A pawnshop business actually functions like a bank only at faster and more accessible manner. It does away with the stringent bank requirements making it the easiest refuge for those in dire need of cash.
But while pawnshops are normally portrayed in a not so palatable image, a Pangasinan-based CB Estrada Pawnshop is trying to correct that negative perception over this business. It offers what could be the industry’s lowest interest rate at 2 percent and treats its customers with decency and understanding away from the usury-kind of work pawnshops are likened to.
Dean Eric Carlo B. Estrada, CB Estrada Pawnshop chief operating officer (COO) and chief finance officer (CFO), makes sure that despite its low interest rate and flexible terms the operation remains profitable and sustainable.
THE COMPANY
The Estrada family has been in the pawnshop business for the past 32 years. Eric belongs to the second generation now running their parent’s original business.
Eric joined the family pawnshop business in 2009 only and been trying to expand the business. In 2014, the business expanded to other areas in Pangasinan through franchising with the help of FRANCORP.
“From there we decided to set ourselves apart from other pawnshop businesses,” adds Eric. CB Estrada added more services like bills payment, micro insurance, money insurance, and loans to teachers against their salaries.
“This is our core business,” says Eric noting that had the company not been doing well it could not have supported the family’s other business ventures.
There are already 22 CB Estrada pawnshop branches now. With its franchising model, Eric aims to hit 500 pawnshops in five years. This means they will be opening 2 branches per month. At least 400 branches will be offered for franchise while 100 branches will remain company-owned or 20 percent of total.
The franchise fee is only R450,000, which is good for five years and renewal for two terms. But the total investment could be between R2.5 million to R3.5 million depending on the size of the branch. A pawnshop can be 20 to 30 square meters in size with a guard and one teller. Ideal location is to be beside an existing pawnshop so pawners can compare the rates and services.
“Once they go to our pawnshop, they will not go to another pawnshop anymore,” says Eric, who finished business administration.
Eric has placed the return on investment at a conservative two and half years although the CB Pawnshop experience taught them it is easier to recoup one’s investment in just within one and a half years. Its pawnshop averages R25,000 a day for at least 5 transactions daily.
CB Estrada has a low operating cost and no pilferage because the system is built in such a way that its operation is fool-proof. The Bangko Sentral ng Pilipinas regulates the pawnshop business but as long as the franchise is still with CB Estrada, all requirements are through CB Estrada making the business hassle-free.
There have been serious inquiries and the line of applicants is quite long, says Eric.
Actually, pawnshop is a great choice as a business start-up. No complications, no special business skill is required. Pawnshop is a recession-proof business that can withstand the volatile economy of our country.
It enjoys fast return-on-investment with relatively low initial capital. Most of all, it has very few inventory to manage unlike other businesses.
Read more at http://www.mb.com.ph/a-pawnshop-with-a-social-dimension/#xJSaifuAeqFvyqom.99
Source Link: MANILA BULLETIN