Fully describe the business's activities?
The business is a toy shop that operates in the upper highway area.
How long has the business been established?
The business was started in 2003.
How long has the owner had the business?
The current owner started the business.
How does the business operate on a daily basis?
The business operates like any normal shop in a mall environment.
How are the clients attracted to the business?
The majority of clients walk past the shop on their way to the large supermarket in the mall. Knowing it is there they will go in when they are looking for toys or educational gifts.
What Advertising/Marketing is carried out?
Minimal advertising is carried out in local publications. The shop also maintains a facebook page which attracts some customers.
Does the business have any contract work?
The business does not have any contract work .
What competition exists?
There are some general toy sellers in the area (Supermarkets) but these have limited ranges and no educational toys.
What are the seasonal trends?
The Christmas period is the most prolific from a sales point of view.
Is the business VAT Registered?
The business is VAT registered.
What VAT documentation is on file?
All VAT documentation is on file.
Are there up-to-date Management Accounts available?
Up to date Management accounts are available.
What Balance Sheet and Income Statements are available?
February 2018 AFS are available.
What percentage of the business is cash/credit?
The business receives payment as the customer leaves the shop. Approximately 30% of sales are paid for in cash while 70% are paid by credit card.
What is the age analysis of the debtors book?
There is no debtors book.
How could the profitability of the business be improved?
The 2 major opportunities are to stock more well known brands (Lego, Fischer Price etc) and to develop a website that will allow online purchases to be made from the store.
Is Seller finance available and for what amount?
Seller finance is not available.
What is the total staff complement?
It is envisaged that the store will be purchased by someone who wishes to run it themselves.
Give a breakdown of staff/ functions/ length of service?
Do any receive special perks or incentives?
Are they on contract?
Do any have management potential?
How involved is the Owner in running the business?
The owner currently employs someone to manage the store and feels that he cannot devote enough time to the store. He has a wholesale toy business that supplies the store as well as other outlets. As he wishes to continue supplying the store, he wishes the new owner to be a hands on manager of the business.
When does the current lease end?
The current lease ends in mid 2020.
Is there an option of renewal & what period?
Their is an option to renew for a further 3 months.
What is the annual escalation %?
The annual escalation is 8%.
What are the trading hours?
The current trading hours are: M-F : 8:30 - 5:00 Sat : 8:30 - 1:00 Sun : 9:00 - 1:00 (This is optional)
What is the square meters of the business?
Who is the Owner/Landlord?
The mall is managed by a property management company.
Is a copy of the lease available?
A copy of the lease is available.
Do you require a licence?
A normal business license is required.
What lease deposit and/or other surety is required?
One Months Rent.
What are the main assets of the business?
The shop has an aircon, computer and shelving.
Are any items not included in the sale?
The pastel POS system is not included in the sale.
What is their overall condition?
The overall condition of assets is good.
Do any require repairing?
None require repairing currently.
How have they been valued ?
Which assets are on lease/HP and with whom?
There are no assets on HP.
What are their settlement amounts?
Will Seller settle or Buyer to take over?
Are copies of agreements available?
Are they presently insured?
All of the shops contents are currently ensured.
The greatest strength of the business is the shops location in a busy mall. This together with the fact that the business has been in this location for so long, mean that many people know of the stores location when they need to buy education toys for children and grandchildren. The current owners wish to continue supplying the shop and so have a vested interest in ensuring the continued profitability of the shop.
The shop lacks the product mix to increase sales further. In addition to the current range, brand names such as Lego and Fischer-Price would increase the turnover in this affluent area. An additional weakness is the current owners lack of hands on time in the store as he tries to manage both the shop and his wholesale business.
In addition to stocking major brands mentioned above, a new owner could market directly to schools and could develop an online toy store. Additional promotional activities outside the shop could also be undertaken.
The biggest threat to the business is the general economic climate which discourages buyers from spending money on non-essential purchases.
What is the reason for the sale?
The owner has expanded into supplying toys on a wholesale basis which takes a significant amount of his time. He feels it is in the interests of both businesses that he sells the shop and concentrates on the wholesale business.
Why is this a good business?
While the location of the shop and how well known it has become since 2004 will ensure ongoing sales, the opportunities to expand these sales through stocking well known education toy brands add the prospect of real growth. This formula for success has been carried out in another shop that was sold. The business has since thrived and expanded. A distinct advantage of this shop is that the knowledgeable owner wishes to continue supplying the shop and so will remain available for advice etc for years to come.
What is the price plus stock and the net profit?
The shop is selling for R200,000 with an estimated stock value of R150,000.
Annual Turnover Amount between R 500 thousand and R 6 million