"Selling your business is our business"
"Selling your business is our business"
Fully describe the business's activities?
This business was established by the initial owner in 1985.
It is one of the leading independent spare shops in the Western Cape, highly regarded by major suppliers due to its excellent track record.
The current owner is the third owner since the company's inception. He has been operating the company since February 2019 to date. The owner operates the business daily but remotely; the staff are well trained and accountable for the position each holds, the owner only releases the purchase money and monitors the daily sale,purchase, and stock via Humble Till Software.
Its main customer base is supplying to the next tier in the supply chain which is the smaller retailer and workshop.
It only sells brand new spares to the aftermarket, and its suppliers are all based locally. It has a retail shop in which all car care products and accessories are sold. It supplies and fits batteries and has the Western Cape distribution rights to the MR Mechanic range of products.
It is SABS-approved for the manufacture of number plates, which it does in-house. All in all, a very stable business with an excellent loyal customer base.
How long has the business been established?
Since 1985
How long has the owner had the business?
01 Feb 2019, Third Owner.
How does the business operate on a daily basis?
Stock is ordered daily and delivered by the supplier.
Customers phone in to place orders and these are delivered same day from their large stock holding or ordered from a supplier.
Customers come in to the shop and are served at the counter.
How are the clients attracted to the business?
The business is well known in the area among the customers and word of mouth and excellent service sells the business to new customers
What Advertising/Marketing is carried out?
The company has a well-established web page that is linked to YouTube, Facebook, Instagram, and X.0
Although there is no paid advertising, international boat customers arriving in Cape Town, do pick it up on various platforms
and pop in for supplies from time to time.
Does the business have any contract work?
No, the business does not have a contract but rather a 30-day payment term with a few customers.
The majority of customers were converted to a card payment method which works well.
What competition exists?
There is no competition in the immediate area, but these do exist in neighboring suburbs.
They have been there for many years and are not considered a threat.
What are the seasonal trends?
The turnover is stable throughout the year, but spikes do take place before and during holiday times as clients service their vehicles to go
on holiday.
It also has good support from other industry players who own vehicle fleets, and who do their own vehicle servicing.
Is the business VAT Registered?
Yes
What VAT documentation is on file?
All VAT is up to date and documentation available in due diligence
Are there up-to-date Management Accounts available?
Yes
What Balance Sheet and Income Statements are available?
Feb 2024
What percentage of the business is cash/credit?
Credit - 45%; cash - 10, debit & Credit Card - 45%
What is the age analysis of the debtors book?
Strictly 30 days
How could the profitability of the business be improved?
There are several product lines and brands within the industry into which a new owner could expand.
What is the total staff complement?
4
Give a breakdown of staff/ functions/ length of service?
On file for DD
Are they on contract?
Permanently employed
Do any have management potential?
Yes - to be discussed
How involved is the Owner in running the business?
Rarely involved, works remotely
When does the current lease end?
October 2025
Is there an option of renewal & what period?
Yes - 3 Years
What is the annual escalation %?
8%
What are the trading hours?
Mon - Fri >> 08:00 - 17:00
Sat >> 09:00 - 13:00
What is the square meters of the business?
217 Sq Metres
Is a copy of the lease available?
Yes
Do you require a licence?
A licence exists for the manufacture of number plates against which a monthly fee is paid to the South African Bureau of Standards.
What lease deposit and/or other surety is required?
One Month rental
What are the main assets of the business?
Shelving
Computers
A full asset list is on file
Are any items not included in the sale?
All included
What is their overall condition?
Good
How have they been valued ?
Fair market value
Which assets are on lease/HP and with whom?
None
Are they presently insured?
No
Strengths?
A 30-year history with a clean and reliable reputation for supply to the Motor Industry, supplying only Branded products with Factory and
supplier backup.
They achieve a 12 x plus annual stock turnaround due to reliable suppliers and a constantly updated computer system.
Hence, there is very little dead stock, and only a little finance is tied up in stock, producing a good cash flow.
They have established and achieved a policy of one-hour delivery on stocked items, on which their customers rely.
They have a competent, knowledgeable, and reliable long-standing staff who pay attention to detail.
They currently hold a BBEEE rating of Level 1 which opened the door to City Of Cape Town and frequently get requests for qoutes.
Weaknesses?
None perceived
Opportunities?
Explore the City Of Cape Town opportunity in full, currently, they are not as focused as they should be.
Threats?
None perceived
What is the reason for the sale?
The owner spends more time abroad to pursue opportunities that arise in the other businesses he owns
Why is this a good business?
It has been trading successfully for over 30 years.
A consistent level of sales and profit in this stable business. The business is a neat, well-managed operation with excellent, knowledgeable, longstanding, loyal staff.
It has well-oiled systems and procedures in place. Two softwares are used for sale and accounting, both are cloud
based.
The owner can see all transactions with a click of a button from the cellular network.
The stock is taken during normal operating hours, using the bar code method., no need to stop work to record the inventory.
Main desktop was replaced a year ago.
