MANDATE REPORT
|
1. History Background
|
Fully describe the business's activities
|
This is a neat well positioned biltong shop. It is right in the entrance of a shopping centre in Pretoria East. All the people on the way into the centre and the supermaket walks right past your shop. It is up to you to tap into this client base. Quality of product and position is there. Add a bit of marketing flair in this become opportunity.
|
How long has the business been established?
|
12 years, so the position must be great.
|
How long has the owner had the business?
|
3 Years
|
What steps are in place to solve "load shedding" problems
|
N/A
|
2. Present Market
|
How does the business operate on a daily basis
|
Manager run with owner only involved in orders to suppliers, prepared by the manager, and the financial aspects of the business, like banking and paying suppliers.
|
How are the clients attracted to the business
|
Position, clients walk right past it into and out of the centre
|
What Advertising/Marketing is carried out
|
None
|
Does the business have any contract work
|
No
|
What competition exists
|
Supermarket also sells biltong in the mall, but much better quality from this shop
|
What are the seasonal trends
|
Busier around sport days, April and December holidays
|
3. Financial
|
Is the business VAT registered?
|
Yes the seller is VAT Registered. You will be buying one of the shops of the seller as a going concern, thus you must either be VAT registered as the buyer or you will be paying VAT of 14 on the transaction.
|
What VAT documentation is on file?
|
N/A
|
Are there up to date Management Accounts available?
|
Yes
|
Balance Sheet and Income Statements?
|
Not applicable for this shop
|
What Percentage of the business is cash/credit?
|
50% Cash, 50% Credit Card
|
Age Analysis?
|
N/A
|
How can it be more profitable
|
More sales from product range expansion
|
Seller Finance available?
|
No
|
4. Staffing
|
What is the total staff complement?
|
2 staff
|
Staff Breakdown and length of service
|
1 Manager with business for 2 years and 1 casual for weekends
|
Do any receive special perks, bonuses or incentives?
|
Manager get salary and commission.
|
Are they on contract?
|
One is permanent, 1 is casual
|
Do any have management potential?
|
Yes, manager in place
|
How involved is the Owner in running the business
|
Owner is only taking care of suppliers and finance.
|
4. Premises
|
When does the current lease end?
|
Oct 2014.
|
Is there an option of renewal & what period
|
Yes, 36 months option.
|
What is the annual escalation %?
|
10%
|
What are the trading hours?
|
Mon - Fri 09:00-19:00
Sa - 09:00-17:00
Sun - 09:00-14:00
|
What is the square meterage of the business?
|
12m2
|
Is a copy of the lease available?
|
Yes
|
Do you require a licence?
|
No only trade license/health certificate
|
6. Assets
|
Is a full asset list on file?
|
Yes
|
Are any items not included in the sale?
|
No
|
What is their overall condition?
|
Good
|
Do any require repairing?
|
No
|
How have they been valued?
|
Replacement Value
|
Which assets are on lease/HP and with whom?
|
None
|
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
|
4. S.W.O.T. Analysis
|
Strengths
|
Position, Ease Of Operation, Manager Run.
|
Weaknesses
|
Lack of owner involvement but that is beneficial to the buyer. Lower return if manager in place, but income then semi-passive. High rent, but good position
|
Opportunities
|
Owner can run this shop himself and make an extra R9,000 profit per month, or keep the manager and have a semi-passive income
|
Threats
|
None perceived
|
|
What is the reason for the sale?
|
Owner has another shop in another suburb 20km away and is also full time employed and this no longer fits his portfolio.
|
|
Why is this a good business to buy?
|
Manager run, well positioned, easy to run business.
|