I've been contemplating for about two weeks as of now if I will push through with this possible investment in a call center company.
They need a 600K capital infusion which they will get from a maximum of 3 interested investors of which, in that case, there will be 3 blocks of 200K each. They will expand their operations and will be opening their third facility in Pasong Tamo, Makati City.
At present, they have two facilities located in Valenzuela and somewhere in Amorsolo St., Makati City. They operate as a credit card telemarketer. They call prospective clients and offer them credit cards. They will then receive commissions from the bank for every approved credit card.
I met personally with the President and Owner of the company at their Amorsolo St., Makati City office. He gave me documents such as DTI Certificate, DTI Application, Business Permit, Business License Plate, Barangay Clearance, Fire Safety Inspection Certificate, and copy of the contracts with the bank. On top of it, he also gave me income statement and cash flow projections of the facility. From my review, it is a viable investment. They are one of the top agencies in terms of sales according to them which later I verified and authenticated with the Bank. They have a monthly production of about 500.
My 200K investment will earn 75% in 13 months giving an approximately monthly fixed return of 5.76%. The payment plan will be 7 post dated checks for 50K each starting from March 2009 up to September 2009 covering the 13-month period which will then yield a net income of 150K.
So in short, my 200K investment will become 350K after 13 months. Sounds good right?
In fact, his friend whom he was renting his office from offered me a live video feed of the makati office to monitor their operations. But this will not be free as I will have to pay 1,400+ per month for the bandwidth to his friend.
I am very cautious as of now since I lost some huge amount before when I ventured into my very first business. I ventured into a computer internet shop before that never operated. It was a long story. I was too immature back then that I easily trusted people. I invested 100k back then. Good thing I was able to get 14K by selling 2 of the computers. In short, I lost around 86K.
I know I have readers in this blog. I need your advise guys. Tell me what do you think. I know that high yield comes with high risk. The stock market as of now is not a good vehicle of investment as it was experiencing a bear market. I need to be extra cautious as of now.
Please view here the cashflow projections - Open it on another window.
Your advise, thoughts and reactions are highly appreciated especially for those fellow entrepreneurs out there.
Thursday, August 7, 2008
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10 comments:
Too good to be true. But if I had the disposable money, I'd probably try it.
these amounts are in Ph. pesos, right?
check the company's contract with the bank.
usually these types of accounts don't run for very long. at first it may seem to be doing well as the leads are still fresh, but as soon as they recycle the leads, sales numbers would definitely drop. not sure how they get the leads but usually companies buy them.
if the bank is no longer getting good numbers in terms of the sales the company is putting in for them then they might end the contract.
also, if the company is no longer generating enough sales that would cover for their cost of operation then they might also end the contract.
why don't they approach bank for funding? with their healthy cashflow, it should be easy to get a loan. if the bank interest is around 10 pct, why look for funding somewhere else with a whooping 150pct interest? if they're prudent as their spreadsheet likes us to believe, their decision don't make sense. like the first commenter said, if it's too good to be true, it probably is.
I second the 3rd anonymous comment. If they appear as strong as you wrote about them then why wouldn't they just apply for a loan from the bank?
There are other reasons why this could be so though, just don't be afraid to ask them. After all, this is your hard earned money.
I hope you achieve your goals soon!
good luck.
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Thanks for all your comments. For the 2nd comment, yes it's in Php.
I agree with the 3rd comment.
I also consulted my friend and she advised me not to got for it for the following reasons:
1. This business is a sole proprietorship. And they are not registered with SEC. Only with DTI. The sole owner will have the full control.
2. They cannot provide me with at least interim Financial Statements to begin with. They said they don't file for BIR as they applied for BSBE.
3. Their expansion might be too raw for them. They just operated for roughly one year. With the high yield that they promised, and with the 3rd comment above, they might go into default.
4. I asked the owner if I could meet the other investors. And he told me that the other investors don't want to reveal themselves as they might be hunted by the BIR. If there's nothing to hide, then why not allow it?
Good decision dude. Now it's time to go to stocks. :D
Personally I never into such investment, risk is simply too high to take. I would rather invest in share or properties
Thanks Jean Chai. The President gave me a bank statement yesterday since I was asking for a Financial Statement and he cannot provide. Upon examining the transaction details on the bank statement, I saw that they operate at a very minimal income. So definitely, it's a no-no and I turned down his offer of huge returns.
Thanks to all who suggested.
I honestly think you should option out.
$15000US/CAD for a call centre? operating where?
If the proposal where legit why wouldn't the person seek a personal partner? How close are you to this person? Pinoys may only have a GDP of $3300US/CAD per capita but I am sure they can find a way to fork out 15k for the high return (and by that I mean unreal ROI).
For your $5000 why not find someone who sells blueray DVD cases. Find a buyer here in North America...try the dollar store to really clean the market. You're going to have so many pissed off competition.
Email me at jt_rr_504@hotmail.com for your answer to my question as I probably wont be seeing your blog anymore
sorry I didnt read your responses up top.. good decision stranger.
JBT
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