Fully describe the business's activities?
A MICT & Services Seta Accredited National Microsoft Computer Training provider, covering : Office, Excel, Word, Outlook / Project Management / various Soft Skills. Well established with Individual & Business clientele, however a BEE inward Investment will allow this business to rapidly expand into the Corporate market. The full Sale Price would be R2.2m or a 51% share at R1.1m (which is the Sellers choice). The Report speaks to projections inclusive of the planned BEE partner, with the final Net Profits (NP) to be split between the present owner & the BEE partner if a 51% share is bought.
How long has the business been established?
15 yrs since established by the owner
How does the business operate on a daily basis?
The owners: 1. check on the days bookings - venues, trainers, clients 2. prepare for the following days courses, as above but including course material & client documentation 3. contact existing & potential clients discussing needs, courses & personalised solutions 4. check on emails, website, course restructuring & materials, certifications, receipts, payments
How are the clients attracted to the business?
existing clients, word-of-mouth, website, google ad words
What Advertising/Marketing is carried out?
The Co has a good website & spends on google ads - which seems to be working well.
Does the business have any contract work?
No but a lot of continual work from existing clients. BEE access to the Corporate market will allow for contract work
What competition exists?
There are a few very large training organisations i.e Damelin, Boston College & Varsity College who concentrate on open classes & long duration courses for the masses, however in the niche of onsite Corporate, that is at the at clientâs office &/or convention venues, then this Co. is probably in the top 5 Nationally. In general, the training is mostly private & customised for the business/corporate client.
What are the seasonal trends?
Turnover: Apr-Nov are highest with Dec/Jan the lowest
Private & Business Individuals = 15% at some R2 500 per course Businesses = 45% spending below R20 000 pa ; 35% between R20 000 to R50 000 pa; 5% spending R50 000 pa & over A BEE investor would add to the above, the Huge Corporate Market, which should add incrementally to the existing growing turnovers of this Co.
Is the business VAT Registered?
Yes with all documentaion on file
Are there up-to-date Management Accounts available?
Management accounts are available that would show monthly variations, while this Report has averaged figures. The owner & wife's benefits are added-back, then a replacement cost of R132 000 pa for the wife is added to the expenses to obtain a zero base/ true net profit for the business,. The Report indicates results as at Feb 2019, but they are actually this years projected income/expenses inclusive of the effect of the first year with a BEE 51% shareholder. The NP for the year is projected to come out at R561 451 (an increase over the R390 000 odd without the BEE partner) while the following year should achieve a NP of R0.9m. These NP's would be shared between the two parties or be available in total to someone purchasing the full 100% shareholding.
What Balance Sheet and Income Statements are available?
Past AFS are available
What is the age analysis of the debtors book?
90% + pay upfront, Larger Businesses/Corporates sometimes request 30 Day terms.
How could the profitability of the business be improved?
IT work on the on-line course process would allow an exponential increase in the present minute on-line income, with an approximate 90% NP factor A BEE investor would allow for the Huge Corporate Market to be tapped: which should increase dramatically the present years projected turnover without a BEE partner of R1.4m (R1.2m 2017/18) & Net Profit R390 000 odd (R269 000 2017/18), to R1.8m & R561 451 respectively with a BEE partner, then R2.2m & R0.9m respectively within a year, then followed by R3m & R1.4m respectively.
What is the total staff complement?
The owner & his wife operate the business with a half-day assistant, as well as, the external contractor trainers who are on standby & booked/paid when required. These trainers are some of the best available.
The business is head Office'd in Durban with it's main rented offices are located. JHB also has fully leased premises, while across the country, space is available on usage leases or venues are booked, as & when required for courses, . Based on turnover: 80% of training occurs on the clients premises, with 19% being hosted at the business's premises or booked venues, and 1% is online (which could be grown substantially with the correct IT input, drastically reducing cost involved in the training.
What are the main assets of the business?
At 2nd hand value: 25 laptops (R50 000); Office Equip (R20 000); At development cost : website (R150 000); on line courses / manuals (R80 000 - R100 000 each) Undetermined : MICT & Services Seta Accreditations which are valuable & time consuming to obtain
MICT & Services Seta Certifications Existing courses & materials Top external contractors who conduct the training & are paid only when required Stable base of clients & turnover Turnovers & NP's are rising
Unable to tap into the huge Corporate Market without a BEE partner
IT work on the on-line course process would allow an exponential increase in the present minute on-line income, with an approximate 90% NP factor A BEE investor would allow for the Huge Corporate Market to be tapped: which should increase dramatically the present years projected turnover of R1.4m (R1.2m 2017/18) & Net Profit R390 000 (R269 000 2017/18), to R1.8m & R 561 000, then R2.2m & R0.9m respectively within a year, then followed by R3m & R1.4m respectively. Offer school leavers etc training during the December/January low season.
Competitors following the strategic thinking/processes of this Co
What is the reason for the sale?
The Seller is willing to look at two options: 1. To grow the company with a BEE investor (49:51 ownership basis on a R1.1m purchase price), which will be easily attainable under BEE regulations in respect of Corporates, with additional NP's in the realm of 50% of additional Corporate Turnover. This will then give the Seller the returns he wants from the business. 2. Otherwise he sells the full 100% of the business, where the Seller is prepared to work in the business for a period of 1 to 12 months in order to
Why is this a good business?
The base is existing (certifications/courses/clients) & a BEE partner will with the present owner - REAP THE BENEFITS from accessing the Corporate market with its higher profit margins
What is the price plus stock and the net profit?
The full Sale Price would be R2.2m or a 51% share at R1.1m. The NP for the present 2018/19 year is set to reach R390 000 odd, then with a BEE partner R561 000, then R0.9m within a year, followed by R1.4m.
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