Manufacturer of Wooden Windows & Doors and Related Products. Northern Suburbs

Asking Price

R7,500,000

Monthly Profit

R270,422

Asset Value

R 1,500,000

Stock Value

R 350,000

Yearly Net Profit

R 3,245,063

Summary

Supplies Builders and construction sites. Excellent Profits.This business, based in the Northern Suburbs of Johannesburg, has been operating for 20 years. They manufacture wooden windows, doors, frames, skirtings and fencing. Profitable and growth potential is very good. Cash flow is good.

Give me more information

Fully describe the business's activities?

The business is a timber factory and joinery specialising in manufacturing of residential and commercial windows, window frames, doors, door frames, skirtings, fencing, architraves etc

How does the business operate on a daily basis?

The Supervisor opens the factory and offices at 7.00 am. The Front Office Manager also arrives at this time. The workers report to the factory and get busy with their work for the day.

How are the clients attracted to the business?

The business has a lot of referrals and word-of-mouth sales due to excellent service and products. The business also has a website.

Does the business have any contract work?

The business is not reliant on contracts per se but projects and sales are consistent over the course of each month.

What competition exists?

There are competitors in the market but they are not able to give the service to customers that this business is able to.

What are the seasonal trends?

The business closes for builders holidays in late December and early January. September to November can be very busy. The rest of the year is quite consistent.

Is the business VAT Registered?

Yes, the business is VAT registered.

What Balance Sheet and Income Statements are available?

February 2024.

What percentage of the business is cash/credit?

Most clients pay by EFT.

What is the age analysis of the debtors book?

30 Days

How could the profitability of the business be improved?

There is no outside sales force so a Sales Rep on the road would make a huge difference to the revenue numbers.

What is the total staff complement?

There are 12 members of staff. Most work in the factory. A breakdown of staff is available.

Do any receive special perks or incentives?

A bonus may be paid at owners discretion at the end of the year.

Are they on contract?

Yes, staff have letters of appointment.

Do any have management potential?

Yes, there is a Supervisor who would be good for management training.

How involved is the Owner in running the business?

The owner is involved in the business on a daily basis.

When does the current lease end?

The owner owns the property from which the business operates. The owner is happy to consider a lease or a sale of the property.

Is there an option of renewal & what period?

Yes, normally 3 years at a time.

What is the annual escalation %?

The annual escalation is 6% to 8%. To be negotiated.

What are the trading hours?

Monday to Thursday: 7.00 am to 4.45 pm. Friday: 7.00 am to 2.00 pm.

What is the square meters of the business?

1092 Square Meters

Do you require a licence?

No special licence is required to operate this business.

What lease deposit and/or other surety is required?

Normally one to two months rent or guarentee.

What are the main assets of the business?

Woodworking machinery and allied tools as well as numerous small tools, computer equipment, office furniture etc.
A full asset list is available.

How have they been valued ?

Owners valuation taking into account replacement value and wear-and-tear.

Strengths?

20 years of history, well-trained staff, good name in the market, operationally strong. Very good cash flow.

Weaknesses?

Marketing can be drastically ramped up and an external sales person would assist in growing the business even more.

Opportunities?

A Sales Rep will increase sales. There is no external sales force at the moment.

Threats?

Normal economic conditions faced by all businesses.

What is the reason for the sale?

The owner wishes to retire.

Why is this a good business?

Good cash income. Very nice growth potential. There are numerous other markets that can be entered and exploited - for example coffins and caskets. The business has provided the owner with a very good lifestyle.