"Selling your business is our business"
"Selling your business is our business"
Fully describe the business's activities?
This family-run business manufactures baby wear products in Cape Town. The products are distributed in the market through their online store, in a large retailer as well as resellers in South Africa, Namibia and Australia.
The business has a factory in Cape Town and outsources the manufacturing to independent contractors as and when needed.
How long has the business been established?
The owners started the business in 2005 but only registered the CC in 2009
How does the business operate on a daily basis?
The owner visits the factory every second week and works remotely from home.
She spends 4-5 hours per day involved with Finance and Admin and decision making.
They have 1 permanent staff member in the factory with a 2nd person ( table hand ) as a casual. Then the business also make use of independent contractors to fulfill 2 roles in the manufacturing process - they get paid per item produced.
The owner works closely with the production team at the factory, and communicate with them via WhatsApp.
All orders from direct clients and resellers are run through the website order interface.
They manufacture on order and ship with lead time to the client.
If resellers are not productive, their agreements are cancelled.
They do have an import/export license.
They attend events where products are sold and resellers are signed up.
How are the clients attracted to the business?
The business gets advertised on Facebook, Instagram and when they do events.
The resellers also advertise on their own websites / social media platforms.
What Advertising/Marketing is carried out?
Paid posts on Facebook and Instagram
Face to face marketing at events - handing out pamphlets
Small Google Campaign
Does the business have any contract work?
They have an agreement with a large Retailer and can get the products into more stores.
What competition exists?
One large competitor in the sector in South Africa
What are the seasonal trends?
The nature of the products creates a higher winter season, while the markets/events happen during the summer months.
The Christmas season also does well through the large retail focus.
Christmas markets have a good cash boost in January of every year.
Is the business VAT Registered?
Yes
What Balance Sheet and Income Statements are available?
Full AFS 2024 are available
Management Accounts also available
What percentage of the business is cash/credit?
Full payments happen before manufacturing and shipping only takes place once the outstanding payments have been received.
What is the age analysis of the debtors book?
No Debtors, all orders are sent out once fully paid.
The large retailer is on payment terms off 15 days after delivery
How could the profitability of the business be improved?
Better Marketing and focus on getting more retailers
What is the total staff complement?
The business has 1 Admin lady who liaises with the contractors and clients from the Factory.
She has been with the Business for eight years.
They have one other employee in the Factory.
2 Independent Contractors - paid per product delivered
Give a breakdown of staff/ functions/ length of service?
Independent contractors does the actual manufacturing and gets paid per manufactured product.
Are they on contract?
The Admin lady has a employment contract.
How involved is the Owner in running the business?
Most of the owners involvement lies in decision making and logistical.
When does the current lease end?
The factory is a 80sqm building with a mezzanine.
The lease is a 3 year lease , with option to renew in May 2026.
The business can be run from an owners home also.
What are the trading hours?
Production 8-5
Office 8-4
Factory shop 9 to 4
No weekends or public holidays
What lease deposit and/or other surety is required?
1 month
What are the main assets of the business?
Machinery +- R 78k
Dies / Patterns - R 70k
Stock - R 395 000
What is their overall condition?
Good working order
How have they been valued ?
Good second hand value
Are they presently insured?
No
Strengths?
This business has been running well for almost 20 years.
Sought after products in baby fashion
Weaknesses?
The owner does not have time to market the business more or to acquire more resellers.
Opportunities?
Grow the reseller base
Get into more retailers
Threats?
One large competitor but they diversed away from local manufacturing and imports most of their products.
What is the reason for the sale?
The seller wants to join her husband who is full time in the ministry.
Why is this a good business?
Easy to manufacture product
Sought after
Simple to manage
All systems / processes in place
Small employee force with outsourced manufacturing
