Crowdfund Investing For Assets-back Business and Real Estate

BUSINESS PLAN

FOR

“BANQUERIGO VEHICLE FOR RENT AND GENERAL REPAIR SERVICE CENTER, INC.”

INTRODUCTION

          As you may notice, this is not the usual business plan format you used to know. I chose to construct a modified business plan in more practical way and as basic as possible. I own a Repair and Maintenance Shop in General Santos City which fixes all kinds of electronic appliances, vehicles, and provide other services such as welding jobs and other technical services. This business is doing great for the last five (5) years and my customers are many individuals. Some became my regular customers and it’s doing fine. But I wanted more for my Shop. I’m not contented anymore with just individuals as my customers. I plan to compete to the next level. I aim to provide to new types of customers other than individuals. I’ll be serving Government Agencies and Private Companies and make them as my Regular Customers soon. The problem that holds me back is the Funding. I don’t have the resources. Let me tell you that for the past years in my business operation, I only have DTI and Barangay Business Clearance as Business Permits. I failed to get Mayor’s Business Permit and B.I.R. Registration. Yes, that’s right! I don’t issue Official Receipts (O.R.) because of the Funding problem. What’s the advantage of having Official Receipt (O.R.)? The advantage is, if I have Official Receipt (O.R.), I can extend my services to Government Agencies (such as Hall of Justice, DENR, LGU, etc.) and to Private Companies (Fastfood Chains, Hospitals, Trucking Companies, and other private companies). These types of customers do not entertain Repair Shops that do not issue Official Receipt (O.R.). There are lots of Government Agencies and Private Companies who came to my shop before but they were asking for Official Receipt (O.R.) because if I have, they will give the maintenance works to my Repair Shop. Aside from Repair and Maintenance Shop, I am also involved in Vehicle Rental activities. I rent out Motorcycle, Tricycle, Top-down, and four-wheeled vehicle.

          Lately, I decided to look for Investors to join me in a Joint Venture. I am an Entrepreneur but I also like Investing activities like Real Estate. In this Business Plan I shall share to you the business idea I came up with. I hope you’ll be interested.

OBJECTIVE

          The business I want to present to you is related to Real Estate Investing. We are going to accept Mortgaged (Sangla) Real Properties (such as Commercial Space, Boarding House or Apartment, etc.) which are voluntarily mortgaged (isinangla) by their owners for Zero (0) percent interest rate but, in return, we will gain the right to use and manage the property and as well as the right to receive rental income from these properties. The appraisal rate will be at least 3% monthly return.

THE PLAN

          The Plan is to make my Repair Shop and Vehicle Rental Business into a Regular Corporation for the purpose of making it as the Holding Company for all of our Real Estate Investments. I already made an application for Registration of my Company to the Securities and Exchange Commission (SEC) as One Person Corporation (OPC) stated in the Section 116 of Republic Act 11232 or known as the Revised Corporation Code. The name of the Company in my application was “BANQUERIGO VEHICLE FOR RENT AND GENERAL REPAIR SERVICE CENTER, OPC” and the Certificate of Registration will arrive soon.

My Plan is to gather twenty (20) Investors who are willing to participate in this Joint Venture by investing at least One Hundred Thousand Pesos (P100,000) per head. The projected paid-up Capital is estimated to be Two Million Pesos (P2,000,000). After gathering the desired funds, I shall convert right away my One Person Corporation (OPC) to a regular Corporation which consists of twenty (20) shareholders. After converting, the 20 Shareholders will be having a Shareholders’ meeting as stated in the Law to elect the Board of Directors and Officers of the Corporation, as well as the By-laws or the rule that we will follow inside the company and everything in the meeting will be recorded in the minutes of meeting by the elected Secretary. In the meeting, we shall discuss everything. Then, right after, we will proceed by processing the Mayor’s Business Permit and B.I.R. Registration to obtain ATP for our Official Receipt (O.R.) issuance.

The main objective of our Company is to Invest in Real Estate by accepting Mortgaged Real Properties (such as Commercial Space, Boarding House or Apartment, etc.) and charging Zero (0) percent interest but, in return, we will gain the usufruct or the right to use and manage the property and the right to receive rental income.

As you may recall, our Company has secondary objective. The Repair Services feature of our company is just a secondary purpose but still quite profitable. My Repair Shop has loyal customers already and because our Company can issue an Official Receipt (O.R.), we can add the Government Agencies and Private Companies to our Regular Customers soon. This feature of the company can make active income to our company significantly. The Vehicle Rental feature of our Company can also make passive income that will play a major role in our operation. It can produce passive income in hourly or daily basis and almost 5% return every month. That is very high return indeed. The positive point in this business is the maintenance expenses of the vehicle inventory will not be a problem because we have our own Repair Shop on our hands. This Vehicle for Rent feature is a very important for survival in the long run.

BUDGET ALLOCATION

The Budget will be allocated as follows and it will be explained in detail below:

Note: The Fund Allocation might change depending on the Budget.

A.Real Estate Fund. Since it is the main objective of our business operation, it has the majority of allocation of 50% of the total fund. The One Million Pesos (P1,000,000) fund will be used to acquire mortgaged real properties which are intended in renting out.

B.Repair Services Equipment. This fund will be used for Equipment and Tools for Repair Services.

C.Vehicle Rental Inventory. This fund is for purchasing vehicles (motorcycle, tricycle, car, truck, etc.) and its accessories (sidecar and other vehicle accessories), either for cash or installment, which are intended to be rented out to customers in an hourly or daily basis.

D.Principal Office. Our Company’s principal office will be in my current repair shop at Arradaza St., Brgy. Lagao, General Santos City. The status of my Shop is I am just renting here for three thousand pesos (P3,000) for five (5) straight years. But the owner has an offer to me, that is, he is asking me to look for persons who will accept his commercial space as mortgage. He wants to pawn (sangla) his commercial lot for Three Hundred Thousand Pesos (P300,000) because he needs money. So I propose that we will accept his commercial lot as our 1^st Real Estate Investment so that we won’t be needed to pay monthly rental expense for our principal office anymore. The commercial lot has an area of 150 square meters and it earns at least 3% per month. It is actually a good deal. After we accept it as mortgage, we will allocate another Two Hundred Thousand Pesos (P200,000) for Office Building Construction for our main office to look good. The building will have three (3) office spaces with rolling doors. When it’s done, we will occupy one of the spaces and rent out the other two (2) spaces to earn monthly rental income. The Two Hundred Thousand Pesos (P200,000) fund for Office Building Construction will be refundable upon redemption as the land owner already agreed. If you wish to see the location site of the commercial lot where my shop is currently located, please do contact me so that I can tour you here.

E.Cash On Hand Account. This will be the Cash Fund to be used in daily operation of our business.

PLAN AFTER FORMATION

          If you will elect me as the CEO of the company on the first board meeting, I shall execute this post-formation plan immediately:       

1. 1.Real Estate Investment. This is the main purpose why our company exists. We will acquire Commercial Space, Boarding House or Apartment, and any properties that can be rented out, preferably with existing tenants/renters and earns at least 3% monthly return, and accept these as mortgages (sangla). The One Million Pesos (P1,000,000) should be spent all in the first 3 months of the operation. I already have prospect land owners who are looking for mortgaged offers for their properties. So the plan is to negotiate with them right away. The legal process would be, first, we will make the mortgaged contract with the land owner in their designated barangay council and pay him/her accordingly. Then, we will notarized the contract to a law firm and proceed to the Register of Deeds because the law so requires. Then after that, we will receive rental income monthly from its existing tenants or renters until the land owner decided to redeem his property or the contract expired, whichever comes first. In the event that my prospects changed their minds and decided to decline our offer, do not worry. Looking for properties to acquire is easier than you thought. The plan afterwards is to look for some land owners who has commercial space, boarding house or apartment, etc., and then, I’ll offer them to mortgage their properties. Believe me when I tell you that I’ll talk to all land owners with the types of properties we desired in the entire General Santos City and convince them one-by-one. Every individual land owners who has posters like “Space for Rent”, “Apartment for Rent”, and “Lot for Sale” in front of their properties, I shall get in touch with them and tempt them, even if I have to go door-to-door, in case the worst case scenario occurs. But I don’t think that’s necessary because looking for prospects is as easy as walking in the park. And besides, my prospects already agreed. My mission is just to dispose the whole One Million Peso (P1,000,000) worth of mortgaged properties.

1. 2.Repair Shop. The budget for the Repair Shop department of our Company is One Hundred Thousand Pesos (P100,000). This budget is intended for Equipment and Tools and other costs. The Plan after the formation of our company is to obtain Official Receipt (O.R.) with VAT in order for the Repair Shop department to transact Government Agencies and Private Companies. As you may notice, all Government and Private Company offices have appliances, air conditioner (aircon), vehicles such as cars and trucks, and other stuffs which need repair and maintenance. And that’s the reason why our Repair Shop department exists. If I’ll be elected as the CEO, I shall make sure that this Repair and Maintenance Services of our company will be marketed to not just individual customers, but also to Government Agencies and Private Companies as well. On the first month of operation, I plan to go to all Government Agency Offices to present and introduce our services that we provide. The first offices I’m going to visit will be the Hall of Justice and DENR because they are already regular customers here in my existing Repair Shop. According to their messenger, they will give the maintenance job to my shop if I can provide Official Receipt (O.R.). That’s the condition I must comply in order get their repair and maintenance contract. Next, I shall visit the PNP office in Barracks because some of the individual police officers there became my loyal customers already and I’ll also visit the Bureau of Fire (BFP) to offer repair services for their fire trucks and send a letter of proposal to their main office. Then, I shall visit every Government Offices and I shall bring along a formal letter of proposal addressed to the head of their agency and calling cards of our company for them to contact us. I shall schedule an appointment if I have to. In case we have other competitors, we will defeat them with some Bidding attached in the letter of proposal. We have to become competitive in order to get the repair and maintenance contracts from the government. I plan to use all my cards, connections and I’m willing to offer commissions to the government officials who can significantly help us in getting the contracts. Every card I have, I’m willing to play in order to win the Government Repair and Maintenance Contracts. The Services we can offer are Appliances Repair, Vehicle Repair, Airon Cleaning and Repair, and other Technical Services. The other target customers we have, aside from the Government Agencies, are the Private Companies like Fastfood Chains, Hospitals, Banks, Hotels/Motels, Fishing/Trucking Company, etc. I shall send a formal letter of proposal to their Company President and Manager to set an appointment. We will offer Bid for the Price War if we have to. I shall definitely tempt them with our high quality services and attractive prices. I shall also offer in the proposal that our Company will give 5% trade discount in all Repair Services if their company will sign a 5-year contract with us.

1. 3.Vehicle for Rent. This feature is also useful in the long run which can give us life line in the future. The proposed budget for this fund is Two Hundred Fifty-thousand Pesos (P250,000). This fund will be used for all activities related in Vehicle Rental. The Plan after the formation is to focus first in motorcycles, tricycle, and top-down. The car rental and truck rental might be executed in the far future. But in the City of General Santos, the main means of transportation is Motorcycle and Tricycles. As you may know, I operate this kind of business for a while now. I earn passive rental income daily. This is how it works. Our company will acquire motorcycles, tricycles, and top-down and rent it out to tricycle drivers, self-employed persons who need top-down in their businesses, employees who need single motorcycles for their service vehicle, etc. This way we can earn passive rental income every day. Of course, we will comply for all legal permits such as franchise if we’ll operate this kind of operation. Just leave all Business Permit matters to me. We will buy motorcycles and make our own sidecars for tricycles and top-down. We will NOT buy motorcycles for cash. We will buy motorcycles for credit or installment instead. When making sidecars, we will hire a skilled welder that will be a regular employee in our company for minimum wage and buy materials for the sidecar from suppliers who accepts credit if possible. In Business, buying on credit instead of cash gives lots of advantages, not to mention the benefit of having Zero (0) Capital. I shall explain this topic in the first Board Meeting during the Election of Officers.

CONCLUSION

          This Company we are going to build is a service provider company which provides repair & maintenance and vehicle rental services to the customers. This business model is proven by yours truly. I’ve been involved in this business for a long time. I’ve been planning for expansion in other cities in the Philippines and extend the Services, not just individual customers, but also to Government Agencies and Private Companies. The problem that holds me back is the Funding Problem. That’s where you come as investors. Providing Repair Services and Vehicle Rental Business is really good. But this nature is just for show or a cover for our main objective. The main objective of our Company will be the Real Estate Investment by accepting mortgaged commercial properties and apartments to earn passive income of at least 3% every month. 3% return compounded every month is actually very high return.

Our Company which renders services will serve as a Holding Company of all our Real Estate Investments. I know it sounds confusing for a beginner but this is actually happening in the Business World today. The famous example of a company that the purpose is just for Holding purposes is the BERKSHIRE HATHAWAY of the legendary Investor Warren Buffett. The Berkshire Hathaway is Textile Production Company. That was supposed to be its main operation. But it’s Revenue or Income doesn’t come from its Textile Production but from its Investments in Subsidiaries and Associates. That was brilliant. Another famous company that acts as Holding Company is the MCDONALD. The McDonald was supposed to be a fast food restaurant but it was a surprise that it is actually not. The main operation is in food industry but about 90% of their revenue or income doesn’t come from its food business. McDonald is actually a REAL ESTATE BUSINESS. This kind of Business Model is BRILLIANT. They operate in food industry but their main objective is actually Real Estate Investment and we are going to do the same thing. We will build our own version of McDonald business model.

Here in the Philippines, the famous holding company is SM PRIME HOLDINGS INCORPORATED. Its purpose written their Articles of Incorporation is to act as a Holding Company. Smart Businessmen are building companies to act as Holding Company only. That’s a fact and that’s what exactly what we are going to do.

          I am an avid fan of Robert Kiyosaki and Warren Buffett. If you happen to admire these persons, we are sitting on the same boat. Thank you for your time for reading this modified business plan. I hope you like it. I’m expecting to meet you soon.

Prepared by: Mark Anthony S. Banquerigo

09480034889

banquerigoservices@gmail.com