Fully describe the business's activities?
The business offers a work from home opportunity for someone with a flair for fashion/clothing. They sell upmarket second hand and have a reputation for their quality product. The business has a large following on social media and they sell on markets as well as supply wholesale / on consignment to retail outlets. They have suppliers to whom competitors do not have access and which provides them with an opportunity to supply exclusive and quality items to the market.
How long has the business been established?
The business was established by the owner in 1994.
How does the business operate on a daily basis?
Prior to COVID-19: Clients view the items on appointment at the premises. Enquiries from social media are dealt with. Booking and preparing for markets. Dealing with orders/enquiries from retail outlets - shipping, invoicing, etc. During LOCKDOWN (since phase 4): Since the Seller could not travel for purchases and stock could not be transported from Suppliers to Cape Town, the Seller sourced and purchased stock locally and marketed clothing items to her extensive database via sms and FB.
How are the clients attracted to the business?
Large following on social media. Word of mouth. Markets (prior to COVID-19). Retail outlets (prior to phase 3 of COVID-19) SMS marketing.
What Advertising/Marketing is carried out?
Very little advertising is carried out, but they have a good following on Facebook and they exhibit at markets like KKNK, Grahamstown Festival. These events are prohibited currently due to COVID-19, but will present a new owner with good opportunities again once normal activities are allowed and resumed.
What competition exists?
Informal trade do not appeal to higher income bracket individuals. No competition for the leather jackets - quality is outstanding.
What are the seasonal trends?
Winter months are more lucrative.
How did the Covid-19 pandemic impact the business turnover / daily operations?
No trading has been possible during phase 5 of the lockdown. The retail outlets may trade during the current phase 4, but the are in need of stock and for the moment sales are limited until stock can be ordered and delivered from suppliers. The business will take time to build up momentum again - a reality for all businesses globally.
What steps / actions have been taken to combat the effect of Covid-19 pandemic?
Since the Seller could not travel for purchases and stock could not be transported from Suppliers to Cape Town, the Seller sourced and purchased stock locally and marketed clothing items successfully to her extensive database via sms and FB.
Is the business VAT Registered?
The business is not VAT registered.
Are there up-to-date Management Accounts available?
Management Accounts up to December 2019 are available.
What percentage of the business is cash/credit?
Direct sales = 100% cash. Consignment items (pre-COVID-19/lockdown regulations): Stockists send through report of sales on Mondays. Items that were sold are then re-stocked. Stockists pay for sold items at end of month after stocktake / recon.
How could the profitability of the business be improved?
Invest in more stock. Do more markets once they are resumed again. Supply more retail outlets once they are fully operational again. Activate the website/upgrade FB page with full catalogue and online order and pay facilities.
What is the total staff complement?
Since COVID-19 the Seller has operated the business on her own and staff was made redundant.
How involved is the Owner in running the business?
What are the trading hours?
Stock is advertised online on social media and via sms - so no specific trading times. Markets determine trading times and it varies from market to market.
What are the main assets of the business?
Stock Equipment used at markets (clothes rails, hangers, change 'room', mannequin(s) Banners
What is their overall condition?
All assets are in good condition.
How have they been valued ?
Fair second hand value.
Work from home Income derived from sales at markets, sales from enquiries through social media, and from retail stockists. Well established for 25 years.
Advertising limited to sms, Facebook and exposure at markets (when it is resumed). Owner's health.
The business will benefit from an aggressive and continuous advertising / marketing drive. Actively pursuing selling through retail outlets. Website with online shop. Improve Facebook page and offer online ordering and payment facilities. Invest in more stock.
Owner's health the only reason for the decision to sell.
What is the reason for the sale?
Why is this a good business?
Well established with suppliers. Well established also at markets and with customers. Good cashflow with 100% wholesale markup, and 300 - 600% markup for retail outlets.
What is the price plus stock and the profit?
Asking price R105,000 including stock
Annual Turnover Amount between R 500 thousand and R 6 million