Fully describe the business's activities?
This retail business focuses on Gifts, Jewellery, Collectables, Antiques, etc, The owner sources new or 2nd-hand / antique products & displays such in an attractive environment that ensures continual sales, with turnover and profits rising every year.
How long has the business been established?
It has been operational with the present owner in Durban for 26 yrs, of which the last 10 have been in the present major Upper Highway Mall, with the last 2 years being in the same well positioned internal corner spot.
How does the business operate on a daily basis?
The owner will open/close the shop during the 5 days of the week that he works, while two assistants work together over the other 2 days, & will open/close the shop. The owner sources stock (new, 2nd-hand & antiques), that he believes will be attractive to the Centre's clientele & give him the required mark-up.
How are the clients attracted to the business?
Prominent position within the Centre, with huge corner windows & nicely displayed products in the large/open store.
What Advertising/Marketing is carried out?
Leaflets, although the long standing reputation, word-of-mouth & foot-traffic is the main source of business.
What competition exists?
No-one else in the Centre close proximity has the array & depth of similar products
What are the seasonal trends?
Holidays are the higher income months
Is the business VAT Registered?
yes, with all info on file
Are there up-to-date Management Accounts available?
Yes the owner keeps good accounts. These in rounded format have been used for this Report.
What Balance Sheet and Income Statements are available?
Each year AFS are produced, which include the owners benefits, which once added-back produced an annual Net Profit of R1.16m on a turnover of R2.77m for 2017/18 (turnover for the two previous years was R2.45m approx, each). Even with additional provisions to cover rent and wages increases allows for a NP to the new owner of some R1.1m on the same turnover.
What percentage of the business is cash/credit?
All business is cash or credit card
What is the total staff complement?
The owner works during the week & two part-time assistants together man the shop over the weekend.
How involved is the Owner in running the business?
The owner manages the opening/closing, stock ordering & control, as well as, financial aspects of the business
When does the current lease end?
The present lease will end in July 2019, but can be renewed at the normal 8% annual escalation (normal leases 2-4 years). The 70 m2 shop has a present rental charge, inclusive of all fees except VAT, of R30 000 pm (with a provision within this Reports accounts to cover the increase for the new owner)
What are the trading hours?
as per the centre latest 9- 18h00 earliest 9 - 16h00
What are the main assets of the business?
Top quality display cabinets/furniture, office furniture, printer, alarm/camera's, reference books which would cost with shop fittings, some R340 000 and at a forced sale price may be some R100 000.
Are any items not included in the sale?
A personal car is not included
Long established & well known name in the Upper Highway area & especially this mall where it has been for 10 years. Well positioned within the centre of the mall on a corner, with huge glass display windows Good spread of new vs old /antique gifts & collectables...
Presently no website, facebook, twitter, or internet product viewing/purchasing options
Develop an interactive website & social media plan (facebook/twitter...) to further enhance the business's reputation & products
That another similar shop establishes close by, which would be fool-hardly considering the long established presence of this shop
What is the reason for the sale?
The owner is relocating & retiring
Why is this a good business?
Easily manageable business with only two temporary weekend staff members to allow owners time off. It is long established, with a well known reputation in the Upper Highway area & especially this mall where it has been for 10 years. It has a great position within the centre of the mall on a corner, with huge glass display windows & a varied spread of new vs old /antique gifts & collectables...
What is the price plus stock and the net profit?
The Sale Price is R1.398m, excluding the present owners stock of some R600 000. The Net Profits including the owners benefits was R1.16m on a turnover of R2.77m for the 2017/18 financial year. Additional expenses for the new owner in the form of provisions would reap R1.1m in 2018/19 on the same turnover. An excellent return for minimal involvement & risk from this long established, ever improving retail shop.
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