MANDATE REPORT

1. History Background

Fully describe the business's activities

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.

How long has the business been established?

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.

How long has the owner had the business?

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.

2. Present Market

How does the business operate on  a daily basis

The owner runs the stores hands on and spends 100% of his time looking after the business.

How are the clients attracted to the business

This is all word of mouth and passing trade. Again the focus on quality and service is what brings the clients back again.

What Advertising/Marketing is carried out

In one of the malls for around 6 months

Does the business have any contract work

No

What competition exists

The normal competition in the malls

What are the seasonal trends

Being retail the business peaks in December other than the normal slow start in January and February shows a nice consistency throughout the year.

3. Financial

Is the business VAT Registered

No, but you are buying the going concern

What VAT documentation is on file?

N/A

Are there up to date management accounts?

Yes

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

The seller is busy with the financials

What percentage of the business is cash/credit?

±60% Cash and
±40% Credit Card

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

None

How could the profitability of the business be improved?

More advertising and marketing as well as potentially expanding the product lines.

Is Seller finance available and for what amount?

No

4. Staffing

What is the total staff complement?

Nine staff members

Staff Breakdown and length of service

4 x Staff

5 x Temps

Do any receive special perks, bonuses or incentives?

Bonuses in December

Are they on contract?

No

Do any have management potential?

Yes, four permanent staff members, and two temps

How involved  is the Owner in running the business

The owner is 100% involved in his business

5. Premises

When does the current lease end?

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

Is there an option of renewal & what period

Yes, negotiated lease renewal terms with landlord

What is the annual escalation %?

Currently 8%

What are the trading hours?

Mall hours per Mall

What is the square meterage of the business?

Between 12m² and 25m²

Is a copy of the lease available?

Yes, with the seller

Do you require a licence?

Normal Health and trading certificates required by the landlords / departments

6. Assets

Is a full asset list on file?

Yes, will be supplied to serious buyers

Are any items not included in the sale?

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

What is their overall condition?

Very good

Do any require repairing?

No

How have they been valued?

Fair market and averaged cost

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

Great positions in the malls.

Well trained staff in place

Good product range with excellent quality

Systems and procedures

Returning customer base

Weaknesses

Time required from the owner

Opportunities

Expand with more stores

Additional product lines and services

The normal marketing and advertising

Give permanent staff more management opportunities

Threats

None identified

8. Reason For Sale

What is the reason for the sale?

The owner is keen to get involved in new business venture and does not have the time with the existing business.

9. Conclusion

Why is this a good business to buy?

Great placements in the Malls, all staff, systems and procedures in place. Very profitable. Opportunity to expand.