Sectors / Category

Annual turnover

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  • Mandate: 34612
  • Added: 13 Apr 2021
  • AFS
  • 206

Iconic Coffee shop in Popular Shopping Centre

Eastern Cape, Port Elizabeth
206
Mandate 34612
Added 13 Apr 2021
R 1,520,000* ZAR
Stock: R 20,000
Assets: R 788,000
R 39,576 ZAR
Willem Smuts
(PRINCIPAL)
Aldes Algoa
Eastern Cape
Eastern Cape
Summary

This Coffee shop was established in 2002 in a popular beachfront shopping center and has always been an Iconic meeting place in the suburb. This business has always been well supported by locals and produced an average monthly turnover for the 12 month period to 29 February 2020 in excess of R 220 000 per month and targeting a Gross Profit of 60% on turnover.

Iconic Coffee shop in Popular Shopping Centre
SELLING PRICE AFS
R 1,520,000* ZAR
Stock: R20,000
Assets: R788,000
R 39,576 ZAR
Summary

This Coffee shop was established in 2002 in a popular beachfront shopping center and has always been an Iconic meeting place in the suburb. This business has always been well supported by locals and produced an average monthly turnover for the 12 month period to 29 February 2020 in excess of R 220 000 per month and targeting a Gross Profit of 60% on turnover.

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Fully describe the business's activities?
This coffee shop is well situated in the entance to a very popular beachfront shopping centre. the shopping centre also hosts a huge grocery retailer and most bank branches resulting in high foot traffic in the area. The owner/manager is very creative in her offering and well supported by locals and visitors to the centre.

How long has the business been established?
The business was established in 2002

How long has the owner had the business?
The owner has had the business since 2018 and wishes to sell as the family has been transferred to Johannesburg.

Give a breakdown between sit-down, takeaways and deliveries
Sit-down meals is 90 % with a limited take-away sales.

How does the business operate on a daily basis?
The kitchen staff enter at 7:15 am and start the daily routine of stock taking of fast moving stock and placing orders as from7.30am Preparation is also started and the door opens at 7:30am for the public. The coffee shop has a comprehensive breakfast and lunch menu which is revised on a regular basis and offered all other services expected from a upmarket Espresso Bar.

How are the clients attracted to the business?
The Coffee shop is well established and the name is well known throughout the nabourhood. Situated at the entrance to a popular seaside shopping centre which also hosts a well-known Grocery retailer, most brands of banks, pharmacies and associated shops which attract huge foot traffic. The coffee shop is also well known for its creative menu and well manicured dishes.

What Advertising/Marketing is carried out?
The best form of advertising is by word of mouth. I do not think there is resident of the suburb that is not aware of this coffeeshop. The centre also advertises on behalf of all the tenants.

Does the business have any contract work?
No contract work but huge recurring customers to the coffee shop.

What competition exists?
Limited competition from other coffeeshops in the centre.

What are the seasonal trends?
Consistent sales throughout the year with a slight surge in December, Easter holidays and during annual events ( Splash festival, Iron Man Competition, etc.)

How did the Covid-19 pandemic impact the business turnover / daily operations?
The Covid 19 Pandemic has had a devastating effect on the hospitality industry. The Total lock-down of April and May 2020 resulted in zero sales and the landlord did give concessions to assist the tenants. As the lock-down eased sales slowly started to recover and has virtually returned to normal.

What steps / actions have been taken to combat the effect of Covid-19 pandemic?
The coffee shop adhered to all the protocols as set out by the Department of Health. Social distancing, sanitisation and wearing of masks was strongly enforced. This did have an effect on sales of the business.

Is the business VAT Registered?
Yes, the business is VAT registered.

What VAT documentation is on file?
Bi -monthly VAT returns as required by SARS

Are there up-to-date Management Accounts available?
Yes, up to date management Accounts available.

What Balance Sheet and Income Statements are available?
All AFS available up to February 2021

What percentage of the business is cash/credit?
The business is 100% cash.

Is Seller finance available and for what amount?
Seller finance is not available. The owner has been transferred to Johannesburg and wishes to make a clean break from the business.

What is the total staff complement?
The current Staff compliment is 10 staff members which range from Manager to Waiters.

Give a breakdown of staff/ functions/ length of service?
A break-down of staff will be given to serious buyers.

Do any receive special perks or incentives?
The manager is remunerated at a market related fee as per the hospitality industry. All staff members are remunerated as per the Sectoral Determination set out by the department of labour.

Are they on contract?
All staff members are on Contract. A new staff member would join a fixed-term contract and thereafter placed on a Permanent contract.

Do any have management potential?
The current manager has excellent managerial skills and has a good working relationship with the staff.

How involved is the Owner in running the business?
The current owner is a hands on operator and did spend 80% of the operating time at the coffee shop, but since transferred to Johannesburg and managing the manager on a remote basis.

When does the current lease end?
The current owner has just resigned a lease till March 2022 and can be extended. The current owner will assist the new owner in negotiating a lease contract on similar terms as the present lease conditions.

Is there an option of renewal & what period?
To be negotiated between the new owner and the Centre Management..

What are the trading hours?
The current trading hours are 7.30 am to 5 pm Mondays to Saturdays and 8 am to5 pm on Sundays. The trading hours are flexible and the new owner can reduce or extend the hours as he wishes..

What is the square meters of the business?
The Shop is 126m2 and the kitchen is 27m2

Is a copy of the lease available?
A copy of the lease agreement is available.

Do you require a licence?
The Coffee-shop has a liquor licence, and the new owner may trade on this licence till transferred onto new owners name.

What lease deposit and/or other surety is required?
One months rental deposit is required.

What are the main assets of the business?
The main asset of the business is the iconic reputation as a well situated, established, value for money, destination coffee shop. a full list of physical assets ( Equipment, furniture and fittings, electronic equipment etc.)is available and in a well maintained condition.

Are any items not included in the sale?
all assets on the list are included in the sale.

What is their overall condition?
Excellent working condition. The seller guarantees that all equipment will be in an excellent working condition.

Do any require repairing?
The equipment is regularly serviced and no repairs are required at this stage.

How have they been valued ?
Been valued at a realistic market-related value.

Which assets are on lease/HP and with whom?
All assets are fully paid.

Strengths?
This Espresso Bar/Coffee-shop has been established since 2002 and has stood the test of time. Other Coffee-shops have opened and closed as they are not well situated or offer the same ambiance as this coffee shop. The shopping centre is on the beachfront and hosts a popular grocery retail store, major banks and other redline shops which attract foot traffic.

Weaknesses?
Coffee shops are very competitive and effective management is essential.

Opportunities?
This coffee-shop is well situated, has a good reputation amongst local residents and holiday seekers. unfranchised, which gives the owner room to be creative in menu designs and presentations. This is an ideal opportunity for a creative person for a passion for the hospitality industry.

Threats?
This coffee shop is fully compliant to all HASAP requirements as set out by the Department of health. The liquor license is in place and the coffee shop may trade accordingly. Security and Fire threats are managed by the Centre Management.

What is the reason for the sale?
The family of the owner is transferred to Johannesburg.

Why is this a good business?
This business has stood the test of time and survived through numerous crises. Well established, profitable, and excellent reputation as Iconic rendezvous for local patrons.

What is the price plus stock and the profit?
This business has produced an OperationalProfit in excess of R 470 000 for the period 1 March 2019 to 29 February 2020 and the asking price is R 1 500 000. The average month-end stock value is estimated at R 20 000, but will be determined by a physical stock take at the Effective Date of take-over .

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FRANCHISE DETAILS

Aldes Algoa

1 members
16 active mandates
Eastern Cape
16 Frykenhuis Street, Summerstrand
6001

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