Summary

Pre-school occupying purpose built building, very well equipped and staffed on large stand with 6 classrooms. Currently the owners out of choice have 130 kids, they are allowed 191 from babies to Grade R. So there is plenty of scope to improve profitability. This business can easily net over R150 000.00 per month

1. History Background

Fully describe the business's activities?

Pre-school occupying purpose built building, very well equipped and staffed on large stand with 6 classrooms. Currently the owners out of choice have 130 kids, they are allowed 191 from babies to Grade R. So there is plenty of scope to improve profitability. This business can easily net over R150 000.00 per month by increasing the numbers of children, 20 more children would result in approximately R40 000pm and taken to the limit of 191 would result in an increase in income by over R100 000pm with marginal increase in costs

How long has the business been established?

The school was established in 2003 in modern purpose built premises

How long has the owner had the business?

Since Inception

2. Present Market

How does the business operate on a daily basis?

The owner is there part time and there is a lady in place who is basically the principal and is very capable of running the school

How are the clients attracted to the business?

The school is located in an upmarket area with lots of new housing developments, most of their children come via word of mouth

What Advertising/Marketing is carried out?

Very little

Does the business have any contract work?

Parents sign an agreement for their children to attend the school

What competition exists?

There are no quality nursery schools in the area

What are the seasonal trends?

None really except January before the schools open

3. Financial

Is the business VAT Registered?

Not required

What VAT documentation is on file?

Not required

Are there up-to-date Management Accounts available?

Yes

What Balance Sheet and Income Statements are available?

To Feb 2011

What percentage of the business is cash/credit?

Mostly EFT or cash at the end of the month

What is the age analysis of the debtors book?

Most payments EFT

How could the profitability of the business be improved?

Up to now the owners have chosen to keep the number of children to around 130, but it is licenses for 191 with the same staffing levels the numbers enrolled could be increased as there is demand for the services offered

Is Seller finance available and for what amount?

No but there is a small bond registered with Business Partners who assisted with the initial building and financing of the school, so it is a strong possibility that they may finance a new owner as they know thr business

4. Staffing

What is the total staff complement?

16 staff

Give a breakdown of staff/functions/length of service?

1 Manager/principal 6 teachers 2 assistants 1 cook 6 cleaners

Are they on contract?

Yes

Do any have management potential?

Yes she already runs a large portion of the school and admin

How involved is the Owner in running the business?

Half Day

5. Premises

What are the trading hours?

06h30 to 18h00 Monday to Friday

What is the square meters of the business?

Property 1700 square metres, Main Building 440 sqm, 634 sqm of driveway and paving

Is a copy of the lease available?

Property is included in the sale price

Do you require a licence?

Yes but all in place

6. Assets

Is a full asset list on file?

Yes

Are any items not included in the sale?

Some personal items

What is their overall condition?

Excellent

Do any require repairing?

Normal maintenance

How have they been valued ?

Property and movables by professional valuator in June 2009

Which assets are on lease/HP and with whom?

Copier on rental

What are their settlement amounts?

Nil

Are copies of agreements available?

Yes

Are they presently insured?

Yes

7. S.W.O.T. Analysis

Strengths?

Beautiful purpose built school with lovely large classrooms, on a large stand, there is also already a slab to build extra classrooms if required

Weaknesses?

Current owners are not interested in pushing the school to its full potential

Opportunities?

Potential to net up to R200 000pm with increasing the numbers in the school. This is a quality operation professionally run with lots of growth including growing the property as a party venue at weekends

Threats?

None known

8. Reason For Sale

What is the reason for the sale?

Going to OZ (Australia0

9. Conclusion

Why is this a good business?

The best pre-school i have seen with great prospects

What is the price plus stock and the net profit?

Buildings R3.8m, school R2.7m totalling R6.5 million currently netting before bond costs over R80 000 per month, the net can be increased to close to R200 000 per month under new ownership