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Glue Manufacturer
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Business For Sale


BUSINESS FOR SALE OVERVIEW


Glue Manufacturer with Blue Chip Clients, Profitable, Small Staff Compliment, Good hours.


BUSINESS SELLING DETAILS

  Selling Price     11,750,000   Turn Over Per Month     1,317,432 
  Stock Included 450,000    Profit Per Month 298,489
  Assets Included  500,000   R.O.I %  30%
  Total Price   11,750,000    



BUSINESS MANDATE INFORMATION
 History and Overview Of The Business
Fully describe the business's activities  The business is a glue manufacturer with major corporate clients, including "blue chip" companies across the bedding, furniture and upholstery industries.
When was the business established? The business has been established for 7 years.
How long has the owner had the business? The owners started the business and have managed it since inception.
 How Does The Business Operate
How does the business operate on a daily basis There is a manager who opens and closes the business and he also manages the other 4 staff members in the absence of the owners.
How are the clients attracted to the business? Word-of-mouth mostly - big corporates have picked up that there are savings to made by by using this company's products. The big factories are increasingly price-conscious and still have to use a superior product.
What Advertising/Marketing is carried out? None really although the owners do visit clients occasionally. There is also a website which does attract business. If a rep was employed to visit current clients and also procure new business this company would do even better than it is now.
Does the business have any contract work? The business is arguably one of the largest suppliers of glue to the foam industry in the country. They also have numerous blue chip corporate clients on board from the bedding, furniture and upholstery industries. So although the industry does not work on a contract basis they are the preferred supplier for certain glues to these corporates. The barriers to entry works in their favour against the competition being able to easily steal clients from them.
What competition exists? The very large glue companies are competition but just cannot compete on price and flexibility.
Seasonal Trends? The business flow is pretty constant except for the normal December holidays when they also close.
 Financial Information
Vat Registered? Yes, the business is VAT registered.
Vat Documentation on File? Normal VAT returns are on file.
Management Accounts? Yes, there are Management Accounts to 31 August 2019.
Audited Financials? AFS's at February 2019 and Management Accounts to August 2019.
What as Cash/Credit Split? Large client pay by EFT but there is a very nice cash element from the small distributors who also sell glue into much smaller clients.
Debtors Book Age Analysis 30 to 45 days for most of the big companies.
How can you improve the profitability? A rep on the road would take the business to another level. The importation of certain products which is used rather than buying from local agents would also make a difference.
   Staffing Of the Business
What is the total number of Staff? There are 5 staff members plus the two owners.
Staff Breakdown The staff compliment consists of 1 x manager. 1 x foreman and 3 x factory workers. The two owners meet with clients, make purchases and take orders and generally oversee the business.
Does any of the staff have management potential? Factory manager and foreman are in place.
How involved is the Owner in running the business? The owners spend on average about 3 to 4 hours a day in the business Monday to Friday. An easy to run business and it is ticking over very nicely so they are not there for 8 hours a day.
  Premises Of the Business
When Does the Current Lease ends? The current lease ends in February 2020.
Is there an option to renew? Yes, there is an option for renewal for 2 years .
What is the annual escalation % The annual escalation is 8% per annum.
What are the Trading Hours? Monday to Friday: 7.30 am to 4.00 pm.
What is the square meters? 285 square meters: consisting of a factory unit with a small office upstairs. Ample parking is available in a secure industrial park.
Is a copy of the lease available? Yes, a copy of the lease is available, Two months deposit is currently in place but may be negotiable with the landlord.
 Assets Of The Business
Full Asset List available? 4 x Mixer Machines, 1 x Forklift, 1 x 2.5 ton delivery vehicle, office furniture.
 What is condition of the assets Excellent. 2.5 ton vehicle is fairly new and machines are bought new and services are done on time.
 Any Assets on Lease/HP that Buyer needs to take over? The 2.5 ton delivery vehicle is on lease.
 Are they insured at the moment? Yes, the assets and the business is insured.
  SWOT Of The Business
 STRENGTHS Consumable products are sold therefore a constant need for replenishing of stock for their clients. Corporate blue chip clients on board. Can assist clients with special needs which the larger glue companies just cannot and will not do. Price. Service.
 WEAKNESSES A lack of marketing. A rep/customer service person on the road would see a huge improvement in top and bottom line for a minimal investment.
 OPPORTUNITIES They are about to install a wood-glue mixing machine which has already been purchased. This is a very nice market for them to tap into and they can start selling this product to current clients who are presently buying their wood glue elsewhere.
 THREATS There are large companies out there but they just cannot compete on price and this business is gaining market share as a result. The barriers to entry also protect this business from smaller competitors getting into their clients.
 Summary
Why is this a good business Blue chip clients. Scalability. This business is growing very nicely. Operating costs are generally low. Very good profits. Wood-glue machine about to be installed.
Why is the owner selling it? The owners wish to relocate.


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