Aldes Business Brokers

Summary

This vehicle Fitment Centre is run by a manager and enjoys loyal local support. As a franchise of one of South Africa's leading brands the business has bulk buying power. Established 17 years ago the business operates from the same well exposed premises on the main street in town.

1. History Background

Fully describe the business's activities?

This franchise fitment centre caters for the passenger vehicle market. Apart from tyres sales and alignments, it also sells and fits shocks, exhausts, batteries and towbars. Llocated on one of the main streets in town the business attracts constant walk-in clients.

How long has the business been established?

The business was established 17 years ago

How long has the owner had the business?

The owner bought the business 2 years ago when he decided to move down to the Cape.

2. Present Market

How does the business operate on a daily basis?

The manager (who has been with the business for 6 years) runs the day-to-day operation of the business which include purchasing, client orders, organizing staff and availability of stock, quality control and invoicing. the admin staff member does the debtors and creditors, record keeping and general admin.

How are the clients attracted to the business?

Word-of -Mouth and a good position of the premises attracts clients. The franchise brand is well known. the business also caters for motor vehicle dealerships and car rental companies on a fleet account basis. The business has well exposed sign boards facing the main road.

What Advertising/Marketing is carried out?

The franchisor does TV advertising as well as radio advertising. The owner also advertises in the local newspaper and the business sponsors some local events and projects in the community.

Does the business have any contract work?

At least 55% of the business income is from motor dealerships and fleet accounts with car rental companies in the town.

What competition exists?

there is 5 other tyre and fitment centres in town.

What are the seasonal trends?

december is the busiest month. Historical turn over figures have proofed that the winter months tend to have better turn over.

3. Financial

Is the business VAT Registered?

The Company is VAT registered.

What VAT documentation is on file?

We did not ask for the VAT returns, because the owner also operates a totally none related business through the same company.

Are there up-to-date Management Accounts available?

The business has a wonderful Point-Of-Sale system with daily up-dated turn over figures.

What percentage of the business is cash/credit?

Some 50% of the business turn over is on accounts. Individual clients tend to pay either cash or card.

What is the age analysis of the debtors book?

The debtors/account is strictly 30days.

4. Staffing

What is the total staff complement?

11 staff is employed. One manager who acts as salesman apart from overseeing the day-to-day operation of the business. One admin lady. One tea lady. One salesman assisting clients on the floor. 5 "Fitters" and one qualified alignment technician. Driver who also assist as a fitter when needed.

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

The manager has been with the business for 6 years and the owner is very satisfied with his performance. The admin lady has been with the business for 12 years and know all the ins-and-outs of the business.

Do any receive special perks or incentives?

None. The managers salary package has been structured to include a car allowance.

Are they on contract?

All the staff contracts is signed and readily available.

Do any have management potential?

The current manager is more than capable to operate the business and the owner is satisfied with him.

How involved is the Owner in running the business?

The owner spends about 10% of his day in the business.

5. Premises

When does the current lease end?

July 2012

Is there an option of renewal & what period?

There is an option to renew for 5 years.

What is the annual escalation %?

The owner has negotiated the lease agreement so that there will be no escalation until the lease expires.

What are the trading hours?

Monday to Friday is from 7h30 to 17h00 and Saturdays from 08h00 to 12h00. The business is not open on Sundays or Public Holidays.

What is the square meters of the business?

300 squares.

Is a copy of the lease available?

The owner has a copy of the lease at his office.

What lease deposit and/or other surety is required?

The owner expects that the landlord will require one months lease deposit.

6. Assets

Is a full asset list on file?

We have an asset list on file.

What is their overall condition?

the 3D alignment machine is two years old and in very good condition. All equipment has been well maintained and in good working order.

Do any require repairing?

None.

How have they been valued ?

The owner valued the equipmet at realistic market value.

Which assets are on lease/HP and with whom?

None - all asstes are paid for in full

Are they presently insured?

The business is properly insured.

7. S.W.O.T. Analysis

Strengths?

Very strong franchise brand. Marketing from franchisor. Buying power. Well trained staff. Solid management. Good position and exposure. Accounts with bigger clients.The owner is currently not doing any business on agriculture and truck where there are still a huge opportunities to grow.

Weaknesses?

The owner is not satisfied with the lay-out of the shop. The owner is only 10% of time at the shop.

8. Reason For Sale

What is the reason for the sale?

The owner operates another business that imports product from China. He needs capital to expand his imports and wants to focus on the other business.

9. Conclusion

Why is this a good business?

Well established franchise with good management. 17 years established with excellent local support.

What is the price plus stock and the net profit?

The asking price is R 1 750 000 plus stock of R 400 000 (minimum).