* Included in Asking Price
Frozen Food Wholesaler, Supply & Distribution Business
Location Home Counties
Asking Price £ 30,000
Estimated 2012 Turnover circa £263,000
Estimated Gross Profit circa £50,000
Long-established and well known business with many loyal customers
Historic High Revenues
Well-run business operations that can be easily re-located
Strong relations with numerous international suppliers
Key focus on Independent Sandwich Bar marketplace
The business supplies wholesale goods mainly to the independent sandwich bar market with around thirty customers nearly all of whom have twice weekly deliveries. Customers are located in Reading, Wallingford, Botley, Oxford, Aylesbury, Watford, Acton, Hammersmith, Shepherd’s Bush, Marlow, Maidenhead, Abingdon. Nearly all customers pay cash on delivery, one customer pays weekly and two have a 28 day account.
In 2008 the company had sales of £882k and gross profits of £149k. The economic downturn caused a number of customers to go out of business and sales have been further reduced by the reduction in footfall in the high street. The combination of these major factors has reduced sales in the intervening years to its current level of circa £240k per annum with gross profits currently running at 20%.
The company has been under capitalised for some time. This was caused by debts incurred by a previous business partner. The effect of this is that the business has not always been able to take advantage of lower cost prices offered for bulk purchases. I estimate this has reduced profits by about 5-10%. Also, being able to offer lower cost products to customers almost certainly leads to selling other products. For example a number of customers (and ex-customers) will only buy a certain brand of back bacon. Offering this product (which can only be bought on a pallet basis costing approx £2000) would increase profits to current customers by £100 per week and by offering it to ex-customers could increase this figure to £200-£300 per week (£10,000-£15,000 per annum). Similarly, I estimate that investment in chicken (c£2100 per pallet) would increase gross profits by £200 per week (£10,000 per annum).
The business has a long standing history and reputation, which is a great asset to the company. All operations are streamlined with low overheads. The client base is diversified enough to give stability to future earnings with the revenues spread across them. The customer base has been loyal over the years, which provides confidence in future earnings from which to build.
|Facilities:||The business is fully re-locatable and currently operated from a home office, with off-site storage facilities.|
|Competition:||The business was originally built on a direct sales approach with site visits to gain new customers, however, over time business has been increased from ‘word of mouth’ recommendation and referral. The business would benefit from a defined marketing campaign and website presence, ideally with on-line ordering facilities.|
|Growth Potential:||The vendor believes the primary route to returning the business to the annual revenues of circa £1Million is by way of capital investment to compete on price for general goods, whilst increasing margins. This could be further advanced by a marketing drive to win some of the many new independent customers across the catchment area. The business would benefit from a defined sales strategy and focused sales representative.|
|Training/Support:||The owner is happy to provide training for an agreed handover period.|
|Sale Reason:||The vendor is now approaching retirement.|
Seller Reference #AF148
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