On my way to P250 Million

Even if I worked for a 100 years as an employee, I won't be able to earn that amount. I know that pretty well. Yes, working until retirement is not exactly the way to get rich. I am not a businessman, not an actor, not a big time athlete neither.

Consider this first major business plan that I thought of to get rich.

A few years ago, probably 2005, I started thinking of a business. Not exactly the business that could earn me millions, but something a little close to that. I thought of the transportation industry. It is something most Filipinos need to do. So customers won't be a problem.

Here was my business proposal: Establish a passenger jeepney transportation business in Cavite. Starting Capital: P250, 000 for a second hand vehicle. Estimated Annual Income per vehicle: P3000/week, P150, 000 annually.

My business objectives included (1) Income from a business venture of course (2) help provide jobs to my relatives for most of my uncles and friends can drive for a living.

By starting small, with roughly P250 thousand pesos. I can be a millionaire in say 10 years.
Look at this business table:

# of jeeps__years past____est. worth____est. income__add. investments
1__________0_____________P250, 000_____P 0__________P 0
1__________1_____________P250, 000_____P150, 000____P100, 000
2__________2_____________P500, 000_____P300, 000____P200, 000
4__________3_____________P 1 M_________P600, 000____P150, 000
7__________4_____________P 1.75 M______P 1.05 M_____P200, 000
12_________5_____________P 3 M_________P 1.8 M______


Stop there. What is the table above all about?

1. Estimated worth of assets after 5 years is P3 million pesos generating an annual income of P1.8 million. If you're business can generate P1.8 million annually, isn't that huge? And at that, I will have 12 passenger jeepneys in my posession.
2. Total capital investment in five years amount to P900, 000.
3. Total Income = Assets + Income - Expenses. Meaning after 5 years, I will earn P3.9 million. Wow!!!

How was it possible?
1. Each second hand passenger jeepney would cost P250, 000. I will start small with just ONE jeepney and it's not even brand new.
2. After each year, all of the income will be used to buy passenger jeepneys. Additional investments should be made available to buy more jeeps.

After 5 years. This is not considered a small business already. Major adjustments has to made. Like:
- Start buying brand new jeepneys. But, still need to buy second hand jeepneys? Why, to reduce competition from the road.
- Start creating employee benefits and bonuses.
- Open up for Maintenance and Accounting jobs

After 10 years, and if following the business plan. The computed asset worth would reach P25 Million consisting of around 70+ passenger jeepneys and generating around P10 million annually. Again? and generating around P10 million annually!!!

In reality:
1. Each passenger jeepney will depreciate in value. So the net worth of assets will be much less than the computed value.
2. Needs to account for maintenance and possible accident costs. This can be a real problem.
3. Is there a market for this huge acquisition of passenger jeepneys. Will there be opportunities to buy jeepneys from the competition? Competition here refers to other operating jeepneys on the road. This is really the big question mark.
4. Can I sustain the required additional investments and is it possible for me not to take any peso from this business? Well, I have to have a decent job to satisfy this.

So there. The plan seems good enough for me. I mean, to have a business with assets of P25 million worth after 10 years with just a total investment of P2 million? That's 1250% growth rate. Supposed, there is an annual 4% peso inflation rate and the maintenance costs amounting to P5 million in ten years. I would still have a good business right? Right.

In the end, the available market environment is the biggest problem. There are just too many passenger jeepneys on the road now. Adding more brand new jeeps is not an option. I must find a way to buy the competition. One jeepney at a time. If I can do that, after only 10 years of good business management and performance, I will be rich. And that's just 10 years.

Consider that. I am open for business partners.