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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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The business is a car wash and valet business. The owner has also introduced trailer rental as an additional stream of income with 4 trailers, as there is a demand for this service in the area. There are 4 wash bays and 16 detail bays. They have a store room, toilets for clients, a large netted waiting area with tables, a play gym for kids and a refurbished unfitted facility to open a snack/coffee bar. An added bonus is the water used for washing comes from a borehole on the premises. The business is well positioned on a busy road in the industrial hub with a fair amount of panel beaters in the vicinity.
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How long has the business been established?
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12 years. The Seller took this business over 3 months ago, and spent most of his reserves he had in upgrading the premises and obtaining new equipment.
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How long has the owner had the business?
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3 Months.
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What steps are in place to solve "load shedding" problems
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N/A
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2. Present Market
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How does the business operate on a daily basis
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Cars come in on a daily basis for washing and valets. Trailer rentals are done on short and long term basis.
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How are the clients attracted to the business
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Word of mouth, passing trade, some old returning customers and canvassing at the local repair shops, car dealers and panel beaters.
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What Advertising/Marketing is carried out
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Flyers, knock and drop, billboards and emails.
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Does the business have any contract work
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There are 4 companies making use of the services on a contract basis at present and this is expanding continually.
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What competition exists
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One or two in the area but not very competitive and smaller.
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What are the seasonal trends
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None to sellers knowledge
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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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None
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Are there up to date management accounts?
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Yes owner has on file with all cash slips etc.
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What audited financials are available, income statement and or balance sheets?
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None prepared yet.
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What percentage of the business is cash/credit?
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All cash except one contract which pays monthly.
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What is the age analysis of the debtor’s book?
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N/A
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How could the profitability of the business be improved?
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The refurbished room can be fitted out and turned into a snack bar/coffee shop for waiting clients as an extra income stream.
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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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10 staff members on payroll with 5 shift / freelance workers on standby.
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Staff Breakdown and length of service
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1 Supervisor, 9 washers, and 5 casuals on standby.
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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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No
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Do any have management potential?
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No
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How involved is the Owner in running the business
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Owner managed.
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5. Premises
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When does the current lease end?
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A rent of R 16,000 pm all inclusive. Rent is 3 years + 3 years option, but new lease to be concluded with the landlord. Current lease expires 2015.
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Is there an option of renewal & what period
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Yes 3 years, but new lease to be arranged
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What is the annual escalation %?
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10% current, but new lease to be created
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What are the trading hours?
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Mon-Fri 07:00 – 18:00
Sat-Sun 07:00 – 16:00
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What is the square meterage of the business?
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2000m2
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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 available and prepared for fair market value
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Are any items not included in the sale?
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The owners laptop, but relevant data files will be transferred.
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What is their overall condition?
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Good
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Do any require repairing?
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No
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How have they been valued?
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Fair market / Replacement value
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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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Established for many years, very well positioned on busy thoroughfare, in close proximity to car dealers, panel beaters and light industrial businesses. Well equipped with potential to grow into a profitable business
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Weaknesses
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Short on additional cash flow as owner has exhausted his resources on improvements.
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Opportunities
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Grow the client base by signing up more contracts and marketing the trailer rental side more aggressively. Also get the snack bar/coffee shop going to provide a better client experience.
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Threats
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None perceived
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8. Reason For Sale
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What is the reason for the sale?
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The owner also has other interests and wants to pursue an opportunity that presented itself but cannot do so as this business ties him down.
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9. Conclusion
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Why is this a good business to buy?
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Since the owner has taken over the figures has improved month on month, and with dedication and commitment the growth potential of the business is very positive. Sales can further improve and the wage bill can be trimmed resulting in better profit margins.
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