Business for Sale Ozonated Water Shop

Transcription

1 Business for Sale Ozonated Water Shop This business produces Ozonated water they sell to the public. This is a fast growing industry. The water used is normal water that they put through an ozonation process and bottle in different sized bottles in store. All products are sold over the counter. With a good three year track record this is a stable business with very little seasonal trends as people need to drink water all the time. With very little marketing done currently and limited owner involvement the opportunity exists for a new owner to grow the business. Selling Price 275,000 Turnover pm 35,000 Stock 12,000 Profit pm 15,000 Total Asking Price 287,000 Nett Assets Incl 100,000 Date: 10/04/2013 Page 1 of 5

2 MANDATE REPORT 1. History Background Fully describe the business's activities How long has the business been established? How long has the owner had the business? What steps are in place to solve "load shedding" problems 2. Present Market How does the business operate on a daily basis How are the clients attracted to the business What Advertising/Marketing is carried out Does the business have any contract work What competition exists This business produces Ozonated water they sell to the public. This is a fast growing industry. The water used is normal water that they put through an ozonation process and bottle in different sized bottles in store. All products are sold over the counter. With a good three year track record this is a stable business with very little seasonal trends as people need to drink water all the time. With very little marketing done currently and limited owner involvement the opportunity exists for a new owner to grow the business. 3 years in the current premises. The owner owns the business for the last 3 years. There is no backup generator on premises. Load shedding has never occurred. Owner only visits the store twice a week, but his father is currently managing the store. Word of mouth, and are known in the area for 3 years. marketing is done. web sites or any pamphlets. There is good potential in good local store marketing strategy. ne. As far as the client knows none. What are the seasonal trends 3. Financial Is the business VAT Registered They are situated in a suburban area and are business slower in holiday times. What VAT documentation is on file? Are there up to date management accounts? What audited financials are available, income statement and or balance sheets?, below the threshold Can be supplied on demand On request Date: 10/04/2013 Page 2 of 5

3 What percentage of the business is cash/credit? What is the age analysis of the debtor s book? How could the profitability of the business be improved? Is Seller finance available and for what amount? All cash. It is a cash business. More local store marketing. 4. Staffing What is the total staff complement? Staff Breakdown and length of service Do any receive special perks, bonuses or incentives? Are they on contract? 1 staff member. One Staff member can manage the business on its own. ne Family manage business. Do any have management potential? How involved is the Owner in running the business n/a Owner spends a few hours per day, 2 days per week at the store. 5. Premises When does the current lease end? The current lease will end over 3 years. Is there an option of renewal & what period Yes there is a option for renewal What is the annual escalation %? 10 % What are the trading hours? What is the square meter age of the business? Is a copy of the lease available? Mondays to Fridays from 9h00 to 6h00 Saturdays 9h00 to 15h00 Sunday closed 30m² Yes on request Do you require a licence? Just a Business licence 6. Assets Is a full asset list on file? Yes on request. Date: 10/04/2013 Page 3 of 5

4 Are any items not included in the sale? ne. All assets are sold as is What is their overall condition? Do any require repairing? How have they been valued? Which assets are on lease/hp and with whom? What are their settlement amounts? Will Seller settle or Buyer to take over? Are copies of agreements available? Are they presently insured? Excellent ne n/a Yes 7. S.W.O.T. Analysis Strengths Weaknesses Opportunities Threats This store is the only water supply store in the area, competition levels are low. t enough marketing. With a good local store marketing plan, can this store grow? The competition in the area is few and with a good operator with knowledge of this industry, can this business be a house hold brand. There is a lot off business trading in the area. ne identified 8. Reason For Sale What is the reason for the sale? The owner works on a full time base and cannot manage the business full time 9. Conclusion Why is this good business to buy? It is in a good location with a lot of potential. If the new owner do more local marketing and broker more deals with all supermarkets in the area, will this store give the owner a good income. Date: 10/04/2013 Page 4 of 5

5 Using the information provided by the client the following Valuation was prepared as indicator of price. VALUATION VALUATION INPUT 1) EXTRA EARNINGS POTENTIAL 1 Assets Net Asset Value (a) Stock Interest 5% 3 Interest 5% Per Annum Salary Drawn Per Annum Salary Nett Profit Per Annum Total (b) Time Period 24 Months Netprofit (c) ROI 30% per annum Extra Earning Potential (c-b) Debtors Nett - Time Factor Years 2 1 The replacement value of the assets should you go and buy comparable equipment and property in simialar condition on the open market Goodwill Net Asset Value Extra Earn VALUATION ) RETURN ON INVESTMENT 2 The stock value at cost part of sale Net Profit Pa In the event that you leave the money applied for Salary the purchse in an interest bearing account or in a Actual Profit bond you would be earning interest. What % is R.O.I. % 30% that? R.O.I. VALUATION What salary would you expect to draw EXTRA than 4 your normal income for taking the risk of running 3) PAYBACK PERIOD your own business? Monthly Profiit The nett profit per annum Time Period 24 6 The time period (Price Earning - PE) in MONTHS to get your money back PE VALUATION The Return On Investment % (ROI) pa Offset of Debtors / Creditors if included SUMMARY VALUATION Business Value Stock Debtors - Market Value Date: 10/04/2013 Page 5 of 5