ABBANIS Business Brokers

Dear Prospective Seller. Herewith a few pointers on how we operate:-

CONFIDENTIALITY. Confidentiality is extremely important when working with a Broker and Prospective Buyers during the selling process. We strive to protect your sensitive information from being exposed to Time Wasters or non-qualified Buyers. Just as we would require good financial information on your business in order for buyers to make an informative buying decision, we require potential buyers to provide evidence of financial ability.

We are extremely aware of the sensitivities surrounding the sale of your businesses, for example the negative influence on the moral of personnel affecting the performance of businesses etc. and the fact that the process should be managed in a highly confidential manner. We are hesitant to bring prospective buyers to your business until such time that the Buyer is seriously considering making an offer. Even then we will make prior arrangements with you on where we can meet so as to maintain confidentiality. Before we divulge any information a prospective and qualified buyer has to provide us with a commitment in the form of a signed Confidentiality and Net Worth Statement. A copy is attached. If you deem it necessary then we would also enter into a similar type of agreement with you.

PHOTOGRAPHS.  When we list your business it is normal practice to take a full range of digital photographs, which is then presented in the privacy of our offices to screened buyers.

PROFESSIONALISM. We pride ourselves in the way in which we analyse and present to our clients. You cannot expect anyone to buy a business unless they are presented with at least a summary of the Financials as well as a brief description on the working of the business.  To this extent we will prepare a detailed presentation based on the information that is being supplied to us together with a realistic valuation for the business.

VALUATION. We use a Statistical Model based on the Return on Investment (ROI) method in order to value your business or alternatively expressed as “P/E = Price Earnings Ratio”.  It is imperative that we maintain a balance in the pricing in order to provide the Seller with a realistic market related price whilst at the same time acting in all fairness towards the prospective buyer. Our valuation is free of charge with the only proviso that if you decide to sell we be afforded the opportunity to first expose your business to the market.

Once you have made a decision to continue with the process then we would require the following information. Once available then we will make an appointment with you to discuss the valuation in more detail. There after we will prepare a comprehensive Business Presentation together with a realistic Valuation for your Business for your perusal and approval before we go ahead with the marketing and exposure thereof to screened and qualified buyers

1) ESSENTIAL INFORMATION NEEDED FOR VALUATION.

) Financial Information.

i) Monthly Sales / Cost of Sales statistics for a two year period (See attached “Excel spreadsheet” under Sales window)

ii) The average monthly running expenses (See attached “Excel spreadsheet” under Expenses window)

iii) Management reports for the last 12 months of trading. In other words, 12 months worth of Income statement

iv) The Income Statement and Balance Sheet for the last two financial years of trading. (Not essential for now but will be required at a later stage).

v) The VAT reports for the last 12 months trading  (Not essential for now but will be required at a later stage).

b) Asset List.

i) List of assets at book value and replacement cost also indicating which of the assets are encumbered, the outstanding balance due, remaining period of repayment and the monthly instalments. (See attached “Excel spreadsheet” under Assets window)

ii) If the premise is for sale and forms part of the transaction we would require the Title Deed (Erf number and Title deed number), name of the conveyance attorney and obviously who owns the property as legal entity and owners name, ID number 

c) Debtors and Creditors.  If this is not a predominantly cash business: -

i) What is the outstanding Debtors value in Rands and the period of payment from issuing of statement in days?  Please supply a Debtors age analysis.

ii) What is the outstanding Creditors value in Rands and the period of payment from issuing of statement in days?  Please supply a Creditors age analysis

d) Selling Price and Franchise Fees if any. 

i) What are the aspiration levels in terms of the selling price?  Would this include / exclude the stock, debtors and creditors?

ii) Are there any franchise joining fees / training fees and what is the projected value in Rands.

2) NON-ESSENTIAL INFORMATION FOR VALUATION. REQUIRED FOR BUSINESS PRESENTATION AND PROCESS THERAFTER

a) Customer Base.

i) A list of the top 80% of the customers that the business serves (if applicable)

b) Description of the Working of the Business.

i) Explain which product or service the business produces and which market  / customers does it serve.

ii) Explain basically how the business operates.

c) Details of the Premises and the Rental Agreement.

i) The size of the premises in square meters (open areas and under roof), period of lease and yearly escalation %, seating capacity for restaurants and coffee shops. 

d) Operational Details, Staff, Hours of Work

i) What does the stock consist of and what are the average levels in Rand value.

ii) List of Staff with description of their respective positions as well as their monthly earnings. (See personnel list underneath)

iii) Who manages the business, the owner or a manager?

iv) The hours of work, Monday to Sunday.

e) Ownership and Legal Entity

i) Does the business sort under a Sole Proprietary, a Company, Trust, Partnership or a Close Corporation. What is the name of the Legal Entity, the Registration Number and Owner/s details together with Identity numbers? What is the composition of the shareholding?

ii) When was the business established and when was it taken over by the current owner?

f) Selling Strategy, Future Potential and Growth Opportunities. 

i) What makes the business a good business?  In other words why would a prospective buyer be interested to buy this business (Growth prospects, High Barriers to Entry, Good position, Easy to manage, etc.)?

ii) What opportunities exist in the micro and macro environment that a new owner will be able to explore / exploit to ensure future growth in the business?

iii) Are there any negative external influences or risks in the business that could have a negative impact on the business? 

3) PROCESS THERE AFTER

We are totally committed to spend money and time to market and sell your business.  In return we would require a commitment in the form of a signed mandate. There are two types of mandates. (See attached “Excel spreadsheet” under Mandate window) for actual terms.

We continually strive to serve you to the best of our ability whilst at the same time maintaining the highest levels of professionalism and confidentiality.

Our Company details are as follows:- Company name, Abbanis Services CC t/a Abbanis Business and Property Brokers with registration number CK1995/049907/23 and VAT registration number 4210153815

We would be honoured to market and sell your business and look forward to be of assistance to you.

Please complete the following four documents below in full and e-mail or fax back to Abbanis Business Brokers at abbanis@iafrica.com or (021) 855-3219.