Summary

A baking business that has become a national brand is now available for sale. The business is located at a prime location, sells both to the public (walk in customers) and retail stores (bulk customers). The business has a lot of potential to really take significant market share in an environment that has dollarised and is starting to buy more and more snack type products.

1. History Background

Fully describe the business's activities

The business is potentially a national brand focussed cookie baking and distribution. The business has become a household name over the years across Zimbabwe and especially in the south of Zimbabwe. The business makes and sells 9 lines (brands) of cookies as well as a limited range of confectionery. The operation sells in bulk to kiosks, shops, retail chains and supermarkets around Zimbabwe and also operates a direct sales outlet within the CBD, thus attracting walk in customers as well.

How long has the business been established

Established 13 years ago by the owner.

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

The location of the bakery is in the CBD so they are rarely affected by power cuts

What is the average KW usage

40 Kva

2. Present Market

How does the business operate on a daily basis

The manager takes in calls for orders from various retail chains, stores and supermarkets and deliveries are made by small light truck. There are also direct van sales that are made to kiosks around the city. There are also some bulk customers who pick product. Baking is done onsite the previous night based on orders and estimated demand.

How are the clients attracted to the business

(1) Walk in customers because of strong brand and good location (2) Sales Reps and van sales

What Advertising/Marketing is carried out

Print media advertising in newspapers and merchandising within the shop outlet

What competition exists

One other company in Zimbabwe that makes similar cookies, north of Zimbabwe. Biscuits also form some competition being Mitchells, Lebena, Lobels and Arenel.

What are the seasonal trends

No peaks and troughs

3. Financial

Is the business VAT Registered

No

What VAT documentation is on file.

No

Are there up-to-date Management Accounts available

Yes

What Balance Sheet and Income Statements are available

Management account to 31 May 2010

What percentage of of the business is cash/credit

40% cash and 60% credit

What is the age analyse of the debtors book

30 days

How could the profitability of the business be improved

By injecting more working capital as demand is fairly strong

Is Seller finance available and for what amount

50%

What is the payback period

24 months

What is the ROI

50%

4. Staffing

What is the total staff complement

14 staff members

Give a breakdown of staff/functions/length of service

On file

Are they on contract

Yes the staff are on contract

Do any have management potential

Yes. The accountant can be groomed to assume a management role

How involved is the Owner in running the business

The owner is the Managing Director

5. Premises

When does the current lease end

31 December 2010

Is there an option of renewal & what period

The lease is renewed annually

What is the annual escalation %

25%

What are the trading hours

6am to 6pm

What is the square meterage of the business

113 square metres

Is a copy of the lease available

Yes a copy is available

Do you require a licence

Yes. A shop and trading licence

6. Assets

Is a full asset list on file

Yes

Are any items not included in the sale

Yes. A stand in Kelvin West owned by the business.

What is their overall condition

Fair

Do any require repairing

No

How have they been valued.

Owners Valuation. Depreciated Replacement Value

Are they presently insured

No

7. S.W.O.T. Analysis

Strengths

1. Nationally recognised brand 2. Strong customer following

Weaknesses

1. Business is undercapitalised 2. Could be stronger nationally and in northern markets

Opportunities

1. Market is not being fully supplied 2. New recipies could be introduced and old ones improved in line with South African Imports 3. Exports to Zambia and Botswana are possible

Threats

South African products

8. Reason For Sale

What is the reason for the sale

Owner feels she has done as much as she can with the business. New ideas and strategies from a second pair of eyes could take the business to a new level.

9. Conclusion

Why is this a good business

Strong brand. Profitable.

What is the price plus stock and the net profit

PRICE: US$300,000.00 NET PROFIT:US$10,000