MANDATE REPORT
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1. History Background
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Fully describe the business's activities
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This Salon caters for hair creations, but also offers a Sun-bed for tanning, plus there is a nail bar for nail care. Brazilian blow waves are done as well as hair extensions. Eye lash extensions are done and general beauty tips complete the picture. The owner has introduced her own branded product line for hair care as an added bonus.
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How long has the business been established?
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1.5 years with about 250 to 300 clients on record.
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How long has the owner had the business?
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4 years.
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What steps are in place to solve "load shedding" problems
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N/A
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2. Present Market
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How does the business operate on a daily basis
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Owner managed but owner is not a hairdresser. Because of this fact, loyal clients will not leave with owner as is sometimes normal in this industry.
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How are the clients attracted to the business
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Word of mouth, Passing trade in busy suburban thoroughfare and loyal clients. Also monthly ads in local ad pamphlet.
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What Advertising/Marketing is carried out
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Cheese and wine promotional evenings on a 3 monthly interval with clients.
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Does the business have any contract work
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No, but longstanding regular clients frequent the establishment
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What competition exists
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None really.
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What are the seasonal trends
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Normal as per this industry
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3. Financial
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Is the business VAT Registered
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No
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What VAT documentation is on file?
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N/A
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Are there up to date management accounts?
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Owner preparing
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What audited financials are available, income statement and or balance sheets?
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Owner preparing
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What percentage of the business is cash/credit?
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All cash
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What is the age analysis of the debtor’s book?
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N/A
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How could the profitability of the business be improved?
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There is a huge opportunity to improve turnover. Firstly there are 4 chairs that can be taken up by hairdressers as only one is currently being used, plus the Branded Hair Care products can be more aggressively marketed in store and on the internet.
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Is Seller finance available and for what amount?
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No
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4. Staffing
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What is the total staff complement?
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1 staff members on payroll (hairdresser)
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Staff Breakdown and length of service
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1.5 years
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Do any receive special perks, bonuses or incentives?
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Hairdo’s
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Are they on contract?
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Permanent
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Do any have management potential?
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No
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How involved is the Owner in running the business
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Owner managed.
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5. Premises
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When does the current lease end?
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A rent of R 5,800 pm includes W & L & Vat. Current lease expires Jun 2014.
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Is there an option of renewal & what period
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Yes 3 years, but new lease to be arranged. Buyer can take over deposit.
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What is the annual escalation %?
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Not sure but thinks it is 10%
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What are the trading hours?
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Tue-Fri
08:00 -17:00, Sat 8:00 – 03:00 Closed on Mondays.
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What is the square meterage of the business?
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60m2
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Is a copy of the lease available?
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Yes
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Do you require a licence?
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No
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6. Assets
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Is a full asset list on file?
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Owner preparing
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Are any items not included in the sale?
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No
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What is their overall condition?
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Excellent
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Do any require repairing?
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No
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How have they been valued?
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Fair market / Replacement value
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Which assets are on lease/HP and with whom?
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N / A
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What are their settlement amounts?
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N / A
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Will Seller settle or Buyer to take over?
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N / A
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Are copies of agreements available?
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N / A
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Are they presently insured?
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Yes
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![]() ![]() 7. S.W.O.T. Analysis
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Strengths
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Well established with good name this business has a lot of room to grow. Already showing a good return, with a new owner that can also act as hairstylist, and improving the sales of its own branded products, this could be a gem.
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Weaknesses
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None perceived
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Opportunities
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Grow the client base, as above under “strengths”.
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Threats
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None identified
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8. Reason For Sale
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What is the reason for the sale?
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The owner is involved in other businesses that takes up her time and a qualified hairstylist would be better served here.
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9. Conclusion
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Why is this a good business to buy?
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A clean business running well with a good return of investment waiting for a new owner.
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