MANDATE REPORT

1. History Background

Fully describe the business's activities

Well established Dry Cleaning business in a very busy centre for sale. The business was established more than 30 years ago and still has great potential for increased business. Over the years the business has built up a strong customer base.

PLEASE NOTE: THERE IS BETWEEN R30,000 AND R70,000 COMPLETED WORK IN PROGRESS THAT WILL NEED TO BE DISCUSSED AND IS NOT IN THE PRICE SHOWN !

How long has the business been established?

30 years

How long has the owner had the business?

4 Years

2. Present Market

How does the business operate on  a daily basis

The business is manager run. He basically visits the business twice a week to do cash ups.

How are the clients attracted to the business

Regular customer base and walk in business

What Advertising/Marketing is carried out

No marketing is being done

Does the business have any contract work

No

What competition exists

There are no other dry cleaning businesses in the area. There is a Laundromat a few kilometres away.

What are the seasonal trends

Winter is the peak season

3. Financial

Is the business VAT Registered

No

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?

Only management accounts

What percentage of the business is cash/credit?

Only Cash

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

N/A

How could the profitability of the business be improved?

By offering laundry facilities. There is sufficient space in the shop to add a few washing and tumble drying machines.

Is Seller finance available and for what amount?

No

4. Staffing

What is the total staff complement?

Manager and 4 other staff members (Some of the other staff have experience and potential to stand in for the manager)

Staff Breakdown and length of service

Manager runs the business and the other workers takes care of the routine work

Do any receive special perks, bonuses or incentives?

Small performance bonus

Are they on contract?

Yes, manager is on a month to month contract

Do any have management potential?

Yes

How involved  is the Owner in running the business

Owner is not actively involved in the running of the business.

5. Premises

When does the current lease end?

Month to Month

Is there an option of renewal & what period

Yes, to be negotiated but the landlord seems to like 3 years

What is the annual escalation %?

Landlord wants 10% but the seller achieved 8% previously

What are the trading hours?

Mon-Fri 8:30am – 6pm, Sat 8.30am – 1pm, Sun closed

What is the square meterage of the business?

60m²

Is a copy of the lease available?

Yes

Do you require a licence?

No

6. Assets

Is a full asset list on file?

Assets listed below

Dry Cleaning Machine - R300,000

Press - R5,000

Washing Machine X2 - R6,000

Tumble Dry - R1,000

Tumble Dry - R2,000

Cobbler - R5,000

Sewing Machine - R2,000

Till - R1,000

Are any items not included in the sale?

No

What is their overall condition?

Good

Do any require repairing?

Problem with the Dry Cleaning machine currently is being fixed

How have they been valued?

Seller valuation

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

Established business with great equipment.

Great centre

Weaknesses

Lack of owner involvement and no marketing

Opportunities

To introduce laundry facilities

Threats

None perceived

8. Reason For Sale

What is the reason for the sale?

Owner lives far from the business and he has other interests to pursue

9. Conclusion

Why is this a good business to buy?

Well established business located in a very busy mall.