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MANDATE REPORT
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1. History Background
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Fully describe the business's activities
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Filling Station with convenience store revamped in the last couple of years. There is a car wash that is independent.
This station pumps 265,000 litres on average with 22 nozzles supplying ULP 93, ULP 95, LRP and Diesel and has been upgraded to the latest pumps. Total tank capacity 115,000 litres.
There is a Convenience store as well as some rental tenants contributing to the income mix.
Turnovers
Shop R200,000
Airtime R200,000
Rental R 18,300
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How long has the business been established?
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60 Years
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How long has the owner had the business?
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5 Years since 2008
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What steps are in place to solve "load shedding" problems
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None
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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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Social responsibility as in sponsoring the local soccer, etc.
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What Advertising/Marketing is carried out
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None
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Does the business have any contract work
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One client of around R40,000
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What competition exists
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The normal for these type of businesses
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What are the seasonal trends
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Business is very steady apart from the Easter weekend and December which are quite quiet.
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3. Financial
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Is the business VAT Registered
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Yes
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What VAT documentation is on file?
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All Vat returns are with seller
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Are there up to date management accounts?
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Yes
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What audited financials are available, income statement and or balance sheets?
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2013 and earlier
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What percentage of the business is cash/credit?
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100% Cash
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What is the age analysis of the debtor’s book?
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Only one of R40,000 else there are no accounts.
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How could the profitability of the business be improved?
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Make sure they tanks are kept full to prevent dry tanks.
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Is Seller finance available and for what amount?
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No
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4. Staffing
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What is the total staff complement?
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20
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Staff Breakdown and length of service
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4 Cashiers, 1 Merchandiser, 1 x Manager, and the balance are Forecourt. The manager will need to be replaced.
The staff of 18 excluding the manager and merchandiser are split into two teams of 9 guys, 7 forecourt and 2 cashiers, they then work one week on, one week off to do 96 hours in a two week cycle. During their on week they work 12 hour shifts. They used a labour broker to properly document the system and it passes labour inspection. Staff also prefer the system. This also makes the wages very straight forward.
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Do any receive special perks, bonuses or incentives?
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Sunday lunch
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Are they on contract?
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Yes, the business makes use of the services of a labour broker.
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Do any have management potential?
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Yes, with training the cashiers.
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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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2015
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Is there an option of renewal & what period
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Yes, renewal for 5 years
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What is the annual escalation %?
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Determined by the franchisor based on the volumes sold.
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What are the trading hours?
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24 x 7
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What is the square meterage of the business?
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Office 47.25m²
Rest of the site ?
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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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DME and Retail
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6. Assets
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Is a full asset list on file?
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Seller will prepare
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Are any items not included in the sale?
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Anything not part of the sale will be pointed out by the seller to potential buyers.
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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 repairs are 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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Yes
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7. S.W.O.T. Analysis
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Strengths
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The location of the station with respect to the main road and sandwiched between business and residential areas, then having a local taxi rank.
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Weaknesses
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No Generator
Unreliability of the depot
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Opportunities
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Hold more fuel in stock
Offer accounts to surrounding business
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Threats
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None identified
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8. Reason For Sale
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What is the reason for the sale?
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Seller is tired and looking for a change.
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9. Conclusion
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Why is this a good business to buy?
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This is a solid station with good volumes, convenience store and extra rental income.
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