Fully describe the business's activities?
Fashion designing and clothing manufacturing business. High caliber clients, such as Ministers, royalty and regular clients. , One boutique also orders from the business. The business does a few lines but also designs specifically for individual clients. The owner and her fashion designer design the outfits, the pattern maker makes the patterns for new outfits and then the garments get made by the team of cutters, finishers, and fuser.
How long has the business been established?
The seller started the business 25 years ago.
How long has the owner had the business?
The owner started the business.
How does the business operate on a daily basis?
Regular and new referred clients contact the business to design and make outfits. The clients will then come in for the fitting and collect their outfits or it will be couriered to them on request. The business also designs and makes a few lines that they sell to regular clients and the boutique to whom they supply.
How are the clients attracted to the business?
Long standing and regular clients. Word of mouth.
What Advertising/Marketing is carried out?
The business has a facebook page.
Does the business have any contract work?
The business supplies to one exclusive boutique.
What competition exists?
There are many other fashion designers but very little has the exclusive client base.
What are the seasonal trends?
The business closes around 16th December to 1st week in January of each year.
Is the business VAT Registered?
The business is VAT registered.
What VAT documentation is on file?
VAT documentation will be made available during due diligence.
Are there up-to-date Management Accounts available?
Management accounts for the period January 2019 to October 2019 are on file.
What Balance Sheet and Income Statements are available?
We have 4 year AFS on file, the latest for the year ended December 2018.
What percentage of the business is cash/credit?
Only the Boutique pays once a week. All other sales are cash.
What is the age analysis of the debtors book?
The business signed a contract to supply to one exclusive boutique, exclusively. The Boutique orders new stock and pays every Friday.
How could the profitability of the business be improved?
Employ another fashion designer.
Is Seller finance available and for what amount?
The seller will look at reasonable offers.
What is the total staff complement?
The total staff compliment is 14, excluding the owner.
Give a breakdown of staff/ functions/ length of service?
1 Fashion designer and pattern maker has been with the business for 15 years. 6 Machinists 3 Cutters 1 Fuser 1 Cleaner
Do any receive special perks or incentives?
The staff get their 3 week holiday pay in December. The factory staff gets paid weekly. Bonuses are paid by discretion of the owner.
Are they on contract?
The staff have signed employment contracts.
Do any have management potential?
The fashion designer is able to run the business in the absence of the owner, she also knows the clients well.
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?
The current lease expires in September 2020.
Is there an option of renewal & what period?
The lease has an option to renew for a further 5 years.
What is the annual escalation %?
What are the trading hours?
Monday to Friday 9am to 4.30pm Saturday 8am to 1pm and Public Holidays and Sundays by appointment only.
Is a copy of the lease available?
A copy of the lease will be made available during due diligence.
Do you require a licence?
No license is required to operate the business.
What lease deposit and/or other surety is required?
The buyer may negotiate a two months rental deposit with the landlord. +/- R70,000.
What are the main assets of the business?
Sewing machines,workshop equipment, office equipment and computer equipment.
Are any items not included in the sale?
All assets as seen on the asset list are included in the sale.
What is their overall condition?
The assets are in good condition.
Do any require repairing?
The business has a technician who comes and service the machines.
How have they been valued ?
The accountant valued the assets at depreciated value.
Which assets are on lease/HP and with whom?
All assets are unencumbered.
What are their settlement amounts?
Will Seller settle or Buyer to take over?
Are copies of agreements available?
Are they presently insured?
The business and its assets are comprehensively insured.
Excellent goodwill with high caliber clients. Well trained staff.
A new owner will have to be a fashion designer, or employ another.
Employ more fashion designers and workshop staff.
There are no real threats identified.
What is the reason for the sale?
The owner turned 70 years and wishes to retire.
Why is this a good business?
Cash business with good cash flow and profitability. Well trained staff. Repeat business. Good name in the industry.
What is the price plus stock and the profit?
The price is R1,300,000, inclusive of stock. The average net profit is R56,590 per month.
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