MANDATE REPORT

1. History Background

Fully describe the business's activities

The business source local garments, manufacture its own range, and bi-annually source from overseas to provide a niche, little catered for market where it has gained access to through years of reliable supply and quality products. Mornings are spent displaying and selling the merchandise and most afternoons in running admin, purchasing and organizing if required.

How long has the business been established?

15 Years

How long has the owner had the business?

15 Years

2. Present Market

How does the business operate on  a daily basis

Owner and her assistant takes the products out in the mornings to pre-booked appointments and displays, sells and deliver pre orders. Afternoons are spent if required managing the making of ranges, buying material or doing admin and securing future bookings.

How are the clients attracted to the business

There is a fixed list of clients, with relationships built up over years which ensure an almost exclusive entry to this market. Requests from additional sources cannot be exploited as the owner has a persistent health problem and is nearing retirement which hampers her in achieving previous heights.

What Advertising/Marketing is carried out

No advertising or marketing is done as the owner alone would not be able to handle the increase in business due to previously mentioned constraints. A younger person will certainly be able to improve on figures and profit.

Does the business have any contract work

No, but longstanding regular clients

What competition exists

Little competition

What are the seasonal trends

December and January are found to be quiet. The owner uses these months to service machines, sort out sale items and go overseas to look at new ranges.

3. Financial

Is the business VAT Registered

No

Are there up to date management accounts?

Management accounts are kept by the Owner in basic form as business model is very simple.

What audited financials are available, income statement and or balance sheets?

No audited financials available, only records of trading and expenses.

What percentage of the business is cash/credit?

All cash

What is the age analysis of the debtor’s book?

N/A

How could the profitability of the business be improved?

Sales can be improved by a large margin in various ways with low input resulting in improved profitability.

Is Seller finance available and for what amount?

No

4. Staffing

What is the total staff complement?

2 staff members.

Staff Breakdown

1 X Seamstress and 1 X assistant plus the owner.

Do any receive special perks, bonuses or incentives?

No

Are they on contract?

Full time employees

How involved  is the Owner in running the business

The owner is fully involved in the business, but has a fair amount of spare time for personal issues.

5. Premises

When does the current lease end?

Home based business so no rental requirements.

Is there an option of renewal & what period

N/A

What is the annual escalation %?

N/A

What are the trading hours?

Mon-Thu 7.30 – 15.00 Fri 7.30 – 13.00

What is the square meterage of the business?

Size of a double garage. 36 sqm.

Is a copy of the lease available?

N/A

Do you require a licence?

No

6. Assets

Is a full asset list on file?

Yes available and prepared for fair market value

Are any items not included in the sale?

Seller will take nothing out except her computer (all business related files will be transferred). Lock stock and barrel.  Lots of small items not included in valuation.

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

This business has built a reputation over the last 15 years of friendly service coupled with quality products serving a niche, ever expanding market. It is simple to run, offers free time to address home based issues, overseas travel if required by new owner, and a competitive edge over similar enterprises. It has a good name with existing clients and offers expansion possibilities.

Weaknesses

Results are dependent on owner’s passion, enthusiasm and energy.

Opportunities

The business can be easily expanded if required to include accessories and other items, appointing a sales/marketing person to assist in selling and setting up more sales appointments, and improving on the relations with current clients.

Threats

None identified

8. Reason For Sale

What is the reason for the sale?

The owner is nearing retirement age and has developed a health issue which limits her activities somewhat. She wants to hand over to someone younger before it impacts on her business and customers.

9. Conclusion

Why is this a good business to buy?

This is an excellent business for someone interested in selling clothing and fashion items, who like to deal with people, work from home, travel, and operating in a niche market with little competition.