Fully describe the business's activities?
Supply of stationery and office consumables, including groceries (tea, coffee, sugar) to the corporate market in Johannesburg and Pretoria.
How long has the business been established?
The business has been established for 25 years since 1993.
How long has the owner had the business?
The owner started the business 25 years ago.
How does the business operate on a daily basis?
Owner and 1 other staff member has authority to open and close. Staff process orders that come in from clients and ensure stock is pulled and collated for delivery. Orders come in via telephone and e-mail.
How are the clients attracted to the business?
Word-of-mouth over a long standing period of time. Their customer service attracts clients and ensures the current clients stay on board.
What Advertising/Marketing is carried out?
There is great potential here. Very little advertising is carried out. The occasional special will go out on an e-mail. More business can be generated by being more aggressive in the marketing arena.
What competition exists?
There are other stationers and suppliers out there but service is the key which keeps this business doing well.
What are the seasonal trends?
Busy throughout the year but closed part of December and part of January for 3 weeks.
Is the business VAT Registered?
Yes, the business is VAT registered.
What VAT documentation is on file?
All VAT returns etc are on file and available.
Are there up-to-date Management Accounts available?
Yes there are.
What Balance Sheet and Income Statements are available?
Up to February 2018
What percentage of the business is cash/credit?
All the customers work on an account basis and therefore work with EFT's etc. Very little cash changes hands as the customers are larger corporate entities.
What is the age analysis of the debtors book?
30 days. Closely managed. No bad debts.
How could the profitability of the business be improved?
If just one rep was put on the road in Johannesburg/Pretoria area it would increase business dramatically. A website would also assist - none at the moment as well as some advertising and marketing via e-mail to existing as well a potential new clients. None of this is happening currently yet the business is doing nicely.
What is the total staff complement?
There are 5 staff and the owner and his wife in the business currently.
Give a breakdown of staff/ functions/ length of service?
1 x Order Clerk, 1 x Receiving and Pulling clerk, 3 x delivery drivers who also assist. 1 x owner who oversees everything, 1 x owner's wife who controls debtors, dispatch and purchasing.
Do any receive special perks or incentives?
No. Bonuses are purely at management's discretion.
Are they on contract?
Yes, they have letters of appointment.
Do any have management potential?
Yes, one member of staff who has been on board for 8 years and works on orders also acts in a management position when the owners go away.
How involved is the Owner in running the business?
The current owner is involved on a daily basis but when away on holiday or overseas the staff member mentioned above steps in.
When does the current lease end?
The lease operates on a six-monthly basis. August 2018 is when the next 6 month period kicks in.
Is there an option of renewal & what period?
Yes, 6 monthly.
What is the annual escalation %?
The annual escalation is 8% per annum.
What are the trading hours?
Monday to Friday: 8.00 am to 4.30 pm.
What is the square meters of the business?
Approximately 100 square meters with shipping containers also used as storage space.
Is a copy of the lease available?
Yes, copy of the lease is available.
Do you require a licence?
No licence is needed to run this business.
What lease deposit and/or other surety is required?
1 x months rental will be needed as a deposit. The current monthly rental is R8 800 per month.
What are the main assets of the business?
3 x delivery vehicles, 1 x generator, 1 x computer system, 1 x laptop, fixtures a fittings for stock.
Are any items not included in the sale?
What is their overall condition?
Very good to excellent.
Do any require repairing?
No, assets are regularly maintained.
How have they been valued ?
Net realisable value.
Which assets are on lease/HP and with whom?
None of the assets are on lease/HP.
What are their settlement amounts?
All paid for.
Are they presently insured?
Yes, fully and comprehensively insured.
Length of time in the market - 25 years, positive history with corporate clients, personalised service wherever possible, staff's knowledge of the products, clients and market.
Lack of advertising and marketing in any form. No website, no sales people etc.
Gearing up the advertising, a website, potential to a have a rep on the road. All of this can be funded from current cash flow and create huge opportunities. The market for school stationery is also very large - a market they have not touched.
None really. 25 years of successful trading speaks for itself. Maybe some opposition companies but they do not have the service levels that this business has.
What is the reason for the sale?
The owner is 72 years of age and wishes to retire. However, he is happy to assist with an extended handover etc to ensure new owners hit he ground running.
Why is this a good business?
Nice and profitable with huge growth potential with some advertising and marketing. Easy to run business. Business hours are perfect: Mon to Fri 8.00 am to 4.30 pm. Known in the industry - not starting from scratch!
What is the price plus stock and the net profit?
The profits are R1.050 million at Feb 2018. The asking price is R3000 000 plus stock at cost of approximately R200 000.
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