Fully describe the business's activities?
First Trade is a Property Services Company that provides all property-related services with regards to; Electricians, Plumbers, Bathrooms, Kitchens, Drain Unblocking, Waterproofing, Handyman Service, Painting And Decorating, Building, Alterations & Additions, Tiling, Carpentry, Plastering, Dry Walling, Steel Work, Compliance Certificates, High-Pressure Cleaning, Renovations, Extensions, Bricklaying, Paving, Landscaping, End Of Tenancy Refurbishments First Trade has been established for 8 years and boasts a current client base of 377 clients being made up of, - 10 Estate Agents (growing monthly) - 7 Property Management Companies - 10 Body Corporates which look after 2 to 3 complexes - Private clients, a large base of private clients that use and recommend the business on a regular basis. What needs to be understood is that due to the quality of the work and the service levels given to the clients the business is constantly picking up new private and business work as a result of word of mouth recommendations, references are available that attest to this.
How long has the business been established?
The owner started the business in 2012 and has run it ever since then
How long has the owner had the business?
The owner started the business
How does the business operate on a daily basis?
The business is owner run with three Foreman, currently the owners son is one of the foreman but he will be leaving the business shortly to emigrate and the owner then fulfills this foreman role. It must be noted that the owner is hands on in quoting and checking that the jobs have been done correctly, hence the reputation for quality and service the business has in the market and the continually referrals of new clients, no advertising is required.
How are the clients attracted to the business?
Due to the quality of the work and the level of service delivered by the business, there is a 90% word of mouth component and the owner, therefore, does not advertise as he is not interested in growing the business any bigger than it currently is, the owner is comfortable with the current revenue produced by the business and is not personally driven to generate more, he likes the business at its current size as he finds this comfortable. There are over 377 clients and the business gains between 3 and 5 new clients on a monthly basis. 60% of the business is repeat business
What Advertising/Marketing is carried out?
The business has a Website and Facebook presence
Does the business have any contract work?
No signed contracts but multiple Estate Agents, Property Management companies and Body Corporate's that use the business, some of them exclusively
What competition exists?
The normal in the industry for Property Services as supplied by this business, the difference is the quality and service level supplied that sets this business apart from the rest and keeps the client base growing.
What are the seasonal trends?
Due to the nature of the work and the client base the business is busy through out the year, please note this is a 24/7 business as in when your clients call with a problem you must service them, this the reason so many business clients exclusively use this business and stay loyal to the business
How did the Covid-19 pandemic impact the business turnover / daily operations?
None essential services could not be done during certain lock down levels, however the essential services kept the company busy.
What steps / actions have been taken to combat the effect of Covid-19 pandemic?
The business implements all the required regulated requirements, details can be discussed with the seller.
Is the business VAT Registered?
What VAT documentation is on file?
Are there up-to-date Management Accounts available?
Yes up to July 2020
What Balance Sheet and Income Statements are available?
What percentage of the business is cash/credit?
90% is EFT 10% is Cash
What is the age analysis of the debtors book?
One large Property group is on 30 Days, the balance are 14 Days, 7 Days and Next Day This means there is a small debtors book overall, it can grow a bit sometimes with the large group but there is no real risk in this.
How could the profitability of the business be improved?
The seller is comfortable with the current size of the business and has no interest in growing it larger, that being said for a new motivated owner they can build on the existing client base and extend this with advertising and marketing.
Is Seller finance available and for what amount?
Give a breakdown of staff/ functions/ length of service?
3 Foremen (Years in service 8, 4) (sellers son is one but will be leaving and the seller otherwise provides this function) 5 Other staff (Years in service 7, 7, 4, 2, 1)
Do any receive special perks or incentives?
Accounts lady gets 13th Cheque, other staff 3 Weeks extra salary, XMas Party, XMas Present, Food Basket
Are they on contract?
Foremen and Accounts have contracts and the rest are on Weekly contracts
Do any have management potential?
Yes, the one Foreman does and stands in when the owner is on leave currently
How involved is the Owner in running the business?
Owner is 100% involved in running the business
Any special arrangements for the staff related to the Covid-19 pandemic?
As per the required regulations, can be discussed with the seller
When does the current lease end?
The current premises will only be able for a maximum of six months and by then the buyer will need to relocate the business as the premises belong to a family member A buyer is also welcome to immediately relocate the business if they prefer.
Is there an option of renewal & what period?
No, six months maximum lease
What is the annual escalation %?
What are the trading hours?
While the owner starts earlier and prepares himself for the day, the staff and rest operate more along with the following time frames 07:30 - 17:00 Monday to Friday Saturday and Sunday they are available for call outs as required, this is part of the reason that the business is so highly regarded by the client base and must be seen as a 24/7 business for any prospective buyer
What is the square meters of the business?
To be discussed with the seller as to the space requirements for staff, tools and stock
Is a copy of the lease available?
Seller will draft
Do you require a licence?
No, however qualifications and skills in areas like Plumbing, Electrical and other trades will be an advantage
What lease deposit and/or other surety is required?
What are the main assets of the business?
Three bakkies R 30,000 Isuzu R 80,000 Colt R180,000 Kia 1 Ton Truck R150,000 Tools of the business
Are any items not included in the sale?
A assets register with all the assets will be provided to and confirmed with the buyer of the business
What is their overall condition?
All the vehicles and tools are kept in very good condition and one of the vehicles is basically new.
Do any require repairing?
Ongoing repairs and maintenance is performed
How have they been valued ?
Which assets are on lease/HP and with whom?
One of the vehicles which will be settled by the seller on the sale of the business
What are their settlement amounts?
None, any leases, etc on the assets will be settled by the seller on the sale of the business
Will Seller settle or Buyer to take over?
Seller will settle
Are copies of agreements available?
Are they presently insured?
Well established with a eight year track record A solid business client base of Estate Agents, Property Management Companies and Body Corporate's, some of which use the business exclusively In addition a large base of private clients Three to five new word of mouth referral clients monthly The essential services component of the business protects it from potential future lock down challenges Well staffed with long term staff members in place, plus a Foreman that can stand in for the owners when not available
The economy but due to the quality of work and level of service the business does not appear to be suffering at all
With advertising and marketing the client base can be grown
What is the reason for the sale?
The sellers are looking at immigrating and are preparing themselves for the move, this will also enable the seller to perform an extended hand over of three months to the new owner, additional time can also be discussed if required
Why is this a good business?
For all the reasons mentioned throughout this report, a profitable, growing , well established, lock down proof, well staffed and always in demand business that correctly run will provide the same and greater levels of profitability to a new owner, with the potential to expand and grow this as big as one is prepared to drive it. There are no limitations from a regulatory or area perspective, it is up to the owner!
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