MANDATE REPORT
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1. History Background
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Fully describe the business's activities
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Welding and fabrication engineering business
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How long has the business been established?
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3 Years
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How long has the owner had the business?
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The owner started the business
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2. Present Market
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How does the business operate on a daily basis
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Owner run
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How are the clients attracted to the business
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The business has a great website that attracts multiple enquiries per day.
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What Advertising/Marketing is carried out
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Direct sales with the sales manager doing cold calls.
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Does the business have any contract work
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Only jobbing type contracts.
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What competition exists
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Various other business as is normal in this industry.
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What are the seasonal trends
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December is the quietest with the business closing from the 29th Dec to the 13th January.
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3. Financial
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Is the business VAT Registered
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No
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What VAT documentation is on file?
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N/A
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Are there up to date management accounts?
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Yes – Seller is drawing up
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What audited financials are available, income statement and or balance sheets?
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Seller will prepare
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What percentage of the business is cash/credit?
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95% EFT and 5% Cash (Business operates on a 50% deposit and balance on delivery)
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What is the age analysis of the debtor’s book?
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None
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How could the profitability of the business be improved?
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Sales and proper follow through on quotes issued by the business.
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Is Seller finance available and for what amount?
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Seller will consider a minimum down payment of R175,000 to the right buyer
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4. Staffing
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What is the total staff complement?
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4 staff members.
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Staff Breakdown and length of service
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1 x Sales Manager
3 x Welders/Fabricators
1 x Assistant (Temp)
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Do any receive special perks, bonuses or incentives?
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No
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Are they on contract?
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Only the salesman and one welder have a signed contract
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Do any have management potential?
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Yes the salesman
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How involved is the Owner in running the business
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100%
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5. Premises
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When does the current lease end?
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October 2014
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Is there an option of renewal & what period
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Yes, 1 year
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What is the annual escalation %?
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Seller to confirm
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What are the trading hours?
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Mon-Fri 8am to 4:30pm
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What is the square meterage of the business?
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600m²
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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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No
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6. Assets
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Is a full asset list on file?
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Yes, seller will also update to encompass all the assets
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Are any items not included in the sale?
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Owners laptop
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What is their overall condition?
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Good condition
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Do any require repairing?
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On going maintenance is performed
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How have they been valued?
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Owner valuation
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Which assets are on lease/HP and with whom?
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N / A
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What are their settlement amounts?
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N / A
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Will Seller settle or Buyer to 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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No
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7. S.W.O.T. Analysis
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Strengths
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Website with the no of enquiries that it generates.
Skills of the staff
Position is in a prime site in a major industrial area
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Weaknesses
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Seller motivation
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Opportunities
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Various industries have been left untapped.
Proper follow up on enquiries to the website
The amount of repair and maintenance jobs available in the market.
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Threats
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Economy, but that will also bring more maintenance work.
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8. Reason For Sale
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What is the reason for the sale?
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The seller wants to join his wife in her business.
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9. Conclusion
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Why is this a good business to buy?
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Nice well established business with a variety of jobs on the horizon, sales and technical skills are all in place.
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