MANDATE REPORT

1. History Background

Fully describe the business's activities

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.

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How long has the business been established?

3 years in the current premises.

How long has the owner had the business?

The owner owns the business for the last 3 years.

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

There is no backup generator on premises. Load shedding has never occurred.

2. Present Market

How does the business operate on  a daily basis

Owner only visits the store twice a week, but his father is currently managing the store.

How are the clients attracted to the business

Word of mouth, and are known in the area for 3 years.

What Advertising/Marketing is carried out

No marketing is done. No web sites or any pamphlets.  There is good potential in good local store marketing strategy.

Does the business have any contract work

None.

What competition exists

As far as the client knows none.

What are the seasonal trends

They are situated in a suburban area and are business slower in holiday times.

3. Financial

Is the business VAT Registered

No

What VAT documentation is on file?

No, below the threshold

Are there up to date management accounts?

Can be supplied on demand

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

On request

What percentage of the business is cash/credit?

All cash.

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

 It is a cash business.

How could the profitability of the business be improved?

More local store marketing

Is Seller finance available and for what amount?

No.

4. Staffing

What is the total staff complement?

1 staff member.

Staff Breakdown and length of service

One Staff member can manage the business on its own.

Do any receive special perks, bonuses or incentives?

None

Are they on contract?

No Family manage business.

Do any have management potential?

n/a

How involved  is the Owner in running the business

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?

Mondays to Fridays from 9h00 to 6h00

Saturdays  9h00 to 15h00  Sunday closed

What is the square meter age of the business?

30m²

Is a copy of the lease available?

Yes on request

Do you require a licence?

Just a Business licence

6. Assets

Is a full asset list on file?

Yes on request.

Are any items not included in the sale?

None. All assets are sold as is

What is their overall condition?

Excellent

Do any require repairing?

No

How have they been valued?

No

Which assets are on lease/HP and with whom?

None

What are their settlement amounts?

No

Will Seller settle or Buyer to take over?

No

Are copies of agreements available?

n/a

Are they presently insured?

Yes

7. S.W.O.T. Analysis

Strengths

This store is the only water supply store in the area, competition levels are low. 

Weaknesses

Not enough marketing. With a good local store marketing plan, can this store grow?

Opportunities

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.

Threats

None 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.