Profitable Retail & Micro-Lending Business with Online Auction Platform

1404

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Asking Price

R8,000,000

Monthly Profit

R275,805

Asset Value

R 500,000

Stock Value

R 2,500,000

Yearly Net Profit

R 3,309,663

Summary

Established retail and micro-lending business offering secured and unsecured loans, second-hand goods, and online auctions. Consistent cash flow, proven systems, and year on year growth.

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Fully describe the business's activities?

This is a well known franchised retail shop that sells new and second hand goods. They also give secured money lending against goods as well as unsecured loans. This franchise has stood the test of time. This business has a good cash flow, is ideally located with loyal employees in place.

How does the business operate on a daily basis?

Day to Day retail as well as online sales and online auctions which is becoming more and more popular.

What Advertising/Marketing is carried out?

Both the Franchisor and Franchisee has marketing campaigns but on a different level. The Franchisee is more locally engage and the Franchisor do marketing on a national level

What competition exists?

There are other companies in the same line of business but only one company that can actually be regarded as competition on a national level.

What are the seasonal trends?

The income of the business is stable through the year and therefore known as a "recession proof" business. In the period that leads up to the end of year holiday season the business has its highest sales of the year. In the first quarter of the following year the secured and unsecured loans are peaking.

Are there up-to-date Management Accounts available?

YES

What Balance Sheet and Income Statements are available?

Yes

What percentage of the business is cash/credit?

ALL CASH

How could the profitability of the business be improved?

The owner is not full time involved in the day to day management of the business due to other business commitments. The profitability can greatly be improved if the owner engage fully in the management of the business.

Is Seller finance available and for what amount?

Seller finance is a possibility and depends on the feasibility.

What is the total staff complement?

Do any receive special perks or incentives?

Do any have management potential?

Yes

How involved is the Owner in running the business?

Somewhat

What skills and background is the franchisor looking for in a prospective franchisee?

For prospective franchisees to qualify, half of the total purchase amount is required upfront, in cash, while the balance can be financed through your institution of choice. The franchise team will assist with the compilation of your business plan. The franchisor does not want investors to manage from a distance, but to be hands-on owner-operators who are aligned with their values, professionalism, passion, respect, integrity, and collaboration.

When does the current lease end?

2029

Is a copy of the lease available?

Yes

Do you require a licence?

Yes

What lease deposit and/or other surety is required?

Approx 200k

What are the main assets of the business?

Available on request

What is their overall condition?

Good

Do any require repairing?

Which assets are on lease/HP and with whom?

None

Strengths?

- Multiple revenue streams

- Reduced bad debt

- Strong unit economics on used goods

- Convenience and speed of service

- Online auctions are growing

Weaknesses?

Risk due to handling of cash and thus the cash is reduced to a minimum.
Regulatory Complexity

Opportunities?

Expand online auctions and marketplace

Full time presence of the owner will increase profitability

Be in control of the expenses of the business

Threats?

Changes in macroeconomics
Competition expansion

What is the reason for the sale?

The seller has been in the business for 26 years. He is in the process of scaling down and eventual retirement

Why is this a good business?

The business has shown steady growth over the past three years.
The business is very innovative and the risk is spread through the different departments.
The business has positive cash flow and minimal bad debts.
The business is quite resilient to economic cycles and even tend to thrive in a high inflation environment and a struggling economy. This has been proven with the growth of the business through the market crash of 2008.