The Success Factors Of Pawn Shops Finance Essay

The pawnshop is where people apply for money loan by giving the pawnshop a pledge. Pledge is any movable thing that can be carried. The most common thing used as a pledge is jewelry, however, many of the pawnshops also allow television, camera, training video cam and even cell phones.

The phrase "Pawn" originates from the Latin phrase "PATINUM" this means fabric or clothing. During early on centuries, in Europe, when people borrowed money, the guarantee they used was their clothes. Pawn broking was around in the early Roman and Grecian civilizations. The first formal pawnshop businesses were in China. They originated in Buddhist monasteries, where in fact the interest was usually at 3% or less.

By 1812 Advertising there have been at least 20, 000 pawnshops in China. In the 1970's, Chairman Mao and his Red Military eradicated all the pawnshops and also other private enterprises. Lately pawnshops began making a comeback, filling the space in their nationwide banking system, lending money to people who earn enough to get loan company accounts. Pawnshops were so respected by the Chinese human population that they called, Kwan Tai, one of these Gods, the "Patron God of Pawnshops".

Pawn broking is one of the oldest credit means in the Philippines. Many people believed that the Spanish friars have launched it when the Philippines was still ruled by the Spaniards.

In order to modify the procedure of pawnshops and almost all their existing laws, rules and regulations affecting their procedures, the joint IMF-CBP Bank Survey Percentage on the Philippines Financial System recommended to truly have a law regulating all the pawnshops functioning in the country. Presidential Decree No. 114 was promulgated to hide all the aspects about how to determine, and the procedure of pawnshops. It also suggests that the Central Loan provider of the Philippines was charge with the task and responsibility of regulating the operation of pawnshops.

Background of the Study

Filipinos patronize pawnshops among the alternative source of credit and with the increasing numbers of pawners, people should become aware of the pawnbroking trades, auction sale plus some important information that will certainly reduce the risk of pawning and purchasing of unredeemed articles.

The loan is often a fraction of the price tag on the initial item such as 50 percent. Some of the rules are designed to protect the actual pawn shop customer while others are designed to make sure that any goods that are taken, that might be knowingly purchased with a pawnshop, can be traced back by the seller, and possible thief. Pawnshops and check loan places are worse than lawn sales for a number of reasons.

Pawnshops still offers low market rates for whatever is pawned. People borrow funds y adding their things or putting up something they own as security, selling used merchandise, and purchase new and used goods. Pawnbrokers give money on components of value ranging from silver and gold or diamond jewelry to tools, television set, musical instruments, household items and much more. These exact things or items maintain their value over a reasonable period of time and easy to store like jewelries. If you don't pay back with interest on it, they'll sell it for dual what they provided you.

The experts choose Mandaluyong City because regarded as the "RETAIL CENTER Capital of the Philippines" due to its notable volume of shopping and entertainment hubs. They have got chosen Mandaluyong where Kalentong Streets is located. It really is a place with a huge number of pawnshops that can satisfy the needs of folks in pawnbroking.

Statement of the Problem

This study will investigate on the success factors of pawnshops at Kalentong, Mandaluyong City. It will also seek to answers the following questions.

What are the advantages of the pawnshops?

What are the weaknesses of the Pawnshops?

What will be the opportunities of the Pawnshops?

What will be the hazards facing when stepping into in this field of business?

What will be the pledge/pawn frequently received?

Is there a significant difference among thoughts of the respondents regarding the talents and weaknesses of Pawnshop when group relating to gender?

Hypotheses

Null Hypothesis:

That there is no significant difference among opinions of the respondents regarding the strengths and weaknesses of Pawnshop when grouped corresponding to gender.

Alternative Hypothesis:

That there's a factor among views of the respondents regarding the advantages and weaknesses of Pawnshop when grouped according to gender.

CONCEPTUAL FRAMEWORK

Building business having good personnel is just what a pawnshop needed. Having a good marketing plan can't be achieved without having persons who have been capable in controlling such position needed in funding business.

Pawnshop can be categorised as a funding firm. There exists a need of having a good relationship between the customer and the staff. An organization needs to create a long-term, affordable link with individual customers. The staff should possess a few of the management skills for it's the key for the firm's success. It requires certain skills to carry out the various functions of management and this business lead to a desired performance level. The performance achieves through the management comprises of two important measurements: the effectiveness and the efficiency of the management. Aside from having a minimal interest for the pawned property, customers want to be cared for well. People who reside in and work in the community where a firm is located or conducting business are often focus on of public relations effort.

Building trust and keeping cost near to zero (low interest rate) was the main factors in the success of the business.

Management Skills

Technical skills - skills that reflect both an understanding of and a proficiency in a professional field. For instance, a manager may have technical skills in accounting, money, and engineering.

Human skills - skills associated with a manager's ability to work well with others, both as person in the group so that as a head who gets things through others. Managers with effective human skills are usually adept at communicating with others and motivating them to build up themselves and perform well in search of organizational goals.

Conceptual skills - skills related to the capability to visualize the business all together, discern interrelationships among organizational part, and know how the organization works with in to the wider context of the industry, community, and world. Conceptual skills, coupled with technical skills, human skills, and a knowledge bottom, are important ingredients in organizational performance.

To have and effective and successful staff, it takes a blend of education and experience about the field or area's it`s going to use or control. Relating to several casual studies, managerial work in the future is particularly apt to be affected by an increasing need to control change and invention, the growing diversity of the task force, the burgeoning globalization of business, and the expanding concern with issues of quality and ongoing improvement.

The Research Paradigm

The illustration below provides the following boxes: insight, process, and end result which symbolize the researcher's perception on the research's construction. The input container contains owner's contributions that happen to be their management and marketing strategies. Standard reasons why the clients patronize pawnshops are also highlighted on the suggestions box.

Process discloses the SWOT research (Power, Weakness, Opportunities, and Dangers) of pawn shop business. Each item lists 5 items. End result, as the term actually means, is the end-product which resulted from the type and output. It provides the excellent results that can be acquired through intensive and intensive concerns or careful research of the business

Process

SWOT research of Pawnshop Business

Strengths

Accessible location

Low interest rate

Process is fast and reliable

Longer maturity period compared to others

Highest degree of appraisal

Weaknesses

The law restricts the eye rate

Some do not have jewelries or almost everything to pawn

Many people can't pay their debts

Equipments that aren't calibrated

If not included, you assume all the liabilities of the business

Opportunities

Affiliations or establishment of significant influence over other pawn retailers (Incorporation)

Business expansion (money order, etc. )

Acquisition of collateral costs cheaply

Branching of business

Acquired guarantee can be bargained

Threats

Abundance of independent pawn brokers

Prone to Robbery

Fraud among employees

Fast rate of depreciation of items pawned

Widespread availability of bank cards which can provide lending options without pawning any item

Output

A successful pawn shop business:

Accessible location- conspicuous or situated in a commercial place

Low interest rate- borrowing of money costs cheap in comparison to other pawn shop

Process is fast and reliable- orders are done feasibly

Longer maturity of period in comparison to others- extended due date

Highest degree of appraisal- more money for customer

Input

Owner's contribution:

1. Marketing strategies

Low interest rate

Long maturity date

2. Management strategies

Skilled pawn brokers

Knowledgeable managers

Consumer's reason why they patronize pawn shop:

For immediate cash

To build up funds

To sell jewelries or convert non-cash advantage into cash

The Research Paradigm

Significance of the Study

The research paper will be a great help for many who wants to put up a small venture such as pawnshops, for many who look for the services of pawnshops, as well as for pawnshop owners.

For pawnshop owners:

The research newspaper is significant to have the ability to understand well the demand and supply analysis for every single month of the entire year, the different interest rates that pawnshops apply and the marketing work they utilize.

The demand and supply analysis can help them consider the shifting of consumer demand also to be able to help owners to be ready for it. If source and demand 's the reason for jewelry's appraisal, there must be a change in resource, demand, or something that affects the source/demand curves in order for the price to improve.

The different rates of interest applied will help them determine the efficiency of every rate and what loaners want. This might help them meet the demands with their customers and increase their sales.

For business people:

The research study can help business people who wished to open up their own pawnshops can know the regulations that they could fall under based on the selection of location will have a significant impact how you decide to pursue your business. Maximum money charges, minimum positioning times, unredeemed pledge disposal, and many other important business metrics are governed by these statutes and need to be complied with. These limits sometimes change from city to city.

It is important to understand these limits before buying your pawnshop business is of great importance to business owners. Many additional products and services to create additional revenue streams would be needed for such an operation to actually run profitably.

In most areas there are rigid requirements on varieties to be utilized when doing business in a pawnshop. The strictest need is in the content necessary on the pawn loan file, or pawn ticket.

For loaners:

It is very important to loaners to learn different legal interest rates that a pawnshop can offer. This way, they won't be deceived and would understand different advantages and fireplace back of loaning through pawnshops.

Overall, the study study is important to be able to help individuals who relates or is involve with pawnshops. It can help through the eradication of ignorance that concerns to the subject matter being discussed.

Scope and Limits of the Study

This analysis will focus on the success factors of pawnshops found in Kalentong. Mandaluyong. It'll entail 7 pawnshops particularly: Papa`s Pawnshop, Villarica Pawnshop, G. Ochoa Realica Pawnshop, All Women Pawnshop, Palawan Pawnshop, M. G. Bismonte Pawnshop and Cebuana Lhuillier. The respondents of the analysis will be 7owners, ---employes, ----costumers. This analysis will cover the time from June to Oct 2010.

DEFINITION OF TERMS

Amortization- the progressive elimination of a liability, such as a home loan, in regular payments over a specific time frame.

- Writing off an intangible property investment within the projected life of the resources.

Appraisal - the practice of determining the value of property.

Appraiser - a specialist who has the knowledge and competence necessary to calculate the value of an asset, or the likelihood of an event developing, and the cost of such an incident. Preferably, an appraiser functions individually of the buying and selling celebrations in a transaction in order to arrive at the good value of an asset without bias.

Auction -a process of investing goods or services by offering them up for bet, taking bids, and then advertising that to the highest bidder.

Bid- price - is the best price a buyer is inclined to pay for a good.

Broker loan rate- interest at which brokers borrow from banking institutions to hide the securities positions of the clients. The broker loan rate usually hovers a share point roughly above such short-term interest levels as the federal cash rate and the treasury bill rate.

Business license- a legal report that grants you the to operate an enterprise in your city. Depending on your business, there are other licenses that can also be required.

Business loan - a mortgage granted for the utilization of any business

Business plan - is a formal affirmation of a couple of business goals, why they are thought attainable, and the arrange for achieving those goals. It could also contain backdrop information about the organization or team attempting to reach those goals.

Cash flow-a measure of a company's financial health. Equals cash receipts minus cash repayments over a given time frame; or equivalently, net profit plus volumes incurred off for depreciation, depletion, and amortization.

Camera- is a tool that reports images, either as a still photograph or as moving images known as videos or videos.

Cellphone- A mobile time allowed for repayment, discount for cash or early payment, and the amount or rate of late payment penalty. Cordless cell phone that communicates with an area transmitter using a short-wave analog or digital transmitting.

Collateral- is a borrower's pledge of specific property to a lender, to secure repayment of a loan.

Collateral contract- continuous agreement under which a securities broker-dealer borrows from a standard bank against stated securities to buy or bring inventory, financing the underwriting of new issues, or hold the margin accounts of clients. Synonymous with broker's loan.

Credit- identifies money loaned or the power of a person or company to borrow money. Credit is also used to mean positive cash entries in a bank account. For instance, an account may be acknowledged with interest. Credit is the opposite of debit.

Credit term - Standard or negotiated terms (offered by a vendor to a buyer) that control the regular and total credit amount, maximum

Diamond - is an allotrope of carbon, where in fact the carbon atoms are arranged in a deviation of the face-centered cubic crystal composition called a diamonds lattice. Gemstone is renowned as a materials with superlative physical characteristics, the majority of which result from the strong covalent bonding between its atoms.

Discount Retail - is an chance for customer to make their us dollars go further. It helps other stores and community giving them more discretionary money.

Financial planning- is a systematic methodology whereby the financial planner helps the client to maximize his existing financial resources through the use of financial tools to accomplish his financial goals.

Financial planning also determine as the procedure of meeting your daily life goals through proper management of finances.

Fine jewelry may be thought as jewelry crafted from precious metals such as gold or sterling silver and arranged with important or semi-precious rocks.

Foreclosure the procedure by which mortgaged property enters in to the possession of the mortgagee without right of redemption by the mortgagor, usually for reason of delinquency in mortgage repayments.

Foreclosure procedure a person defaults by not repaying the loan, the security becomes the property of the pawnshop after the loan is overdue by a particular amount of time, generally one to three months.

Gadget is a tiny technological object (like a device or an product) which has a particular function, but is often regarded as a novelty.

Gold is a chemical element with the image Au and an atomic number of 79. It's been a highly sought-after precious steel for coinage, jewelry

Identity report (also known as a piece of identification or ID) is any doc which might be used to verify aspects of a person's personal identification.

Standard-sized card, most commonly it is called an individuality credit card (IC).

Interest -the cost of borrowing money, usually portrayed as a share per year.

Interest rate -the price a debtor pays for the use of money they acquire from a lender, for illustration a tiny company might acquire capital from a bank to buy new possessions for their business, and the come back a lender gets for deferring the utilization of cash, by financing it to the debtor.

Jewelry signifies components of personal adornment, such as necklaces, bands, brooches, earrings and bracelets. Rings may be produced from any material, such as gemstones, valuable metals or shells, besides other materials, depending on social differences and availability of materials

Lending- disposing of money or property with the expectation that the same thing (or an comparative) will be returned.

Loan- An agreement in which a lender provides money or property to a customer, and the borrower agrees to come back the property or repay the money, usually along with interest, at some future point(s) with time.

Loan covenant- is a problem in a commercial loan or relationship issue that will require the borrower to satisfy certain conditions or which forbids the debtor from executing certain activities, or which possibly restricts certain activities to circumstances when other conditions are found.

Margin bank account- brokerage bank account allowing customers to buy securities with money borrowed from the broker.

Marketing Startegy-written plan (usually an integral part of the overall corporate plan) which combines product development, campaign, distribution, and rates approach, identifies the firm's marketing goals, and points out how they'll be achieved in a stated timeframe. Marketing strategy determines the choice of marketplace segment, positioning, marketing combine, and allocation of resources.

Money- is any subject that is generally accepted as repayment for goods and services and repayment of obligations in a given country or socio-economic framework. [1][2] The primary functions of money are distinguished as: a medium of exchange; a unit of bill; a store of value; and, sometimes, a typical of deferred repayment,

Patinum- latin expression which means cloth or clothing.

Pawn -the condition of being held as a pledge up against the payment of a loan: jewels in pawn.

Pawnable Items- Nearly every item that has monetary value can be pawned. This consists of articles of clothing, rings, home goods, house wares, mechanized vehicles and tools.

Pawnbroker - Any person engaged in the business of financing money on the security of pledged goods and who could also purchase goods for resale from sellers and stock traders. A pawnbroker makes lending options on personal property still left as collateral. The house can be redeemed when the loan plus interest is repaid.

Pawnbroking is a noble profession dating back again thousands of years, yet due to its nature is often misunderstood by business owners who want to go into the industry

Pawning-you generate something you own and present it to the pawnbroker as security for financing.

Pawnshop - the location at which, or premises in which, a pawnbroker regularly conducts business. That is a community business providing essential services to the city.

Pawn or Pawn deal - A written bailment of personal property as security for a debt, redeemable on certain conditions within 180 days, unless restored, and with an implied power of deal on default

Pawn off- to dispose or get rid of deceptively.

Pawn solution- receipt for goods pawned.

Pawn/Guarantee - a borrower's pledge of specific property to a lender, to secure repayment of financing.

Pledge - An item to be sold to a pawnbroker.

Profit the positive gain from an investment or business procedure after subtracting for all expenses. opposite of damage.

Redeem- To recuperate possession of by paying a specified sum.

Short-term - relating to or increasing over a restricted period; "short-run planning"; "a short-term rent"; "short-term credit"

Silver- a soft white treasured univalent metallic factor getting the highest electronic and thermal conductivity of any metallic; occurs in argentite and in free form; used in coins and charms and tableware and photography

Television (Television set)- is a widely used telecommunication medium for transmitting and receiving moving images, either monochromatic ("dark and white") or color, usually accompanied by sound.

Valuation - the determination of the monetary value of a secured asset or liability.

Wholesale- value of used good, in the event that pawnshop struggles to sell it and they opt to sell it to a low cost product owner of used good.

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