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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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Group of biltong stores based in major Gauteng shopping Malls. These stores have staff, systems and procedures in place.
The group is made up of three stores and one kiosk and all the stores are profitable contributors to the groups income.
It’s the seller’s focus on quality and service which draws the customers and he does not compete with price.
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How long has the business been established?
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The initial stores are over five years old, the current owner acquired them around three and a bit years ago, one of the other was started around the same time and the last one around one and a half years ago.
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How long has the owner had the business?
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The current owner bought the first two three and a bit years ago, added the third not long after that and the last just over a year ago.
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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 owner runs the stores hands on and spends 100% of his time looking after the business.
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How are the clients attracted to the business
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This is all word of mouth and passing trade. Again the focus on quality and service is what brings the clients back again.
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What Advertising/Marketing is carried out
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In one of the malls for around 6 months
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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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The normal competition in the malls
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What are the seasonal trends
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Being retail the business peaks in December other than the normal slow start in January and February shows a nice consistency throughout the year.
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3. Financial
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Is the business VAT Registered
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No, but you are buying the going concern
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What VAT documentation is on file?
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N/A
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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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The seller is busy with the financials
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What percentage of the business is cash/credit?
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±60% Cash and
±40% Credit Card
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What is the age analysis of the debtor’s book?
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None
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How could the profitability of the business be improved?
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More advertising and marketing as well as potentially expanding the product lines.
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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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Nine staff members
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Staff Breakdown and length of service
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4 x Staff
5 x Temps
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Do any receive special perks, bonuses or incentives?
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Bonuses in December
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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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Yes, four permanent staff members, and two temps
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How involved is the Owner in running the business
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The owner is 100% involved in his business
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5. Premises
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When does the current lease end?
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Leases will be disclosed to serious buyers, please note however that you will require the follow approximate deposits ±R300,000 cash or bank guarantee – negotiable with the landlords
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Is there an option of renewal & what period
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Yes, negotiated lease renewal terms with landlord
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What is the annual escalation %?
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Currently 8%
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What are the trading hours?
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Mall hours per Mall
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What is the square meterage of the business?
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Between 12m² and 25m²
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Is a copy of the lease available?
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Yes, with the seller
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Do you require a licence?
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Normal Health and trading certificates required by the landlords / departments
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6. Assets
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Is a full asset list on file?
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Yes, will be supplied to serious buyers
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Are any items not included in the sale?
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1. Consignment stock - Negotiable with suppliers to take over
2. POS – Negotiable with suppliers to take over
3. One Ola ice cream fridge – Negotiable with suppliers to take over
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What is their overall condition?
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Very 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 and averaged cost
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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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Great positions in the malls.
Well trained staff in place
Good product range with excellent quality
Systems and procedures
Returning customer base
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Weaknesses
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Time required from the owner
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Opportunities
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Expand with more stores
Additional product lines and services
The normal marketing and advertising
Give permanent staff more management opportunities
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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 is keen to get involved in new business venture and does not have the time with the existing business.
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9. Conclusion
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Why is this a good business to buy?
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Great placements in the Malls, all staff, systems and procedures in place. Very profitable. Opportunity to expand.
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