"Selling your business is our business"
"Selling your business is our business"
Fully describe the business's activities?
A work-from home hand-crafted artisan sourdough bakery. Whilst sourdough loaves make up the largest proportion of sales revenue the bakery also produces rolls, pizza bases, pitas, bagels, brioches, prego, ciabatta, seed-loaf, rye, olive, cheese and onion, tomato and garlic, sweet potato breads. They do speciality bakes such as hot cross buns, scones, brownies and kitka. The bakery is managed by the head baker and his assistant who are involved 5 days per week and overseen by the owner who liaises with clients for weekly orders, arranges distribution, runs the accounts and replenishes supplies.
How long has the business been established?
The owners bought the business from a baker 8 years ago when it was baking 1 day per week for a local market.
How long has the owner had the business?
The current owner has had the business for the past 8 years.
How does the business operate on a daily basis?
Orders are accepted weekly within a 3 day order window to allow for fermentation and autolysis (clients are on a WhatsApp group) and the bakery operates 5 days per week with the Head Baker and his assistant managing daily baking operations and the owner dealing with clients, suppliers and doing the accounts and admin.
How are the clients attracted to the business?
A WhatsApp group is run for existing client base of 988 and 29 outlets some of which are as far afield as Ballito.
Use of social media, monthly visits to new restaurants where engagement with the owner is done to market directly, monthly baking courses are run for a maximum of 7 people and many clients find the business via the web. The most successful marketing tool has been word-of-mouth and a policy of "no questions asked" if product is returned. It is the owners belief that service has become a competitive marketing edge.
What Advertising/Marketing is carried out?
The use social media such as Facebook and Instagram, web site, in-house courses and restaurant visits to find new clients.
Does the business have any contract work?
No, however there are monthly orders from clients in the midlands area, a few restaurants, retirement homes and food outlets. The business starts each month with orders of approximately R 25 000.00.
What competition exists?
A more commercial bakery is located in the village but nobody is able to compete with the sourdough recipe which has been perfected over the years based on knowledge gained whilst abroad - this sourdough is unique based on the "mother" (+ 20 years old) and the process which is overseen by an expert sourdough baker. Most clients never return to previous outlets once they have experienced our breads.
What are the seasonal trends?
No specific trends but naturally are busier in school holidays, public holidays, Easter and Christmas.
Is the business VAT Registered?
No
Are there up-to-date Management Accounts available?
Yes - run on Quick Books
What Balance Sheet and Income Statements are available?
AFS 2025 are available. An adjusted income and expense schedule is available as it was necessary to strip out cost and revenue of another business to reflect the "true" financial state of the bakery.
What percentage of the business is cash/credit?
Offer 30-day payment terms.
Cash sales very low and insignificant.
What is the age analysis of the debtors book?
Maximum 30-days and no bad debt.
How could the profitability of the business be improved?
The current business has reached capacity on a 5-day per week single shift basis and a footprint of 86sqm.
A new owner could increase output based on size of footprint, additional staffing and equipment, expanded markets and some CAPEX investment.
Is Seller finance available and for what amount?
No
What is the total staff complement?
2
Give a breakdown of staff/ functions/ length of service?
Head Baker - 8 years
Assistant Baker - 3 years
Do any receive special perks or incentives?
No
Are they on contract?
Contract is in place for the Assistant Baker but not the Head Baker.
Do any have management potential?
Between the Head Baker and Assistant Baker they are capable of running the operational aspects of the bakery. They are expert in the quality of the products and can make process adjustments on the run to maintain the quality clients have come to expect. They are not capable to run accounts or do the marketing and larger client interaction.
How involved is the Owner in running the business?
The owner is involved for a few hours every day - he is not required to work in the bakery on the process. He deals with client orders, distribution, suppliers, marketing accounts and general administration.
When does the current lease end?
No lease in place as it is a work-from home business.
What are the trading hours?
The bakery operates 5 days per week but does not ordinarily deal with the public - orders are placed and either delivered or collected. The business opens at 07h30 and closes at 16h30 daily.
What is the square meters of the business?
86sqm + a container for storage of raw materials.
Do you require a licence?
A food licence is required as Health and Safety Standards are critical to the process.
What are the main assets of the business?
An asset list has been provided. The major assets based on value above R 10 000.00 are
6 gas ovens
I fridge
1 freezer - R 20000.00
1 magimix
Numerous small baking related items from R 2000.00 to R 18.00
Are any items not included in the sale?
No, none specified.
What is their overall condition?
Everything is fit for function or in working order.
Do any require repairing?
No - ongoing general maintenance
How have they been valued ?
Purchase price less depreciation.
Which assets are on lease/HP and with whom?
None
Are they presently insured?
Yes
Strengths?
This is a unique business based on intellectual property acquired over the past 8 years.
The sourdough is considered high-quality in both flavour and the health benefits.
Various bakery products compliment the business and offer diversity
East to run and manage business with low overheads and staff costs
Can be set up on home property - by-laws dependent
Existing client base and growing
Service which is personal is a distinguishing feature.
Capacity to expand market
Weaknesses?
No lease - must be a work from home business
Head baker and his assistant are key to the business and live locally and should, ideally, go with the new owner.
Opportunities?
Plenty room for expansion in product range and market penetration.
Increase footprint, CAPEX injection and review distribution aspects.
Threats?
The product is unique based on the IP and process. Clients do not generally leave once they have experienced the product.
Sourdough is freely available from most large food retailers as are their scones, buns, bagels, brioche, Kitka etc.
What is the reason for the sale?
The owners have embarked on a new venture and require the space that the bakery occupies. They do not intend working in the baking sector going forward.
Why is this a good business?
An excellent and unique opportunity in the right hands - well suited to a work from home or addition to an existing food outlet. The product range will compliment a business in the food/hospitality sector. It is simple to relocate and set-up and commission and be trading within days. Training will be provided to the buyer to ensure all aspects of the process are understood.
