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LocationSouth Africa, Gauteng

Sector - Retail

Asking Price
R300,000
Monthly Profit
R 98,935
Asset Value
R 300,000
Stock Value
R 2,000,000
Yearly Net Profit
R 1,187,220

Summary

All required ingredients, equipment, packaging and decorative requirements are found at this business.

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Fully describe the business's activities?

The business supplies to home industry suppliers, caterers, bakeries, and,budding entrepreneurs .
The business buys in bulk, ton loads at a time - directly from the manufacturers and spend a lot of time bargaining with suppliers to ensure competitive prices to cater for a cost-conscious market.
The business stock more than 2,000 products - sold either in bulk or smaller quantities. This includes a wide range of packaging materials, baking ingredients, cake decor and ribbons, cake boards, baking tins (for hire or buying), icing equipment, cutters, dried fruits and nuts, herbs and spices, aluminium containers and a treasure trove of chocolate and related products.

How does the business operate on a daily basis?

Regular clients (retail and wholesale) orders or walk in to place orders.
The business has a website linked to shopify where new and existing clients can place orders online. This online business was recently added and the business has already loaded 1,000 products. The clients pay via credit card and the orders are delivered via courier service. The owner has negotiated good prices with courier company.

What Advertising/Marketing is carried out?

The business has an online website and also advertise on Facebook.
The business has just started a loyalty program for its shoppers.
The business employs a qualified home economics graduate, who also controls the quality of the stock and offers cooking classes. The income for the cooking classes goes to the staff member but ensures sales and added value.
The business prints pamphlets with baking tips, recipes, and cooking class dates.
Regular emails are being sent to their clients on the database, with tips, new recipes, and other useful information.
The online buyers get an offer of a free gift.

What competition exists?

Another baking supply business located about 26 kilometers from this business. Their prices are not as competitive.

How could the profitability of the business be improved?

The shop should ideally be moved to ensure more walk-in clients and to cater for the growth and stock. The business is not on a busy road.

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

We have a staff breakdown on file.

Do any have management potential?

The staff are able to run the business for short period of time in the absence of the owner.

How involved is the Owner in running the business?

The owner is in the business daily, doing stock control, ordering of stock and overseeing the finances.

When does the current lease end?

The owner own the two properties from where the business operates.

What are the trading hours?

Monday to Friday 8h00 to 17h00
Saturdays 8h30 to 12h30

What are the main assets of the business?

The main assets are the shelving, tills, computer system with 5 computers, scales, wrapping machines. An asset list is on file.

Strengths?

A well established business opened for 28 years with loyal clients.
.Well trained staff.
Good systems controlling stock and POS

Weaknesses?

Due to the GP margins of 30% the business carries high volumes of stock. Good stock control systems are in place and obsolete and slow-moving stock is offered in the bargain corner. The month of April was very difficult as the business was closed due to Covid19.

Opportunities?

Franchise the business.
Loyalty points to regular buyers.
The business is currently offering a cashback on a minimum amount of R400 sales as a once-off to new clients. They are spreading the word and this seems to be very effective marketing.
Relocate the business to ensure more foot traffic to attract new clients.
Open offset points/small retail shops.

Threats?

General economic situation. This business has however remained constant in sales and profitability.

What is the reason for the sale?

The owners wife started the business in 1992, Due to ill health the husband had to take over the business three years ago. He is in his seventies and wishes to retire.

Location

Contact | Enquire

Anna-Marie

Anna-Marie Bothe

LocationSouth Africa, Gauteng

Preferred method of contact

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