Fully describe the business's activities?
This business was started in 2017 mainly to supply a large well established Air Conditioning company that is owned by the same owner. It manufactures ducting for large developments such as shopping malls hospitals and blocks of flats etc. It has recently started supplying other customers in the area who do not have the manufacturing capability.
How long has the business been established?
How long has the owner had the business?
What steps are in place to solve 'load shedding' problems?
There is a generator at the factory site.
What is the average KW usage?
How does the business operate on a daily basis?
The business receives orders from contracts that the air conditioning supplier has secured. The plans for the construction development are assessed and staff are tasked with manufacturing the ducting products to the orders generated. The ducting products are then packaged and sent to site for a team of installation staff to install
How are the clients attracted to the business?
Large contractors utilize the air conditioning company, as a preferred supplier and as a sub contractor to supply the air conditioning and ducting for the development. Smaller clients in the air conditioning business also place orders with the manufacturing company to supply ducting products for their projects.
What Advertising/Marketing is carried out?
There is a web site that is utilized, but the majority of the work comes from the large projects that the major contractors are awarded, and who in turn sub-contract this company to supply the ducting requirements.
Does the business have any contract work?
Yes. The majotity of the work tasked is on a contract basis with the large contractors who are busy with large developments.
What competition exists?
There are a few smaller suppliers, but these do not have the capacity to get involved in large developmenrt requirements, so they place smaller orders for smaller construction requirements.
What are the seasonal trends?
The projects from the large developers are normally for 12 to 24 months in advance, which means that the supply of ducting is continuous for years in advance.
Is the business VAT Registered?
What VAT documentation is on file?
It is administered by the accountant.
Are there up-to-date Management Accounts available?
What Balance Sheet and Income Statements are available?
What percentage of the business is cash/credit?
All business is paid via eft payments
What is the age analysis of the debtors book?
How could the profitability of the business be improved?
Growth in the construction environment would require larger orders for the manufacturing of ducting products to be supplied. Marketing to other smaller suppliers of Air conditioning developments is an ongoing process of new business development.
Is Seller finance available and for what amount?
What is the total staff complement?
1 X Manager and 12 semi skilled operators.
Give a breakdown of staff/ functions/ length of service?
Each phase of the duscting manufacture has a skilled operator who fits ino a "supply chain" process for the duscting products. Once completed the unit is packaged and transported on to site of the development by the Air Conditioning contractor.
Do any receive special perks or incentives?
Are they on contract?
Do any have management potential?
There is a supervisory structure in the production cycle.
How involved is the Owner in running the business?
The owner visits the factory site on a daily basis.
When does the current lease end?
2020 The business plans to move into larger premises due to the fact that the growth in production has outgrown the current site. The owner has built a larger site with ample parking and storage space.
Is there an option of renewal & what period?
Not Applicable when moved into the new site
What is the annual escalation %?
What are the trading hours?
0730 hrs to 1630 hrs Monday to Friday
What is the square meters of the business?
The new site will be in excess of 1000 square meters
Who is the Owner/Landlord?
Growth Point/The owner of the business will be the new landlord
Is a copy of the lease available?
Do you require a licence?
What lease deposit and/or other surety is required?
Double month's rent as a deposit is required.
What are the main assets of the business?
A variety of manufacturing machinery is already in place and all are fully functional, as well as welding, packaging and hoisting equipment . All assets are unencumbered and form part of the selling price.
Are any items not included in the sale?
What is their overall condition?
Very good as the machinery is only a few years old.
Do any require repairing?
How have they been valued ?
By the insurance company at replacement value.
Which assets are on lease/HP and with whom?
The copier is on a lease
What are their settlement amounts?
Will Seller settle or Buyer to take over?
This will be decided when a potential buyer completes his due diligence, and purchases the assets of the business.
Are copies of agreements available?
Are they presently insured?
Very well known for quality ducting products and is the major supplier to the large construction development companies, as a preferred supplier
Due to the growth in orders the business will require to be relocated into larger premises when the lease expires in 2020
Once in larger premises the growth in the business will be able to be focussed on, and due to the track record of this company there is capacity for expansion, as many other developers require ducting products.
There is no real threatr perceived. A BEE owner would experience a massive growth in new business.
What is the reason for the sale?
The owner is very involved in the Air Conditioning aspect of his main business and would like a BEE buyer to assist in the manufacturing of the ducting supply.
Why is this a good business?
Very well known for quality products and for good service delivery to the large construction sites. There is scope to grow this business into a much larger enterprise.
What is the price plus stock and the profit?
Priced at R7 million with a Net Profit of close to R1,8 million and growing on a monthly basis. Stock of R400000 to R600000.
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