Aldes Lowveld Business Brokers

Summary

Yes you can have your cake and eat it. This burgeoning trendy coffee shop is centrally situated. Familiar for its impromptu friendly and corporate inspirational coffee breaks alike, with a delicious carefully chosen blend of coffee and cuisine Mr. Bean would definately approve.

1. History Background

Fully describe the business's activities?

Coffee shop with easy trading hours catering for corporate and daytime trade with light meals and also caters for the surrounding businesses and banks with platters made to order.

How long has the business been established?

8 Years then a name change and upgrade.

How long has the owner had the business?

Since November 2010.

2. Present Market

How does the business operate on a daily basis?

Open Monday to Friday at 06:30 to 16:00. Sit down or take a ways or deliveries. Owner opens and closes.When the staff arrive the cleaning and prepping is done for the daily trading.The stock orders are also placed by the owner.

How are the clients attracted to the business?

Visible wooden deck with tables and chairs canvas roof with name of the coffee shop printed on it. Well established centrally situated. The business is very visible from the street and is adjacent a large parking lot in the centre of town.

What Advertising/Marketing is carried out?

Flyers, specials and word of mouth.The banks order platters for their functions.

Does the business have any contract work?

No.

What competition exists?

There are two other food out lets in the vicinity but not of the same nature as this one. This coffee shop is in a caliber of its own.

What are the seasonal trends?

Consistent - but is quieter over christmas as is situated in the main area of town.

3. Financial

Is the business VAT Registered?

Yes.

What VAT documentation is on file?

Vat returns for the past 12 months.

Are there up-to-date Management Accounts available?

Yes.

What Balance Sheet and Income Statements are available?

Latest balance sheet and income sheet.

What percentage of the business is cash/credit?

85% cash and 15% credit.

What is the age analysis of the debtors book?

30 Days.

How could the profitability of the business be improved?

The food cost is too high. Cakes , quiche etc. can be prepared and baked by the owner to save costs. Better stock control. The current owner has no food experience and the opportunity to embrace a more varied basket of delights is avaliable.

Is Seller finance available and for what amount?

No.

What is the payback period?

68 Months.

What is the ROI?

18%

4. Staffing

What is the total staff complement?

7 Staff and 1 Manager ( Owner )

Give a breakdown of staff/functions/length of service?

3 x Kitchen staff 3 x Waitress 1 x Delivery 1 x Owner.

Do any receive special perks or incentives?

No, waitress get tips.

Are they on contract?

Yes.

Do any have management potential?

Yes. ( Maria )

How involved is the Owner in running the business?

Manager is running the business who is one of the owners, but she lacks experience of hospitality trade.

5. Premises

When does the current lease end?

31 May 2015.

Is there an option of renewal & what period?

Yes, for a further 5 years.

What is the annual escalation %?

10%

What are the trading hours?

Monday to Friday from 06:30 to 16:00 Closed on Saturday and Sunday Closed on Public Holidays

What is the square meters of the business?

84 sqm.

Is a copy of the lease available?

Yes.

Do you require a licence?

Yes, a liquor licence.

What lease deposit and/or other surety is required?

1 Month up front and 1 month down.

6. Assets

Is a full asset list on file?

Yes.

Are any items not included in the sale?

Yes, Proline flat screen TV.

What is their overall condition?

Good.

Do any require repairing?

No.

How have they been valued ?

By depreciated value

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?

Yes.

7. S.W.O.T. Analysis

Strengths?

Location, trading hours - no other shop open as early. Service is very good, the banks in the vicinity all make use of this coffee shop for its platters and frequent as a meeting place with special clients . Wooden deck outside adds to the ambiance of the coffee shop.

Weaknesses?

Trading hours are limiting as it is not open over weekends. No oven to prepare baked meals and freshly baked breads and their own baked cakes ,which will add to the atmosphere and prof ability.

Opportunities?

Catering for more business functions and more corporate events .The marketing of fresh rolls to all the banks in the vicinity, by sending out a basket with a variety of fresh made rolls at lunch time.The instalation of an oven to bake freshly on the premises would be a huge advantage as there is a captive market in the vicinity.

Threats?

Not at this moment.

8. Reason For Sale

What is the reason for the sale?

Personal reason - family business.

9. Conclusion

Why is this a good business?

This is a good business due to nice food, good service and affordable prices. The shop established a good name over the past year. It has room for expansion on the food marketing and baking side.Should more strict stock controls and in house baking be introduced , with an aggressive marketing strategy to the surrounding businesses and more advertising done , the profitability of the business can greatly be improved.

What is the price plus stock and the net profit?

R 450 000.00 is the price. Net profit per month is R 11 309.00.