| History Background |
| Fully describe the business's activities? | This business is a pawnshop. The owner buys goods like TV's, fridges and other appliances from the public. The sellers can buy the items back after a certain period for the nominal value plus 30%. If they don't want to buy back, the items are sold for roughly double the amount they were bought for. The items are bought for about one third of the value of a comparable new product. Two thirds of people buy their goods back. The owner requires a police clearance and copy of the seller's ID. | |
| How long has the business been established? | The owner started the business in 2003. | |
| Present Market |
| How does the business operate on a daily basis? | The owner makes sure that he stays up to date with prices in the market by reading newspapers and looking at pamphlets. When clients walk in, a transaction is done. All items are tested before they are accepted. A stock take is done once a month. | |
| How are the clients attracted to the business? | About 5300 customers are currently on the database of the business. Of these, some only came once, others are regulars, but new ones are added all the time. A visible location and word-of-mouth bring new clients in. | |
| What Advertising/Marketing is carried out? | No advertising or marketing is carried out. | |
| Does the business have any contract work? | Some clients pay their 30% every month to keep their property off the sales floor, and since some have been doing this for some time it hs effectively become monthly income the owner can count on. | |
| What competition exists? | There are a number of pawnshops in Windhoek, each catering to a different clientele. Some focus more on furniture, others on appliances etc. | |
| What are the seasonal trends? | Sales and buybacks are high in December, whereas many people pawn in January. The business is fairly constant, however. | |
| Financial |
| Is the business VAT Registered? | Yes, business is vat registered | |
| Are there up-to-date Management Accounts available? | Yes, up to date accounts available | |
| What percentage of of the business is cash/credit? | Everything is cash. No accounts, no credit cards. | |
| How could the profitability of the business be improved? | The business would be more profitable if the owner would be the one running it, thus saving the manager's salary. | |
| Is Seller finance available and for what amount? | Seller finance is not available. | |
| Staffing |
| What is the total staff complement? | The business employs three people. | |
| Give a breakdown of staff/functions/length of service? | A manager has been working in the business for 6 years. He is very good and trustworthy and does everything that needs to be done in the business. The two others are general workers, helping with sales, cleaning and making sure there is no shoplifting. One of them has also been with the business for 6 years. | |
| Do any have management potential? | There is a manager in the business who is competent and able to run the show. | |
| How involved is the Owner in running the business? | The owner is not very involved at all. He is there about 20% of the time, except when the manager is on holiday. He checks the cash-ups and other management reports every day. | |
| Premises |
| When does the current lease end? | The lease ends in November. | |
| Is there an option of renewal & what period? | It is never a problem to renew, sometimes the landlord and the tenant forget to renew and it just keeps running. | |
| What is the annual escalation %? | Usually 10% | |
| What are the trading hours? | Trading hours are 8:00 to 17:00 | |
| Do you require a licence? | The normal licence from the municipality is required, as with any business in Windhoek. | |
| Assets |
| Are any items not included in the sale? | All assets are included. | |
| What is their overall condition? | The assets are not new, but everything is in good working condition. | |
| Do any require repairing? | Nothing requires repairing. | |
| How have they been valued. ? | The assets have been valued at fair value. | |
| Are they presently insured? | All assets are presently insured. | |
| S.W.O.T. Analysis |
| Strengths? | Good customer base, little work, cash business. | |
| Opportunities? | Start taking lay-bye's, and furniture could be added if the premises were bigger. | |
| Threats? | Legislation unclear whether pawnshops are cash loan businesses. | |
| Reason For Sale |
| What is the reason for the sale? | The owner wants to move to Cape Town. | |
| Conclusion |
| Why is this a good business? | The business is manager-run, cash and has built up a good customer base over seven years. | |
| What is the price plus stock and the net profit? | The price of the business is N$1 250 000 plus stock, with a monthly net profit of about N$40 000 per month. | |