Fully describe the business's activities?
This is a large Pre-Primary School in a secluded leafy West-Durban suburb.
How long has the business been established?
The school was started in 1987 and moved into its current premises in 1997.
How long has the owner had the business?
The owners have had the business since its inception in 1987.
How does the business operate on a daily basis?
Children are dropped of by the parents between 7:00 and 7:15 am . Organised activities begin at 8:00 in the morning.
How are the clients attracted to the business?
The school has a reputation for providing a warm and nurturing environment for the development of kids in their younger years. Prospective parents are also attracted by the impressive facilities which were purpose built for the school by the current owners.
What Advertising/Marketing is carried out?
While occasional adverts are placed in local media, the school has relied on its strong reputation, and the spreading of that reputation by existing parents, for the majority of its sourcing of new pupils each year.
Does the business have any contract work?
While a nursery school does not have contract work , the kids are at the school for a number of years thereby providing stability and security of future income.
What competition exists?
There is very little competition within the immediate vicinity of the school and certainly no school that offers the same facilities .
What are the seasonal trends?
The school operates normal school terms.
Is the business VAT Registered?
The school is not Vat registered.
Are there up-to-date Management Accounts available?
All management accounts are up to date and available.
What Balance Sheet and Income Statements are available?
Year end Feb 2017 financial statements are available.
What percentage of the business is cash/credit?
Payments for school fees are done by EFT on a monthly basis.
What is the age analysis of the debtors book?
There is no debtors book as fees are paid upfront.
How could the profitability of the business be improved?
The school has recently implemented a baby group for children from 4 months to 18 months old however the financial results presented do not include this benefit. The facilities could also be hired out for birthday parties over weekends.
Is Seller finance available and for what amount?
Seller finance is not available.
Who is the bookkeeper/Accountant?
The accountants are the Dianne McArthur Group.
What is the total staff complement?
There are currently 19 staff members.
Give a breakdown of staff/ functions/ length of service?
7 Teachers 4 Assistants 2 Aftercare Assistants 1 Secretary 1 Gardner
Are they on contract?
All staff are on full employment contracts.
Do any have management potential?
Yes, at least 3 members of staff have the potential to manage the school.
How involved is the Owner in running the business?
The 2 owners each work for 3 days a week until 12:00 thereby covering the Monday to Friday school week.
When does the current lease end?
The premises are owned by the current owners of the school and therefore there is no lease in place. The new owner would sign a new lease with the current owners .
Is there an option of renewal & what period?
The owners wish to sign a 5 year lease with the purchaser with the option to renew for a further 5 years.
What is the annual escalation %?
This will be negotiated but an increase of 9% is suggested.
What are the trading hours?
The school operates from 7:00 in the morning with the majority of the kids being picked up around 12:30. The school does operate an aftercare for parents who need full day supervision for their children.
What is the square meters of the business?
The school buildings measure 376m2 in area and the school is located on a 1/2 acre plot.
Who is the Owner/Landlord?
The landlord is the current owners of the school.
Is a copy of the lease available?
A new lease will be negotiated with the purchaser.
Do you require a licence?
Yes, a Health and Social Welfare license is required to run the school. This license is in place.
What lease deposit and/or other surety is required?
One months deposit is required.
What are the main assets of the business?
The main assets of the business are the educational toys and teaching aids.
Are any items not included in the sale?
The owners vehicles and personal effects are excluded from the sale.
What is their overall condition?
All assets are in good working order.
Do any require repairing?
None require repairing.
How have they been valued ?
Assets have been valued at replacement value.
Which assets are on lease/HP and with whom?
The photostat machine is on lease.
What are their settlement amounts?
There are no settlement amounts.
Will Seller settle or Buyer to take over?
The buyer will take over the lease for the photocopier.
Are copies of agreements available?
Copies of the leasing agreement are available.
Are they presently insured?
All assets are currently insured.
The school's location in a leafy suburb of Durban provides an endless supply of young kids to enter the school. In particular the premises of the school, together with the nurturing environment created by the dedicated staff give the school a unique offering to young parents.
There are no perceived weaknesses at this stage.
Opportunities include the utilization of the school facilities after hours for events like kids parties.
The only perceived threat is if junior schools opened facilities similar to those offered by this school. This seems unlikely given the schools that this school feeds.
What is the reason for the sale?
The owners have put many years of love and dedication into the school and especially into the children that have moved through the school. They have however now reached the age where they wish to retire.
Why is this a good business?
The school operates out of built for purpose premises which makes an ideal environment to nurture and grow young minds. As a business, the fact that the kids often stay for quite a few years means that income is secure and provided the good name and nurturing atmosphere is maintained, this business will provide reliable good returns well into the future.
What is the price plus stock and the net profit?
The price is R 4 million with a nett profit of R 1,56 million. The property is also available for sale at a price of R2.6 mill.
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