MANDATE REPORT

1. History Background

Fully describe the business's activities

This hair salon is located in an upmarket area of Pretoria. The business operates without any owner involvement with 3 staff members doing hair, make-up and nails.  There are 7 seats so it can double in size and various additional services can also be introduced.

How long has the business been established?

Since 2013.

How long has the owner had the business?

Since inception

What steps are in place to solve "load shedding" problems

N/A

2. Present Market

How does the business operate on a daily basis

The business is managed and operated by the staff members.

How are the clients attracted to the business

Excellent stylists, products and personal attention to an established client base.  The business get walkin’s and phone’ins as well due to its visible location next to the suburbs busy shopping centre.

What Advertising/Marketing is carried out

They have a Facebook Page, and sometimes do some marketing on Google, Flyers, SMS’s and the signage outside also attracts clients

Does the business have any contract work

No, but they have an established client base

What competition exists

Normal spread of other salons in the area.

What are the seasonal trends

Quiet in January/February and busier Nov/Dec

3. Financial

Is the business VAT registered?

No

What VAT documentation is on file?

N/A

Are there up to date Management Accounts available?

Yes

Balance Sheet and Income Statements?

No, but they are in process

What Percentage of the business is cash/credit?

100% cash business

Age Analysis?

N/A

How can it be more profitable

The salon has 3 staff members but the salon has space for 7 staff.  You can also introduce other services.  Obviously owner involvement will have a significant impact.

Seller Finance available?

No

4. Staffing

What is the total staff complement?

3 staff

Staff Breakdown and length of service

3 stylists, and with the business since inception

Do any receive special perks, bonuses or incentives?

Commission structure will be explained to a buyer.

Are they on contract?

No

Do any have management potential?

Yes

How involved  is the Owner in running the business

Owner is involved with the financial management of the business on a day to day basis but the operations are run by the senior staff member.

4. Premises

When does the current lease end?

May 2015.

Is there an option of renewal & what period

Yes, 12 months option.

What is the annual escalation %?

10%

What are the trading hours?

Monday - Saturday 08:30-18:00

What is the square meterage of the business?

65m2

Is a copy of the lease available?

Yes

Do you require a licence?

No

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, less than 24 months old

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

Well trained staff, excellent location, high income area, quality products and an established brand.  Facebook also have over 600 likes and the website had over 13,000 visits since they opened.

Weaknesses

Lack of owner involvement but that is beneficial to the buyer

Opportunities

Room to double the staff and thus double the turnover.  An owner will also contribute significantly

Threats

None perceived

What is the reason for the sale?

Seller relocating overseas.

Why is this a good business to buy?

Cash based business in a great location with a good staff core and established client base.