Aldes Business Brokers

Summary

The business is a branded supermarket located in an amazing city that is becoming an even bigger tourist haven. The location is ideal and a long lease is available. The store generates in excess of ZAR1,200,000.00 per month in revenues. There is room to manage costs even further and put more money on the bottom line.

1. History Background

Fully describe the business's activities?

The business is a franchised supermarket that sells various goods and commodities to the general public, hotels, schools and lodges in the resort town. The business is well situated and well patronised in the growing resort town that has become an international destination.

How long has the business been established?

33 years

How long has the owner had the business?

33 years

What steps are in place to solve 'load shedding' problems?

The business has a back up generator

What is the average KW usage?

55KVa

2. Present Market

How does the business operate on a daily basis?

The owner manager runs the shop with the assistance of loyal staff. The shop is open early at 7am and closed at 5pm.

How are the clients attracted to the business?

The supermarket is well known through its strong franchise brand and good service and through word of mouth.

What Advertising/Marketing is carried out?

Limited advertising is carried out but there are instore promotions from time to time.

Does the business have any contract work?

Yes

What competition exists?

Another branded supermarket that has recently been set up in the town

What are the seasonal trends?

Sales are high during public holidays and particularly the December holidays

3. Financial

Is the business VAT Registered?

Yes

What VAT documentation is on file?

VAT returns are available

Are there up-to-date Management Accounts available?

Yes

What Balance Sheet and Income Statements are available?

Yes

What percentage of of the business is cash/credit?

All cash

What is the age analysis of the debtors book?

All cash. No credit.

How could the profitability of the business be improved?

The store could be refurbished to create a new buzz and improvements could be made in the service department.

Is Seller finance available and for what amount?

None

What is the payback period?

176 months

What is the ROI?

7%

4. Staffing

What is the total staff complement?

43

Give a breakdown of staff/functions/length of service?

Attached

Do any receive special perks or incentives?

No

Are they on contract?

Some are on contract while others are casual workers

Do any have management potential?

Yes

How involved is the Owner in running the business?

Very involved

5. Premises

When does the current lease end?

31 December 2011

Is there an option of renewal & what period?

Yes

What is the annual escalation %?

5%

What are the trading hours?

Mon-Friday 8am to 6pm Saturday 8am to 4pm Sunday 9am to 12 noon

What is the square meterage of the business?

The selling area is 1,000 square metres

Is a copy of the lease available?

A lease will be arranged with the buyer

Do you require a licence?

Yes. A standard shop licence.

6. Assets

Is a full asset list on file?

Yes

Are any items not included in the sale?

No

What is their overall condition?

Good

Do any require repairing?

No

How have they been valued. ?

Owners valuation

Which assets are on lease/HP and with whom?

None

What are their settlement amounts?

Not applicable

Will Seller settle or Buyer to take over?

Not applicable

Are copies of agreements available?

Not applicable

Are they presently insured?

Yes

7. S.W.O.T. Analysis

Strengths?

(1)The supermarket runs under a well known brand (2) The location of the supermarket is convenient and central

Weaknesses?

(1) The premises need a facelift when compared with competition

Opportunities?

(1) Raise the standard of furnishings and create a new look for the store

Threats?

(1) Small independent shops located in the high density surburbs

8. Reason For Sale

What is the reason for the sale?

The seller is retiring

9. Conclusion

Why is this a good business?

(1) The business has provided a good living for the seller and his family and can continue to do for a long time to come (2) The business is generating significant turnovers

What is the price plus stock and the net profit?

Price: US$800,000.00 Real Profit: US$20,000.00