Fully describe the business's activities?
This business, within the plastic injection moulding and blow moulding sector, is a manufacturer who operates a small work force, runs two shifts (08:00 - 17:00 and most evenings 17:00 â 19:00 & N/SHIFT 19:00 â 07:00). They supply products to various Blue Chip Retailers. The owner's team, has operated the small family business for over 2 years but they have decided to put this awesome, easy to manage and operate business, onto the market due to health . Although it remains technical by nature, all that is needed could be learned.
How long has the business been established?
The business was started 19 years ago.
How long has the owner had the business?
The current owner bought the business 2 years ago.
How does the business operate on a daily basis?
The owner's son is an Engineer by profession and he is the technical part of the business. He oversees the machines, maintenance and setting thereof and setting of the moulds as and when needed for different products. The Owner is involved with client service, general operations, staff management and deliveries. The workforce works in 3 shifts with the number of staff, depending on how many machines operate. The operators on each machine reports any irregularities in the production line to the shift supervisor and technical manager who will attend to/reset the machines as to ensure production runs at optimum levels.
How are the clients attracted to the business?
The past 19 years of excellent service has ensured that through what they manufacture, they are able to supply their products to independent merchandisers. These products go to various Blue Chip clients and well known retail chain stores. One of their products is being supplied to an International Client who has been dealing with them for many years and another one of their products are supplied to Local Municipalities within the Western Cape. Besides manufacturing for clients, they also manufacture and sell their own product line.
What Advertising/Marketing is carried out?
No active marketing is being done. The business has a website as well as a Facebook page. Other than that, excellent service and word of mouth.
Does the business have any contract work?
There are no formal contracts is in place but all the existing clients place monthly orders and have done so for well over a decade.
What competition exists?
There are a few competitors within the sector. However, understanding the industry has led to manufacturers knowing what products to supply and to whom. The barrier of entry is fairly high to acquire the assets, but more difficult than that is to be able to get into the supply chain. Price and service always determines who gets the business: both components the seller has been very successful with.
What are the seasonal trends?
Winter periods are slower, with the end of the year season spiking.
Is the business VAT Registered?
Yes the business is VAT Registered - VAT returns available.
Are there up-to-date Management Accounts available?
Up to date Management Accounts are available.
What percentage of the business is cash/credit?
Most customers pay on 7 days. Older agreements on 30 days. (2 only)
How could the profitability of the business be improved?
Productivity can be Increased due to more capacity Extensive marketing can take place to grow the "own products". Production can be supervised closer to optimize levels of production. The business can also expand with additional machines to grow the lines.
What is the total staff complement?
7 Permanent workers in total. The number of employees per shift is being determined by how many machines operate. In each shift, a senior person (one of the ladies), would oversee. The owner's son oversees the technical part of the business. He oversees the machines, maintenance and setting thereof as well as setting of the moulds as and when needed for different products. He needs to be replaced.
Give a breakdown of staff/ functions/ length of service?
This information would be supplied during the Due Diligence period.
Do any receive special perks or incentives?
Not at this time.
Are they on contract?
7 of the staff members are permanently employed and 2 are on contract.
Do any have management potential?
Yes, the supervisors.
How involved is the Owner in running the business?
The owner's wife is involved with client service, general operations, staff management and deliveries.
When does the current lease end?
The current lease ends February 2020.
Is there an option of renewal & what period?
Yes there is an option to renew for 5 years.
What is the annual escalation %?
The annual escalation is 10%.
What are the trading hours?
Monday to Friday mostly 24 hour shifts and weekends as required.
What is the square meters of the business?
The size of the premises: 482 sqm
Do you require a licence?
No licence required.
What lease deposit and/or other surety is required?
Deposit equal to 1 month's rent.
What are the main assets of the business?
Machines - R 1,9 m Moulds - R 320k Vehicles - R 180k Other â R 200k
Are any items not included in the sale?
Yes, 2 office desks, small tables and other personal items to be discussed.
What is their overall condition?
Overall condition of assets is good.
Do any require repairing?
Minimal repair as and when needed. Regular maintenance is being done and recorded.
How have they been valued ?
Owners valuation, replacement value at Fair Market Terms.
Which assets are on lease/HP and with whom?
No, everything is paid for.
Loyal existing customers - 19 years Good Quality Fair Prices Excellent Customer Service
The owner's son is currently the setter in the business and a new mould/machine setter/driver needs to be employed.
Sales Rep New products & machines
What is the reason for the sale?
Owner's health and traveling complications. The son is emigrating.
Why is this a good business?
Easy to run and well set-up ISO accredited system. Staff is well trained and knowledgeable. Loyal clients have over years, supported the business due to the fact that they know what quality they will be getting. The major clients are and always have been loyal to the business over the last 19 years. These clients support the business on a continuous basis and ensures that the business has a secure and consistent monthly order book. Cash flow is positive and financial system run Pastel. Already an ISO QMS 9001 accredited and in progress with 14001 & 18001.
Annual Turnover Amount between R 500 thousand and R 6 million