Singing Pig

Hi Craig,

Thats encouraging.  I had been worried that my catchment population would be too small.  Obviously it depends on the demographics of the area, and I probably need to do alot more research on my target groups.

Perhaps the best thing for me to do is earmark 6 months where I try to do this alongside my current job.  This may prove to be a serious grind, but worth it in the long run.  Then, with hopefully the beginning of a successful business in place, ditch the 9 to 5 and concentrate on growing and developing the thing.

It would be great if I could bend your ear briefly some time Craig.

Thanks,

Keep it Goin'

That's just what I'm planning to do KIG.  My first set of leaflets are due to be delivered next week and I plan to start off SLOOOOOOWWW (1 client a week will do me for the first few months).  I can spare about an hour each evening after work doing collections, plus Saturday mornings, although I think the headache is going to be the admin side.  Once you have bought Paul's manual (I think Craig is selling it now with his mentoring package) ask David A to invite you to the private members forum it's extremely useful.

It seems the mistakes others have made is trying to grow too quickly, as Craig says, and to me it seems you must be ready to reject most of your applicants in the early stages and only go with the safest groups - e.g. female aged 30-40 or thereabouts.

I plan to build it up over a year and then hopefully give up the 9-5.  I'm expecting the next 12 months to be hard going.

Regards

Rob

thought i would throw my tuppence worth into the mix.

After a false start (long story) I have been operating for around 7 weeks. I took on board the advice of David, Craig, Tassotti and others and have taken an fairly cautious approach. I have a very small number of clients so far and my lending limit is 200. Most ask for more but I gently let them down. lending so far is mainly gut instinct and advice from the others - but as Tass mentioned its always a gamble and you have expect to be let down. I mainly encourage starting at £100 if possible but most want more. Admin is straightforward as long as you are diligent and stay disciplined.

 It's a buzz at first when the phone starts ringing. Its quite nice to see your spreadsheet start to fill up. Its also very nice when you collect your first tenner - which you thought you would never see again! The phone often rings while you are in the street you are leafleting - these callers are usually young, or desperate, chancers and hopeless non-starters.

I still have a 'real' job - and it's not easy to run this while working - especially if its a problem to take calls at work. thats the main reasons I havent expanded fast - finding time to market / leaflet after work + the weather has been crapola (excuses excuses). So far I have recruited around 1 client per 100 leaflets - don't know too many businesses that get that kind of response!

Defo not a get rich quick scheme. My estimate is that 60 customers with minimal defaulters would bring in around £500 cashflow per week. Thats lending a mixture of 200 / 100 + 75. So on my current figures if I lend £1500 - my revenue should be aorund £750. Obvisouly higher loans means bigger profit OR bigger losses. Still dont know when the breakeven figure arrives - and the business is self financing. I prefer to go for more customers with lower lending limits if possible. Not doubt at some point you have to lend higher if you want to keep them. Also I am amazed at the number of clients that overpay! Dont know if its a fluke yet.

Getting customers has been very easy so far. I have knocked back aournd 50%. Managing them once they have the money is tricky. Every time you call on someone its always a pleasant surprise when they make their payment- even ifthey have been 100% payers! Clients do put you under pressure re lending decisions and you re forced to think on your feet - especially when they ask for a 'topup'. I think it can get quite stressfull if you have a bad few weeks. you also find yoursefl in the company of some very strange people and is some strange situations. I think you could write an interesting book when you retire from this game.

For all the cynics I would say this is a very ethical business - providing a vital service to people who dont have access to conventional credit - we take the people most big institutions don't touch. yes the interest is higher - but this is unsecured lending and the collection costs are also high. I actually like most of my clients and they are mostly just ordinary folks apart form the chancers obviously.

I think in time, with the right attitude and some luck it is possible to build a very healthy business. During the early years its a good idea to have some other income to supplement or a partner with a good income.

Anyway as long as you go into this with your eyes open and are prepared to stick it out you should be able to build a decent business. My personal goal is to build value into the business - which in reality means a large loan book i.e. lots and lots of customers. Don't know why I am telling you this - I really don't want any competition

Two interesting posts from James and Robert, thanks guys.

Robert, you are certainly going to develop slowly.  Do you see this rate of development as necessary?  I would have thought that 10 clients after 10 weeks would prove frustrating, and taking up a similar amount of time to say, 30 or 40 clients.  Maybe therein lies the trick, start slowly and don't get burnt!

 James, your cashflow projections interest me.  My aim is to be able to pull £500 per week profit from the business pretty quickly.  What number of clients and size of loan book do you feel would be necessary to acheive this?

Sorry for the newbie questions guys.  Maybe I should just bite the bullet and purchase the manual, and leave you folks alone!!!

Keep it goin':

James, your cashflow projections interest me.  My aim is to be able to pull £500 per week profit from the business pretty quickly.  What number of clients and size of loan book do you feel would be necessary to acheive this?

I wasnt too clear abuot the cashflow. what I meant was that 10 clients (with no defaults) would bring about £750 gross profit. That's them doing only one loan and paying back in full.

Its early but I expect that most clients will do around 2 - 3 loans / year.

Profit is impossible to predict right now but I reckon I need around 300 clients, lending modest amounts (up to £200)  to generate around £50k. Not too great really! 

But - I think if you market like crazy and you are in a juicy area you could get 300 within a couple of years. 300 clients is a lot of work for one person - not sure its doable actually - 60 collections a day! you would defo need to work on saturday.

I could be talking out of my hat here - the guys who have been in this game for a while know better! There's so much I really havne't worked out yet - breakeven position so that the business self-finances.

If you aren't working and worked diligently - I think you could reach your £500 target quite quickly.

Hi KIG

To Generate £500 per week NET profit, your client base will need to be around 100, and depending on your growth rate, capital required is £10-15K.

If you dedicate yourself full-time, this COULD be generated in ten weeks. However, from experience,  I would strongly advise against expanding this quickly. It brings much higher risks in bad lending decisions and, therefore, bad debts.

When you say you would like to pull out £500 quite quickly, what is your definition of that time-scale?

Tass 

The key is to learn from your mistakes.

MAN I've made some baaaddd mistakes. Really. 

Tassotti:

Hi KIG

To Generate £500 per week NET profit, your client base will need to be around 100, and depending on your growth rate, capital required is £10-15K.

If you dedicate yourself full-time, this COULD be generated in ten weeks. However, from experience,  I would strongly advise against expanding this quickly. It brings much higher risks in bad lending decisions and, therefore, bad debts.

When you say you would like to pull out £500 quite quickly, what is your definition of that time-scale?

Tass 

 

Brilliant, Tass has answered my post now too!!  If I could just get David A and Pal to answer I'd have all the big hitters!!!

 Tass, to answer your question, I have to put my position in context.  I have a young family to support who rely on me to bring home the dough.  I have a comfortable job which has allowed me to provide for them, but it lacks opportunities to advance, and to be frank, i'm getting pissed off in the job.

If I were to leave my job and go head long into this, I would need to be pulling £500 per week within maybe 6 to 8 weeks.  The more I read, the more it becomes apparent that this would be laden with risk, and i certainly do not want my kids to go without!

Therefore, my strategy will probably have to be more cautious.  At this early stage, I was thinking off setting aside a period of 12 months.  During this 12 months, I would aim to get 2 clients per week, building up to 100 clients at the end of the first year. 

During this time, I would plough any profit back into the business.  I foresee myself having to work really hard, as this would be done in my spare time after work.

The hours I would be able to spend in the first 12 months would be Wednesday 5pm-6.30pm, Friday 4pm-6.30pm and Saturday 8am-12noon.

 My aim, at the end of the year, would be to have a loan book comprised of at least 100 clients.  I would like to think that, with a years experience, I would have learned alot.  Then the big one....DITCH THE 9 TO 5!

Having left my job, I would immediately have to begin drawing a wage from the business, whilst also wanting to grow it.  My aim for year 2 would be to be able to pull between £1000 and £1200 per week from the business.

So tell me guys, pie in the sky or worth pursuing? What do you all think?

Thanks,

Keep it Goin'