Fully describe the business's activities?
The business distributes local and imported interior wood coatings, solvents and allied products e.g. sand paper etc. to manufacturers of wooden furniture, fittings and picture framing into the Western Cape. The majority of customers in the company's target market are cupboard manufacturers and shop fitters. They also distribute a few specialist industrial coatings for metal, glass, and plastic surfaces.
How long has the business been established?
The company was established in May 1993.
How long has the owner had the business?
What steps are in place to solve 'load shedding' problems?
A generator is owned by the company that gets it through periods of Eskom outages.
How does the business operate on a daily basis?
The company's main activities include the delivery of orders to all areas in the Cape Peninsula, Boland, and Overberg and the colour matching of pigmented lacquers, wood stains, and translucent lacquers to match colour standards.They also provide after sales services which include developing unique finishes and coating "effects", providing specialist advice and training for surface and coating preparations.
How are the clients attracted to the business?
The best marketing and sales is still performed door to door by the companies representatives in industrial areas.
What Advertising/Marketing is carried out?
A radio marketing campaign was held and they have a website.
Does the business have any contract work?
The company does not do contract work directly, but a number of customers are sub-contractors on larger contracts, so the company is affected by this.
What competition exists?
There are 4 main competitors in the Western Cape.
What are the seasonal trends?
Their busy season is from October to December and the quiet period is from April to July.
Is the business VAT Registered?
The company is VAT registered.
What VAT documentation is on file?
VAT reports are on file and ready for inspection.
Are there up-to-date Management Accounts available?
Up to date Management accounts are available for the period 1 March 2018 to February 2019 and audited Annual Financial Statements from 1994 to year ending Feb 2018.
What Balance Sheet and Income Statements are available?
Audited financials available from 1994 to end Feb 2018.
What percentage of the business is cash/credit?
Credit sales are about 80% and cash 20%
What is the age analysis of the debtors book?
As at 1 April 2019 the debtors book stood at R 3 781 541. A full age analysis is on file.
How could the profitability of the business be improved?
Reducing the cost of the fast moving range of lacquers through a new manufacturer/supplier whose prices are more competitive. Negotiations are currently underway. Improve the productivity in the Colour Matching Department thereby increasing capacity with higher value sales. Increase the number of promotion demonstrations of the higher value product ranges as these are showing good growth already. Further diversification of product range.
Is Seller finance available and for what amount?
A structured deal is negotiable.
What is the total staff complement?
20 Permanent and 1 contract worker.
Give a breakdown of staff/ functions/ length of service?
3 x Drivers ; 1 x Credit Controller/Buyer - 24 years ; 2 x Sales Reps - 21 years and 19 years ; Colour matching Supervisor - 18 years ; 3 x Colour Matches ; 2 x Assistant Colour Matches ; Payroll Clerk - 26 years ; Senior Creditors and Internal Sales Clerk - 13 years ; Despatch Stores Supervisor - 8 years ; Filing Clerk and Cleaner - 14 years ; Senior Front Office and Operations Supervisor - 14 years ; Stores and Despatch General Worker - contract worker.
Do any receive special perks or incentives?
13 Receive provident fund contributions ; 3 receive medical aid contributions ; 4 receive RA contributions ; 2 receive sales commision ; 2 have company vehicles ; 3 can use company vehicles from home to work and back.
Are they on contract?
20 are permanently employed and 2 are on contract.
Do any have management potential?
3 x Staff members have management potential who are now senior supervisors - 1 admin, 1 admin and operational, and 1 operational.
How involved is the Owner in running the business?
There are 3 owners of which 2 run the business.
When does the current lease end?
There are 2 monthly leases.
Is there an option of renewal & what period?
The 2 leases can be renewed at end April 2019.
What is the annual escalation %?
The annual escalation is by mutual agreement but usually based on the body corporate levy increase.
What are the trading hours?
Monday to Thursday : 07h30 - 16h20 Friday : 07h20 - 15h20 Saturday : Closed
What is the square meters of the business?
2 x units of 510 and 128 sq metres respectively and 3 x Mezzanines for work space.
Is a copy of the lease available?
Do you require a licence?
The company has a licence to store flammable liquids No other licences required.
What lease deposit and/or other surety is required?
There is no lease deposit charged.
What are the main assets of the business?
There is a full asset list on file.
Are any items not included in the sale?
A colour matching dispensor is not part of the sale.
What is their overall condition?
Do any require repairing?
How have they been valued ?
Fair market value
Which assets are on lease/HP and with whom?
4 x Vehicles are on HP with ABSA. The PABX and CCTV Security System are on rental with NRB Rentals ( ITEC is the service provider )
What are their settlement amounts?
To be established
Will Seller settle or Buyer to take over?
Negotiable with the owners.
Are copies of agreements available?
Yes - on file
Are they presently insured?
All insured via SANTAM
A well spread debtors book from large to small customers totaling about 160, many of whom have been loyal to the company for many years. The company has many highly experienced staff with the majority having long term service records ( 11 have 14 years or more). The 2 reps are not only sales people but have vast experience in coating applications especially regarding spray painting. A wide range of lacquers and stains to meet most requirements of durability, gloss levels and aesthetic effects. A range of solvents and waterbased products. Up to date colour matching software and hardware including 2 x spectrophotometers with latest software. The company has 3 business processes of policies and procedures to guide management to achieve high productivity, accurate workmanship and financial control. Excellent extraction and safe flammable stores. An underground tank to store 14 000 liters of lacquer thinners - so bulk buying at an excellent price. The company owns a generator which prevents down time during outages.
High prices when importing better quality time saving lacquers and stains from Europe which have only recently attracted more and more interest in the market. Top heavy senior directors drawing substantial income packages.
To continue to promote higher quality lacquers and stains imported from Europe as the sale s of these is growing satisfactorily. To conclude a fair agreement with local manufacturers to provide the company with fast moving mid-market lacquers at a competitive cost and with practical payment terms. To grow colour matching through the improved technology and new more efficient dispensing machines and software that have recently been installed. In addition, through more training and production line optimising to grow the capacity of the department. By reduction in the company's salary and benefit costs when directors sell.
The economy continuing in its depressed state.
What is the reason for the sale?
Directors wishing to retire.
Why is this a good business?
A well spread and insured debtors book from large to small customers totaling about 160, many of whom have been loyal to the company for many years. The company has many highly experienced staff with the majority having long term service records ( 11 have 14 years or more). The 2 reps, with 40 years experience,are not only sales people but have vast experience in coating applications especially regarding spray painting. A wide range of lacquers and stains to meet most requirements of durability, gloss levels and aesthetic effects. Up to date colour matching software and hardware including 2 x specrophotometres with latest software. The company has 3 business processes of policies and procedures to guide management to achieve high productivity, accurate workmanship and financial control. Excellent extraction and safe flammable stores. An underground tank to store 14 000 liters of lacquer thinners - so bulk buying at an excellent price. The company owns a generator which prevents down time during outages.
What is the price plus stock and the net profit?
Selling Price : R 5 950 000 including stock Stock : R 1 900 000 Monthly net profit : R 214 000
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