MANDATE REPORT

1. History Background

Fully describe the business's activities

This carpet cleaning business is well known in the northern suburbs of Johannesburg.  The seller bought it 15 years ago from the founder. Well trained staff assists him on all his jobs.  His industrial machine is in a class of his own, therefore his fees are not the same as the wet and dry DIY carpet cleaners.  The seller solely relies on word of mouth referrals and will therefore be willing to pass with his cell number as well.

How long has the business been established?

18 years

How long has the owner had the business?

15 years.

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

The beauty of this business is that the industrial cleaner mounted to a trailer runs under own power.

2. Present Market

How does the business operate on  a daily basis

Owner operated with 2 staff.  The seller mostly operates morning when families are out and children are at school and he can wash carpets unhindered at clients.  That also allow the carpets to be dry by the time people are back at night.

How are the clients attracted to the business

Word of mouth, established clients that has been using his services counts about 100 active clients.  He also does on estate that has a bunch of rental apartments in between tenants.  Once per year he also cleaning the carpets and upholstered chair of a church

What Advertising/Marketing is carried out

Nothing.  This is the biggest opportunity for a new buyer.  Without any marketing done currently or any online presence there are huge growth opportunity

Does the business have any contract work

No but he has cleaned the carpets and chairs of a well-known church now annually for 7 years.  He is also responsible for the carpets of all the tenant apartments of a security estate as they move out for the last 5 years.

What competition exists

Normal competition but where their equipment has a much lower pressure spray capability, much weaker sucking (1bar vs 3 bar) leaving carpets not as clean or dry after a clean.  The other equipment also has 60liter wast water tanks, his 450litre in the trailer, meaning he can run longer between stops  He also have no power out problems or servicing sites without power like games lodges.

What are the seasonal trends

Slow in winter and very busy in summer.

3. Financial

Is the business VAT Registered

No

What VAT documentation is on file?

No, not registered

Are there up to date management accounts?

No, but complete sets of invoice books

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

None.

What percentage of the business is cash/credit?

Cash or EFT

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

1-2 days, in 15 years about 10 people didn’t pay

How could the profitability of the business be improved?

 Increasing the existing client base by doing some marketing

Is Seller finance available and for what amount?

No.

4. Staffing

What is the total staff complement?

2 Staff members.

Staff Breakdown and length of service

Do any receive special perks, bonuses or incentives?

N/A

Are they on contract?

Yes

Do any have management potential?

No

How involved  is the Owner in running the business

Owner operated

5. Premises

When does the current lease end?

Work from home.

Is there an option of renewal & what period

N/A

What is the annual escalation %?

N/A

What are the trading hours?

Mostly mornings

What is the square meterage of the business?

N/A

Is a copy of the lease available?

N/A

Do you require a licence?

No

6. Assets

Is a full asset list on file?

Owner will provide, but Trailer and Industrial cleaner is about R180,000 and two other industrial cleaners (mobile) are about R40,000

Are any items not included in the sale?

No

What is their overall condition?

Good

Do any require repairing?

No

How have they been valued?

Replacement

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 Clients.  Established Name.  Trained Staff. Work From Home.  Great Equipment.

Weaknesses

Currently the owner has lost interest.  No Online presence at all. No Marketing, relying only on word of mouth

Opportunities

Marketing, Online Presence, perform other services to the existing client base like window washing, tile cleaning, spring cleaning, in other word a suite of services

Threats

All the rats and mice running around with a wet and dry machine claiming to be carpet cleaners.  Therefore differentiate with a suite of services and leverage of your industrial cleaning equipment

8. Reason For Sale

What is the reason for the sale?

Seller is planning to move to the coast.

9. Conclusion

Why is this a good business to buy?

A good client base, a good set of equipment, good skilled staff gives you a flying start to run this business from home.