MANDATE REPORT

1. History Background

Fully describe the business's activities

This is a traditional dry cleaner with laundry that offers washing, drying and ironing. The business also does alterations and tailoring for it’s clients.

How long has the business been established?

18 years

How long has the owner had the business?

Current owner has the business 6 years

2. Present Market

How does the business operate on  a daily basis

The business is owner run, one of the staff members opens in the morning at 7am with the owner coming in around 9am, the owner closes at night

How are the clients attracted to the business

Word of mouth mainly

What Advertising/Marketing is carried out

The shopping centre has marketing days to attract clients to the centre. They have also distributed pamphlets in the past but other than that there is no real marketing or advertising being done.

Does the business have any contract work

The business is contracted to cleaning the overalls of the local supermarket as well as for another organisation in the area. Then there are three depots that make use of the Dry Cleaner with collections from two of them.

What competition exists

Closest competition is at least 6km away.

What are the seasonal trends

Winter is peak season for the business and then again December and January.

3. Financial

Is the business VAT Registered

No

What VAT documentation is on file?

N/A

Are there up to date management accounts?

Yes up to Feb 2014 and busy with current year

What audited financials are available, income statement and or balance sheets?

Yes, 2012 with seller, 2013 at the accountant who is also busy with the 2014 financials.

What percentage of the business is cash/credit?

95% Cash and 5% EFT

What is the age analysis of the debtor’s book?

None

How could the profitability of the business be improved?

More marketing, canvas business in the area such as Guest houses, restaurants, businesses for business clothes such as overalls, etc.

Is Seller finance available and for what amount?

No

4. Staffing

What is the total staff complement?

7 staff members.

Staff Breakdown and length of service

3 x Iron staff

2 x Dry Cleaning staff

1 x Tailoring and alterations

1 x Washing and front of house, also opens

Do any receive special perks, bonuses or incentives?

One gets 10% commission on alterations and tailoring

Are they on contract?

No

Do any have management potential?

Yes two of the staff members do

How involved  is the Owner in running the business

The owner is daily in the business from 9am onwards till closing

5. Premises

When does the current lease end?

August 2014, busy with negotiations for a renewal of the  lease

Is there an option of renewal & what period

Yes for 5 years

What is the annual escalation %?

10%

What are the trading hours?

Mon-Thu       7am – 6:30pm

Fri               7am – 6pm

Sat              8am – 2pm

Sun             Closed

What is the square meterage of the business?

±98m²

Is a copy of the lease available?

Yes

Do you require a licence?

No

6. Assets

Is a full asset list on file?

Yes, seller is adding values to current asset list

Are any items not included in the sale?

Embroidering machine

Industrial sowing machine- seam binder

In kitchen, 2 cabinets with 2 drawers each

What is their overall condition?

Good condition

Do any require repairing?

Ongoing repairs and maintenance is performed

How have they been valued?

Owner valuation

Which assets are on lease/HP and with whom?

N / A

What are their settlement amounts?

N / A

Will Seller settle or Buyer to take over?

N / A

Are copies of agreements available?

N / A

Are they presently insured?

Yes

7. S.W.O.T. Analysis

Strengths

Well established and very well managed.

The centre is getting busier and the area surrounding is a growing area.

Centre puts on regular special days to attract clients

Weaknesses

No real weaknesses identified

Opportunities

Business is running at around 80% capacity before new staff or equipment will need to be added.

There is the potential for a KFC coming to the complex

Then there is also 5,000 post boxes coming to the centre right by the shop.

Threats

None identified

8. Reason For Sale

What is the reason for the sale?

The seller is relocating to the cape

9. Conclusion

Why is this a good business to buy?

Profitable, well run and managed business with scope for growth, seller only selling because they are relocating to the Cape.