MANDATE REPORT

1. History Background

Fully describe the business's activities

This client base normally numbers in excess of 400 clients annually but the client feels is at this stage she is comfortable to base the pricing on 300 clients, already taking a 25% drop of into account if she sells.  This client base is about the completion and submission of individual tax returns.  This also includes other related services like Tax Directives and Provisional Tax Returns.

How long has the business been established?

15 years

How long has the owner had the business?

5 years.

What steps are in place to solve "load shedding" problems

N/A

2. Present Market

How does the business operate on  a daily basis

Owner operated or 1 staff member specifically focused on the clients is sufficient.  There is no staff member to be considered in this sale.  The seller does however know of a person that can do the job in the area if required.

How are the clients attracted to the business

Word of mouth, established clients that has been with the practice for a significant time, predating the current owner and has been handled over time by various different staff members.  The existing clients also refer others

What Advertising/Marketing is carried out

Not really any at the moment except a tax banner at the current office during tax season.

Does the business have any contract work

No, but longstanding regular clients support them

What competition exists

Normal competition from other tax practitioners and accountants in the area.

What are the seasonal trends

Tax Season starts in July and end in November, making this the right time to buy this practice..

3. Financial

Is the business VAT Registered

No

What VAT documentation is on file?

No, not registered

Are there up to date management accounts?

Yes

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

No.

What percentage of the business is cash/credit?

95% COD, 5 % Credit

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

95% Current, 5% on 30-60 days.

How could the profitability of the business be improved?

 Synergy with existing client base

Is Seller finance available and for what amount?

R100,000 deposit and 3 payments for the balance will be considered to a buyer that has the ability to pay the balance.

4. Staffing

What is the total staff complement?

None

Staff Breakdown and length of service

N/A

Do any receive special perks, bonuses or incentives?

N/A

Are they on contract?

N/A

Do any have management potential?

N/A

How involved  is the Owner in running the business

Owner operated currently

5. Premises

When does the current lease end?

N/A.

Is there an option of renewal & what period

N/A

What is the annual escalation %?

N/A

What are the trading hours?

N/A

What is the square meterage of the business?

N/A

Is a copy of the lease available?

N/A

Do you require a licence?

N/A

6. Assets

Is a full asset list on file?

N/A

Are any items not included in the sale?

N/A.

What is their overall condition?

N/A

Do any require repairing?

N/A

How have they been valued?

N/A

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?

N/A

7. S.W.O.T. Analysis

Strengths

Established practice for many years with a great name, great clients, great service.  Good paying clients

Weaknesses

Currently only the owner and seasonal income

Opportunities

SARS pushing harder for compliance will grow the demand for this service and for existing clients to remain with the practice

Threats

SARS pushing harder for compliance will require more and more expert tax knowledge from the practitioner.

8. Reason For Sale

What is the reason for the sale?

The seller is taking a more active role in her husband’s business and don’t have the time for this anymore..

9. Conclusion

Why is this a good business to buy?

A solid loyal client base, very good record keeping of each client’s activity in their files will confirm that.  Accounting practice seldom comes available in the open market and a loyal client base is a rare opportunity.