcoal for cooking. They also buy blocks of ice to keep the tuna fresh in their storage bins. Usually they bring at least 30 blocks of ice with them.

Rocks loaded to the boat. Photo Credits

These small-scale fishermen uses hand-line method for fishing. To help them catch tuna, they also buy and load thousands of rounded rocks into their fishing boat. Not but not the least, they need to purchase containers of crude oil and gasoline for the mother boat and its ranger/scout boats. All of their supplies should provide them with enough of what they need for at least 15 days in the ocean. Bigger boats can even last for a month.

In this kind of fishing business, however, the owner of the fishing boat doesn't need to be the one to provide the starting capital. It could be anyone given that he or she can raise the required amount needed for a single trip. When the boat docks and sells its catch, the starting capital financier gets five (5) percent of the gross amount of the sales. For example, if the boat gets a gross sales of Php 300,000.00, the financier gets Php 15,000.00 automatically and without any question.

Yellow fin Tuna. Photo Credits

How cool is that, huh?!

One more good thing about being a starting capital financier is that, when the boat docks and doesn't earn enough to recover all the starting expenses, the negative amount is carried over and over the next trip until such time that it is completely recovered. Pretty safe but not ideal for the faint-hearted. Starting capital usual ranges from Php 50,000.00 to Php 100,000.00 and the income is entirely dependent on the GROSS sales.

When I learned about this, I thought that becoming a financier is less risky and that maybe I can try it for a start.

If I were to ask your opinion, is it okay to become a starting capital financier?