Business Summary - Laundry in Cape Town CBD

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1 Business Summary - Laundry in Cape Town CBD This report is based on information provided by the Seller and has been accepted in good faith to represent to prospective buyers. The information was provided in verbal form, books, records and accounts relating to the business. No warranty can be given by the agent as to its accuracy or otherwise and the responsibility lies with the purchaser to verify the accuracy of the information contained herein. Summary Business Established: Purchased 1 September Laundry has been in operation since Premises Details: Current Rent p.m R 13, Term of Current Lease: 3 Right or Renewal(s): 3 Years Next Rent Review 2018 Staff: Full Time Staff 6 Part time Staff 2 Working Owners 2 Turnover: R 653, Net profit: R 172,037,00 Estimated ROI: 34% Asking Price R 495, excluding VAT

2 Overview and background The business was purchased 1 September 2015 by the present owner and has been in operation since Activity consist of running a drop and go service as well as regular informal contract work. Services also includes dry cleaning (outsourced) and dying (outsourced) service. So, walk-ins are from the area and regulars. Situated in the heart of the city with surrounding hotels and guest laundry is also a huge part of our clientele. Collection and deliveries apply to contracts. Ideally half the turnover is derived from cash business (60%), contracts (40%) pay on a monthly / weekly basis The location is prime and convenient! Surrounded by hotels and in the heart of the city. There are regular customers as well as walk ins (highest profit margins). This income has been growing consistently. Marketing to the vast number of hotels, guesthouses and B& B s is a huge opportunity in Town. It is estimated that another 5-10 regular accounts like bed and breakfast, hotels or restaurants, will double turnover (capacity is available but would require an extra staff member). Financial Performance Financials available. Vat registered Up to date management accounts available. Balance sheet and income statements available

3 Trading hours Monday to Friday 8h30 18h00 Saturday 8h30 14h00 Sunday Closed Lease No licence required, current Lease agreement: (approved 1 September 2015, signed for a 3-year period). With option to renew. However, a new owner would need to sign a new contract with deposit required. Current Rent p.m. R 13, Term of Current Lease: 3 Right or Renewal(s): 3 Years Next Rent Review 2018 Owners Involvement All purchasing, marketing, sales strategy, pricing is performed by owner/manager. All accounting, HR functions performed by owner/manager and book keeper Owners Reason for Selling The owner bought the laundry as a safety net due to uncertain work environment in in 2014/15. Since then their circumstances turned around and demands more time and focus. The Laundry has been a positive experience and although it has been profitable and self-sustaining, they have no time to spend at the laundry and it is better for them to consolidate in let a new owner take it to new heights in fairness of the staff and the business. Staff Currently the owners are not on the premises but come in once a week to cash up. A new owner would be responsible for all the general management / invoicing/ communication with contracts / sourcing contracts/ staff / salaries and monthly reconciliations. Dependable staff are responsible for the day to day operations and dealing with walk in customers. Payroll, position, income and incentives (see example) Z Mohamed bookkeeper R9200 basic Fulltime Plus overtime N Murray sales person R6000 basic Part time Plus overtime

4 Marketing No marketing has been done, now website business either which leaves huge potential for growth. Remote contracts have been dropped due to demand on cost and efficiency. There is a need and huge opportunity to market to guesthouses and restaurants in Town which will improve the nett income substantially Competition There are many Laundries in the City but all seems to do well and competition does not have an impact on the business potential. There is a good share of regular informal contract work with hotels, restaurants, bed and breakfast act. Seasonal trends Walk ins have been ever increasing, despite the season. In summer months, the contracts (guest houses & restaurants) are at their busiest. Strengths & Weaknesses Strenghts Walk in business is fantastic and can be increased. Contracts can be easily added. Staff is dependable No real competition Weakness Cost of electricity & water Staff costs due to the owners not being available to work there themselves. Capacity can be improved with extra machines. Growth Potential An on-site owner will be able to interact with customers and look for more business opportunities. Will be able to optimize workflow and decrease operational expenses such as electricity usage. It is estimated that an on-site owner will save +-R4000 / month on salaries if semi operational in Laundry. Opening hours can be extended; town is busy so walk ins will improve and production will be increased. New contracts: Huge opportunity for marketing the laundry in Town and the Waterfront. Regular advertising currently the walk in database is available but not recorded to support marketing of promotions, etc. Sourcing cheaper alternative suppliers Website and online bookings. The business makes use of an outsourced driver; this cost can also be absorbed and optimized.

5 Assets The Nissan Levina delivery vehicle is exluded from the sale, but available on negotiation. Investment Required Tangible Assets R 300, Intangible Assets R 195, Stock Working Capital R 25, R 100, Total R 620,000.00

6 Conclusion A self-managed profitable cash business. Loyal customer base consisting of walk ins regular walk ins and contract business, which can be easily increased with presence and pro-active marketing. Expenses can be cut by increased owner presence. Excellent location for feet and convenience. Agent Africansun South Africa info@africansun.co.za