Aldes Business Brokers

Summary

Supermarket located in a well established area and is well known by the community. The sale is for supermarket and liquor store. a Revamp is needed on the supermarket and liquor store. There is lots of opportunities within the group to expand product lines and therefore income. The property is in brilliant condition and no repairs is needed and also up for sale at R9 000 000.00. You will be required to sign a non disclosure agreement.

1. History Background

Fully describe the business's activities?

This is a well known super market in a well established area. The supermarket is franchised and you do get support from the Franchisor with regards to advertising and general management of a supermarket. It is located in the East of Johannesburg. The supermarket, Liquor store and property is for sale and a potential has to buy all, a deal will not be structure for business and then property.

How long has the business been established?

The business has been established for 15 years or more

How long has the owner had the business?

The current owner bought the business and property 5 years ago

2. Present Market

How does the business operate on a daily basis?

The business is open 7 days a week. It sells all the necessary groceries to the community and stock all that is needed in a house hold. The liquor store is also open during the whole week and sells liquor, malts and wines. The property is well maintained and does not need any repairs of maintenance. A revamp is necessary for both the liquor store and supermarket.

How are the clients attracted to the business?

The business is well established and well known in the area. The suburb is also quite old and well established.

What Advertising/Marketing is carried out?

Most marketing and advertising is handled by the head office.

Does the business have any contract work?

No, just regular customers from the area

What competition exists?

There is competition but it has no impact on the business whatsoever.

What are the seasonal trends?

The business is very stable and has peaks during school holidays.

3. Financial

Is the business VAT Registered?

Yes

What VAT documentation is on file?

VAT Returns with the sellers accountant

Are there up-to-date Management Accounts available?

With the seller yes. NOTE: Additional income on Aldes Income statement is the liquor store's net profit of +/-R41000.00 and the rental income of property of R41 000.00

What Balance Sheet and Income Statements are available?

Feb 2011 with the seller.

What percentage of the business is cash/credit?

80% Cash and 20 % credit card.

What is the age analysis of the debtors book?

N/A all cash business

How could the profitability of the business be improved?

The franchise is expanding and this will also increase your sales value. This business is ideally located and the fact that you buy the property also adds to the expantion plans of the franchisor.

Is Seller finance available and for what amount?

No. The seller is willing to guarantee turnovers.

What is the payback period?

30 Months

What is the ROI?

40% per year

4. Staffing

What is the total staff complement?

35 in Total

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

2 Manager cashiers bakers butchers packers cleaners

Do any receive special perks or incentives?

No

Are they on contract?

Yes

Do any have management potential?

There is currently two managers in place

How involved is the Owner in running the business?

The owner is involved daily in most aspects of the business and it is needed from whom ever takes over to do something similar.

5. Premises

When does the current lease end?

The property can be bought as an option. New lease has to be signed.

Is there an option of renewal & what period?

Property is sold with the business

What is the annual escalation %?

Property is sold with the business

What are the trading hours?

Mon-Sun 07h00-20h00

What is the square meters of the business?

+/- 1500sqm

Is a copy of the lease available?

No

Do you require a licence?

Yes liquor license

What lease deposit and/or other surety is required?

Revamp: Liquor Store +/-R700 000.00 Supermarket +/- R2 300 000.00

6. Assets

Is a full asset list on file?

Not yet

Are any items not included in the sale?

Supplier equipment

What is their overall condition?

Very good

Do any require repairing?

No

How have they been valued ?

Second hand value

Which assets are on lease/HP and with whom?

None

Are they presently insured?

Yes

7. S.W.O.T. Analysis

Strengths?

Well known in the area. It is a brilliant brand. The fact that you buy the property also adds additional opportunities. You get the whole package with this purchase.

Weaknesses?

The fact that a revamp is due will mean you will loss a little bit of income once it gets started.

Opportunities?

The revamp will increase sales by 23% as per the franchisor which means increased profits. There is also other opportunities with in the group and the fact that you will own the property means there is little to no limit to what you can do.

Threats?

No

8. Reason For Sale

What is the reason for the sale?

The seller is looking to decrease his involvement in business ventures.

9. Conclusion

Why is this a good business?

Brilliant brand name, well established in the area, good profit margins. There is also multiple income streams.

What is the price plus stock and the net profit?

The price including Supermarket, Liquor Store and stock is R8 400 000.00 with a monthly net profit of about R250 000.00.