Performance Business Sales Phone : (08) 94 ****
Pat Keenan-Smith
08 94 ****

0413 ****


Net $204,000 working only 15 days each month!

Listing Id : 43768

Location : Western Australia - PERTH

Category : Distribution

Asking Price : 460,000 + SAV

Business description

 IMAGINE WORKING JUST HALF OF EVERY MONTH…
TO NET $2**** **** ,000 PROFIT!!

…THIS BUSINESS RUNS LIKE CLOCKWORK…

You know you’ve hit a gold mine when you find a business that:

- Is simple to run
- Has ZERO staff
- Provides essential products to high-demand markets
- Generates 99% repeat orders
- Has grown every year for many years
- Could double or triple in size

…All with NO marketing effort…

AND…the best thing of all - you get 15 days off every month!! PLUS 6 weeks Christmas break EVERY YEAR.

This business has an exceptionally loyal and strong client base – competitors are few and far between and simply don’t get a look-in given the quality and service provided, with very little effort.

Sales for the 2011/12 financial year were up 19.8% on 20**** **** /09 figures and sales for the 2012 calendar year are up 6.5% on the 2011 - steady growth in both sales and profits having characterised this business from the outset, no matter what the prevailing economic conditions at the time.

The current financial year shows every sign of continuing that trend. Last calendar year the business averaged a 28% Gross Profit margin which, together with self-propelled sales and growth with no advertising or marketing, indicates the fundamental solidity of this business, which instead benefits from the substantial advertising budgets of its suppliers.

For a working owner looking for an ideal mix of lifestyle and income, this is a business which still has room to grow. More products can easily be added, and there are still many outlets who aren’t being serviced by this business that are prime candidates for its product range.

Or, with half the month to spare, a new owner might choose to expand the area serviced and potentially double sales and profits.

Solid Client Base
The total client base numbers approximately 50 customers, with 99% of those placing repeat orders on a regular basis.

The business has not actively sought new customers over the last few years, with the emphasis instead having been on enhancing what is provided to the existing customer base.

This business has little reliance on any one customer, making it less susceptible to major downturns arising from the loss of clients.

Uniqueness of Service
By constantly focusing on service and reliability, including good communication, the business has developed a very good reputation within the industry. Compared to smaller competitors, this business provides customers with something the others cannot, or choose not to, offer: a high level of service and reliability.

Demand for products
Clients are motivated to regularly buy from this business as they continue to get value for money which encompasses price, service, reliability, communication and the overall relationship. In the past some clients have suggested that this business not supply to their competition as they see themselves having a distinct advantage by buying from this business – what an endorsement!

WHAT MAKES THIS A GREAT INVESTMENT?

• High Gross Profit margin 
From inception the business has increased its turnover and achieved consistent profit growth each year. Financial returns reflect this, as does the Profit and Loss statement for calendar year ending 31 December 2012. Self-propelled sales and a high gross profit margin of 28% (for the same calendar year) are indicative of a business which is both solid and in a continued strong growth phase.

• Historical ongoing growth, no matter what the state of the economy
The business has continued to record increases in sales and gross profits from inception and on this basis the owners see no reason why this trend will not continue, especially given the fact the mining boom is expected to continue and will drive demand.

• Essential products
The growing Western Australian population will require this business’s products as there will always be continued demand. As the economy grows, the business will grow. Service will always be an important part of any operation and this business continues to prosper in this area.

• Low hours required by owner
Owners of this business benefit from an extraordinary amount of free time. With an average of 30 days in each month of which just 10-15 days are involved with the business means the remaining days are spent at their discretion.

• Exclusive contracts
Although there are no exclusive contracts, extremely strong relationships have been established with the majority of the customer base meaning continued opportunities.

• Preferred supplier status
This business is in the enviable position of being a preferred supplier to several major customers.

• Long established
This business has been established for 16 years and during most of that time the demand for its products has exceeded projections. With very little sales or marketing effort turnover has continued to grow year by year, purely through reputation and word of mouth. Although there has been consistent growth with the existing customer base the vendors have not actively sought out new customers, meaning the new owner has many options to further expand the business.

• No reliance on sales staff to generate sales
The vast majority of sales are simply self-propelled, which means that the current owner does not have the overhead of running a sales force. However, it also puts the new owner in the enviable position of having at hand a means by which demand could almost certainly be increased if need be.

• High level of client loyalty
A significant number of the client base has been with the business for the full term of its operation.

• Low competition
The few competitors that the business does have are long-established, so the company has always operated against the present level of opposition. In these market conditions the business is able to achieve significant sales and constant growth so the presence of competitors effectively has no effect on its turnover or profitability.

• Excellent location
Situated in a high traffic location close to major airports and freight terminals, and the Perth transport hub.

• Immediate potential to expand the business
There are a number of businesses that have never been approached, these are located in areas where the business has always operated all the time. Not only this, there are a significant number of product variants that could be sold through existing channels.

• Barriers to market entry
Aside from the significant capital requirements to establish a business such as this, a newcomer to the market hoping to compete with this business would be unfamiliar with the client needs. They would also find customers very reluctant to change from a reliable supplier.
They would not only need to establish relationships with suppliers, but also negotiate adequate trade discounts. In all, to have the same operation as the one the vendors are offering an estimated $250,000 would be required even before the business started.

• No need for expensive advertising
As the focus has always been on service, reliability and communication, it has always been more rewarding to approach potential new customers in person rather than traditional forms of marketing.

• Simple to operate – no experience necessary
The current owners had no industry experience prior to purchasing the business; however within a short period of time the vendors understood the industry and its workings.

• Monopoly in the market place
Due to the location and the fact that this is the only business of this type servicing its region, it effectively has a monopoly in the market place.

• Owners can take holidays
During the time the business has been owned by the vendors they have travelled to the eastern states on numerous occasions, and also to America, all without interrupting the business’s operations. Over the life of the business the month of January is allocated for holidays, hence there is normally a period of not less than six weeks of down time. There are also 15 days of each month free for smaller trips and breaks as required.

• Low trading hours
The business is there to provide a service to its customers, therefore, should any customer require something of any urgent nature every effort is made to achieve this. In general, however, the business operates 10 days straight – for the other days in the month, the owners can choose which days they operate the business.

• Work from home
With the way the business operates a warehouse is used only for storage of stock, with all administrative responsibilities being undertaken from a home office. There is no requirement for the business to operate from Perth; it could be based in any town. The former owner of the business used to live in, and operate the business from, Geraldton.

• Current year to date sales are up
Financials over the years will show that the business has not only increased turnover but also profit, with the trend this financial year being for a similar forecast increase. Growth is already reflected in the audited calendar year figures.

• Long term historical growth
Growth has been entirely based on performance – the better service it provides the more sales it gets. This means its growth isn’t dependent on external factors over which it has no control.

• Minor overheads
Given the size of the annual turnover, overheads remain relatively small. The vendors choose to undertake most of the work themselves, thereby eliminating unnecessary costs.

• Long established repeat client base and supplier list
Not reliant on agencies or a few large clients, thus offering excellent stability.

• Low stock holding
The existing vendors currently hold in the order of $80,000 worth of stock as they have been able to achieve a significant number of deals which require bulk buying. On the whole half this stock value would be adequate. Most other businesses will carry much higher levels than this does, which will demand higher working capital requirements and unnecessary money tied up during the term of ownership. The majority of stock is purchased on an “as needed” basis. As stock is available from a number of different sources it is not necessary to hold large volumes.

• High level of COD receipts – low working capital
This is a high cash flow business with some 40% of debtors paying COD. This provides the business with an excellent cash flow, which minimises working capital. The majority of debtors pay within 14 days.

• Profits can be proven
The business has a complete set of verified accounts which clearly show its profitability. The owners have always placed significant importance on the financials of the business, hence all reporting is done swiftly with end-of-year tax returns being completed by the accountant by September / October of each year. GST has always been lodged by the due date.

• High asset mix in purchase price
A high percentage of the purchase price is made up of tangible stock and equipment. Compared to low asset businesses, this reflects a lower risk and potentially delivers a higher bottom line profit through being able to minimise its tax through claiming depreciation as a non cash expenditure item on its long life equipment.

• No bad debts
During the vendor’s ownership the business has experienced only one bad debt, not directly associated with its customer base.

• High level of client loyalty
In the past seven years of operation the business has retained virtually all of its customers.

• Business warehousing operations
At times the vendors are not at the warehouse when interstate stock arrives, and as a reciprocal practice the pallets are unloaded by the building owner’s staff.


This is an opportunity not to be missed – not only will you have the capability to change your financial future FOREVER, you’ll also have one of the most desired lifestyles on earth.

 

Contact: Pat Keenan-Smith (Mob:**** ****

 


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