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.