Fully describe the business's activities?
This business was established by the previous owner in 1985. It is one of the leading independant Spares Shops in the Western Cape, highly regarded by major suppliers due to it's excellent track record. Although the owner operates in the business daily, it has an excellent well trained staff complement with service of between 15 and 20 years with the company. It's main customer base, is supplying to the next tier in the supply chain which is the smaller retailer and workshop. It only sells new spares to the after market, and its suppliers are all based locally. It has a retail shop in which all car care products and accessaries are sold. It supplies and fits batteries and has the Western Cape distribution rights to the MR Mechanic range of products.It is SABS approved for the manufacture of number plates, which it does in house. All in all, a very stable business with an excellent loyal customer base.
How long has the business been established?
How long has the owner had the business?
Since October 2016 - 2 nd Owner
How does the business operate on a daily basis?
The business carries about R 845 000 worth of stock from which its supplies to its customer base, daily. It has credit facilities with all major importers and is able to source and supply non-stocked items timeously on a daily basis. These goods are then delivered to its doorstep for further distribution to its customers, with its fleet of 5 delivery vehicles. The stock and accounts are managed by the latest version of Pastel. Stock control is of utmost importance and this package allows full control.
How are the clients attracted to the business?
The business employs a representative who services the existing customer base and who sources new business. Word of mouth business and the fact that they are so well established and well known in the area.
What Advertising/Marketing is carried out?
Very little marketing is carried out. A website exists but has not been developed. The building is very well signaged, as well as the delivery vehicles which all attract custom.
Does the business have any contract work?
No the business does not operate with contracts but rather with accounts of which there are 230.
What competition exists?
There is no competition in the immediate area, but these do exist in neighbouring suburbs. They have been there for many years and are not considered a threat.
What are the seasonal trends?
The turnover is stable throughout the year, but spikes do take place before and during holiday times as clients service their vehicles to go on holiday. It also has good support from other industry players who own vehicle fleets, and who do their own vehicle servicing.
Is the business VAT Registered?
What VAT documentation is on file?
Are there up-to-date Management Accounts available?
What Balance Sheet and Income Statements are available?
Up to February 2018
What percentage of the business is cash/credit?
75% On account ; 25% cash/credit card
What is the age analysis of the debtors book?
30 to 60 days.
How could the profitability of the business be improved?
There are several product lines and brands within the industry into which a new owner could expand.
Is Seller finance available and for what amount?
What is the total staff complement?
Give a breakdown of staff/ functions/ length of service?
On File for DD
Do any receive special perks or incentives?
Discretionary Xmas bonus. Other perks will be discussed.
Are they on contract?
Do any have management potential?
How involved is the Owner in running the business?
The owner does not get involved in the daily operations of the business, nor in the selling process. His involvement is purely financial/administrative.
When does the current lease end?
A new 3 year lease was signed from May 2018 to April 2021.
Is there an option of renewal & what period?
Renewable for 3 years or longer
What is the annual escalation %?
What are the trading hours?
Monday to Friday : 08h00 - 17h00 Saturday : 08h30 - 12h00
What is the square meters of the business?
217 sq metres Mezzanine floor of approximately 40 sq metres
Is a copy of the lease available?
Do you require a licence?
A licence exists for the manufacture of number plates against which a monthly fee is paid to the South African Bureau of Standards.
What lease deposit and/or other surety is required?
What are the main assets of the business?
Motor vehicles ; computers ; shelving ; counters ; furniture; number plate machinary for aluminium and perspex number plates. A full asset list is on file.
Are any items not included in the sale?
All are included
What is their overall condition?
All in excellent working and serviced condition
Do any require repairing?
How have they been valued ?
Fair market value
Which assets are on lease/HP and with whom?
VOIP Telephone system installed September 2017. ME Systems is the leasor.
Will Seller settle or Buyer to take over?
Buyer to take over remaining lease of 24 months.
Are copies of agreements available?
Are they presently insured?
All fully insured through Frontline
A 30 year history with a clean and reliable reputation of supply to the Motor Industry, supplying only Branded products with Factory and supplier back up.They achieve a 12 x plus annual stock turnaround as a result of reliable suppliers and a constantly updated computer system. Hence there is very little dead stock and not too much finance tied up in stock, producing a good cash flow. They have established and achieved a policy of one hour delivery on stocked items, on which their customers rely. They have competant, knowledgeable and reliable staff of long standing who pay attention to detail. They have a BEE rating of Level 4.
Expand into other segments of the market and focus on the cash element of the market.
What is the reason for the sale?
The owner has enjoyed the business but wishes to slow down and pursue a quieter business interest in the business broking field.
Why is this a good business?
It has been trading successfully for over 30 years. A consistant level of sales and profit in this stable business. The business is a neat well managaed operation with excellent knowledgeable long standing, loyal staff. The owner need not get involved in the daily operations because there is an Operations Manager. It has well oiled systems and procedures in place.
What is the price plus stock and the net profit?
R 1.56M plus quality stock Stock : R 840000
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