Summary

Business in exiswtence for just on 3 years. Low overheads. Great growth potential with strategic marketing. Excellent investment offering a 65% ROI and 19 months repayment period.

1. History Background

Fully describe the business's activities?

The business is operating as a mobile bar company which provides a comprehensive bar service ranging from bar rental to fully stocked and manned bars for any function.

How long has the business been established?

The current operator started the business ±3 years ago.

2. Present Market

How does the business operate on a daily basis?

Bar units can be set up anywhere from private homes to company offices, shopping malls, expos, event venues, concerts, festivals and community halls. They currently have 10 Mobile Bars which is custom built.

How are the clients attracted to the business?

The business has a website and they have done limited advertising and promotion in the past. It is an area where the prospective new owner may find an opportunity for growth.

What are the seasonal trends?

The last quarter of the year is significantly busier than the rest, but with more intensified marketing and especially personal visits to Event Venues the turnover should increase more equally over the year.

3. Financial

Is the business VAT Registered?

The business is not a registered VAT vendor as the turnover is below the minimum requirement.

What VAT documentation is on file?

The business is not registered for VAT.

Are there up-to-date Management Accounts available?

The seller prepared income and expenditure records for a 16 month period ending April 2012. Cost of Sales includes all purchases; renting; setup cost which includes traveling; wages/salaries and additional rental of equipment where required.

What percentage of the business is cash/credit?

100% cash business.

What is the age analysis of the debtors book?

No debtors all sales are on a cash basis.

How could the profitability of the business be improved?

The business could increase sales revenue by doing promotional set ups, internet advertising and by pro actively approaching venue centres, hiring companies, catering companies and event companies.

What is the payback period?

The current payback period is 16 months.

What is the ROI?

Very good investment at 77% ROI.

4. Staffing

Are they on contract?

They currently do not employ any permanent staff but have a large data base of temps who worked for them in the past. As and when functions are book they contact the temps and procure their services for the specific eveny.

How involved is the Owner in running the business?

Partners have run the business on a part time basis, taking bookings, ordering/purchasing and are involved in set-up at functions.

5. Premises

What are the trading hours?

No specific trading hours. As and when bookings are made.

Do you require a licence?

No premises required to operate this business as long as the purchaser has sufficient space at his residence to store the equipment and trailer.

6. Assets

Is a full asset list on file?

We have a full asset list on file as supplied by the Seller.

Are any items not included in the sale?

All items as per the asset list is included in the sale.

What is their overall condition?

Equipment is in excellent condition and offers good build quality allowing for durable and reliable bar units.

How have they been valued ?

Owners valuation.

7. S.W.O.T. Analysis

Strengths?

In existence for 3 years. Low overhead business. Quality of Assets.

Weaknesses?

Very little marketing in the past.

Opportunities?

Focus on marketing strategies to reach both the corporate and private market. Focus on Venue Centres and other service providers in the industery.

Threats?

None identified, but definitely the wrong type of/or no marketing.

8. Reason For Sale

What is the reason for the sale?

Partners have other business interest and are not able to give the business the focus it deserves.

9. Conclusion

Why is this a good business?

Very reasonable selling price which offers an excellent return on investment. Great growth potential with low fixed overheads. Our valuation of the business is R320 000.

What is the price plus stock and the net profit?

R280 000 with an average net of ±R18 000 for the 12 months period ending April 2012.