Summary

This is a Cash business. Easy to Manage. The store has a lot of potential to grow with good staff and owner involvement.

1. History Background

Fully describe the business's activities?

The business rents and sells DVD's and games as well as snacks and phone cards.

How long has the business been established?

The owner started up the business 4 years ago.

2. Present Market

How does the business operate on a daily basis?

The business trades from 10am to 8pm Monday to Sunday.

How are the clients attracted to the business?

Clients are mainly attracted via word of mouth and normally lives within the area.

What Advertising/Marketing is carried out?

Pamphlets are handed out and also printed in the homework books of schools in the area. SMS's are also sent out.

What competition exists?

There is another franchised DVD store a few blocks away.

What are the seasonal trends?

The business tends to be busier during school holidays.

3. Financial

Is the business VAT Registered?

No.

Are there up-to-date Management Accounts available?

The owner keeps his own management accounts. Figures can also be proven from the POS system.

What percentage of the business is cash/credit?

Only about 2% of the business is on contract, where clients pay in advance the rest is all paid cash.

What is the age analysis of the debtors book?

N/A

How could the profitability of the business be improved?

The business definitely needs some owner involvement and good staff.

Is Seller finance available and for what amount?

Seller will consider when a good deposit is paid.

4. Staffing

What is the total staff complement?

Currently have two staff members that is not permanently employed.

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

Both of the staff has only been with the business for one month.

Do any receive special perks or incentives?

An hourly rate of R10 - R15 is paid and if work more than 45 hours x 1.5 per hour.

Are they on contract?

No.

Do any have management potential?

No.

How involved is the Owner in running the business?

Because of the staff turnover the owner has tried to be at the business a bit more, prior to this only once a week.

5. Premises

When does the current lease end?

Lease ends in June 2012.

Is there an option of renewal & what period?

A 3 year renewal option.

What is the annual escalation %?

10%

What is the square meters of the business?

Approximately 75 sq/m

Is a copy of the lease available?

A copy is available from landlord.

Do you require a licence?

License from Film and publication board and TV licenses.

What lease deposit and/or other surety is required?

One months security deposit and one months rent in advance is payable.

6. Assets

Is a full asset list on file?

Owner will draw up.

Are any items not included in the sale?

The Ola Fridge is not included as it belongs to the supplier. Owner has 3x Game machines and 1x Teddy bear machine that is not included in the sale but should buyer wish to take them over an offer can be made.

What is their overall condition?

Everything is in a working condition.

Do any require repairing?

No.

How have they been valued ?

The owner assisted us with a valuation.

Which assets are on lease/HP and with whom?

N/A

Are they presently insured?

Yes, insurance is in place.

7. S.W.O.T. Analysis

Strengths?

This is a cash business that is easy to operate.

Weaknesses?

The owner has not been involved and needs to appoint trustworthy staff.

Opportunities?

More advertising can be done and specials run but mainly owner involvement is needed.

Threats?

None were identified.

8. Reason For Sale

What is the reason for the sale?

The owner has various other businesses that needs his attention.

9. Conclusion

Why is this a good business?

This is a cash business that is easy to operate.

What is the price plus stock and the net profit?

The selling price is R390 000 which includes R150 000 stock and generates an average net profit of R13 000p/m