Fully describe the business's activities?
This long established engineering business offers a 24 hour breakdown service to government and private entities. They have longstanding relationships with a vast client base which ensures a constant workflow through the workshop. They act as consultants to their clients and
How long has the business been established?
How long has the owner had the business?
The owner established this business in September 1983.
How does the business operate on a daily basis?
Breakdown calls are attended to, job cards opened, parts ordered where applicable. Vehicles are despatched to collect and deliver machine parts. Problem solving are part and parcel of daily activities.
How are the clients attracted to the business?
They have longstanding relationships with their clients which ensures a constant workflow. No additional advertising is carried out. New clients are attracted to the business by word of mouth.
Does the business have any contract work?
They are listed as preferred supplier with government entities, but have very longstanding relationships with their clients both in government and in private.
What are the seasonal trends?
The business closes from mid December to mid January, which results in a lower turnover and income during the December holiday season.
Is the business VAT Registered?
The business is VAT registered
What VAT documentation is on file?
VAT returns are on file and will be made available during Due Diligence.
Are there up-to-date Management Accounts available?
Up-to-date Management Accounts are available on request.
What Balance Sheet and Income Statements are available?
AFS 2019 will be made available as soon as possible.
What percentage of the business is cash/credit?
Clients pay by EFT within 30 days of statement.
What is the age analysis of the debtors book?
They have no outstanding debtors.
How could the profitability of the business be improved?
Two machines need upgrading which will improve workflow and service delivery and result in savings.
What is the total staff complement?
Owner and his wife - responsible for managing and administration 7 x employees in the workshop
Give a breakdown of staff/ functions/ length of service?
All staff has been with the business longer than 5 years. 2 x turners 1 x welder 1 x machine operator 1 x general worker/assistant 1 x miller 1 x labourer
Do any receive special perks or incentives?
Employees with 10 years+ service receive an extra week leave p.a.
Are they on contract?
Do any have management potential?
Welder/Foreman can be trained to manage the business
How involved is the Owner in running the business?
The owner is 100% involved in the running of the business.
When does the current lease end?
Is there an option of renewal & what period?
The lease is renewed annually, but the landlord would prefer a 3 or 5 year contract.
What are the trading hours?
08:00 - 16:45 Monday to Thursday 08:00 - 14:00 Friday 24 hours on call
What is the square meters of the business?
Who is the Owner/Landlord?
Is a copy of the lease available?
A copy of the lease will be made available during due diligence.
What lease deposit and/or other surety is required?
A deposit equal to 2 months rent is required.
What are the main assets of the business?
Machinery 3 x vehicles not on the asset list (to be discussed)
What is their overall condition?
All assets are well maintained.
How have they been valued ?
Bob Hamilton Machine & Tools provided a professional market value based on replacement less 30% Office equipment and other assets included in sale but no value attached to it.
Which assets are on lease/HP and with whom?
All assets are fully paid for.
Are they presently insured?
All assets are fully ensured.
â¢ Long established â¢ Solid client base â¢ Profitable with good cash flow â¢ Loyal and skilled staff
The owner needs to have a technical / engineering background
A well designed website will attract private clients and individuals requiring engineering services.
Load shedding is a concern Current political and economic climate Global pandemic
What is the reason for the sale?
The owner wishes to retire.
Why is this a good business?
The business is long established, profitable and offers a good cash flow. They have decades of strong client relationships and a large, solid client base. A new owner will be able to capitalise on the excellent history and reputation of this business. Asking price below asset value.
What is the price plus stock and the profit?
Asking price R2,200,000 including stock of +- R20,000.
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