Fully describe the business's activities?
The business offers sunbed & spray tanning; ozone detox & red light therapy. They also do product sales.
How long has the business been established?
How long has the owner had the business?
How does the business operate on a daily basis?
Clients book appointments in advance for the specific service they require. The studio tanning consultant on duty will perform the necessary service and product sales.
How are the clients attracted to the business?
Social media and mostly by word of mouth.
What Advertising/Marketing is carried out?
Social media; website and Google Adwords.
Does the business have any contract work?
They have a number of clients who takes out contracts for the service they require. These clients normally pay by debit order or cash up front in cash or credit cards. The monthly debit orders amounts to Â±R10 000p.m.
What competition exists?
There are obviously a number of competitors around, but not in the same shopping mall than this business.
What are the seasonal trends?
March to June is slow months. July to December being the peak months.
Is the business VAT Registered?
The business is not a registered VAT vendor yet.
Are there up-to-date Management Accounts available?
Management accounts up to end Feb. 2018 is available.
What Balance Sheet and Income Statements are available?
What percentage of the business is cash/credit?
This is a 100% cash business. 60% credit/debit card payments and balance cash and as previously mentioned some clients pay by Debit Order (R5 700 p.m.)
What is the age analysis of the debtors book?
No debtors, this is a cash business.
How could the profitability of the business be improved?
Expand on product and service offering by incorporating beauty treatments as well as anti-ageing and other, facial products. Other professional services such as nails, waxings etc. The business could also look into offering a range of beachwear ie swimwear, sarongs, wraps, sandals, beach bags, towels, sun hats, sunglasses. Also to investigate the possibility of a mobile spray tan therapist that will go around to clients in the surrounding areas.
Is Seller finance available and for what amount?
The seller will not assist with vendor finance.
Who is the bookkeeper/Accountant?
Equate Acccounting Services.
What is the total staff complement?
2 full-time studio hygienist. One was employed in 1999 and the other in April 2004. They work shifts and alternate weekends. They jointly earn plus minus R6 500 pm. The split between them depends on the hours they work. The business also makes use of students to work the afternoon shifts from 3-7pm. They also alternate on weekends. their hourly rate for weekdays are R25 p.h., R30 for Saturdays and R40p.h. for Sundays and Public Holidays. Collectively their salaries work out to plus-minus R3 600p.m. depending on total hours worked. The students are also associated with the business for a long time. 4 years and2 years respectively but they both also worked at similar studios in the past.
Give a breakdown of staff/ functions/ length of service?
2 x studio consultants one being with the business for 3 years and 1 for 5 months. All the staff work on hourly rates as they work on a shift basis. The 2 studio hygienist (cleaners) are with the business for 12 and 13 years respectively. When it is very busy and or if one of the regular staff members can't work a shift, the business has replacement staff lined up to work shifts.
Do any receive special perks or incentives?
There is a incentive scheme in place when the consultants reach and exceed their sales targets, they qualify for a commission.
Do any have management potential?
There is one of the staff members that definitely have management potential.
How involved is the Owner in running the business?
The owner is involved on a daily basis. She normally works the morning shift.
When does the current lease end?
The current lease expired in May 2016. The landlord is aware of the pending sale and is prepared to rent to the current owner on a month to month basis until a new owner is identified.
Is there an option of renewal & what period?
A rental of between 3 to 5 years will be on offer with renewal options.
What is the annual escalation %?
Again, it will be determined by the Landlord, but the indication that we have is that it will be in the region of 10%.
What are the trading hours?
Winter Months: Monday - Friday 7am - 7pm Saturday: 7am - 3pm Sundays: 9am - 1pm Public Holidays: 10am - 4pm Summer Months: Mon - Fri.: 7am - 8pm Sat.: 8am-5pm Sun.: 9am - 1pm Public Holidays: 10am - 4pm.
What is the square meters of the business?
66 - 67mÂ²
Is a copy of the lease available?
Will have to be obtained from the Landlord.
Do you require a licence?
No licence is required to operate this business.
What lease deposit and/or other surety is required?
According to the landlord, they will determine the deposit required once they have done a credit check, and depending on the financial status of the purchaser. It could be anything from 1 month to 3 months deposit required.
What are the main assets of the business?
2 x Ergoline sunbeds; 1 x stand up tanning unit; 1 x spray machine; 1 x collagen light therapy bed and an ozone detox unit.
Are any items not included in the sale?
All items generating the income stream as indicated in this report is included in the sale. As a separate business, the seller and a partner also offer laser therapy. The equipment required for that specific service does not form part of the sale and income streams mentioned in this report.
What is their overall condition?
The equipment is in a excellent operational condition.
Do any require repairing?
No, they are been maintained on a regular basis.
How have they been valued ?
Owner's valuation. The seller has done some research to obtain the 2nd hand values of similar equipment in the market place.
Which assets are on lease/HP and with whom?
None. All assets are 100% unencumbered.
Are they presently insured?
The business risks and equipment are comprehensively insured.
- In existence for 20 plus years; - Excellent position in a mayor and popular Northern Suburb Mall; - Loyal client base.
- Seasonal business.
- Expand on product and service offering; - Intensified marketing campaign. - Possible facelift (refurbishment) of the premises.
None specifically identified.
What is the reason for the sale?
Seller wants to concentrate on laser therapy business which will be established closer to home. (Westrand). She also had some family crisis in the last year, and need a break in her routine as she is tired.
Why is this a good business?
22 years in business. Well positioned in mayor mall. Service is very popular especially in the more effluent area where this business is situated.
What is the price plus stock and the net profit?
The asking price is R550 000 plus stock of R25 000 with a monthly average net cash flow of R24k prior to owner's drawings, depreciation and tax.
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