Cannot be over taken by technology Ref No. PB3434

Business Summary

Net Profit: $115,000
Price: $255,000
Industry: Service, Transport

 
Australia’s freight volumes are projected to increase by 80% between 2010 and 2030 and to triple by 2050 – and that doesn’t take account of recent predictions that WA is set to become the world’s biggest producer of lithium and global capital of batteries for electric cars.

Key Features

  • Historical ongoing growth - no matter what the state of the economy
  • Essential service
  • Widespread growing repeat client base
  • Exclusive service
  • Long established – 35 years
  • Low staffing
  • No reliance on sales staff to generate sales
  • Low competition
  • Immediate potential to expand the business
  • No Stock
  • Simple to operate – minimal experience is necessary
  • Low trading hours

Business Overview

Test Click to enlarge image

Serving a lucrative and growing route for the past 35 years, the business is ideally positioned to capitalise on projected increases. Currently a small and highly efficient business with minimal overheads, it could build on its longstanding reputation for reliably servicing its 70-odd clients, using them as a reference and referral source to capture a much larger base, adding vehicles and staff only when contracted volumes justified it and thus minimising any risk.

Currently this is a five-day-a-week service with set collection and delivery times, offering a guaranteed same day service to the southern metro region. Utilising a van and a medium sized truck, all loads are covered and the business is the only one operating this route that has a tail lift for heavy loads, making deliveries easier. Many of the business’s customers have been in place for over 20 years which demonstrates a business which is both needed and one that has exceptional customer satisfaction.
 
On the other side of the ledger, the business operating costs are exceptionally low. There is no stock other than fuel, just one staff member, and very little advertising. This, plus the fact most customers are on seven day accounts, means the business enjoys excellent cashflow and requires minimal working capital. With 40 percent of the purchase price representing Plant and Equipment, this is a very low risk option with immense expansion potential.
 
The total active client base numbers approximately 70, around 90 percent of which are repeat order clients and no one customer represents a large proportion of the business.
 
The business has built up a substantial client list over its establishment period.  It has little reliance on any one customer making the business less susceptible to major downturns arising from the loss of clients.

The business is in the fortunate position where it needs no aggressive marketing plan or sales force to generates sales. Instead the business relies on word of mouth referrals from satisfied customers to maintain its market leader status.

Key features
  • Historical ongoing growth -  no matter what the state of the economy
It has continued to record increases in sales and Gross Profits from inception and on this basis the owner sees no reason why this trend will not continue, especially given the fact that Australia’s increasing population is universally projected to drive increased demand for freight transportation through to at least 2050.
  • Essential service
Products of all kinds will continue to require transportation from ports and airports to distribution centres and thence to retailers and other users, including those in regional areas.
 
  • Widespread growing repeat client base
 The growing list of customers currently numbers approximately 70, with no one customer representing more than approximately 15 percent of the annual sales. This has been a deliberate policy employed by the vendor to make the business less susceptible to major sales downturns resulting from a loss in a major customer. This is a key feature not often found in businesses of this calibre
  • Exclusive service
Daily set schedule with enclosed secure loads and a two-tonne tail lifting service.
  • Long established – 35 years
The business has been servicing the Perth market for some 35 years and during most of that time the demand for its services has exceeded the business’s capacity. With very little sales or marketing effort turnover has continued to grow year on year, purely through reputation and word of mouth.
  • Low staffing
This keeps overheads to a minimum. And the industry being as large as it is, there has never been a problem to source new staff when required.
  • No reliance on sales staff to generate sales
The clear majority of sales are simply self-propelled which means that the current owner does not have to spend time canvassing for clients or using company funds as advertising expenditure. However, this also offers a new owner a readily accessible means by which sales could be increased if desired
  • Low competition
The businesses competitors are also long-established, so the company has always operated against the present level of opposition. In these market conditions, the business can achieve year-in year-out sales increases so the presence of competitors effectively has no effect on its turnover or profitability.
  • Immediate potential to expand the business
By establishing further set runs into other regions or expand the fleet offering a more diverse payload.
  • Barriers to market entry
Aside from the significant capital requirements to establish a business such as this, a newcomer to the market would face competing against a well-recognised and longstanding provider with strong branding, already serving a large and well-established client base
  • Minimal advertising
The business does virtually no advertising to generate its current levels of sales and profits. However, should a new owner wish to grow the business further, a proactive sales and marketing effort would almost certainly result in growth.
  • Simple to operate – minimal experience is necessary
The current owner had no industry experience prior to purchasing the business and has always employed a driver for the heavy vehicles, which leaves the current owner with minimal work in the business.
 
  • Owner can take holidays
The current owner has been able to take holidays as and when needed, leaving the business in the hands of the current drivers.
  • Low trading hours
The business operates Monday to Friday only and can be run under management. 
 
  • Work from home
The business can be run from a home office with space available on site to park the truck and van overnight.
  • Long term historical growth
The business growth has been entirely based on performance – the better service it provides the more work it wins. This means its growth isn’t dependent on external factors over which it has no control.
  • Minor overheads
Given the size of the annual turnover, overheads are relatively small.
  • No significant stock holding
The business only holds small stocks of fuel. Most other businesses will carry much higher values, which will demand higher working capital requirements and unnecessary money tied up during the term of ownership.
  • Low Working Capital
This is a high cashflow business with some 5 percent of debtors paying COD with most of the balance of customers paying on seven-day accounts.  This provides the business with an excellent cash flow, which minimises working capital.
  • High asset mix in purchase price
A high percentage of the purchase price is made up of plant and equipment. Compared to low asset businesses, this business reflects a lower risk and potentially delivers a higher bottom line profit through being able to minimise its tax through claiming depreciation as a non-cash expenditure item on its long-life equipment.

FOR THOSE WHO DON’T WANT TO BUY RISK
 
...OUTSTANDING - Growth Prospects for The Future
 
…OUTSTANDING - HISTORY – 35 Years
 
...OUTSTANDING - Gross Profit
 
...OUTSTANDING - Business - You’ll Be Convinced When You Read Our 70 Page Report. 

Contact us today to receive a detailed business profile – the first step to your securing this exciting opportunity.

Register your interest now – report will be available in one week!

Email Me now and I will give you along with other registered buyers a 7 day lead time prior to the business being shifted to “Available Now” section of our website.

Important: Recent analysis of our business sales reflected over 75% of businesses sold were to buyers who registered interest against the business before the report was finalised, which eliminated the need to advertise the business for sale in the media.


 
 
 
 

Financial Analysis

graph Click to enlarge image

Plant $110,000 Stock $Nil Goodwill $145,000 Profit $115,000 Total Price $255,000