How does the business operate on a daily basis?
The business hires out construction equipment for varying lengths of time. It also sells new equipment,spare parts and consumables all which get imported from Canada, Italy, China and UK. They also enter into very lucrative rent-to-buy agreements with customers where the customers pays off/ hires the machine over a year and takes ownership on payment of the last installment

How are the clients attracted to the business?
It has a web page but word of mouth and an excellent reputation with continuous come backs ensure growth in sales. 90% repeat business.

What Advertising/Marketing is carried out?
Sales and Marketing is done by a full-time representative, as well as sending out regular emails via their substantial database collected over the years.

Does the business have any contract work?
The company successfully tenders for hire work from City of Cape Town as well as from the Drakenstein Municipality.

What competition exists?
There is competition but because they import the majority of their equipment it gives them a big advantage on capital costs as well as maintenance costs and also affords them to be very competitive in the market place for sales of new equipment.

What are the seasonal trends?
The construction industry closes for part of December and January and the company shuts down for 2 weeks over this period.

Is the business VAT Registered?
Yes

What VAT documentation is on file?
All available including VAT payments

Are there up-to-date Management Accounts available?
March 23 to Feb 24 Management a/c available as well as the last 10 years audited financial statements.

What Balance Sheet and Income Statements are available?
Balance sheet as at Feb 24 available.

How could the profitability of the business be improved?
Increased turnovers and profitability can be greatly improved via diversification - the sky's the limit as to what types of equipment you would want to add to your offering. The owner already has a substantial amount of data for additions and has just recently launched 4 different products as new offerings.
The mix of products available at the right price would suit someone wanting to open or add to other branches country wide, as well as opening a second or third branch in the Western Cape.

Is Seller finance available and for what amount?
The owner is prepared to consider financing a part of the business sale.
This will include allowing the new owner to pay for new stock at cost as and when it is sold ( drawing it as required) over the period of one year on a 30-day trading account, payable 60 days from the statement date.

What is the total staff complement?
14

Give a breakdown of staff/ functions/ length of service?
3 Key staff members have over 40 years of service between them.
The current owner will reward them with a substantial bonus, payable after one years service with the new owner. . The business is managed for the owner who spends little time in it.
The other 11 members are involved in sales, the workshop and administration. There is a part time bookkeeper who has been involved for many years.

Do any receive special perks or incentives?
All staff, from cleaners up, receive a small monthly bonus calculated on the prior month's profit, which has deductions based on broken or missing items.

Are they on contract?
All have contracts and are permanently employed.
The company recently had an HR specialist peruse all contracts and forms etc. and formalized an Employee Handbook bringing all HR matters up to date. They also provided training to management on labour issues and disciplinary hearings.

Do any have management potential?
The business is run day to day by a Branch Manager with 13 years service with the owner merely overseeing everything and making strategic decisions.

3 Members are already in management positions, one with 30 years service.

There is an Admin lady with 9 years service..

How involved is the Owner in running the business?
30 % of his time.

The current owner will assist the new owner for a period of 12 months, without remuneration, and after that will always be around to offer assistance and advice.

When does the current lease end?
The owner owns the building so any length of lease can be negotiated at a rental of R 28 000/month exc VAT.

What is the annual escalation %?
8%

What are the trading hours?
7.30 to 5.00 weekdays
Closed weekends

What is the square meters of the business?
410 sq meters plus a 450 sq meter yard.

Do you require a licence?
An import licence is already in place.

What lease deposit and/or other surety is required?
The lease will be R 28 000/month with a R 40 000 deposit payable.

What are the main assets of the business?
The main assets in the business are various motor vehicles and all the hire equipment.
A full asset list is on file.

Are any items not included in the sale?
The current owner has another totally separate business, run next door, established in 2018, run by his son, specializing in access lifts only.
Some minor tools will be removed that belong to this business plus the owners personal belongings

What is their overall condition?
In order to run a successful hire business, one requires reliable machinary. They have a fully equipped and manned workshop that keeps all machinary maintained to OEM statndards

Do any require repairing?
All fully functional and maintained. The fleet is very modern, however given the nature of the business, there is always servicing and repair work being carried out in their own fully manned workshop.

How have they been valued ?
Fair market value

Which assets are on lease/HP and with whom?
None

What are their settlement amounts?
Any HP or lease agreements will be fully settled upon the sale of the business by the current owner.

Are they presently insured?
Yes

Strengths?
This business imports all its equipment from Canada, Italy, UK and China which gives it a big advantage over competition on capital costs as well as maintenance costs.
The business has built up an excellent reputation in the market and a lot of its business comes from repeat business - 90 %.
The business is well managed by a Branch Manager and 3 other managers who virtually run the business.
The business is very profitable and easy to run.

Weaknesses?
None perceived

Opportunities?
Huge opportunity for an energetic person to expand the business by introducing other lines that have already been identified by the owner and by opening a second or third branch in the Western Cape or by expansion nationally...

Threats?
The only perceived threat is the economy but the business has continued to do well throughout the poor conditions over the last period

What is the reason for the sale?
Semi - retirement but the owner needs to keep a small business for his son and for certain tax benefits.

Why is this a good business?
This business imports all its equipment from Canada, Italy,UK and China which gives it a big advantage over competition on capital costs as well as maintenance costs.
The business has built up an excellent reputation in the market and a lot of its business comes from repeat business - 90%.
The business is well managed by a Branch Manager and 3 managers who virtually run the business.
The business is very profitable and easy to run.
There are other opportunities to expand the sales and profitability of the business.

What is the price plus stock and the profit?
Selling Price : R 8 400 000 000 including stock
Stock : R 6 400 000 including all hire equipment
Adjusted net profit : R 3 111 000