BUSINESS PLAN FOR CORNELL FINANCIAL SERVICES

SUMMARY

Cornell Financial Services is going to be a micro-credit institution whose purpose will be to provide short term loans to individuals. We will also assist people in acquisition of assets as they may require. We consider the financial sector to be a very profitable sector though with a reasonably high amount of risk.

THE PRODUCT

At Cornell Financial Services, our product will be the loans we will provide to loanees. Also, we will provide individuals with access to acquire assets such as electronics gadgets,low-priced properties etc

The loans will be in amounts not exceeding 250,000(two hundred and fifty thousand naira)at interest rates of 10% monthly for tenor of between 3-6months

Applicants will be required to provide 6months of their bank statement,proof of employment,collateral or guarantors.we will have a group assigned to vetting each application and rendering proposals on whether they should be accepted or not and if accepted,they will recommend the amount of loan such a person can comfortably handle based on their income level.

TARGET MARKET

It is common knowledge that individuals seek alternative sources of funding to fulfill many of their needs and requirements. It is also common knowledge that lots of people will happily collect loans but find it difficult to repay. We therefore decided to streamline our target market to those who we believe will be low-risk clients. Our target market therefore will be people in the paid employment who earn mid-high income.

To ensure security of our facilities, such individuals will be made to either present a verifiable collateral or provide two guarantors one of which must be a colleague or their Banker. The applicant and guarantors will provide statements of accounts approved by their banks and also provide postdated cheques covering the amount to be borrowed.

We believe by taking this steps our investment will be secure

THE PROPOSAL

The promoters of Cornell Financial Services believe we have the required knowledge,connection etc required to succeed in the sector. We require investors who are willing to partake in the goldmine the financial sector represents. Cornell Financial Services will be a Limited Liability Company with authorised share capital of 10,000,000(ten million) units of which 4,990,000(four million,nine hundred and ninety thousand) units is available for willing investor(s) at the rate of 2naira per share. Any acquisition of up to 10% results in the investor becoming a member of the Board of Directors. minimum acquisition has been pegged at 250,000units

ANTICIPATED EXPENDITURE

In order to be successful in the real estate industry,we have highlighted certain areas we will need to take care of which are of immediate concern

• Product-once we meet our investment targets,our products will be available.we intend to raise 15million naira of which the 10million to be raised from investors will form the basis of funds available for lending while the remaining 5million will be provided by the promoters and used to take care of expenses such as-
• Marketing-we will recruit a team of marketers who will spread the word about our services.we will also have information pamphlets which will be shared round offices and establishments in which our target market are available
• Office-we will need to set up an office from where we will coordinate our affairs.
• Website-we will need to establish a website from which applicants can get information about us and make online applications.
FORECAST

Investment in Cornell Financial Services is going to be very profitable at the long run. To highlight the benefits available in investing in this Business, we will paint a scenario which is a probable one if that course of action is followed

We intend to start a pilot scheme with a maximum of 10 loanees. assuming these ten loanees are granted loans of 250,000naira(two hundred thousand naira) at 10% for 6 months. On each loan we will make a profit of 60% or 150,000(one hundred and fifty thousand naira).on the loans of 250,000naira each for ten people which is a total of 2.5million,after months, we’d have returns of 1.5million which is about 60% profit.

Based on this estimates, within two years, we’d have made over 6million naira profit on that 2.5million.

we anticipate that if our investment targets are met,an initial 2.5million naira will serve to begin the pilot scheme of our services.

We anticipate that -

August-December 2012

Profit after tax will be ploughed back into the business

January-December 2013 and beyond

20% of PAT will be paid out to shareholders as dividend
30% of PAT will be retained earnings
50% of PAT will be rolled over to operational expenditure for the next year
Risks

We have been able to identify the possible pitfalls that may occur in the course of our business and they are highlighted below:

• Competition: There exist numerous micro-lending instituitions which provide short term loans and we will have to compete against them. However we believe with our efforts at marketing and professionalism we will carve a niche for ourselves and win a fair share of the market

• Bad debts: This is the major risk in the financial sector. People sometimes borrow money and are unable to repay. In order to minimize the risks of such, our loans will be backed by security which will either be a verifiable collateral which can easily be turned to cash or the applicant will provide guarantors who must provide statements of account to demonstrate an ability to pay. Guarantors will also provide postdated cheques for the amount to be repaid.

• Poor management: no business can succeed without proper management and accountability.it is form this reason that upon incorporation of this company,the promoters in collaboration with the investors will appoint the team to coordinate the affairs of the company.the board of directors will also be assembled and will meet quarterly while investors will meet yearly where the report for the year will be presented.there will also be yearly audits by accredited firms which will be appointed by the board of directors.



Conclusion

Investment in Cornell Financial services is an investment of a lifetime.please note that this is just a summary of our business plan and details will be available on demand.any further enquiries can be directed to cornellrealtors@gmail.com or 07087433546 or 08097026097.We look forward to doing business with you.

Thanks
Afolabi Olayinka
For
Cornell Financial Services

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