Fully describe the business's activities?
This business specialises in supplying unique decor items, lighting and a floral service for weddings, event planners, film production companies, end-of-year award functions, high profile farewell/retirement functions, private functions, etc. Their showroom is filled with hire items suitable for any events concept, and if required, their experienced team provide a full service including decor hire, floral design and styling for the event.
How long has the business been established?
The business was established in 2012 by the owner.
How does the business operate on a daily basis?
The days are structured around responding to enquiries received from the website, referrals from various function venues, consulting with customers, event planning and coordination, ordering flowers, invoicing, transportation of hire items, managing the showroom, packing and preparation of coming events, logistic organisation, collection and return of hired goods to and from venues.
How are the clients attracted to the business?
They receive enquiries via website, event planners, client referrals and through referrals from function venues where they are listed as preferred supplier. They also have a strong presence on social media like Facebook and Instagram.
What Advertising/Marketing is carried out?
They attend wedding shows and advertise their services on 'Pink Book' - an online wedding directory and blog for brides-to-be. Their services are also advertised through brochures/leaflets available at function venues.
What competition exists?
There are numerous decor hire companies, but this team set themselves apart as they offer a full service (one-stop-shop) of decor hire, lighting and floral design. Each event is unique to their client's needs.
What are the seasonal trends?
Winter months are quiet (July - September)
Is the business VAT Registered?
Yes, the business is VAT registered.
What VAT documentation is on file?
Up-to-date VAT returns
Are there up-to-date Management Accounts available?
Up-to-date Management Accounts are on file and available on request.
What Balance Sheet and Income Statements are available?
December 2018 (Financial Year-End)
What percentage of the business is cash/credit?
This is a 100% cash operation. A non-refundable deposit of between R5,000 - R10,000 is required upon booking, with the balance payable approximately one month before the event.
How could the profitability of the business be improved?
Turnover and profitability can be improved by more focus on the decor hire side of the business.
What is the total staff complement?
Total staff of 11 (permanent & casual)
Give a breakdown of staff/ functions/ length of service?
Events planning and managing are managed between the seller and her mother 1 x Manager Events hiring/Showroom (8 months) 1 x General managing of lighting, packing, transporting, delivering etc (7 years) 1 x Packing, lighting (6 years) 1 x packing (8 months) 1 x Cleaning (6 years) 1 x casual 3 times/week (6 months) 3 x casuals as/when needed
Do any receive special perks or incentives?
Employees receive end-of-year bonuses
Are they on contract?
Employees are not on contract. They are also aware that the business is for sale. The relationship between the seller and staff is one of respect and trust.
How involved is the Owner in running the business?
When does the current lease end?
To be discussed.
Is there an option of renewal & what period?
What is the annual escalation %?
What are the trading hours?
Showroom: 09h00 - 16h30 Monday - Friday 09h00 - 13h00 Saturday No set hours for events.
What is the square meters of the business?
Total of +- 318 sqm.
Is a copy of the lease available?
A copy of the lease is on file and will be made available during due diligence.
What lease deposit and/or other surety is required?
A deposit equal to one month's rent is required.
What are the main assets of the business?
Stock of hire items Hyundai vehicle
Are any items not included in the sale?
All items included.
What is their overall condition?
Assets in good working order. Decor items vary from new to vintage/antique.
How have they been valued ?
Owners estimate of fair second hand value and replacement value.
Which assets are on lease/HP and with whom?
Hyundai H1 vehicle (Nedbank)
What are their settlement amounts?
Settlement amounts will be determined
Will Seller settle or Buyer to take over?
Buyer to take over.
Are copies of agreements available?
Are they presently insured?
All assets are fully insured.
- Loyal and well trained staff - Excellent reputation and well established with popular function venues - Good cash flow - Excellent flow of referrals from function venues and word of mouth - Excellent potential (especially Events Hire) - Strong list of booked events - Healthy pipeline of potential business and daily enquiries coming in
- Long hours - Weekends - Neglected promoting the hire division
- Excellent potential to grow Decor Hire division - Increase stock of chairs and tables( currently hired to large extend) - Potential to increase T/O by advertising locally - Active promotion of the business and their services to new function venues - Update online catalogue to generate more enquiries
What is the reason for the sale?
The seller has been in the industry for 17 years. She has young children that needs her attention and she had to reconsider her priorities.
Why is this a good business?
This type of business and their services will always be in demand. The business is well established as a preferred supplier with function venues and with their suppliers, is profitable and offers great opportunity for growth.
What is the price plus stock and the net profit?
The asking price of R850,000 includes the following: Furniture and fittings (value +- R93,100) Stock/Hire items (valued at replacement value R2,133,200) Bookings for the remainder of 2019 for which deposits has been received (R153,600)
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