Fully describe the business's activities?
This business offers a wide range of plumbing supplies. Many plumbing companies purchase from the business as well as walk in customers.
How long has the business been established?
The business was started in 2008.
How long has the owner had the business?
The owners started the business.
How does the business operate on a daily basis?
Many of the plumbing compies call in early morning to buy their stock for the daily tasks. The business also deliver to some of their clients and employ a full time driver. During the day many customers walk in to buy plumbing supplies.
How are the clients attracted to the business?
The business is well known to the plumbers in Gauteng. A large number or regular plumbers are buying from the business. The plumbers pay on 7 up to 30 days. This makes up around 30% of the monthly turnover.
What Advertising/Marketing is carried out?
Bill board, signage and yellow pages.
Does the business have any contract work?
From time to time clients request that a plumbing job be done. The driver will go out and do the smaller plumbing jobs for their clients. Larger jobs are referred to their pool of plumbers who regularly purchase supplies from the business.
What competition exists?
There is a hardware shop a few blocks away, however, they do not stock a full range of plumbing supplies. Builders wharehouse offers better prices on geysers but overall the majority of the plumbing stock are at much better prices with this business.
What are the seasonal trends?
The business closes between xmas and new year and turnover drops accordingly. On average the sales per week is around R100K.
Is the business VAT Registered?
The business is VAT registered
What VAT documentation is on file?
VAT documentation will be made available during due diligence.
Are there up-to-date Management Accounts available?
Management accounts for the period ending February 2018 are on file.
What Balance Sheet and Income Statements are available?
Financial statements for the year ended February 2017 are on file. The accountant will only finalize the 2018 financials in a few months time.
What percentage of the business is cash/credit?
30% of the sales are to regular plumbing companies, the balance is cash or on credit/debit card. The business has a swipe machine available.
What is the age analysis of the debtors book?
Most of the plumbing companies enjoy 30 day accounts, some of the smaller plumbers pay within 7 days. The business enjoys up to 60 days credit with their suppliers, they however prefer to pay within 30 days to benefit from the additional 2,5% discount.
How could the profitability of the business be improved?
The landlord will give this business 1st option to lease bigger premises where they can have a showroom. The suppliers have undertaken to do the displays for free. The showroom will enhance the walk in business as most clients would like to touch and see the products. The business could also employ a full time plumber.
Is Seller finance available and for what amount?
The seller will look at all reasonable offers from qualified buyers.
What is the total staff complement?
Total staff compliment of 3, includes the 2 owners and the driver/shop assistant.
Give a breakdown of staff/ functions/ length of service?
The driver/shop assistant has been with the business for 5 years. He has a good knowledge of the products and is able to do smaller plumbing jobs.
Are they on contract?
The driver is on a normal employment contract.
Do any have management potential?
The driver/shop assistant is able to manage the shop in the absence of the owners for a short period of time. He knows the clients and products well.
How involved is the Owner in running the business?
The owners are 100% involved in the day to day running of the business.
When does the current lease end?
The business has a one year lease with the landlord.
Is there an option of renewal & what period?
A buyer may negotiate a longer lease with the landlord.
What is the annual escalation %?
Annual escalation could be negotiated with the landlord.
What are the trading hours?
Monday to Friday 7am to 5pm and Saturdays from 8am to 1pm.
What is the square meters of the business?
Who is the Owner/Landlord?
To be confirmed with a serious buyer.
Is a copy of the lease available?
A copy of the lease will be made available during due diligence.
What lease deposit and/or other surety is required?
Two month rental deposit could be negotiated with the landlord (+/- R43,000)
What are the main assets of the business?
Stock of +/- R550,000, shelving and furniture and fittings.
Are any items not included in the sale?
The owners laptop is not part of the sale. The seller would also prefer to keep the delivery vehicle. A buyer will have to purchase a small delivery bakkie.
What is their overall condition?
The assets are in good condition.
Do any require repairing?
Only the delivery vehicle gets serviced and repaired regulary. This vehicle is however old and has sentimental value to the seller.
How have they been valued ?
Stock is valued at cost value.
Which assets are on lease/HP and with whom?
What are their settlement amounts?
Will Seller settle or Buyer to take over?
Are copies of agreements available?
Are they presently insured?
The business is comprehensively insured at a monthly premium of R1,552.
Is a full asset list on file?
The seller will prepare a full asset list when an offer to purchase is signed. The assets mainly consist of the vaious shopfittings and shelving, telephone system, security and camara systems, computer system, fax machine and printer.
Well established business with loyal client base.
No real weaknesses are identified. The turnover remains steady.
Take the option of a bigger shop in the centre and have a showroom. Employ a full time plumber to do plumbing jobs for clients.
No real threats are identified.
What is the reason for the sale?
Due to ill health of the one shareholder, the other shareholder is a lady who wishes to retire.
Why is this a good business?
This business will suit an energetic buyer and an additional sales person to assist with the busy shop.
What is the price plus stock and the net profit?
The price of the business is R2,800,000 which excludes stock of R550,000. Total asking price of R3,350,000. Average net profit of R142,822 per month.
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