Obstacles in consolidating a business in an industry, achieving a vision

Every generation needs a revolution - an entrepreneurial revolution

Rizal Philippines
December 25, 2016

Merry Christmas

This is the time to reflect my purpose and goal in life.

I have dream of consolidating the memorialization business under one roof:   place to inter, place to view and a to be positioned in the new wave.  Right now, I seem to be on track:  buying a memorial plan company.  Then to have mortuary agreements, jv with chapels  and lastly to buy into crematorium businesses by a supplier.  Right now, we have made down payment for two crematorium one in Laguna, one in Pangasinan.  The future of memorialization would be in the cheaper, more environmental friendly that does not use too much land needed for housing and agri, -  memorialization. That is my vision.

However, this is not without restraining forces or obstacles:   detractors, lack of resources, difficult people.

Tale for instance my acquisition of a memorial plan company.  We have paid the P5 million premium despite the govt agency still unable to approve the documents needed to sell;   we cant sell anything at all.  The seller of the company is equally difficult -  stalling the granting of authority for us to sell.  But one of the gift of Christmas is to be more patient and loving.

Despite that, I need to have the memorial plan company as a resource to consolidate many businesses:  chapel memorial service, chapel, and cremation.  I will be on my way.  I will be able to hire an accountant, and close mortuary agreements

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)