Summary
The business is very robust and reliable and because of the essential product range will withstand any economic downturn or recession. A large base of repeat order customers ensures continued growth.
Revenue
$1,929,000 pa
Rent
$52,000 pa
Expenses
$371,000 pa
Net Profit
$233,000 pa
Location Details
Outer Metro Hills Region
This well-established business services a large region to the east of the Perth outer metropolitan area. The total client base numbers are approximately 3,000, of which repeat order clients represent approximately 75 percent of total sales.
Potential
The business has never had an aggressive advertising plan but instead has relied on word-of-mouth, and the occasional social media post. Sales would potentially increase if more advertising was carried out.
The expansion of their website click-and-collect service has potential for excellent growth.
New products could be introduced to complement the existing product range.
The business regularly receives inquiries as to whether it offers deliveries. The vendor believes that if deliveries were introduced, sales would expand rapidly.
Skills
Simple to operate – no experience necessary
The current owner had no industry experience prior to purchasing the business and set about understanding the business and what is required to operate it.
Could be run under management
The current owners work full-time in the business, however a new owner could run the business partly under management.
Hours
The business operates 7 days per week and the owners share the operating hours in conjunction with an employee.
Lease
The current lease is around $4,500 per month and is 3 years into a 5-year term with a further 3 x 3 option available.
Employees
The business currently operates with the owner/manager and his wife along with a part-time person who services customers and general sales duties.
Reason for Sale
The vendor has achieved what he set out to do in the business and feels it needs new energy and direction from an enthusiastic and motivated new owner who could progress the business to its full potential.
About the Business
The business is very robust and reliable and – because of the essential product range – will withstand any economic downturn or recession.
With a large base of loyal customers who have realized that they can rely on the business for the supply of quality products, a lack of imagination is the only limitation on its growth
This solid business has a diverse range of rural products and is fortunate in that with the seasons come demands for different product lines.
When one sector is quiet, another will increase demand, which keeps seasonal variation in sales to a minimum. Stock holdings are always maintained to suit seasonal conditions.
The business is relatively simple to operate and a new owner would not need any specific skills other than business management.
The business is fortunate that its suppliers are reliable, however, if there are supply chain issues there are alternative suppliers from whom products can be sourced.
It has only recently entered the online space, offering click-and-collect on a limited range of products. This is obviously something that a new owner can immediately expand to increase sales.
The business currently operates with a husband and wife team with one additional employee. The current owners choose to be hands-on, but with well-trained and reliable staff the business could run with minimal input from the owners.
The business has continued to record increases in sales and gross profits and the owner sees no reason why this trend will not continue, especially given the fact the population of the region is expected to continue to grow.
Customers provide repeat orders on a regular basis, loyal to this business because of its diverse range of products and presence in town, making it a “one-stop-shop” for all their rural needs.
The competitors are long-established, so the company has always operated against the present level of competition. In these market conditions, this business is able to achieve continued growth, so the presence of competitors effectively has no effect on its turnover or profitability.
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 face the following issues:
1. Breaking the loyalty of the business's repeat customers
2. Establishing supplier arrangements with discount purchases
3. Securing exclusive agencies for key products
4. Finding suitable premises with main road frontage.
History
The business commenced operation in 2001 and was purchased by the current vendors in 2014. It has always received very solid support from locals, as it has developed a good reputation and support from the surrounding communities.
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