Sectors / Category

Annual turnover

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  • Mandate: 34960
  • Added: 22 Nov 2021
  • AFS
  • 298

Butchery with Property in Farming Town

North West, North West
298
Mandate 34960
Added 22 Nov 2021
R 1,430,000* ZAR
Stock: R 0
Assets: R 2,351,000
R 5,976 ZAR
Frans Joubert
(PRINCIPAL)
Aldes Potchefstroom
North West, Potchefstroom
North West, Potchefstroom
Summary

Butchery serving local community for more than 50 years on large property, with potential revenue and market expansion upsides.

Butchery with Property in Farming Town
SELLING PRICE AFS
R 1,430,000* ZAR
Stock: R0
Assets: R2,351,000
R 5,976 ZAR
Summary

Butchery serving local community for more than 50 years on large property, with potential revenue and market expansion upsides.

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Fully describe the business's activities?
Butchery serving local community for more than 50 years on large property

How long has the business been established?
More than 50 Years

How long has the owner had the business?
Nine Years

Products and Services Offfered
The standard range of Butchery products are offered. The butchery has its own Wors recipe that is sought after, as well as their Biltong products. They do cold meats as well as local requirements from time-to-time as required by the market that includes Bones, Lungs. They also stock large chickens that is sourced from farm in area and have customers driving from surrounding towns for some of these products. They recently started supplying marinated Sosaties to butcher in one of the surrounding towns as well as farmstall in area, they expect this relationship to continue. The owner also occasionally bakes different products yet time is constrained to do this fulltime. The local "Tuisnywerheid" also places their products for sale in the Butchery

What is the unique value proposition of the business?
There are no real other butcheries in the area. The product quality is fantastic and the service done with respect and local friendliness. There are no issues with beggars and uncomfortable characters surrounding the store, therefore people come from surrounding town to buy their products without fear of being prone to harassment, pickpockets and crime from central town in surrounding areas that has become a problem.

How does the business operate on a daily basis?
Through the Store itself only, with walkin business

How are the clients attracted to the business?
Quality of Products, Cleanliness. Wors and Biltong own Recipes

What Advertising/Marketing is carried out?
Have a WhatsApp group that updates on products, promotions are sent. No other advertising at this point

Does the business have any contract work?
No real long term contracts but there are some schools and businesses that regularly trades with the butchery. There is a relationship currently being formed with surrounding town butcher for sosaties and road stall in area, yet these are not formal.

What competition exists?
There is an informal Sheep and Pig provider in town, yet the quality of the product is questionable and therefore customers remain consistent

What are the seasonal trends?
December the busiest period

How did the Covid-19 pandemic impact the business turnover / daily operations?
Covid had a drastic impact on most businesses, yet the butchery had a relatively stable income over the period. There was a change in buying behaviour as less T-Bones and Rump steaks are now being sold due to economic pressures.

How is Load Shedding Impacting Business
There is a generator on site so operationally there was no impact, albeit that fuel costs is naturally higher

Is the business VAT Registered?
No

Are there up-to-date Management Accounts available?
Yes

What Balance Sheet and Income Statements are available?
2021

What percentage of the business is cash/credit?
Mostly Cash/Card

What is the age analysis of the debtors book?
N.A

How could the profitability of the business be improved?
There is significant potential for someone that is dedicated to the business in terms of time available as well as having the capital. The community has a definite need for fresh produce that could be supplied as well as bakery products. Offering Blockman services to the hunting farms in region is an opportunity that could be activated with existing infrastructure, only licensing needs to be obtained. Manufacturing and distributing larger quantities of Biltong under own brand could be explored, especially since C Grade meat yields better tasting biltong and meat products. The local boarding schools, old age home, hotel, farms and regional institutions also hold immense potential. Could also explore selling live sheep and pigs in the area behind the butcher on a regular basis to cater for this segment in the market. Experienced Butcher that also understands the informal segments requirements and pricing points could position pre-packed products for distribution to Satellite points in surrounding areas Meal services can be explored.

How can revenues be boosted?
There is significant potential for someone that is dedicated to the business in terms of time available as well as having the capital. The community has a definite need for fresh produce that could be supplied as well as bakery products. Offering Blockman services to the hunting farms in region is an opportunity that could be activated with existing infrastructure, only licensing needs to be obtained. Manufacturing and distributing larger quantities of Biltong under own brand could be explored, especially since C Grade meat yields better tasting biltong and meat products. The local boarding schools, old age home, hotel, farms and regional institutions also hold immense potential. Could also explore selling live sheep and pigs in the area behind the butcher on a regular basis to cater for this segment in the market. Experienced Butcher that also understands the informal segments requirements and pricing points could position pre-packed products for distribution to Satellite points in surrounding areas Meal services can be explored.

Revenue Overview Last Period
Sales for the 6 month period ending February 2021 were at R985,071, making an assumption that revenues will at least be double that for full year the revenues are projected to reach R1,9m. Standard Butchery Products. The Gross Margin on the financials indicates a Gross Margin of about 46%

What is the total staff complement?
Including owner there are 5 people. The Main Blockman thats been with company for more than 30 years, the secondary Blockman that is excellent with making of Wors and Cold meat products. Two general workers/cleaners that come on alternate days

Do any receive special perks or incentives?
They have the option to buy limited amounts on credit during the month.

Do any have management potential?
Yes both the Blockman are exceptional and dedicated people

How involved is the Owner in running the business?
Constantly involved, although Blockman manages when owner not in store

Property Summary Description
Corner Property consisting of Building that houses Butchery as well as office that is currently rented out to administrative business. The building is approx 300 square meters and the property overall approximately 2,230 square meters. The property on Deeds Office records is split across two properties,

What are the main assets of the business?
The Property, Cooling Rooms, Generator and Butchery Equipment, See Asset List. The business Recipes are recorded and will be made available to new owner. Corner Property consisting of Building that houses Butchery as well as office that is currently rented out to administrative business. The building is approx 300 square meters and the property overall approximately 2,230 square meters. The property on Deeds Office records is split across two properties

What is their overall condition?
All working condition

How have they been valued ?
Owner estimations based on industry resources input.

Weaknesses?
The fact that personal loan payment is paid by Butchery is placing pressure on activation revenue generation initiatives as capital is not available to activate these. Stock control could be improved.

Opportunities?
Expanding the business to be a mini Supermarket that can supply a larger variety of products above will yield positive results. Satellite offices that is serviced by main butchery, with these satellite points away from Central CBD that will attract customers that are afraid of these crime "hotspots", rent on these should also be lower as they should not be placed in the centre of these towns, these should include the Biltong products. The property itself is large, adding a borehole could unlock potential to plant organic vegetables that could be supplied into market. Adding Offices on property could attract rental income.

What is the reason for the sale?
Owner wishes to retire. Personal loan repayment from butchery placing block on expanding services to cater for needs of community ad unlocking greater revenues for the business. Property although large remains underdeveloped as well as a result, therefore losing out on additional opportunities.

Why is this a good business?
Extended History - Great potential to service the local community more actively Expanding the business to be a mini Supermarket that can supply a larger variety of products above will yield positive results. Satellite offices that is serviced by main butchery , with these satellite points away from Central CBD that will attract customers that are afraid of these crime "hotspots", rent on these should also be lower as they should not be placed in the centre of these towns, these should include the Biltong products. The property itself is large, adding a borehole could unlock potential to plant organic vegetables that could be supplied into market.

What is the price plus stock and the profit?
R1,430,000 Plus VAT where it may be applicable

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AGENCY DETAILS

Aldes Potchefstroom

1 members
41 mandates
North West , Potchefstroom
Mia Meent Unit 3 6 Fick Street Potchefstroom
Potchefstroom

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