MANDATE REPORT
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1. History Background
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Fully describe the business's activities
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DVD rental outlet where customers come to rent movies, games and series. Older movies are sold bi-annually on a special sale day earning the business an additional R 12,000 income pa.
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How long has the business been established?
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6 years
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How long has the owner had the business?
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3.5 years.
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What steps are in place to solve "load shedding" problems
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The shop next door has a generator and shares with the Video outlet.
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2. Present Market
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How does the business operate on a daily basis
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The Assistant opens and closes the shop daily and helps the clients with their rentals. The owner comes in from time to time to supervise any queries and to purchase new releases.
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How are the clients attracted to the business
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Word of mouth. Walk-in customers and people living in the area frequent the establishment.
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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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No
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What competition exists
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Various in the area but not in close proximity.
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What are the seasonal trends
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Busier during December
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3. Financial
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Is the business VAT Registered
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No
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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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Properly kept set of management account, cashups and other financial information is available to a prospective buyer to confirm the numbers of the business
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What percentage of the business is cash/credit?
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Mostly cash, some credit cards.
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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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N/A
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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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2 x Permanent Assistants working shifts and 1 x casual assisting over weekends
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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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Permanent
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Do any have management potential?
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2 x Assistants runs the shop
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How involved is the Owner in running the business
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Very little, and due to family pressure in another family business, owner now spends hardly any time there, thus this can be almost considered a forced sale.
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5. Premises
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When does the current lease end?
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A rent of R 4750.00 pm all inclusive. (W & L etc)
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Is there an option of renewal & what period
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Yes, but unsure of period, although no problems are foreseen.
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What is the annual escalation %?
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Not sure, but new lease to be created
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What are the trading hours?
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Mon-Sun
10:00 – 20:00
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What is the square meterage of the business?
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40m2
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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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Film and Publications Board notification.
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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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No
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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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Almost a passive income for owner. Staff runs day to day operations. Stable income, with low overheads and easy to manage business. Well situated is suburban mall with good client support.
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Weaknesses
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The size of the shop is small and limits immediate expansion, although it forces owner to keep it streamlined.
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Opportunities
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Grow the client base by advertising, marketing and promotions, as this is not done at all and increase Blueray and Games side.
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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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The owner’s father passed away and she inherited his engineering business on the East Rand. It is very difficult to run between the two businesses and thus the sale.
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9. Conclusion
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Why is this a good business to buy?
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An easy to run business with a good return of investment waiting for a new owner.
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