"Selling your business is our business"
Fully describe the business's activities?
This company has established itself as a leading contractor within the PAINTING and WATERPROOFING industry by setting new standards of quality, have the technical knowledge and provide intensive training to their staff.
They focus on both commercial and domestic painting projects within the Western Cape, South Africa.
A major strength is their ability to keep the expertise within the business and retain staff which in essence, are the assets of the business, the quality of service and the excellent workmanship.
How long has the business been established?
Since 1972
How long has the owner had the business?
The owner has had the Business for almost 5 Years.
He has a strong Management team in place and spends between 1-2 hours involved in the Business per day.
Site managers to store managers to operations managers to office managers and importantly, off-site financial reconciliation by an accounting management service company.
How does the business operate on a daily basis?
The Business has a strong management Team with Managers, overseeing their respective areas.
- The Office Manager ensures the back office support, finance and admin is taken care of.
- A Sales Manager and Sales Assistant ( A QS by profession ) ensures that the business keeps on coming in by seeing clients, and interacting with tenders, quotes and the like.
- 3 Site managers oversee the workmanship onsite where the teams are delivering the core business of the company..
- Teams with between 4-6 members, with a Supervisor call on sites and perform the work.
- A Store Manager ensures enough stock and manages the at-the-premises operations
How are the clients attracted to the business?
Strong goodwill and workmanship
2 representatives quoting and securing jobs ( Sales Reps )
Established for 52 years
Repeat business
Brand awareness
What Advertising/Marketing is carried out?
No marketing
Does the business have any contract work?
The business does both commercial and residential. ( 85% vs 15 % )
Commercial has become a strong focus where long-lasting relationships between property managing companies, property developers and real estate companies with the Business, ensures ongoing business.
What competition exists?
One of the leading brands sharing the market with a handful of similar professional contractors
What are the seasonal trends?
Winter months do have an impact
Business closes for Builder's Holiday
Is the business VAT Registered?
Yes
Are there up-to-date Management Accounts available?
To be provided during a DD
Is Seller finance available and for what amount?
The Owner is willing to accept a full buyout on effective date with a payment structure whereby he will stay involved until June 2025.
A suitable structure can be discussed where the new owner step in and take over the business with the seller providing consultation until June 2025.
A formula for the deferred payment and how work in progress can be shared will be discussed with approved buyers.
What is the total staff complement?
The Business has a strong management Team with Managers, overseeing their respective areas.
- The Office Manager ensures the back office support, finance and admin are taken care of.
- A Sales Manager and Sales Assistant ( A QS by profession ) ensure that the business keeps on coming in by seeing clients, and interacting with tenders, quotes and the like.
- 3 Site managers oversee the workmanship onsite where the teams are delivering the core business of the company..
- Teams with between 4-6 members, with a Supervisor call on sites and perform the work. ( +- 50 )
- A Store Manager ensures enough stock and manages the at-the-premises operations
Give a breakdown of staff/ functions/ length of service?
To be provided during a DD
How involved is the Owner in running the business?
The owner is not very involved. To be discussed.
When does the current lease end?
November 2025
Is there an option of renewal & what period?
Yes
What are the main assets of the business?
The main assets are vehicles and tools.
There is around R 200k of stock in the Business and the owner will ensure that on the effective date, the stock is at a minimum and will only comprise of good, usable stock.
Which assets are on lease/HP and with whom?
Asset list on file
Tools and Equipment.
5 Vehicles are still on HP.
To be taken over by the buyer's entity.
What are their settlement amounts?
+- R 400 000
Will Seller settle or Buyer to take over?
Buyer to take over
Strengths?
52 Years in Existence
Has Proven that the Market is stable
Strong Management Team
Not unionized or staff intensive
20 % growth in the 1st Quarter of 2024
Opportunities?
Grow the Tender base
BEEE
Stronger Marketing Presence and website
Threats?
Small competitors
What is the reason for the sale?
The seller is not involved in the Business.
He has various Businesses.
To be discussed.
Why is this a good business?
This is a very strong business with a long history.
Strong clients and well-trained staff with a proper management structure make this a great business.
Wrong Perceptions:
1) This is in the Building Sector controlled by the "building mafia"
WRONG: This sector is booming in Cape Town. The focus is not on new, freshly built buildings but rather providing a service to the existing commercial and corporate/business client. They are well-known with property developers, property managing agents, higher end private and non government schools and also receive referrals from their suppliers.
Renovating is a reluctant sale but everyone will repaint, build on and renovate.
2) This is seasonal !
WRONG: The work they offer are indoors and outdoors. Over the last 50 years they have learnt how to plan, strategize and implement processes to that the seasons, not influence them
3) Labour Intensive:
WRONG: The benefit of not having a workers force that is employed by the company, but using subcontractors means : no work, no pay, no HR/Labour issues.
They have built their business model whereby they have many subcontractors, delivering a service to them - the subcontractor gets paid, and he needs to take care of his workers.
