Fully describe the business's activities?
The business is a successfully long established family butchery that supplies quality fresh meat, chicken, fish , lamb , cold cuts , preservatives, wood , charcoal, fresh veg and frozen products all available directly to the public from the premises .The business also has a big market of supply chain to all the restaurant , lodges and hotels in the area and supplies wholesale to this hospitality industry. It operates from a hygienic, stylish retail premises and is conveniently centrally situated to service both these markets. The butchery offers a timorous delivery service of its product to the hospitality clientele and some of its public clientele on request .The butchery has a following of clientele due to its long establishment and reputation for quality grade cuts of meat along with it renown delicious bolting which is prepared on site. During hunting season the butchery provides the service of working the hunterâs game carcasses for them and breaking it down into various cuts. During this hunting season the business is exceptionally busy with the working of the game carcasses
How long has the business been established?
The business has been established for 22 years.
How long has the owner had the business?
The current owner has had the butchery for 22 years.
How does the business operate on a daily basis?
The business operates on a daily basis by the owner ordering in as and when required fresh carcass of beef and lamb .Froze chicken and fish are also stocked .Local farmers sell their produce to the butchery who offers is for sale in sore. Fresh meats are also ordered from out of town supplies and delivered weekly. When the carcass and cuts arrive they are received by weighing them in as they are purchased by weight and sold by weight so this is fundamental to the costingâs of the product. It is important not to waste any part of the carcass so it is all utilized in many different ways. The carcass are then stripped down into various cuts and placed into the display fridges for retail purchase or prepared to specification into different gram age portions, stews and Boerawors for private clients or restaurants, hotels, lodges, old age homes and hospitals. Certain clients phone in their orders either for collection or delivery. The careful procurement of biltong is of utmost importance to the business as it has a following of clientele for this product. Certain less popoular cuts of meats like trip, tongue and afval are pre packed and frozen for shelf life. The other products are ordered from various other suppliers and are displayed in the butchery for retail sale. The business also has 2 spit braais which it hires out for special occasions and also supplies the meat and marinades on request.
How are the clients attracted to the business?
The clients are attracted to the business mostly by word of mouth and repeat business of which it has an abundance of due to its supply of quality fresh meats, lamb and other varieties of consumable products, it is also very well known for its quality Boerewors and delicious billing for which the butchery has acquired a good reputation for
What Advertising/Marketing is carried out?
The business advertises on radio Laeveld and in the local newspaper .The business also from time to time offers sponsorships to the Churches and schools.
Does the business have any contract work?
No, the business has no written contract work, it however has been continuously supplying several restaurants and other large clients who have loyally supported the butchery on an ongoing basis for many years.
What competition exists?
There is and has been over the years and will continue to be other competitors and suppliers of the same product such as Spars , checker and Pick and pay , however none of them offer the same personalized attentive service as that of the business . This competition however has never bothered or hindered the business operations as it continues to flourish, maintain and retain its valuable clientele.
What are the seasonal trends?
The business due to its large client base enjoys a steady lucrative flow of business and definitely displays peak trading and profits during the school holidays, Easter and Christmas. and hunting season.
How did the Covid-19 pandemic impact the business turnover / daily operations?
During the lock down and CV19 restriction the business continued to operate due to it having to supply food to its walk in clients. It did however suffer income and its revenue was impacted due to the restaurant and hospitality industry not being able to trades they from part of the business income a they are good supporters of the business
Is the business VAT Registered?
Yes, the business is VAT registered.
What VAT documentation is on file?
The VAT documentation for the last 5 years is available.
Are there up-to-date Management Accounts available?
Yes, there are up to date management accounts.
What Balance Sheet and Income Statements are available?
The financial statements for 2020 are on file and readily available for perusal by a financially qualified buyer
What percentage of the business is cash/credit?
The business currently operates on a 50/50 ratio of cash and account clients.
What is the age analysis of the debtors book?
The age analysis on the books ranges from 30 to 45 days, with the from time to time exception of 60 days.
How could the profitability of the business be improved?
The profitability of the business could be improved by more aggressive advertising and marketing and use of the internet to send specials by mail to clients.
Is Seller finance available and for what amount?
There is No seller finance available on this purchase.
What is the total staff complement?
The total staff compliment of the business at it stands currently is 15 of which 2 are owners , 5 of which are Block men , the 1 owner is the driver and the others are assistant packers , cleaners and counter service assistants.
Do any receive special perks or incentives?
Yes, the current owners afford their staff after a year of service by providing them with a bonus amounting to half of their monthly salary at Christmas time.
Are they on contract?
Yes, the staff is on contract.
Do any have management potential?
Yes, there are 2 staff members who display additional initiative which may lead to management potential.
How involved is the Owner in running the business?
The 2 owners are very involved in the day to day running of the business.
Any special arrangements for the staff related to the Covid-19 pandemic?
The Government lawfully regulated CV19 hygienic implementation are in place to protect the staff and the clients. The staff operate their work load with spread out shifts .The staff and clients are temperature tested as they enter the store and masks are a pr requirements prior to entering. the butchery has always prized itself on being exceptionally clean.
Give a breakdown of staff/functions/length of service?
The current breakdown of the staff compliment is thus besides the owners , 2 have been with the business for 18 years, 4 for 17 years and the balance of the staff for 7 years . The owner is of the understanding to either pay out the long term service directly to the staff or pay their respective obligation portion of service over to the new owner who will resume responsibility of payment thereof
When does the current lease end?
One of the owners of the business is the owner of the premises and the business currently operates on a month to month agreement .The owner is open for discussion to a potential qualified buyer to make application for a 3-5 year lease period for the business or the option to purchase the premises is also available on request if so desired.
Is there an option of renewal & what period?
The owner of the premises is open to negotiations to the signing of a new agreed upon lengthily rental agreement with the purchaser of the business between themselves or he affords the new owner the option to purchase the premises if he has the finances and intention thereof.
What is the annual escalation %?
The annual escalation acceptable by the current owner is 8 %.
What are the trading hours?
The trading hours are from Monday to Friday 8:00 to 18:00, Saturdays 8:00 to 13:00 and closed on Sundays.
What is the square meters of the business?
The size of the premises from which the business operates is 300square meters.
Is a copy of the lease available?
The owner is willing to sign a lease with the purchaser of the business for R26, 000p p.m. Ex VAT, electricity and water. It averages out at around R 86, 00 per square meter which is fair for the centrally situated location of the premises. There is an option for the purchaser of the business to purchase the premises as well .The price of the building will be negotiated should the intent by the purchaser be presented to the owner.
Do you require a licence?
There is a business operating health, hygiene and safety license, which is given with continuous ongoing time to time inspections of the operating premises. The new owner will be responsible to make qualification for application for his own inspection.
What lease deposit and/or other surety is required?
The owner will require the first months rental payable upfront and thereafter all the other rents payable in respect of the lease on the premises will be payable on the 1st day of each and every other consecutive month for the duration of the lease. A rental deposit equivalent to one months rent is required
What are the main assets of the business?
The main assets of the business are its walk in cold rooms, its display and upright fridges and its freezers. the band saws and wors milling machines and biltong dryer.It has a point of sales system and scales .then there is office equipment , desk , chairs , computer , scanner
Are any items not included in the sale?
Yes there are some cold drink fridges that belong to the services providers, these will not be included in the sale All the assets as seen on the asset register are included in the sale and purchase price of the business.
What is their overall condition?
All the assets are in a good condition .
Do any require repairing?
No all the assets are in a working condition
How have they been valued ?
The assets have been valued by second hand replacement value.
Which assets are on lease/HP and with whom?
Yes, there is one asset item which is on the asset inventory and is still on H.P .It is the 2009 1.9 T.D I Volkswagen Caddy delivery vehicle.
What are their settlement amounts?
The settlement of the vehicle varies from month to month as the business effects monthly payments on the H.P.
Will Seller settle or Buyer to take over?
The owner will settle the outstanding H.P with the bank for any monies owing on the vehicle and the new owner will take ownership of a fully paid for vehicle. The new owner will be responsible at their own expense to take the vehicle through roadworthy and for its new license and registration.
Are copies of agreements available?
Yes, a copy of the agreement with the financing institute for the vehicle is available for perusal.
Are they presently insured?
Yes, the assets are presently insured.
Is a full asset list on file?
Yes, there is a full asset list on file.
The strengths of the business lays attribute to its long establishment and familiarization within the local community, the quality of it product, the ongoing support and repeat business it enjoys from its local walk in and hospitality clients and its delicious biltong. The butchery has been in the area for 18 years and offers personal attention to detail when attending to all its clients requirements, this has over the years provided the solid client base from which the business now pivots. The business also has 2 spit braais which are well utilized by the locals when they have reason for celebration. The business also offers a delivery service to the hospitality industry of which it has a large client base. During the hunting season the business has adequate cold storage to keep the hunters game stored and refrigerated until they have time to work and prepack it into various cuts as requested by the hunters. The butchery operates under strict hygienic conditions and is tastefully decorated and fully stocked with a large variety of specialties which all make for a good home braai which is an attraction to the walk in clients. The butchery as an added enticement also sells farm fresh chicken and a selection of frozen fish.
The current weakness of the business is the ownerâs health.
The opportunity of business to grow will rest with an active owner who is prepared to invest in advertising and marketing and target other lines which the restaurants that currently buy from the butchery use daily such as eggs, cheese, bacon, bulk chicken etc. the business can also expand by introducing a deli and a small bakery division within the butchery. The biggest factor why the owner has not pursued this avenue aggressively is due to this ill health and his son who assist him in the business has expressed his continues need to explore his music career.
The business has over the years had to deal with its competitors selling meat at discounted prices to gain market share, however quality may be compromised and this is where the business enjoys a befit as they are known for their quality of product and personalised service ,so there has been no threat to the business in this respect. The only perceived threat is the ownersâ health.
What is the reason for the sale?
The reason for the sale is the ownerâs son has continuously indicated that he wishes to pursue his own dreams of a ministry and music career and the business is just too busy for the owner to manage by himself due to his health, so he has decided this will be the opportune time to retire.
What is the price plus stock and the profit?
The price is R 4, 8 million for the business, this does NOT include the stock on hand. The stock is extra and will be paid separately on the date of takeover to the seller. A stock take will be taken at the time of take over and will be calculated at its lowest invoice price. No, old or perished stock will be counted.
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