Key Features
IRBA Clients
8 Staff
Audit, Bookkeeping, Accounting & Tax, Consulting
R1.00 Fee Ratio
Turnover Warranty
50% Vendor Finance
Balance over 24 months as terms
29% ROI Pre-Tax
Seller Discretionary Earnings of 35%
IRBA Work could be reintroduced
Seaside Living In Western Cape
Established 22 years
Association ensures soft landing
Smooth Handover
Dominant Firm In Area
Predicted Area Growth Ensures Future Growth
Covid19 Already Factored In
This practice with a solid 23 years of history operates out of the far East Rand. It is an established name and has undergone changes over the last few years and has clients all over Gauteng. It supplies various services but currently focuses on IRBA work which is 59.4% of the fees. This is perfect for a firm with RA’s looking at expanding their business offering.
This is an ideal branch for you in Gauteng to service the Far East Rand.
| PRICE | R2,700,000 |
|---|---|
| Fees Pa Warranted | R2,688,915 |
| Expenses Pa | R2,051,055 |
| Profit For Year* | R637,860 |
| *Profit = Seller Discretionary Earning | |
| Fully describe the business’s activities |
The business is focused on providing audit, accounting, taxation, and other financial services for clients in Gauteng, but mainly on the East Rand. The business employs staff locally to ensure there is a societal impact benefit. It supplies various services but currently focuses on IRBA work which is 59.4% of the fees |
| How long has the business been established? | In its current form, the business has been in operation for just over 4 and a half years. The brand has been operational for 23 years |
| How long has the owner had the business? | The current owner has had the business for 4 years, and 7 months. |
| How does the business operate daily? | The business is owner-managed and run. |
| How are the clients attracted to the business | The majority of clients have been attracted by word of mouth. Some have been attracted by referrals and advertising. |
| What Advertising/Marketing is carried out | Very limited advertising. Signs outside the office. |
| Does the business have any contract work | They do not have any contract work. |
| What competition exists | Normal competition. |
| What are the seasonal trends | Schools, Law Society and Estate agent deadlines. Then peak in the tax filing season. Also, Payroll returns |
| Is the business VAT Registered | Yes |
| Are there up to date management accounts? | Yes, management accounts are available upon request. Banking is reconciled at a minimum monthly. |
| What annual financials are available, income statement and or balance sheets? | Yes, available upon request, as part of the Due Diligence. |
| What percentage of the business is cash/credit? | Less than 1% cash. Majority credit. |
| What is the age analysis of the debtor’s book? | Some clients pay on receipt of invoice, with a few being 30/60 days after receipt of invoice. |
| How could the profitability of the business be improved? | Additional Marketing can be done. By increasing fees, and cutting down expenses. Improved productivity of staff and ability to deliver an end product and invoice the client. More bookkeeping clients and eliminating audits of Body Corporates. |
| Is Seller finance available and for what amount? | Yes, a structured deal will be considered on the following basis:- (1) Finding an approved Buyer. (2) The seller will expect an upfront cash payment, of 50% of the purchase price, on the Effective Date. (3) The Seller will warrant turnover for 12 months, subject to acceptable terms and conditions being established for the owner’s continued involvement in the business. (4) The balance is payable in monthly payments over 36 months. (5) The terms and conditions regarding the warranty and ongoing involvement will be clearly defined, as well as how the price will be adjusted, either upwards or downwards at the end of the warranty period. (6) The seller will continue to bring new clients to the business and will be rewarded accordingly. |
| What is the total staff complement? | 8 employees. 1 left at the end of January. so now 7. Currently, 2 SAICA trainees are under contract. |
| Staff Breakdown | A breakdown will be provided as part of the Due Diligence process for interested parties. |
| Do any receive special perks, bonuses or incentives? | No special perks. All employees are eligible for a 13th cheque or bonus in December subject to individual performance and company performance. Staff get reimbursed for travel at SARS rates |
| Are they on contract? | All employees have an employment contract with a calendar month’s notice. |
| Do any have management potential? | Currently 2 employees in Management positions. Audit Manager and Tax/Admin Manager. |
| How involved is the Owner of running the business |
Owner signs all audits, reviews and compilations. Delegates to Management where possible. |
|
When does the current lease end? |
The current lease expires at the end of May 2023. |
|
Is there an option for renewal & what period |
1-year renewal option. |
|
What is the annual escalation |
The last increase was R500, but initially wanted a 10% escalation. |
|
What are the trading hours? |
Monday to Thursday from 08h00 to 16h30. |
|
What is the square meterage of the business? |
The offices are a house |
|
Is a copy of the lease available? |
Yes |
|
Do you require a licence? |
Yes to do audits and reviews are required to be registered with IRBA. |
|
Is a full asset list on file? |
Fixed Asset register and tax register maintained and available during the Due Diligence. |
|
Are any items not included in the sale? |
No. |
|
What is their overall condition? |
Good. |
|
Do any require repairing? |
No |
|
How have they been valued? |
Replacement Value |
|
Which assets are on lease/HP and with whom? |
No leased assets. Printers are on a page-per-copy basis |
|
What are their settlement amounts? |
N/A |
|
Will the Seller settle or Buyer take over? |
N/A |
|
Are copies of agreements available? |
For printer usage agreements, during Due Diligence |
|
Are they presently insured? |
Yes Insured |
|
Strengths |
They have great, long-lasting client relationships. |
|
Weaknesses |
Staff turnover and ability to keep trainee accountants. |
|
Opportunities |
Ability to expand the firm with additional resources, especially with regard to bookkeeping. |
|
Threats |
None Perceived |
|
What is the reason for the sale? |
The owner is planning to emigrate. |
|
Why is this a good business to buy? |
The business has built a reputation in Springs and has a fairly loyal client base. |