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The previous owner operated this business from 2010 to Feb 2016 in the Cape Garden Route. The business previously only sold frozen chicken to black townships and achieved a turnover on average of 1.1 million per month.
Unfortunately the business ran into cash flow problems eventually closing down operations in February 2016. The cash flow problems emanated from the owner’s transport company which impacted negatively on his wholesale business. The current owner took over the business in 2016 after it had been closed down for 5 months. The current owner is a major supplier of fresh and frozen seafood to Pick and Pay as well as restaurants and hotels in Cape Town and was looking for premises in George to also service the PnP chains in the Cape Garden Route. Is currently supplies Pick N Pay in Cape Town and was approached by them to service the Southern Cape. The business is presently quickly winning back its previous customers. Currently 70 % of their sales are coming from the Spaza market (essentially the black retail market) which is a cash market with fairly low margins, between 9% to 12 %. They have introduced new product categories such as seafood, beef (primal cuts) and lamb( whole carcases) and are presently also aggressively targeting new markets such as restaurants and hotels where margins of 18 to 23 % are achieved. As such their medium-term goal is to achieve overall margins of 20 to 25 % within the next 6 to 12 months.
They are also planning to introduce cooked fish and chips as well as roast chicken into our factory shop model as well as the sale of fresh fish and chicken direct to the public. Their premise is well appointed on a busy arterial road and is highly visible. Across the road 650 RDP houses are in the process of being built, at this stage there is civil work being undertaken, ultimately this will become a very lucrative market to them in time.
In addition to supplying PnP with fresh fish they are currently also being listed with fresh and frozen chicken for their cooked foods department which will add substantial growth to the business. They are also the biggest suppliers of Supreme frozen chicken in the Cape Garden Route. Supreme Chicken is produced by South Africa’s fourth largest chicken producer Country Bird. It has been mutually agreed that they will become their sole distributor of their brand in the region with the intention to develop their brand and proliferate the market by creating customer loyalty. To date the brand has been well received with sales growing daily. They are achieving this by adding extra services to their Spaza market by delivering their orders, merchandizing, supplying marketing material as well as being competitively priced and branded. Currently Rainbow Chicken is the most expensive chicken in the market. Their current strategy of offering value add services will enable them to make inroads into Rainbow’s market share.
Reasons to purchase this business
1. Location: They are located in a prime position that has high visibility with a high volume of passing traffic
2. Access: Quick access to the N2 from both sides of their location. They are also on a main bus route with the main bus stop directly opposite their factory shop which transports workers to and from their place of work.
3. Expansion Potential: Between the N2 and their premises is council land which is currently under construction with 650 houses that should be completed by end Feb 2018.
4. Diversified Product Range: The have added fish and meat to the previous poultry offer and have the potential to increase their previous Spaza sales threefold. In addition they are adding take-away foods which will further stimulate their sales. By marketing to restaurants and hotels they will increase their market share, increase their turnover and improve their gross margins.
5. Huge Potential: This opportunity has huge potential as total sales of between 3 and 5 million per month are realistically achievable within the next 3 to 5 years.
6. Ample parking: There is parking available for 30 cars.
7. Key Management: They have key management in place to run the business. A General Manger was appointed who has extensive experience in food wholesale. He previously managed a fish & deli company in Gauteng for 15 years.
8. Loyal Staff. All the previous staff members were reappointed who are fully trained and have a good knowledge of the business. The staff are all hardworking, honest folk who love their jobs.
9. Financial stability: The business is within 2 months of operation approaching its breakeven point and will become profitable over the current festive season. The financial projections used to promote this business are the forecast amounts for 2017. A full breakdown of past, present and future financials is available for scrutiny.
All genuine Buyers may contact Ken Maade at 082 377 1825 or email: firstname.lastname@example.org for further details.
|Total Annual Sales||17700000.00|
|Profit before tax||703000|
|Form of ownership||Private Company|
|Year of acquisition||2016|
|Trading Hours||7am to 6pm Monday to Friday|
|Full Time Employees||6-10|
|Business Premises||Industrial space|
|Current Floor Space||650m2|
|Lease term in years||3|
|Other important details||VAT Registered,Financials up to date,Employee contracts,Air conditioning,Internet connection,Telephone lines,Parking lot,All assets on file,Security,In industrial area,In retail area,Training / Support,Marketing skills|
|Reason for sale|
|Reason for sale||The current owner’s partner who ran his operation in Cape Town recently passed away after battling lung cancer for one year and as such he cannot run two businesses on his own. Since he lives in Cape Town travelling every week is impacting on his family’s lifestyle and therefore regrettably he has decided to sell this business.|
|Growth opportunities||See overview.|