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

0413 ****


Forget the mining Boom - here comes the dining Boom - & this manufacturing business is set to Boom with it... PK0554

Listing Id : 54485

Location : Western Australia -Perth

Category : Manufacturing Light

Asking Price : 1,650,000 + SAV

Business description

Tap into the fastest growing market on the planet


Sales surging 44% ahead of last year’s record sales results
... & continuing to accelerate ...


1. Fortified against overseas (& on-line) competition!
2. Financial Year to date sales up 44% & accelerating!
3. Non-stop Rapid-fire repeat order customer base.
4. Wide spectrum of industries - means no dependency on any one sector to maintain sales.
5. Long established - 40 years.


What does the start of the next booming sector of the economy look like?

The effects are already being seen - financial year to date Sales are Racing Ahead $114,000 (or 44%) of the same period last year! & are still Accelerating!

The largest of its kind in Western Australia, the businesses main competitors are located on the east coast - creating a Logistical Barrier that proves very effective due to the nature of the product.

So Resilient - This business can & has continued to grow in virtually any economic condition - due to the fact that the spectrum of industries it services is so wide, it enjoys no reliance on any one sector of the economy to maintain sales. The business is adding new customers from new industries every week!

...But one industry stands out above the rest - the one this business has solidified itself within as a clear market leader - Australian Agriculture Exports.  Health & Safety Products supplied by this business form an integral part of the export process, & provides Australian Agriculture businesses access to international markets like China - whose customers have literally experienced a 10 fold increase in demand over the last 12 months!

All indications are that this is only the beginning...


Sales:      $1,685,169
Gross:     $687,316
Net:          $540,641
Price:       $1,650,000 plus stock of $150,000


Customer retention is automatic as the business holds template designs tailor made for each wholesale client - streamlining the re-order process and increasing the cost of defection to a competitor (of which there is very few).

 

Key Features!

High Gross Profit margin of 45 percent
Self-propelled sales & a high gross profit margin of about 45 percent is indicative of a business which is both solid & in a strong growth phase.

Historical ongoing growth -  no matter what the state of the economy
The business has continued to record increases in sales & gross profits in recent years & the vendors see no reason why this trend will not continue.  In fact this business is now facing one of the fastest growing market sectors in decades!

Essential products
The products this business manufactures is so versatile its used by different industries in different ways.  For the agriculture industry its an export utility.  But it is also used in cleaning, the manufacture of cheese, breweries, repairs in the automotive industry, airlines, railways, & timber flooring to name but a few.

Breaking News!

"(*censored product*) sales from Australia to China have unexpectedly rocketed, breaking every record and
expectation by surging tenfold since last year..."
The Australian - May 2013.


Serves fastest growing market on the planet
Both the number of people considered middle class in China, & the amounts they earn, are set to rapidly increase. This will result in greater consumption of Australian agriculture produce, with Australia now China’s major supplier of this commodity. This in turn will lead to more sales by the businesses clients, who will require more product from this company to facilitate the export of their agricultural goods.

Recession proof
Health & Safety requirements mandate the ongoing necessity of this businesses products no matter what the state of the economy.  For many customers, these products are simply a must have.

Self-renewing demand
One-use products guarantee that clients return to the business to re-order again & again - often on a weekly basis.

Widespread growing repeat client base
The growing list of customers currently numbers approximately 170 with no one customer representing more than approximately 20 percent of annual sales. This is a key feature not often found in businesses of this calibre.

Low risk – key customer retention features
The business creates & retains template designs for customers’ products. This not only makes re-ordering simple both for the business & the client, but also ensures customer retention - as the inconvenience of having their entire product line re-designed outweighs any small cost benefit that may be achieved by price competition. & in any event, the business is highly price competitive while retaining good margins, meaning clients have no incentive to look elsewhere. It is also the only supplier of these products in WA – a key consideration for clients in industries such as agriculture processing which rely on a “just in time” logistics strategy.

Long established – almost 40 years
The business has been servicing the Australian market for nearly 40 years.  With very little sales or marketing effort turnover has continued to grow year on year, purely through reputation & word of mouth.

Only 4 staff
The industry being as large as it is, there has never been a problem to source new staff when required, though this business is notable for the longevity of key staff, who have been with the business for over 20 years.

No reliance on sales staff to generate sales
The vast majority of sales are simply self-propelled, which means that the current owners do 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
Customer defection to competitors tends to be very rare, which is achieved through consistent provision of quality products & service, backed by the fact the business retains template designs & offers clients ease of re-ordering.

Low competition
The businesses competitors are long-established, so the company has always operated against the present level of competition. In these market conditions the business is able to achieve good profitability, with extra capacity for growth.

Immediate potential to expand the business
While the new owner could easily absorb the 25 percent additional capacity inherent in the existing operation (without needing to invest in more staff or plant) through more pro-active marketing, the business is set to grow organically as the world market for its products expand – continued targeting of its existing client base should result in significant growth even without the new owner seeking to broaden the customer base.

High 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 find it very difficult to get established, as they would not know where or how to purchase some inputs & obtain the best prices. They would then need considerable time to try & establish themselves with clients, who would have little or no incentive to risk changing suppliers. For these reasons the vendors believe it highly unlikely that a new venture would open in the same market.

Low advertising
The business is in the fortunate position it does not have any reliance on advertising to generate sales. Advertising is presently restricted to an advertisement in the Yellow Pages which produces a couple of enquiries a month.  The present owners have opted not to actively market the business & this therefore represents one of the simplest & most direct routes to increased sales for a new owner – particularly if the promotions are aimed at expanding the client base into new facets of industry.

Simple to operate – no experience necessary
The current owners had no industry experience prior to purchasing the business. As a result the new owner will not need any technical experience as its day-to-day operations are simple, the practical aspects are handled by staff, & the entire operation will be clearly explained during handover.

Owner can take holidays
The current owners take regular holidays with their young family, simply taking a laptop to monitor emails.  Staff are capable of answering phone calls & running the business in the owners’ absence.

Low trading hours
The business operates Monday to Friday; no weekend work is required.

Business is run under semi-management
Management of the business is currently carried out by one owner on a part time basis. However staff take care of the day-to-day operations, meaning the owners are not required to be on site in order for the business to continue running.

Could be run under management
There is plenty of capacity in the adjusted net profit to allow for the appointment of a full time manager should the new owner so desire.

Current year to date sales are up 44% & accelerating
The company continues to have organic growth through word of mouth, & the business looks set to win a new key client in the coming weeks. This is a real bonus for the new owners, as this particular client was one of the largest buyers when the current owners took over this business. They subsequently lost that client when the customer closed, & admit they simply overlooked the necessity of following up when it re-opened.  The client has now indicated it would like to re-open the supply chain - a clear win for the new owner.

Long established repeat client base & supplier list
Many clients have traded with the company for decades. Not reliant on agencies or a few large clients, thus offering excellent stability.  The consumable nature of the main product sold means continuing sales without marketing or sales staff.

Secure agencies product lines
The business has exceptionally secure supply arrangements with multiple overseas manufacturers of product.

Profits can be proven
The business has a complete set of verified accounts which clearly show its profitability.

No bad debts
During the vendors’ ownership the business has not experienced any bad debts.

This business is the largest of its kind the Western Australia, with very few competitors who struggle to compete from the eastern states.


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