Fully describe the business's activities?
This long established sewing machine and related sewing products business is situated in a large Garden Route town. The business sells and services almost all major brands of domestic and industrial sewing machines, both new and second hand machines. Also a comprehensive range of haberdashery which is a major contributor to the profitability. They also sell and service over-lockers and embroidery machines for the domestic and industrial markets. Training is included and also offered if requested by clients. Training is offered on all machines. Servicing and repairs on its own is a profit center and an important and well defined part of the business. This business is ideal for a husband and wife team.
How long has the business been established?
Over 15 years.
How long has the owner had the business?
How does the business operate on a daily basis?
The business has a very well structured front shop team overseen by two of the Owners in conjunction with a very experienced and motivated Manager. One director handles all administration and personnel and another oversees the sales and training aspects of the business with the manager and sales staff. The third director heads-up the servicing and repairs side of the business. He is supported by a team of two others who do in-store repairs as well as call outs to industrial textile factories. The premises are well laid out with front shop, store areas and the servicing and repairs out of view of the customers, but on-site too. Premises are in prime position on a main street with secure front of shop parking.
How are the clients attracted to the business?
An actively used Face Book page is used to promote products and forthcoming events. A destination store after many years of trading in the same location. Product offering is comprehensive and products not readily found elsewhere. Servicing and repairs offering is very well supported by domestic and industrial customers alike throughout the region. Predominately Home Sewers, Hobbyists, Quilters, Textile factory owners, Fashion designers, Scholars and other creative people.
What Advertising/Marketing is carried out?
Apart from a limited amount of marketing through social media, there is not much other marketing activity required. This is a destination store and well known in the region for their product offering and services.
What competition exists?
There are other suppliers of product in the region, but few can compete with the services and variety of products as offered by this business. The large chain stores and online stores also sell machines but training is not included and these clients make use of this stores training and servicing facilities to obtain product knowledge and often upgrade to a superior product, which improves the profitability of this business.
What are the seasonal trends?
Business is not impacted by seasonality. The business closes over Christmas for three weeks as this is the annual close down of the textile industry. It must be pointed out that with the solid growth of the retail sales, it may benefit to stay open over this period in the future.
How did the Covid-19 pandemic impact the business turnover / daily operations?
The Covid-19 impact has resulted in an increase in sales of new machines, both in the domestic and industrial sectors as people look for new opportunities and with the demands for self employment. It is worth noting that the turnover of this business over this past period has exceeded all prior years over the same period despite the lockdown.
What steps / actions have been taken to combat the effect of Covid-19 pandemic?
Strict controls on entering the business have been implemented, and have been well received and appreciated by their customers. Social distancing during training and use of masks and sanitising are of paramount importance to the Management.
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?
As and when required.
How could the profitability of the business be improved?
The implementation of online sales of machines, haberdashery and spares is a strong business opportunity. There are opportunities to expand training needs to categories such as quilting and general sewing since there is an ongoing demand.
What is the total staff complement?
There are 8 employees inclusive of the Owners.
Give a breakdown of staff/ functions/ length of service?
There are three Owners who oversee the following functions: One Member handles all management functions and administration. Second Member handles the front shop and the training courses etc (Currently on a part time basis). The third Member handles the servicing and repairs. Store Manager works with customers and staff on sales and general front of shop. Two sales assistants one of whom is fluent in a third language which is advantageous. Two repair and servicing technicians ...one of whom is a part time position.
Are they on contract?
All staff have employment contracts in place.
How involved is the Owner in running the business?
All three Owners are involved in the operational aspects of the business, although one member is now playing a lesser role for personal health reasons.
Any special arrangements for the staff related to the Covid-19 pandemic?
All staff and customers adhere to a very strict protocol in prevention of Covid -19.
When does the current lease end?
The business currently renews the lease on an annual basis. A new lease will be negotiated with the landlord at time of take over.
What are the trading hours?
Monday to Friday: 08-30 to 4-30pm. Saturdays: 09-00am to 12-00 noon. Closed on Public Holidays and on Sundays.
What is the square meters of the business?
Is a copy of the lease available?
What are the main assets of the business?
A branded vehicle is included in the sale. The main asset is new stock to the value of at least R500,000 at retail selling price will be included in the sale. Added to that there are many second hand machines that are saleable as well as many old machines that are used for spare parts. A comprehensive range and stock supply of haberdashery and accessories are also included.
Are any items not included in the sale?
Yes, there are minor items that will be negotiated with the prospective Buyer.
What is their overall condition?
The assets are well maintained.
Are they presently insured?
Well established destination store with customers based far and wide across the Garden Route Award winning business with supplier agreements in place. The supplier base is very supportive and values the support of this business. An Excellent Reputation. Customer data base dating back to inception which can be utilised if required. WhatsApp group broadcasts promotional activities and enjoys great response. Business has a base of old machines and therefore a range of spares not found elsewhere. Service and repairs division remains extremely busy with instore work and call-outs.
There are no weaknesses so long as the Buyer has a passion and understanding of retail and customer care.
Development of the online business offers unlimited opportunities. Introduce a monthly newsletter and send to data base customers. The business is also in the position to start a training school as there is a definite demand.
There are no obvious threats to a focused and motivated Buyer.
List some of the main features on this business
This business has been in existence since 2005 and as such has a very strong following and client base. Part of the success is that it is kept well stocked at all times. The Directors and their close team of staff are very well known and respected in the region and have an extremely loyal following. There are trading agreements in place with their long standing suppliers. The industry is very personal and as such relationships with customers are ongoing and very close. People come specifically from across the regions of the Klein Karoo and Overberg just to make sure that they deal with this business.
What is the reason for the sale?
There are personal health reasons for them wishing to go to the market. Two of the Owners would definitely like to retire from the business whilst the 3rd is prepared to discuss an extended exit strategy.
Why is this a good business?
This is an excellent business for somebody who enjoys the retail environment and interacting with customers. Ideally it would suit a husband and wife team, where the one person has a penchant for administration and general management functions and the other has a passion for sewing, embroidery and quilting type hobbies. The customer relationship one is very personal and the owners would play an active role within the sewing community. The business has shown consistent year on year growth and is well known as the main service and product provider in the greater Garden Route and Klein Karoo region (SWD). The Directors are prepared to consider an extended hand over period as may be required by the Buyer. The Service and Repairs Director would be prepared to remain involved on a freelance basis as long as may be required.
What is the price plus stock and the profit?
The Selling Price INCLUDES at least R500,00-00 of new retail stock a well as many second hand sewing machines which are saleable, as well as large stocks of spares and haberdashery and sundry items. Sale includes all the stock on hand at time of takeover. Selling price inclusive of above is R2,850,000. Annual profit is in the region of R950,000+.
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