MANDATE REPORT
|
1. History Background
|
Fully describe the business's activities
|
This is a retail liquor store selling liquor and allied products to walk-in customers.
|
How long has the business been established?
|
+- 10 years, the owner is not sure. He bought the business in Sept 2011.
|
How long has the owner had the business?
|
Since Sept 2011
|
2. Present Market
|
How does the business operate on a daily basis
|
Walk-in customers purchase goods in the store and passers-by are drawn to shop with A-Frame adverts.
|
How are the clients attracted to the business
|
Word of mouth, A-Frame on pavement and loyal old customers plus specials in-store.
|
What Advertising/Marketing is carried out
|
No official outside advertising.
|
Does the business have any contract work
|
No.
|
What competition exists
|
There are 2 other stores in proximity but not on doorstep.
|
What are the seasonal trends
|
December and January are more quiet than rest of year.
|
3. Financial
|
Is the business VAT Registered
|
Yes
|
What VAT documentation is on file?
|
Records kept on computer.
|
Are there up to date management accounts?
|
No, owner busy preparing
|
What audited financials are available, income statement and or balance sheets?
|
No audited financials available, only records kept by owner.
|
What percentage of the business is cash/credit?
|
Only cash and cards.
|
What is the age analysis of the debtor’s book?
|
N/A
|
How could the profitability of the business be improved?
|
With initial investment in more marketing, advertising, carrying more stock and specials, turnover will improve. Also minor revamp and painting will improve customer experience.
|
Is Seller finance available and for what amount?
|
No
|
4. Staffing
|
What is the total staff complement?
|
2 staff members.
|
Staff Breakdown and length of service
|
2 X Cashiers. Been employed 1 year and 6 months respectively.
|
Do any receive special perks, bonuses or incentives?
|
No
|
Are they on contract?
|
Permanent staff
|
Do any have management potential?
|
No
|
How involved is the Owner in running the business
|
Owner spends about 80% of his time at the business.
|
5. Premises
|
When does the current lease end?
|
Lease ends Sept 2013 with option to renew. Currently rental is R 11,500.00
|
Is there an option of renewal & what period
|
To be negotiated. Normally 2 year option.
|
What is the annual escalation %?
|
10%
|
What are the trading hours?
|
Mon-Sat 8 am – 8 pm.
Sun 9 am – 3 am.
|
What is the square meterage of the business?
|
+- 50m²
|
Is a copy of the lease available?
|
Yes. Lease deposit R 20,000.00
|
Do you require a licence?
|
Liquor licence.
|
6. Assets
|
Is a full asset list on file?
|
Yes available and prepared for fair market value. Also included is a 4 camera security system and BM 2000 POS.
|
Are any items not included in the sale?
|
Seller will take only the copper decorations and small fridge in office.
|
What is their overall condition?
|
Good
|
Do any require repairing?
|
No
|
How have they been valued?
|
Fair market / Replacement value
|
Which assets are on lease/HP and with whom?
|
N / A
|
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
|
7. S.W.O.T. Analysis
|
Strengths
|
Easily managed, student accommodation in close proximity, good visibility, great potential.
|
Weaknesses
|
Not enough marketing, advertising and promotions. Low stock levels.
|
Opportunities
|
Utilizing other businesses in area for liquor requirements during functions. Selling to restaurants in area.
|
Threats
|
None identified except normal competition.
|
8. Reason For Sale
|
What is the reason for the sale?
|
Other business commitments.
|
9. Conclusion
|
Why is this a good business to buy?
|
Great opportunity to get in on ground floor in liquor business.
|