Fully describe the business's activities?
The business is a distributor for furniture manufacturers and suppliers to large retail outlets. They collect from clients and deliver on a daily basis. They also receive large shipments with invoices and distribution points across the Western- and Northern Cape. They provide limited warehousing and storage, and load splitting and strapping services.
How long has the business been established?
Almost two years. The senior partner was the Manager for a transport business, and when the owner passed away and his wife decided to close it down, he established this business and secured the contracts of their previous clients.
How does the business operate on a daily basis?
The trucks leave early to collect from clients and deliver across the Western and Northern Cape. They also receive large shipments from Link Transport with invoices and distribution points across the Western- and Northern Cape. When required, a team would be despatched to clients to do load splitting and strapping.
How are the clients attracted to the business?
They have existing contracts and do no additional advertising. Word of mouth and their excellent service and reputation ensure new and continued contracts.
What Advertising/Marketing is carried out?
No formal advertising / marketing is carried out.
Does the business have any contract work?
They have firm distribution contracts only.
What competition exists?
There are large distribution companies in competition to this business, and even though they are relatively young, their excellent reputation and service has ensured a stellar growth since they established the business.
What are the seasonal trends?
January/February are traditionally quieter months while Sept to November/December peaks.
Is the business VAT Registered?
Yes, the business is VAT registered.
What VAT documentation is on file?
VAT returns and other relevant documentation are on file and will be made available during Due Diligence.
Are there up-to-date Management Accounts available?
Management Accounts are up-to-date and available on request.
What percentage of the business is cash/credit?
All clients pay promply within 30/40 days.
What is the age analysis of the debtors book?
How could the profitability of the business be improved?
The business will benefit from active advertising and promotion to improve Turnover.
What is the total staff complement?
They have 8 permanent employees.
Give a breakdown of staff/ functions/ length of service?
4 x drivers 4 x assistants 1 x Admin/Office assistant Part time casuals when required
Are they on contract?
All employees are on contract.
Do any have management potential?
The Administrative/Office assistant is capable of managing the business.
How involved is the Owner in running the business?
Between the two partners, one is in the office at all times.
When does the current lease end?
The lease agreement currently runs from month to month. Larger premises should be considered though.
Is there an option of renewal & what period?
The landlord is accommodating and open for negotiation.
What are the trading hours?
Official trading hours 07:00 - 17:00 Monday to Friday.
What is the square meters of the business?
+- 200 sqm
Who is the Owner/Landlord?
Is a copy of the lease available?
What lease deposit and/or other surety is required?
Deposit equal to 2 months lease.
What are the main assets of the business?
Vehicles 2 X 4T 4 X 1.3T 3 trailers
Are any items not included in the sale?
All items are included in the sale.
What is their overall condition?
How have they been valued ?
Which assets are on lease/HP and with whom?
All assets are fully paid up.
Are they presently insured?
All assets are fully insured.
Secure contracts Excellent reputation Good cash flow Loyal customer base Great opportunity for growth
Usual risks of transporting goods Limited to shorter distance transport (by choice) They do not have a website No advertising / marketing is done.
Longhaul removal and deliveries offer a great opportunity to improve turnover Larger premises should be considered to accommodate 'resting' loads A well designed website will be an asset. It will benefit from a focused marketing effort and improved management systems
Knock-on effect of political instability and poor economic performance in general.
What is the reason for the sale?
Both partners have other business interests they wish to pursue.
Why is this a good business?
The business has grown rapidly since it was established, and has huge potential for continued growth. Good cash flow Contracts with large clients
What is the price plus stock and the profit?
Asking price R1.8m Average NP R62,600 p.m. ROI 41%
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