Busy Commercial Bakery. Excellent Profits. North-Western JHB. Cash Business. sold

Asking Price

R7,000,000

Monthly Profit

R 367,564

Asset Value

R 1,978,866

Stock Value

R 300,000

Yearly Net Profit

R 4,410,766

Summary

This bakery bakes, sells and delivers between 4 000 and 6 000 loaves of bread per day plus1000 bread rolls per day. It is a highly profitable and primarily a cash business. 16 years of trading with all equipment in place including delivery vehicles.

Give me more information

Fully describe the business's activities?

Bakery servicing an area which comprises mostly cash buyers. The business bakes, sells and delivers about 4000 loaves of bread per day in summer and this increases to about 6000 per day in winter. They also bake, deliver and sell about 1000 to 1200 bread rolls per day. They deliver to shops all over the immediate area including, Cosmo City, Diepsloot and other areas. The business also has a hot food counter/kitchen for the sale of take away food on a daily basis.

How does the business operate on a daily basis?

The owners are involved on a daily basis. However, there are 2 x managers who also assist with opening and closing and day-to-day interaction with customers and staff.

How are the clients attracted to the business?

The business operates entirely on a word-of-mouth basis and because of its location they have not felt the need to advertise. They do support the local community in various projects as they come up which then converts into support for the business.

What competition exists?

None really. The local Spar buys bread and rolls from them to resell.

Is the business VAT Registered?

Yes, the business is VAT registered.

What percentage of the business is cash/credit?

The business operates on a mainly cash basis. 95% cash and 5% cards.

How could the profitability of the business be improved?

One can move to a 24 hour operation which will increase revenue and profits even more.

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

2 x Managers, 9 x Bakers, 2 x Cashiers, 4 x Drivers, 2 x Counter Ladies at Hot Food Counter, 2 x Cleaners, 1 x Packer.

Do any have management potential?

There are 2 x Managers in the business.

How involved is the Owner in running the business?

The owners are involved most days in the week but are able to travel to Europe for extended periods of time to have a break.

When does the current lease end?

The current lease ends in 2026.

Is there an option of renewal & what period?

Yes, there is an option for renewal for 5 years.

What is the annual escalation %?

The is currently an 8% annual escalation.

What are the trading hours?

Monday to Saturday: 6.00 am to 6.00 pm.
Sunday: 6.00 am to 2.30 pm.

What are the main assets of the business?

6 x Ovens, 1 x large Generator, 6 x Delivery Vehicles, Baking Equipment, Shelving and Racking, Office Equipment, Kitchen Equipment, Fridges, Hot Counters, Display Counters, Trollies etc.

Strengths?

The staff are long-serving and very loyal and knowledgeable. Very will known in the area. Excellent Equipment. Cash business.

Weaknesses?

Load shedding costs.

Opportunities?

Become a 24 hours operation. This will ensure even more revenue and therefore profits.

Threats?

The economy - but this business provides food which always does well in most economic scenarios.

What is the reason for the sale?

The owners wish to retire and relocate.

Why is this a good business?

The business is well-established for 16 years. It is mainly a cash business. Relatively easy to run with the right staff already in place. The owners have lived exceptionally well as a result of their investment in this business.