Business Overview
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1. History Background
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Fully describe the business's activities
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Providing bookkeeping and accounting - as well as tax management services to SME’s mainly in Zimbabwe, but with clients in South Africa as well. We also include Payroll and Secretarial services. The bulk of our business services retainer/and or return clients. Other services include consulting (sale of shares, business valuations, process re-engineering, training)
Roughly 10% of the clients are based in South Africa and the others in Zimbabwe. The fee income distribution is nearly the same with the Zimbabwean fees in Dollars and those in South Africa in Rands.
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How long has the business been established?
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Since 2014
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How long has the owner had the business?
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Seller started it
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2. Present Market
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How does the business operate daily?
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The company has six senior staff members (split into different divisions) who each manages their own portfolio of clients.Each senior have a small team of junior clerks in his/her team. The owner meets and interviews prospective clients and plans and assigns the work to a designated team.
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How are the clients attracted to the business
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Word of mouth
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What Advertising/Marketing is carried out
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None
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Does the business have any contract work
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Yes. Please note that 26% of the clients are on retainer.
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What competition exists
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Normal competition.
The growth experienced in the last seven years, however, shows that huge opportunities with enough business are available to a dynamic firm.
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What are the seasonal trends
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January – Tax clearances and Employee payroll reconciliations
Feb-Apr Preparation of Financial statements for Zim and filing of Tax returns.
Mar Advanced tax returns for Zim
June-July Preparation and filling of RSA Annual Financial statements and filling corporate tax returns as well as South African payroll reconciliations.
August Advanced tax returns for RSA
Sep Advanced tax returns for Zim
Dec Advanced tax returns for Zim
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3. Financial
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Is the business VAT Registered
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Yes.
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Are there up to date management accounts?
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Yes Available
It will be provided if needed
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What annual financials are available, income statement and or balance sheets?
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Yes, available.
Income Statement indicating client income (by category) and the related costs to produce that income as you are buying that client base, not the legal entity.
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What percentage of the business is cash/credit?
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Cash and credit
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What is the age analysis of the debtor’s book?
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Outstanding Debtors R214,768 which can be seen is very low.
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How could the profitability of the business be improved?
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Advertising and Growing in other locations/branches throughout Zimbabwe and South Africa. The opportunity to offshore work sourced in South Africa through a team in Zimbabwe unlocks various dynamic opportunities.
Also, they never focused on audit, but there are a number of their clients who would benefit from an annual audit.
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Is Seller finance available and for what amount?
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Yes, a structured deal will be considered on the following basis:-
(1) Finding an approved Buyer.
(2) The seller will expect an upfront cash payment, of 50% of the purchase price, on the Effective Date.
(3) The Seller will warrant turnover for 12 months, subject to acceptable terms and conditions being established for the owner’s continued involvement in the business.
(4) The balance is payable in monthly payments over 24 months.
(5) The terms and conditions regarding the warranty and ongoing involvement will be clearly defined, as well as how the price will be adjusted, either upwards or downwards at the end of the warranty period.
(6) The seller will continue to bring new clients to the business and will be rewarded accordingly.
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4. Staffing
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What is the total staff complement?
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15 Staff members
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Staff Breakdown
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Five staff members – longer than three years.
3 Clerks have been with the firm for more than a year and the others are new
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Do any receive special perks, bonuses or incentives?
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Medical Aid and Transport
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Are they on contract?
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Normal employment contracts.
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Do any have management potential?
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Yes, will be discussed with the potential buyer.
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How involved is the Owner of running the business
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The owner delegates. He is involved with daily management.The owner tends to do some of the higher-level consulting work, but delegates most tasks. and is involved with client onboarding. The owner is always approachable when needed & liaises with the clients & staff regularly.
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5. Premises
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When does the current lease end?
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31 December 2022
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Is there an option for renewal & what period
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Yes
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What is the annual escalation %?
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5%
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What are the trading hours?
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8 am to 5 pm
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What is the square meterage of the business?
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340m2
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Is a copy of the lease available?
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Yes
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Do you require a licence?
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Yes – Practicing certificate from accounting regulator (Could be ACCA/SAICA)
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6. Assets
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Is a full asset list on file?
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Yes
Available on request
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Are any items not included in the sale?
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Owner’s vehicles
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What is their overall condition?
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Good
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Do any require repairing?
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No
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How have they been valued?
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Replacement
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Which assets are on lease/HP and with whom?
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No
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What are their settlement amounts?
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N/A
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Will Seller settle or Buyer take over?
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N/A
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Are copies of agreements available?
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N/A
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Are they presently insured?
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Yes
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7. S.W.O.T. Analysis
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Strengths
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Good reputation due to good customer care.
Good mixture of clients in different industries.
None of the clients resigning will put the company at risk.
Renowned clients.
Above average growth.
Well trained staff and staff are trusted by clients.
Good location.
Good mixture of services that cross-sell easily.
Good IT infrastructure
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Weaknesses
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One location servicing all clients using Cloud Technology
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Opportunities
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Marketing and sales will undoubtedly increase growth.
Focused new products such as estate planning and executor services can be added.
Other bespoke opportunities, which there are a few, can be discussed with the owner.
Offshoring work from South Africa to be done in Zimbabwe.
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Threats
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The macro economical situation in Zimbabwe although this has not affected the company other than on the regulatory front.
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8. Reason For Sale
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What is the reason for the sale?
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Personal Reasons
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9. Conclusion
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Why is this a good business to buy?
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Staff have good relationships with their own clients.
Steady above-average growth regardless of no adverting/marketing.
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