Summary

This is a cash business with no staff, and the owner is very flexible and works little. Can it get any better? For sale here is a vending business with 49 machines. Most suitable places in Windhoek are covered by this business, so the possibility of competition entering the market is extremely small. Price: N$1.8 million, net monthly profit N$60 000.

1. History Background

Fully describe the business's activities

This business consists of 49 coin-operated cigarette vending machines, of which 46 are currently standing in restaurants, bars, the airport and other public places. All the machines are concentrated in the Windhoek area.

How long has the owner had the business

The owner has had the business for more than two years. He bought it from someone else.

2. Present Market

How does the business operate on a daily basis

The owner has to make sure that all his machines are stocked and in good working condition. He tries to visit each site once a week, even though some don't need to be re-stocked that often. One or two machines need re-stocking twice a week. On these visits he also collects the cash from his machines. He works from home, where he carries out repairs as necessary. If there is a problem with certain mechanisms he has to send the part to South Africa for repairs.

How are the clients attracted to the business

The owner pays each site owner a small commission on sales.

What Advertising/Marketing is carried out

The machines carry advertising for the industry, for which they pay the business, or give free stock.

Does the business have any contract work

A contract between the locations and the vendor is always concluded before a machine is delivered. The business also has written agreements with the cigarette companies who pay monthly fees for the advertising on the machines. Some give free stock.

What competition exists

There is one competitor, but he mainly operates at the coast.

3. Financial

Is the business VAT Registered

Yes, business is Vat registered

Are there up-to-date Management Accounts available

Yes, up to date management accounts are available

What percentage of of the business is cash/credit

This business is 100% cash.

What is the payback period

34 months

What is the ROI

36%

4. Staffing

What is the total staff complement

This business has no staff.

How involved is the Owner in running the business

The owner is running this business, but it has to be said that this is less than a half-time job. All repair work is carried out by him.

5. Premises

When does the current lease end

This is a work from home business.

6. Assets

Is a full asset list on file

Yes, asset list is available

What is their overall condition

All machines are in a good working condition. The software has been re-programmed at some cost so that the prices can be adjusted up to N$100.

Are they presently insured

The owner decided against insuring the machines as it is quite expensive. As they are distributed over about 46 locations the risk is spread fairly well in any case. He has spare machines to cater for business interruptions.

7. S.W.O.T. Analysis

Strengths

Machines are difficult to come by, which presents a significant barrier of entry, in addition that just about all good sites are taken.

Weaknesses

None perceived

Opportunities

Expand into other lines within the vending industry.

Threats

Legislation banning smoking may limit the potential of the business to some extent, but it will not threaten the existence of the business in its current form. Similiar legislation in South Africa has not affected the industry unduly.

8. Reason For Sale

What is the reason for the sale

The owner is bored with this business and would like a new challenge.

9. Conclusion

Why is this a good business

This is a cash business with no staff, and the owner is very flexible and works little. Can it get better?

What is the price plus stock and the net profit

The price of the business is N$1.8 million, and net profit per month is N$60 000 on average.