Summary

1. History Background

Fully describe the business's activities

This business is a franchised funeral equipment wholesaler. They supply coffins (custom made if necessary), wreaths, undertaker equipment, mortuaries, gravestones, coffin linings etc. Coffins are assembled in-house, and the processed materials are supplied from the franchisor. The business provides a full service to undertakers, who are provided with a space to meet their clients to discuss arrangements and choose coffins etc. It even provides a mortuary that its clients can make use of. The business does not sell to the public directly. The main branch where the manufacturing takes place is in Windhoek, and a smaller one opened in the North.

How long has the business been established

The seller started the business in Namibia in 2003.

2. Present Market

How does the business operate on a daily basis

The business keeps a sizeable stockholding of finished products on hand, so production carries on every day. When clients come with special wishes this is accommodated. Most clients collect their orders at the premises, but deliveries are made to larger ones.

How are the clients attracted to the business

The business generally does not deal with the general public, but rather only sells to undertakers who re-sell the products. This is a fairly constant market, who all know about this business and in many instances don't have much choice but to buy there. The business also tenders for government contracts, which are quite lucrative.

What Advertising/Marketing is carried out

Does the business have any contract work

The business currently has contracts to supply coffins to two government departments. It also has an agreement with the franchisor to be the exclusive agent for its products in Namibia, Angola and western Botswana.

What competition exists

The business has various competitors for different products. It has little to no direct competition that comprehensively caters to the needs of its clients. This business is a one-stop shop for all funeral requirements.

What are the seasonal trends

Death does not know seasons.

3. Financial

Is the business VAT Registered

The business is VAT registered.

Are there up-to-date Management Accounts available

Management accounts for the six months from March 2010 are available.

What Balance Sheet and Income Statements are available

Balance Sheet and Income Statement for 2008 to 2010 are available.

What percentage of of the business is cash/credit

Most of the customers pay cash, but a handful of bigger clients have 30 day accounts.

How could the profitability of the business be improved

Is Seller finance available and for what amount

Seller finance is not available.

What is the payback period

What is the ROI

4. Staffing

What is the total staff complement

The business employs 15 staff.

Give a breakdown of staff/functions/length of service

There are three office staff (a supervisor, secretary and receptionist), two people at the branch in the north, and the rest of the staff have various positions in manufacturing/operations.

Do any receive special perks or incentives

Are they on contract

Do any have management potential

How involved is the Owner in running the business

The owners, a husband/wife team are highly involved in the running of the business. The wife is in charge of all admin/accounting related functions. The husband supervises the operations, and drives the truck to South Africa himself to collect pre-cut wood and re-sale merchandise. He also does local deliveries.

5. Premises

Is there an option of renewal & what period

The lease is renewed every six months.

What is the square meterage of the business

The business currently has about 500sqm, and also hires 3 containers in a separate location to store stock.

6. Assets

Is a full asset list on file

A full asset list is not on file.

Are any items not included in the sale

A 2009 Mercedes Benz C63 AMG and 2009 Toyota Double-Cab can be left out.

What is their overall condition

All assets are in a good working condition.

Do any require repairing

No

Are they presently insured

Assets are insured.

7. S.W.O.T. Analysis

Strengths

A perk of the business is that it is registered as a manufacturer and so qualifies for a tax break (16% company tax) for another 7 years. Strong support through the relationship with the franchisor provides a significant barrier to entry.

Weaknesses

None perceived.

Opportunities

The Angolan market is not tapped at all so far, and the branch in the north has great potential. Business plans to start a full manufacturing plant and VIP undertaker service are available and have ministerial backing.

Threats

Cremation!

8. Reason For Sale

What is the reason for the sale

The sellers have an opportunity to go into farming that they feel can not be passed on.

9. Conclusion

Why is this a good business

Only two things in life are certain: death and taxes. This business makes money off one and has a reduced rate on the other!

What is the price plus stock and the net profit

The price of this business is N$6.5 million, which includes stock of about N$1.1 million