Last December 12, 2014, we signed the clean MoA and escrow agreement for the acquisition of a P50 million capitalized financial plan company which has been idled by the owners while they were ahead when the the fortunes of the pre need company plummeted with the problems of CAP, Prudentialife, Pacific Plans, PET, Professional, Permanent.
The seller told us that the party to whom they offered the deal at the beginning of the year, a large group of memorial park, was running after this company. Wow! It us a coup for us/1 They seemed to have applied with OIC but the office was sitting on their application. We are entrepreneurs and we decided quickly it was the best deal for us.
It may be our destiny to get this company. Very soon, for a small amount, we get hold of a 50 million pre need company, one of the 22 stronghold in the industry
My view was that the business model of setting aside only 46% of the collection for the trust fund was wrong at the start. If the money does not earn enough even for twenty years, coupled with claims (which could be high in educ and pension plans) and high inflation rate, the pre need company are predestined by law to fail.
Some failed because they took salaried sales people which burdened the other pre need company; the executive floor was filled with highly paid non performing executive(?)
However it is a very different story for memorial plan. However, you must own the chapel and funeral services, buy at deep discount for you to grow your investment. Fortunately for the mp business, the margins are at low of 30% for the low end products and 60 to 70% for packages that are priced premium
Right now we are busy preparing the business marketing,and product plans. God bless us on this new venture.
