Fully describe the business's activities?
Fragrance products are manufactured, bottled and packaged for two main retail outlets, namely retailed at a selected weekend market, and also supplied to established retail stores. 50% of the revenue is derived from each of these outlets.
How long has the business been established?
How long has the owner had the business?
How does the business operate on a daily basis?
The business wholesales to retail stores, and to an appointed vendor, down the south coast, who retails these at a weekend market in that specific area. The products are manufactured by the owner every afternoon throughout the week and are prepared for distribution to the selected retail outlets. The secondary outlet is at at a selected retail opportunity which operates only on a Saturday morning at a popular and busy market. The owner spends afternoons each day manufacturing the fragrances utilizing a sourced ingredient from overseas. Once ready the products are bottled, packaged and warehoused, ready for distribution. Delivery takes place throughout the week.
How are the clients attracted to the business?
There is an active website, but many of the personal clients are sourced at the weekend market. The retail outlets refer other retail stares to the owner, who in turn contacts the potential buyers. There is a great deal of repeat business for both personal homesteads and for established retail stores
What Advertising/Marketing is carried out?
No formal advertising is done
Does the business have any contract work?
What competition exists?
There are other companies who "mass produce" similar products, but these are generally inferior or more expensive. The "hand made" product range of this company is more appealing to the known outlets.
What are the seasonal trends?
No Real seasonal trends, other than when Christmas shopping escalates the turnovers just before and during December months.
Is the business VAT Registered?
What VAT documentation is on file?
Are there up-to-date Management Accounts available?
What Balance Sheet and Income Statements are available?
What percentage of the business is cash/credit?
Approximately 25% cash sales are received at the weekend market and the balance is credit card transactions. The retail wholesalers pay via EFT on statement, or on terms discussed with the owner.
What is the age analysis of the debtors book?
Nil as mostly all orders are paid upfront at both the market and upon delivery to the wholesale retailers.
How could the profitability of the business be improved?
A strategic development of Pharmaceutical wholesalers will escalate the business. Casual workers will then be required to assist in the manufacture of the product ranges in order to increase the stock holdings.
Is Seller finance available and for what amount?
What is the total staff complement?
The owner does everything from sourcing the ingredients, manufacturing the product ranges and delivering to the retail wholesalers. The weekend retail sometimes requires assistance from a casual worker, normally a student. Christmas season often requires an assistant to assist at the weekend market.
Give a breakdown of staff/ functions/ length of service?
Do any receive special perks or incentives?
Are they on contract?
Do any have management potential?
How involved is the Owner in running the business?
The owner is extremely hands on in all aspects of the business.
When does the current lease end?
Manufacturing is home based in a small room attached to the homestead. The market stall is on a month to month rental basis.
Is there an option of renewal & what period?
What is the annual escalation %?
What are the trading hours?
Weekend market hours determine the stall hours.
What is the square meters of the business?
Home based. Bulk raw materials Bottles etc. are stored in an off site storage facility. Finished products and liquid raw materials are stored in a converted servants quarters and garage, at the owners homestead. Manufacture is done in the household kitchen
Who is the Owner/Landlord?
Is a copy of the lease available?
Do you require a licence?
A customer/rebate number is required to operate a 6th schedule rebate store for one of the raw materials. An import licence is also required for the importation of raw materials. It would be worthwhile applying for an export licence at the same time should it ever be required for expansion purposes. All three are a once off application to SARS Customs and Excise and will be required prior to hand over of the business. The market also requires the stall to have credit/debit card facilities
What lease deposit and/or other surety is required?
What are the main assets of the business?
Shelving, trolley, assorted tables and table cloths, laboratory equipment, glass storage containers, aluminium storage containers, filing cabinet (used as a rebate store)
Are any items not included in the sale?
What is their overall condition?
Do any require repairing?
How have they been valued ?
Which assets are on lease/HP and with whom?
What are their settlement amounts?
Will Seller settle or Buyer to take over?
Are copies of agreements available?
Are they presently insured?
Manufacturing is home based. Week day hours are flexible, and is owner run so no staff costs. Inter action with clients and customers at the market is beneficial as they refer cotact details for new customers, and they all like to "meet the manufacturer"
Currency fluctuations, but everyone in business understands this and many other business people have the same issues. If the business expands then a new premises might be a requirement, as well as employing some extra staff.
Develop a new marketing strategy to incorporate new retail outlets as well as focussing on pharmaceutical outlets. Look at weekend markets elsewhere in the Durban/KZN areas. Website optimisation and other online social media advertising to increase repeat sales.
Local other manufacturers may try to undercut the wholesale retailers prices, but quality service and quality products always attract serious buyers. Buying quality raw materials will maintain the quality required in the the product ranges that are on offer.
What is the reason for the sale?
Owner is either relocating to another Province or is looking at emigrating
Why is this a good business?
The business is home based and has flexi hours to suit the new owners commitments. Overheads are low and no staff problems. Ideal for someone with a young family that still needs to earn an extra income. Other potential buyers of the business could be retired or retrenched people looking for a profitable enterprise for them to develop and manage. The products are registered on the Afritox Database (toll free number) in case of accidental ingestion.
What is the price plus stock and the profit?
Selling Price R800000, including Stock of R130000. Net Profit is R444000 per annum
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