More business opportunities at the beginning of 2023 - forecasted to be bad year of the Rabbit

Every generation needs a revolution - an entrepreneurial revolution

Just had a conversation the other day with a business friend, a bank executive regarding her query of the possibility of investing in a memorial park in the capital of island province.   There are no more inventories, and the land she presented to be a possible site 3 years ago at P400/00 sm is now a city

cemetery.

What are the things that favor such a project:

1.  The only memorial park in the city is sold out.

2.   The selling price is  P115k/plot - but there are no inventories

3.   The population of city is 307 k.

4.   The city is first class with annual revenue of P3.8 billion

Memorial opportunities:

    1.  Death rate at 0.5% = 15,000 (we can sell in one year)

    2.  Household  300,000/5 =  60,000

    3.  Class A and B buyers =  10% =  30,000.

We can have buyers in excess of inventories.  We can cover by having say 20,000 columbarium 

Possible sites:

1.  5.2 hectare going up north at P1,200/sm  (about 60m cash)

2.  JV with religious for a columbarium

For the 5.2 hectare, the yield would be about 12,500 plots that can be sold for P80k per plot or 1B

What to do:

1.  Talk to the religious for combi project of  MP and columbarium/crematorium

2.  Agree to P1,200  stagger payment, secure pre sales commitment to pay the balance.   

https://goo.gl/maps/bGuptJKytikcNW8r5

    

The real opportunity in memorial business

Every generation needs a revolution -an entrepreneurial revolution

Ateneo Professional Schools
Makati City Philipppines
June 19, 2016

Happy Rizal Day?  It is the birthday of our National Hero Dr. Jose Rizal

Happy Fathers Day.

Where is the real opportunity in memorial business?  (Opportunity - where large margins are and where is volume)

For a time many thought it is in memorial park.  So a lot went into memorial park development  - contractors, entrepreneurs real estate developers thinking there is gold pot in a memorial park, to be only disappointed.

Why is this so?  While the margins in memorial park plots could be huge, as much as 70 to 80%, sales is slow because the memorial park plots cater to only 9 to 10% of population.   So if you live in a town of 100,000/5, you talk of 20,000 households.  and 10% would be only 2,000.  And if you have an inventory of 20,000 plots, you could hardly sell to the locality because of competition having sold to them, or you having sold to them all ready.  It would take forever to sell the remaining inventories. Unless you have active sales force and or very unique product or service it is a waiting and seeing game or possibly a bankrupt memorial park.  The bulk of the market, the remaining 20,000 prospects would go to the municipal or Catholic Cemetery where burial costs would be about P5,000 to P20,000 for a 5 year lease vs about P100,000 in a memorial park (plot plus interment cost) and you add the cost of memorial service and casket, that is additional P30,000 to P50,000 minium.

The real consistent money would be made in funeral and or memorial service because that is the first thing that the bereaved would look for.  You need casket and service. You have the option of burial at the memorial park or body crypts at public or catholic cemetery which is cheaper.

Memorial service depending on the price would have a margin of between 50 to 90%

So you think that is where the money is to be made?

No it is in the memorial plans The pre need memorial service.?

But then we thought the plans are closing and failing.  Oh yes for the education and  pension and othe plans.  The rise in cost of education and low investment opportunities have left big holes in the liquidity and solvency of the educ and pension plans

But the memorial plans   Let us try to examine the costs and revenue stream  (We are on the final stages of buying one now)