Summary

This dynamic business supports all events (except for weddings!) by supplying all sound equipment, light and visual effects, setting up the stage and even arranging a fireworks display. It is a fantastic business with low overheads for anyone who doesn't want to spend his/her life in an office, but rather meet people and be where it's happening! Exceptional value at N$2.4 million, with average profits of N$100 000 to N$150 000 per month.

1. History Background

Fully describe the business's activities

This business hires out professional sound, stage & trussing, lighting and audio/visual equipment. Setting up and operating the equipment is part of the service, which includes sound engineering. The events supported include government events, trade fairs, fashion shows, product launches, concerts, cultural events, conferences and various corporate functions. Most of the events take place all over Namibia, but there has been business from across the SADC region. This is one division of a bigger business that provides a variety of other services, but the owner is not selling the entire business, just this division.

How long has the business been established

The business was started in April 2001 by the seller.

2. Present Market

How does the business operate on a daily basis

Daily activities of the business include making quotations, servicing equipment and setting up and running of events.

How are the clients attracted to the business

Many clients are recurring, but the business gets a lot of its work through the yellow pages.

What Advertising/Marketing is carried out

Currently advertising in the yellow pages is the only marketing the business does, but cold calling various businesses would bring good results.

What competition exists

There are three competitors to this business. However, while there is some overlap the companies all have their own niche in the market. For examples, this business does not do weddings at all.

What are the seasonal trends

There are less events during winter.

3. Financial

Is the business VAT Registered

The business is VAT registered.

Are there up-to-date Management Accounts available

Management accounts are not available.

What Balance Sheet and Income Statements are available

Balance Sheet and Income Statement at 31 July 2009 are available.

What percentage of of the business is cash/credit

All services have to be paid for in advance.

How could the profitability of the business be improved

The business has a very low overhead structure and no cost of sales since all the equipment that is rented out is owned by the company, so the only way to increase profitability is to raise sales.

Is Seller finance available and for what amount

Seller finance is not available.

What is the payback period

17 months

What is the ROI

72%

4. Staffing

What is the total staff complement

The business has three staff.

Give a breakdown of staff/functions/length of service

The staff are skilled in all the necessary tasks like setting up and breaking down of equipment at the venue, maintenance, sound engineering etc.

Do any have management potential

How involved is the Owner in running the business

The owner is fully involved in the running of the business, and shares in the irregular hours that are par for the course. He is the main liasion to the customer and supervises his staff.

5. Premises

When does the current lease end

The lease of the premises is not part of the sale. The buyer will have to find his/her own premises to operate the business from, which can potentially be from home.

What are the trading hours

The hours of the business are irregular. As a lot of live entertainment happens in the evenings, that is when a lot of the work is done.

6. Assets

Is a full asset list on file

A full asset list is on file.

Are any items not included in the sale

All assets in the asset list are included in the sale.

What is their overall condition

All assets are in good working condition. Some are brand new, some have a bit of mileage on them but all are 100% functional.

Do any require repairing

Nothing requires repairing. The seller guarantees that all assets will be in good working condition on takeover.

How have they been valued.

The assets have been valued at fair value. To replace all assets would cost in excess of N$4 million.

Which assets are on lease/HP and with whom

All assets are fully paid for.

Are they presently insured

The business is insured.

7. S.W.O.T. Analysis

Strengths

There is a lot of recurring business in an industry with relatively little competition. Additionally, the business is self-sufficient in terms of equipment and does not have any need to rent equipment from other companies.

Weaknesses

The owner has to be hands-on all the time, not just 8 to 5.

Opportunities

More marketing. The potential in the market and capacity in the business is there.

Threats

Rain!

8. Reason For Sale

What is the reason for the sale

The seller has other lines of business as well, and can not do justice to everything. A few big projects are coming up, so he needs to free up his time.

9. Conclusion

Why is this a good business

The business has low overheads and littlle staff, there is no goodwill in the price, the return on investment is good and there are many ways this business can be expanded within its market to offer a more complete service to clients.

What is the price plus stock and the net profit

The price of the business, including all assets, is N$2.4 million. The net profit ranges from N$100 000 to N$150 000 per month on average.