Fully describe the business's activities?
This business is involved in the import of medium sized construction equipment which it hires out and sells.
How long has the business been established?
Since 2005. Original business started by the owner in 1991
How long has the owner had the business?
How does the business operate on a daily basis?
The business hires out construction equipment for varying lengths of time. It also sells new equipment,spare parts and consumables all which get imported from USA, Italy or China.
How are the clients attracted to the business?
It has a web page but word of mouth and an excellent reputation with continuous come backs ensure growth in sales. 90% repeat business.
What Advertising/Marketing is carried out?
Very little - there is a sales representative
Does the business have any contract work?
The company successfully tenders for hire work from City of Cape Town as well as from the Drakenstein Municipality.
What competition exists?
There is competition but because they import the majority of their equipment it gives them a big advantage on capital costs as well as maintenance costs and also affords them to be very competitive in the market place for sales of new equipment. The ratio between hire sales and new equipment sales is :
What are the seasonal trends?
The construction industry closes for part of December and January and the company shuts down for 2 weeks over this period.
Is the business VAT Registered?
What VAT documentation is on file?
All available including VAT payments
Are there up-to-date Management Accounts available?
How could the profitability of the business be improved?
The current owner has a number of ideas to take this business to the next level which he has not been interested in doing because of his relaxed lifestyle. He will discuss this with the new owner.
Is Seller finance available and for what amount?
Stock can be paid off over 6 months - the owner is prepared to look at other options of financing.
What is the total staff complement?
Give a breakdown of staff/ functions/ length of service?
3 Members of staff are in management positions. The business is managed for the owner who spends little time in it. The other 11 members are involved in sales, the workshop and administration. There is a part time bookkeeper who has been involved for many years.
Do any receive special perks or incentives?
Are they on contract?
All have contracts and are permanently employed.
Do any have management potential?
3 Members are already in management positions one with 30 years service . Admin lady with 7 years and the manager with 8 years service. The owner has stated that he will leave bonusses equal to 3 months pay, payable one year from the sale date to ensure they remain with the business.
How involved is the Owner in running the business?
30 % of his time
When does the current lease end?
The owner owns the building so any length of lease can be negotiated at a very reasonable rental.
What is the annual escalation %?
What are the trading hours?
7.30 to 5.00 weekdays Closed weekends
What is the square meters of the business?
410 sq meters plus a 450 sq meter yard.
Do you require a licence?
What lease deposit and/or other surety is required?
The lease will be R 20 000/month with a R 40 000 deposit payable.
What are the main assets of the business?
The main assets in the business are various motor vehicles and all the hire equipment.
Are any items not included in the sale?
The owner is taking out certain access equipment comprising various lifts which he will operate in a separate company. This split has already been made with the new company operating alongside the one being sold. This will be discussed with the owner who will in effect become the direct neighbor therefore being fully transparent .
What is their overall condition?
The business has its own workshop with staff who maintain the equipment as it comes back from hire. The equipment is at varying ages but all are in good working and maintained order, all fit to generate the turnover the business is making.
Do any require repairing?
The business has its own workshop and mechanics/fitters to continuously service and repair its existing "fleet" of equipment as they return from being hired out.
How have they been valued ?
Fair market value
Which assets are on lease/HP and with whom?
What are their settlement amounts?
Are they presently insured?
This business imports all its equipment from China, Italy or the USA which gives it a big advantage over competition on capital costs as well as maintenance costs. The business has built up an excellent reputation in the market and a lot of its business comes from repeat business - 90 %. The business is well manged by 3 managers who virtually run the business. The business is very profitable and easy to run.
Huge opportunity for a younger energetic person to expand the business by introducing other lines that have already been identified by the owner and by opening a second branch in the Western Cape.
The only perceived threat is the economy but the business has continued to do well throughout the poor conditions over the last 18 months.
What is the reason for the sale?
Semi -retirement but the owner needs to keep a small business for his son and for certain tax benefits hence the access equipment section which he is retaining.
Why is this a good business?
This business imports all its equipment from China, Italy and the USA which gives it a big advantage over competition on capital costs as well as maintenance costs. The business has built up an excellent reputation in the market and a lot of its business comes from repeat business - 90%. The business is well manged by 3 managers who virtually run the business. The business is very profitable and easy to run. There are other opportunities to expand the sales and profitability of the business.
What is the price plus stock and the profit?
Selling Price : R 10.0M including stock Stock : R 300 000 Average monthly profit : R 360 000
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