MANDATE REPORT
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1. History Background
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Fully describe the business's activities
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Petrol Station with convenience store, selling airtime and related products with 5 reliable tenants on the premises (complimenting the petrol station). The convenience store has been newly refurbished and the resulting increase in turnover is already showing in the figures.
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How long has the business been established?
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Forty years
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How long has the owner had the business?
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Twenty five years
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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 managed
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How are the clients attracted to the business
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Being a petrol station it has the convenience factor and it is situated on a main road.
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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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The business has a number of Key account customers which are secure big spenders at the business.
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What competition exists
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Normal industry competition, however the business is on a main road to its advantage.
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What are the seasonal trends
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The trend is generally flat throughout the year with peaks in the holidays such as Easter and December
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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
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Are there up to date management accounts?
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Yes – Monthly
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What audited financials are available, income statement and or balance sheets?
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February 2011, February 2012 in progress and because the business is part of a bigger group this will still take around four months.
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What percentage of the business is cash/credit?
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Cash 85%, Card 15%
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What is the age analysis of the debtor’s book?
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R25,000 on 7 Days and R25,000 on 30 Days
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How could the profitability of the business be improved?
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Acquiring more account customers, a Lotto application is in progress, More direct management focus on customer service.
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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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14 staff members.
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Staff Breakdown and length of service
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3 x Cashiers, 10 x Attendants, 1 x Fore court co-ordinator
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Do any receive special perks, bonuses or incentives?
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Incentive targets
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Are they on contract?
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Permanent with contracts
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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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Two hours per day onsite and two hours per admin
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5. Premises
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When does the current lease end?
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Three years – May 2015
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Is there an option of renewal & what period
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Yes in three year cycles
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What is the annual escalation %?
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Negotiated with the Franchisor
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What are the trading hours?
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24 hours
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What is the square meterage of the business?
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_
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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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Yes, Petroleum and Fire licenses
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6. Assets
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Is a full asset list on file?
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Yes available with the seller
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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
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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 major government investment in the rejuvenation of the area (CBD and Sunnyside) is seen as a major strength going forward, as a result a major increase in turnover potential subject to the owners willingness to achieve such.
The franchisors latest Site Management system has just recently been installed.
The tenants alone cover the rental for the site.
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Weaknesses
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None identified other than large cash amounts but this is handled by using a drop safe
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Opportunities
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Franchisor has converted this to a consignment site
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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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Other business interests taking all the sellers time
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9. Conclusion
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Why is this a good business to buy?
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Very well established petrol station in area receiving huge amount of government development resulting in a rejuvenation of the area. Additional sources of income from complimentary tenants on site.
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