Spielwarenmesse: Starting up: Question­naire for toy industry founders

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Movers & shakers

Starting up: Question­naire for toy industry founders

from Eva Stemmer und Jörg Meister

The toy industry is incredibly varied – offering a fantastic playing field for new ideas and surprising start-ups. But entrepreneurs cannot act quite as freely as it might appear at first glance. Other than the usual business obstacles, very special challenges loom for founders in the colourful world of toys.

The product idea: Function and design

Many roads lead to the industry. The journey often begins with a very specific product idea inspired by day-to-day contact with children. However, anyone wanting to take one single product idea as the basis to form a company should first put it to the acid test:

  • Is the product idea really new?
  • What functions does the product require to be child- and market-friendly?
  • Can the idea be expanded into a product series or family?
  • What design is needed to succeed?
  • Are the product’s contents digital in nature, or should it be expandable by digital applications?

The toy industry is undergoing upheaval, like most other consumer goods industries: Digital contents are increasing in importance. This can become very challenging for established market participants. For new entrants, however, the change can also hold out the promise of a road not yet travelled.

A business idea then grows out of this product innovation. However, before the founder or the founding team registers their business, they should turn the focus not only to the product, but to the general conditions as well.

The market study: Market and target group

Thorough examination of the market, the target group, and demand is essential. But in the absence of industry knowledge, this is nowhere near as trivial as it might seem. Like the target group, sales channels are quite heterogenous and differ significantly depending upon the product. So important questions are:

  • Who should buy the product?
  • What age range and pocketbook am I appealing to?
  • Where do the potential product idea users shop?

Based on this, a thorough review of the existing market in the segment identified can be undertaken.

The business plan: Time and money

Many founders underestimate the timing and financial demands of their venture. It is thus important at a very early phase of formation to set oneself a “pain threshold”:

  • What are my strengths as an entrepreneur; where do I need help?
  • How much time am I ready to invest?
  • How much capital would I like to invest; how much is available to me until I start earning money?
  • When do I have to break even so that my continued effort pays off – and what factors do I consider in order to determine such point of break-even?
  • What do I do if I do not reach this goal?
  • Do I need a loan, and what security do I have so that I can obtain a loan?
  • What support is out there for my start-up?

Not a few start-ups fail at the level of self-analysis, since the input needed exceeds available time or capital.

The network: Industry experts and sales partners

The be-all and end-all for a successful brand is a dedicated network of industry experts, sales partners, suppliers and customers. In retail, especially, one must know the right people and understand what makes them tick. Only then can business be transacted successfully together. So, founders must ask themselves:

  • Which key people do I already know? Where can I get to know them?
  • What are the most important events held by the market participants and open to me?
  • What advisory bodies are there for me generally as a founder and in the industry?
  • How do I find the right sales channels for my product which will ensure the success of my industry launch?

Patience is needed – along with vigorous and active participation and presence at network meetings. If competent experts are there to help, they might be able to open doors or give valuable advice on what to avoid.

Toy safety: Standards and safety tests

Something else that all too often comes to light too late are the safety requirements to which the founder’s invention are subject:

  • For example, does the product comply with the rigid limits of the European Standard for Toy Safety Testing, DIN-EN71?
  • Is the toy at all marketable?
  • Is Europe the sole sales market, or should markets outside of Europe be targeted?
  • What standards apply there and must be considered from the start in product design?
  • What are the institutes for product testing? Which are positioned internationally, if the product is to be marketed on different continents? 

IP: Copyright and industrial property rights

As soon as a founder goes public with a product idea, there is the possibility of its being copied. An entrepreneur must therefore consider from the start how to protect an idea. Key questions for self-analysis here are:

  • What kinds of protection are there in which markets?
  • Who helps with protection?
  • Can the principle upon which the invention is based be protected?
  • Do protective rights of competitors underlie parts of the invention?

Since these kinds of questions are very complex and often very difficult to answer for newcomers, it is wise to avail oneself of expert knowledge.

Confronting these many aspects can feel intimidating to founders as this constrains creativity and calls for much more drive than initially assumed. But in the face of all the questions, one thing is sure: the more and the more mercilessly a founder thinks things through before registering a business, the greater the likelihood that the business idea will be successful. And Spielwarenmesse is the perfect hub for using the market, retail, trends, and the network in one location, on a joint basis.


This article represents just an excerpt of all the questions that founders should ask about a business idea in the toy industry. It represents the author’s opinion and does not necessarily reflect that of Spielwarenmesse eG.

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