Fully describe the business's activities?
Business was started in 2009 and was initially concerned with agency work, acting as a sales and marketing service to various furniture manufacturers. The business quickly developed into a wholesale operation, taking ownership of goods and reselling to furniture retailers. This allowed me to better control margins and service levels as well as to keep stock of some of the more popular lines. In 2017, the business went online and started retailing direct to public. Although initially reluctant to retail, it has proven to be a worthwhile venture with better margins, less risk and cashflow issues. The business is currently operated out of a storage facility in Honeydew, Roodepoort and is ready to migrate to a larger warehouse space. The idea was always to keep overheads to a minimum and the absence of retail premises has had no negative effect on sales. The business still maintains some of the wholesale clients â approximately 34% of sales.
How long has the business been established?
How long has the owner had the business?
How does the business operate on a daily basis?
The business currently uses 3 product specific websites with a 4th in the pipeline. The main furniture lines being retailed are bunk beds , futon beds and a specialist range of layered foam mattresses. The 4th website, (work in progress) will retail couches of all types â corner couches, 2/3 div, occasional chairs and sleeper couches. Clients are attracted through various social media sites as well as a google adwords campaign. Competitors on the bunk beds are Mistryâs Pine, Fir Furniture and Lotters pine, but business is more competitively priced. On the futon side, there is 1 main competitor. The conventional mattress and base market is vast with every furniture store stocking their own housebrands and different types of mattresses â spring and foam. The business has created own niche in this market with specialist layered foam only type mattresses. The market is very price conscious at present and the business is accordingly positioned. There are no defined seasonal trends, however, December is a busier month, but due to family commitments, business has historically only traded for the first two weeks of Dec.
How are the clients attracted to the business?
Through websites, social media and google ad words
What Advertising/Marketing is carried out?
Through websites, social media and google ad words
Does the business have any contract work?
What competition exists?
There are various competitors
What are the seasonal trends?
Usually December busier
Is the business VAT Registered?
Are there up-to-date Management Accounts available?
How could the profitability of the business be improved?
What is the total staff complement?
This is owner run business with no staff. Casuals can be employed when needed
When does the current lease end?
Storage units used for storing stock and are month to month â no lease. All admin currently run from home office.
What are the trading hours?
M-F 8-5, Sat 9-12
What is the square meters of the business?
What are the main assets of the business?
Websites, stock, office equipment and leased vehicle
Which assets are on lease/HP and with whom?
What are their settlement amounts?
Currently vehicle has settlement of R180k
Are they presently insured?
â¢ Low overheads, resulting in a strong NP percentage â¢ Low staff contingent â¢ Products are well suited to current economic climate â¢ Business still in growth phase (Plenty of product scope)
â¢ Business too reliant on owner input â a staff member would be beneficial â¢ Risk on wholesale side of business â Terms offered, risk of payment defaults â¢ Current premises limiting product offering â Cloud Nine mattress brand would be a great option to retail, requires a means of displaying 3 base sets
â¢ Retailing of Cloud Nine mattress brand â market leader in layered foam mattresses â¢ Wholesale sales & marketing of kwikcupboards (website complete) â this will possibly require marketing directly to informal kitchen installers. Competitive supplier already sourced. â¢ Retail sales & marketing of couches â¢ The wholesale market is open ended, a sales rep could grow this sector of the business. (all products) â¢ Sales of cut foam, sheets and blocks. â¢ Inclusion of other furniture lines: dining room, plasma units, headboards, pedestals etc â¢ Option to buy Wooden bunks directly from Manufacturer â currently buying through intermediary who provides a quicker turnaround. â¢ Opportunity to wholesale Futon mattresses through select retailers (include their details on website as preferred suppliers) â¢ Proven business model which can be scaled up to new territories â Possibly East Rand, Centurion & Pretoria North â¢ Build a new website specializing in spring mattresses. â¢ List with takealot.com and supply bunks nationally (flat packed)
â¢ Decline of price points â although products are widely spread through the different LSM classes. â¢ Increased competitors â service and quick response times will define you as a retailer and set you apart from competition.
What is the reason for the sale?
Why is this a good business?
The business is simply run and has a great supplier base which has been refined over the years. There is a diverse mix of retail and wholesale sales which mitigates the risk factor. The business has great scope and future prospects
What is the price plus stock and the net profit?
R500,000 plus stock, with monthly average profit of R25,000
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