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  • Mandate: 33217
  • Added: 09 Jul 2020
  • AFS
  • 326

ECO Industrial & Commercial Laundry & Steam Cleaning Services - great potential for growth

Western Cape, Cape Town
Mandate 33217
Added 09 Jul 2020
R 1,410,000* ZAR
Stock: R 60,000
Assets: R 1,400,000
R 45,899 ZAR
Kutu Venter
Aldes Alpha
Western Cape
Western Cape

Innovative Industrial & Commercial full laundry services offering, including dye, alterations, wet cleaning (eco dry cleaning of bridal gowns, suits, etc) online linen and garment management solutions, linen rentals and steam cleaning services to healthcare, hospitality, factories, sport clubs, etc.

R 1,410,000* ZAR
Stock: R60,000
Assets: R1,400,000
R 45,899 ZAR

Innovative Industrial & Commercial full laundry services offering, including dye, alterations, wet cleaning (eco dry cleaning of bridal gowns, suits, etc) online linen and garment management solutions, linen rentals and steam cleaning services to healthcare, hospitality, factories, sport clubs, etc.

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Fully describe the business's activities?
The business provides an 'ECO Industrial Laundry Service' which entails wet cleaning (eco innovation for dry cleaning) and industrial laundry services of flat linen (e.g. table cloths, napkins, bed linen etc), dying, alterations, germents etc. The business has installed the latest industrial laundry technology driven equipment whic enables them to custom program laundry washing and drying cycles to adhere to saving of water, electricity, etc. They maximise hygiene levels across the full laundry processing cycle as prescribed by SANS 10146 legislation. They provide laundry- and steam cleaning services to the healthcare and hospitality industries, private residences, supermarkets, transport etc industries.

How long has the business been established?
The business was established in South Africa by the seller in 2010. The Close Corporation was Converted to a Private Company in 2017.

How does the business operate on a daily basis?
Steam cleaning: Delivery notes of jobs are handed to the Steam Cleaning Supervisor who goes with an operator to client's premises to provide a steam cleaning service. Laundry services: Process walk-in customers' laundry and contract customers linen and garments. They provide a collect and delivery service. The business utilises a complete Radio Frequency Identification (RFID) Linen Management solution, managing laundry operations from production to administration, inventory management and customer service for sophisticated hotels, restaurants, healthcare, factories, etc. Customers receive monthly reports regarding condemned items, wash count and re-wash reports, enabling clients to budget for and procure replacement linen which have reached their end of life cycle.

How are the clients attracted to the business?
The majority of contractual clients are attracted by word of mouth. They have their own website, and are listed on various other websites as a service provider.

What Advertising/Marketing is carried out?
Building a brand that is known out there was the first campaign. Then followed education of steam cleaning and the benefits thereof, and thereafter RFID technology. Almost no advertising/marketing is carried out other than through their website and cold calling occasionally.

Does the business have any contract work?
Yes, the majority is contract work (+- 80% contracts)

What competition exists?
In the immediate surrounding area there are two small laundries for public walk-ins, but they are not open on Sundays and Public Holidays. There are no other commercial laundries in the area.

What are the seasonal trends?
The business service varous industry sectors with varying seasonal trends: Hospitality: August - April (Linen) Public walk-ins: Busier during winter months April - September Steam cleaning: April - December when the hospitality industry do maintenance before their peak season, and steam clean mattresses, pillows, kitchens etc.

Is the business VAT Registered?
The business is VAT registered and VAT returns and documentation will be made available during Due Diligence.

Are there up-to-date Management Accounts available?
All financial information is up-to-date and available.

What percentage of the business is cash/credit?
Approximately 30% cash and 70% credit due to contracts which get billed once monthly. All contracts state payment within 5 days from invoice.

How could the profitability of the business be improved?
By increasing volume - the business is running at approximately 50% capacity at present. Solar engergy could be considered.

What is the total staff complement?
Total staff employed 14 (excluding the seller) Laundry Depot Assistants: 3 (3-7 years) Laundry Operators: 6 (6 months- 3 years) Laundry Driver: 1 (3 years) Laundry Invoice Clerk: 1 (2 years) Steam Supervisor: 1 (2 years) Steam Operator: 1 (3 months) Cleaner: 1 (4 months)

Do any receive special perks or incentives?
Staff living in Dunoon get free transport when working night shifts. Permanent staff is part of a Sanlam Provident Fund

Are they on contract?
Both permanently employed and casual staff.

Do any have management potential?
Yes. The Invoice Clerk can supervise all activities on the premises by accessing the camera network. ll

How involved is the Owner in running the business?
Full time.

When does the current lease end?
Lease ends 2025 (6 years remaining)

Is there an option of renewal & what period?
Yes. To be negotiated with the Landlord.

What is the annual escalation %?

What are the trading hours?
08h00 - 18h00 Monday - Sunday (walk-ins) 20h00 - 06h00 Night shift Shift hours are adjusted according to work load.

What is the square meters of the business?
535 sqm

Is a copy of the lease available?
A copy of the lease is on file.

Do you require a licence?
Licences are not required at present, but may become a requirement in future to comply with SANS10146.

What lease deposit and/or other surety is required?
Lease deposit equal to approximately 3 months rent (+- R50,000)

What are the main assets of the business?
Laundry equipment Borehole and filtration system RFID system POS system Daihutsu delivery van

What is their overall condition?
Good - excellent

Do any require repairing?
All items are in good working order.

How have they been valued ?
Estimated market value.

Which assets are on lease/HP and with whom?
Wet Cleaning machines - Wesbank Water Filtration - Wesbank

What are their settlement amounts?
Settlement amounts to be determined during Due Diligence. Seller will settle.

Are they presently insured?
All assets are fully insured.

Innovative company Market leader with RFID technology & Laundry plant equipment ECO friendly - 100% off grid (borehole) High service standards - Elite Clientele Ideal location - easy access and central to all contractual clients

Not enough advertising and marketing. High cost of electricity and risk of loadshedding. Staff will benefit from industry specific training. SETA is in process of finalising accredited courses.

The plant is fully set up and the necessary processes are implemented to take the business to the next level. The business has a head start with RFID technology, which gives them a competitive edge.

Factors threatening the economy in general e.g. political, load shedding, exchange rates, etc.

What is the reason for the sale?
The owner and his spouse are emigrating.

Why is this a good business?
The business is poised to be launched to the next level - all systems and processes are in place. The staff are able to operate independently and the business is running smoothly, allowing the owner more freedom to focus on marketing and call on customers.

What is the price plus stock and the profit?
Asking price reduced R1,350,000 plus stock R60,000 (Total R1,410,000)

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