Fully describe the business's activities?
The business specializes in office automation. They provide you with full business solutions for your office, business or school. This well-known dealership sells, repairs, and service digital multi-functional devices and laser printers. All their clients are on SLA agreements that run on either 3,12, 24, 36 or 60 months contracts. The business also does in-house rental agreement, which makes up out 5% of turnover and can be significantly increased. This business generates annuity income.
How long has the business been established?
The owners started the business in 1996 and has successfully run the business since then.
How does the business operate on a daily basis?
The owner oversees the business on a day to day basis and handles all administrative tasks and the financial aspects of the business. They have a good staff complement and highly trained and qualified technicians. They mainly respond to client inquiries and are extremely service orientated. There is an opportunity to employ a new sales representative to focus on new customers.
How are the clients attracted to the business?
Currently all clients are on contract. The Dealership Head Office will send them referrals to followup on. Due to their high standard of service they get a great deal of word-of-mouth referrals.
What Advertising/Marketing is carried out?
The owners are part of a networking community and receive a lot of inquiries through those channels. They also run Google Adword Campaigns for their business. They currently dont have a sales rep in place and a new owner should consider employing one.
Does the business have any contract work?
Yes, 95% of all business income are on either, 3-60 month contracts.
What competition exists?
There are two other smaller dealerships in the area also specialising in office automation.
What are the seasonal trends?
The contract revenue are very stable. When they focus on sales rather than service there tends to be an increase in revenue.
Is the business VAT Registered?
What VAT documentation is on file?
The information is available from the owner.
Are there up-to-date Management Accounts available?
Yes, the owner provided us with 3 years up-to-date Management Accounts.
What Balance Sheet and Income Statements are available?
The 2018 Financial Statements are available to a qualified buyer.
What percentage of the business is cash/credit?
95% of all clients are on contract and pay via EFT.
What is the age analysis of the debtors book?
The debtors book fluctuates between R150 000 - R300 000
How could the profitability of the business be improved?
A new owner should consider employing a sales representative for the business to focus on new sales and contracts.
Is Seller finance available and for what amount?
What is the total staff complement?
6 x permanent staff members excluding the two owners. They recently employed a sales rep (still on probation)
Give a breakdown of staff/ functions/ length of service?
1 x Customer Care and Service Controller 1 x IT& Technician 1 x Maintenance & Assistance 1 x Driver 1 x Debtors and Creditors Clerk 1 x Cleaning Lady 1 x Sales Executive.
Do any receive special perks or incentives?
All staff receive a basic salary.
Are they on contract?
Do any have management potential?
Currently the owner manages the business on a daily basis and oversees all aspects of the business. The one employee will be able to manage the business for short periods of time but not exclusively employed as the manager.
When does the current lease end?
The owners own the property and would like to sell the property with the business at a market-related price. The property is available to purchase with the business at R2 million. Please note a rental of R25 000 was added to the expenses for the property
What are the trading hours?
Monday - Friday 08:00 - 16:30
Do you require a licence?
The new owner would need to be approved by the dealership head office.
What are the main assets of the business?
The owner provided us with a full asset list.
Are any items not included in the sale?
Two vehicles will not be included in the sale as they are exclusively used by the owner in her personal capacity.
What is their overall condition?
Everything is in a good and working condition and none need repairing.
How have they been valued ?
The owners valuation has been used.
Which assets are on lease/HP and with whom?
Are they presently insured?
Yes, the business is comprehensively insured.
- Annuity Income - Well trained staff - Scope for growth - Service orientated and good reputation in the market - Longstanding clients - Contract-based (24/36/60 months contracts) - Support from Head Office
- More sales representatives to increase the sales and conclusion of future contracts
- None perceived - The owner installed generators and UPS's and can run the business as normal when they have load-shedding.
What is the reason for the sale?
The owners have been running the business for 23 years and would like to pursue another opportunity.
Why is this a good business?
This is a well established business which stood the test of time. Majority of the business income is annuity based with low risk. Small staff complements, but well trained, loyal and vast experience in the industry. The business income can easily be increased by focusing on the sales par of the business.
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