Fully describe the business's activities?
This business comprises of a Spar Supermarket and a Tops liquor store.
How long has the business been established?
The business has been trading on the premises for the last 10 years
How long has the owner had the business?
How does the business operate on a daily basis?
It is a owner managed business assisted by 3 managers. They open at 7 in the morning and sell FMCG to customers visiting the mall. They also operate a bakery, a butchery and supply fresh produce on site.
How are the clients attracted to the business?
Quality service, The Spar is situated on a busy intersection with high visibility. Advertising and in store promotions.
What Advertising/Marketing is carried out?
Nationwide advertising is done by the franchisor. Use social media to advertise to Facebook and Whatsapp groups.
Does the business have any contract work?
No contract work
What competition exists?
There is no direct competition in the immediate catchment area
What are the seasonal trends?
December holiday are quiet as this is a family orientated area where people go away for the holiday.
Is the business VAT Registered?
Yes all u to date
What VAT documentation is on file?
Yes and available only to serious buyers.
Are there up-to-date Management Accounts available?
Yes and available only to serious buyers.
What Balance Sheet and Income Statements are available?
Available only to serious buyers.
What percentage of the business is cash/credit?
30% cash 70% credit card
What is the age analysis of the debtors book?
They do not sell on credit.
How could the profitability of the business be improved?
The shop needs a face lift. Increase the space of the butchery Providing home meals from the bakery
Is Seller finance available and for what amount?
Why is some of the costs in March much higher than the average for the previous year
Those are not monthly expenses and some months attract higher values than other due to the nature of the expense.
What is the total staff complement?
Give a breakdown of staff/ functions/ length of service?
3 managers 5 supervisors A full list will be provided to the serious buyer.
Do any receive special perks or incentives?
Are they on contract?
Do any have management potential?
How involved is the Owner in running the business?
The owner is involved on a full time basis in the daily management of the business
When does the current lease end?
Is there an option of renewal & what period?
Yes for another 10 years
What is the annual escalation %?
What are the trading hours?
Spar - Mon to Fr 7am to 8 pm, Sat 8am to 5pm, Sun 8am to 4 pm Tops - Mon to Sat 8am to 8 pm, Sun 8am to 3.30 pm
Is a copy of the lease available?
Do you require a licence?
Yes you need a liquor license. The current license can be transferred.
What lease deposit and/or other surety is required?
5 months deposit is required
What are the main assets of the business?
Fixtures, fittings Bakery and butchery equipment POS system Detail list is available during due diligence
Are any items not included in the sale?
What is their overall condition?
Fair. All equipment was recently serviced
Do any require repairing?
How have they been valued ?
Owners valuation. They have been valued by Park auctioneers prior to repairs.
Which assets are on lease/HP and with whom?
UPS with Red Capital
What are their settlement amounts?
Will Seller settle or Buyer to take over?
No Buyer to take over contract
Are copies of agreements available?
Are they presently insured?
Strong brand No competition in the catchment area Suburb is expanding population as higher density buildings is now being approved and build in the area.
Store needs to do do a revamp and spend effort to rebuild the reputation.
Every department has opportunities to increase the offering. An additional run can be installed to increase the space for the products. This needs to be advertised to get buy back from the community.
The normal economical / political threats associate with the retail industry in South Africa
What is the reason for the sale?
Reason for selling is one of the owners needs to concentrate on other ventures and is unable to provide sufficient attention to the business at this stage.
Why is this a good business?
The Spar is situated on a busy corner in a community which is expanding rapidly due to increased building density. There is no direct competition in the catchment area. The current owners has invested heavily in upgrading and maintenance of the assets in the store as well as improving the product range to turn around the business. These additional cost had a significant impact on the profitability. There is also an attractive TI available for the new owner to assist with the revamp cost of the store. The store is back on a good growth path and should show good profits from Q2 2019. Current projections is profits of R250 00 to R300 000 a month within the next year.
What is the price plus stock and the net profit?
Asking price is R6 000 000. You would also need R2 000 000 over the next 3 months as working capital for stock.
Requirements by SPAR
This store is part of a large and leading brand, and the Buyer will need to be qualified and approved by the Brand holders Head Office. This will necessitate a one on one meeting with the Head Office management team. There are certain stipulations by Spar that need to be addressed such as a notary bond being issued. Joining Fees. Compulsory training for new Owners. There are general Rules and Regulations associated with the brand. Prior to the commencement of the Due Diligence process, or the release of confidential information, the potential Buyer will need to present Proof of Funds to the Seller and to Spar Head Office.
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