Summary

The business is a high end niche business-to-business flooring and decking factory that is selling 1,250 M2 of product into South Africa every month. The business has good machinery and is self contained to cut, dry, mould and pack hardwoods (Rhodesian Teak) for export. The business has a marketing arm in Pretoria South Africa.

1. History Background

Fully describe the business's activities

The business is a factory that specialises in saw milling hardwood timber and supplies the flooring and decking industry in South Africa. The company mills and processes hardwood logs into planks and lumber. The timber is kiln dried on site using the 5 kilns in the factory, then cut into flooring and decking that is ready for fitting. The business is current milling 132 m3 per month but has the capacity to mill 264m3. The business has a marketing office in South Africa that is situated in Pretoria Gauteng. The next logical step is establish own flooring and decking teams within the South African market and capture margin and market share through a vertically integrated business.

How long has the business been established

Since April 2010

How long has the owner had the business

Since April 2010

What steps are in place to solve "load shedding" problems

No load shedding problems

What is the average KW usage

120Kva

2. Present Market

How does the business operate on a daily basis

The business is opened by the factory manager at 7am and the staff work towards a monthly target of 1,250m3

How are the clients attracted to the business

A South African CC market all the timber as Rhodesian or Zimbabwean Teak

What Advertising/Marketing is carried out

South African newspapers, direct calling, word of mouth

What competition exists

Other sawmills in Zimbabwe

What are the seasonal trends

Business is low in the rainy season from October to March

3. Financial

Is the business VAT Registered

In South Africa yes but not in Zimbabwe

What VAT documentation is on file.

Yes

Are there up-to-date Management Accounts available

No

What Balance Sheet and Income Statements are available

No

What percentage of of the business is cash/credit

100% cash

What is the age analyse of the debtors book

Not Applicable

How could the profitability of the business be improved

Selling into the local Zimbabwean market

Is Seller finance available and for what amount

No

What is the payback period

36 months

What is the ROI

30%

4. Staffing

Give a breakdown of staff/functions/length of service

1 year

Do any receive special perks or incentives

No

Are they on contract

Yes

Do any have management potential

Yes. The supervisors

How involved is the Owner in running the business

Hand on involvement in both manufacturing and marketing

5. Premises

When does the current lease end

31 December 2011 but renewable annually

Is there an option of renewal & what period

Yes. 1 Year.

What is the annual escalation %

Lease is negotiated with the owner

What are the trading hours

7.30am-4.30pm

What is the square meterage of the business

1,800 square metres

Is a copy of the lease available

Yes.

Do you require a licence

No

6. Assets

Is a full asset list on file

Yes

Are any items not included in the sale

No

What is their overall condition

Fair to Good

Do any require repairing

No

How have they been valued.

Owners Valuation

Are they presently insured

No

7. S.W.O.T. Analysis

Strengths

(1) The business is vertically integrated (2) There is fixed export contract (3) The business has the operator skills needed to maintain the high standards

Weaknesses

(1) Does not sell into the local market

Opportunities

(1) Sell into local market (2) Establish its own flooring and decking teams

Threats

(1) Sawmills that have a concession behind them

8. Reason For Sale

What is the reason for the sale

The owner has discovered he has a chronic allergy to sawdust

9. Conclusion

Why is this a good business

(1) Export Contract (2) Correctly priced

What is the price plus stock and the net profit

US$550,000.00 + US$85,000.00 (stock) Profit US$15,000.00