Fully describe the business's activities?
Manufacture and distribution of SABS approved products used in construction daily.
How long has the business been established?
The business was established in 2007 by the current owner.
What steps are in place to solve 'load shedding' problems?
The office is protected by a UPS system. The factory does not require electricity to operate.
How does the business operate on a daily basis?
The sales division call customers, prepare quotes, follow up on orders, and promote their products. Production line involve planning, schedule manufacturings, cleaning and despatch of product. Although they deliver, and some orders are collected, they mostly use couriers to deliver to customers.
How are the clients attracted to the business?
Repeat business, word of mouth, website, social media, google ads, remarketing, advertise in magazines, e.g. SAFAIR onboard magazine, etc.
Does the business have any contract work?
Yes. A local municipality contract (expires in 18 months) Various tenders.
What competition exists?
There are only a few other SABS approved manufacturers of similar products in South Africa.
What are the seasonal trends?
The product is construction related and therefore quiet when builders/construction companies close in December and January. February - November remains relatively constant.
Is the business VAT Registered?
What VAT documentation is on file?
All registration documents and up-to-date VAT returns are available.
Are there up-to-date Management Accounts available?
All financial information is up-to-date and available on request.
What percentage of the business is cash/credit?
20 % cash, 80 % credit However, they have credit insurance and are therefore fully covered.
How could the profitability of the business be improved?
They have worked with a local supplier of raw materials and developed a new raw material which will mean substantial savings without affecting the quality of the product. Their current supplier is not local, so the cost of transport will decrease. They are constantly looking for ways to save costs in line with their internal efficiencies improvements policy.
What is the total staff complement?
+- 22 employees Sales and Marketing: 4 Factory: Manager + 12 Despatch: 4 Admin: 2 Casuals when needed
Do any receive special perks or incentives?
R250 pp Funeral cover & Provident Fund
Are they on contract?
All staff have work contracts, including casual staff
Do any have management potential?
How involved is the Owner in running the business?
The owner is involved in the day-to-day running of the business full-time. However, staff has been trained to work independently.
When does the current lease end?
The seller owns the building and a lease will be negotiated with a new owner. The property is however for sale at an asking price of R6m. The purchaser has first refusal.
What are the trading hours?
08h00-17h00 Monday - Friday
What is the square meters of the business?
Plot 1000sqm Building 680sqm
What are the main assets of the business?
Building (Buyer has first refusal. Asking price R6m.) Machines/Equipment
What is their overall condition?
They follow a maintenance and management plan, and everything is well maintained, from the building to equipment to fans, compressors, etc.
How have they been valued ?
Estimated fair second hand value.
Which assets are on lease/HP and with whom?
All assets are fully paid for.
Are they presently insured?
All assets are fully insured.
The business well established with both suppliers and customers. SABS approved products. The business is very profitable with unlimited potential. Employees are skilled and loyal.
No apparent weaknesses.
The business is the smallest of the a few companies that manufacture SABS approved products. Great opportunity for growth. There is a huge, untapped market in ancilliary products, e.g. pipes and valves. They have designed a calibrated testing bench for R&D to ensure consistency, measure and analyse the product, which gives them huge credibility in the market.
Low quality imports from China and India
What is the reason for the sale?
The Seller has other business interests and feels he needs a change after 12 years.
Why is this a good business?
The business is profitable and is well established with both suppliers and customers. All systems and procedures are in place to take it to the next level.
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Annual Turnover Amount between R 500 thousand and R 6 million