Sectors / Category

Annual turnover

  • Mandate: 31414
  • Added: 19 Apr 2018
  • AFS
  • 500

Popular Coffee and Gift Shop - Price reduced

Western Cape, Cape Town
Mandate 31414
Added 19 Apr 2018
R 1,250,000* ZAR
Stock: R 50,000
Assets: R 536,000
R 69,394 ZAR
Kutu Venter
Aldes Alpha
Western Cape
Western Cape

Located in a smaller shopping centre with a large Supermarket Group as the anchor tenant, this profitable coffee shop with a small gift section is popular within the area and has become a destination shop to their loyal customer base. Their liquor license has been granted which offers various exciting opportunities to improve T/O substantially.

R 1,250,000* ZAR
Stock: R50,000
Assets: R536,000
R 69,394 ZAR

Located in a smaller shopping centre with a large Supermarket Group as the anchor tenant, this profitable coffee shop with a small gift section is popular within the area and has become a destination shop to their loyal customer base. Their liquor license has been granted which offers various exciting opportunities to improve T/O substantially.

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Fully describe the business's activities?
Coffee shop with a small gift section.

How long has the business been established?
Established by the owners in 2011

How does the business operate on a daily basis?
The business trades daily in a shopping centre and is a well-known and popular destination Coffee Shop. Apart from preparing and serving food to customers, the operation includes daily activities such as stock control, cleaning, banking, dealing with suppliers, sourcing gift items, etc.

How are the clients attracted to the business?
The shopping centre is located in close proximity of two private schools and the Coffee Shop caters for the whole family. The Shop is also located at the entrance of the centre's anchor tenant, a large Supermarket Group, ensuring high feet traffic.

What Advertising/Marketing is carried out?
Mainly word of mouth and social media. They sponsor events for local schools from time to time.

What competition exists?
This is the only Coffee Shop in the shopping centre.

What are the seasonal trends?
Good trade all year round, busier time during winter, public holidays and over Christmas period.

Is the business VAT Registered?

What VAT documentation is on file?
Up-to-date VAT returns are on file and will be made available during Due Diligence.

Are there up-to-date Management Accounts available?
Up-to-date Management Accounts are available.

What Balance Sheet and Income Statements are available?
All financial information is available on request.

What percentage of the business is cash/credit?
100% cash

How could the profitability of the business be improved?
There is a pending liquor license which, when approved in the near future, will increase T/O. T/O could also be improved by hosting Trade evenings, more advertising, catering for events, hiring out of venue for functions, etc.

What is the total staff complement?
15 employees

Give a breakdown of staff/ functions/ length of service?
6 employees = +- 5yrs service 5 employees = 2+ years 4 employees = less than 2 years

Do any receive special perks or incentives?
Managers receive 20% discount on meals and 2 coffees per day.

Are they on contract?

Do any have management potential?

How involved is the Owner in running the business?
The owner is involved fulltime. The Managers work part-time.

When does the current lease end?
They have a 5 year Lease Agreement which was renewed in 2017.

Is there an option of renewal & what period?
Yes - option for renewal for another 5 years.

What is the annual escalation %?
Between 8 - 10% (Market related)

What are the trading hours?
08:00 - 17:00 Monday - Friday 09:00 - 17:00 Saturday 09:00 - 15:00 Sunday

What is the square meters of the business?
Inside shop 127sqm Outside +- 80sqm

Who is the Owner/Landlord?
Shoprite Checkers

Is a copy of the lease available?

What lease deposit and/or other surety is required?
A lease deposit equal to one month's rent as calculated for the 60th month's rent, is required.

What are the main assets of the business?
Kitchen equipment and other furniture & fittings.

Are any items not included in the sale?
All items are included in the sale.

What is their overall condition?
All equipment in good working order. 2 X new fridges. An extra fridge will be required when the liquor license is granted.

Do any require repairing?
Equipment good. Kitchen floor however needs maintenance.

How have they been valued ?
Depreciated values.

Which assets are on lease/HP and with whom?
All items are fully paid.

Are they presently insured?
All items are fully insured.

• Profitable and well established • Good cash flow • Excellent reputation for quality food, value for money and good service • Loyal customer-base • Loyal and well trained staff • Recent brand refresh and upgrades • Excellent recipes and menu • Established suppliers

• Owner involvement is essential to the success of the business • Business not part of a large brand name • Customer base not from high end income group

The pending liquor license is expected to be granted within the next 2 -3 months and will increase T/O and attract business people for lunch, etc. Late afternoon/early evening hours can be extended for 'after work drinks'. Another option would be to open in the evenings to fill the gap in the market in the area for dining out. The venue can be rented out for functions OR offer a special menu to host functions.

A new centre opened close by during the last 6 months, but the area is expanding rapidly and competition should not affect the business.

What is the reason for the sale?
The owner has young children at the age when they start extramural activities and she would like to be more flexible with her time. Her husband also has another business opportunity and requires the funds from the sale of this business.

Why is this a good business?
The business is profitable and well established with both customers and suppliers. Customers come from outlying areas to enjoy their cake and coffee. The business concept could easily be reproduced and/or franchised. The newly acquired liquor license opens up a multitude of opportunities.

What is the price plus stock and the net profit?
Asking price R1,200,000 plus stock of approximately R50,000.

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