A BUSINESS OPERATED REMOTELY

ITS PRODUCTS ARE ESSENTIAL - Paints and coatings are extensively used for buildings and machinery. It not only impacts the protection of the structure, machinery or vehicle interior or exterior appearance but also influences the equipment’s structure and longevity. Paints and coatings are special protective applications that prevents corrosion and damage from weakening materials and are an absolute must-have. The growing Western Australian population will require this business's products, as coatings and associated products is an essential product for both domestic and commercial/industrial purposes.

POSITIVE TRENDS - The global paints & coatings market size was estimated at 43.40 million tons in 2016 and is expected to grow significantly over the next 5 years owing to its growing utilization in various end-use industries such as building, automotive, marine, mining construction and industrial markets. The business is well positioned to take advantage of this, having survived the downturn in excellent shape.

PROFITS CAN BE PROVEN - The business has a complete set of verified accounts which clearly show its profitability.

HIGH ASSET MIX IN PURCHASE PRICE - The business reflects a high percentage of the purchase price is made up of tangible stock and equipment. Compared to low asset businesses.

EXCEPTIONAL CUSTOMER AND GROWING CLIENT BASE- The Growing list of customers currently numbers approximately 120 with no one customer representing more than approximately 5% of the annual sales. This is a key feature not often found in businesses of this caliber

HIGH LEVEL OF CLIENT LOYALTY...

IT’S UNDER FULL MANAGEMENT WITH LOW STAFF - The business employs 2 full-time staff. Both are cross-trained in each other’s work, and one of them is the manager who looks after the daily operations. They run the day to day operation of the business without supervision. The current owner lives a long way away from the business and only relieves staff on occasions it is possible to also employ a casual employee to fill that role should the owner wish to do nothing. This arrangement allows the owner to work low hours and take holidays.

NO RELIANCE ON SALES STAFF - The clear majority of sales are simply self-propelled which means that the current owner does not have the overhead of running a sales force. However, it also puts the new owner in the enviable position of having at hand a means by which demand could almost certainly be increased if need be.

Not effected by competitors -The business has never had any problem in handling competition. Its main competitors are big box stores which have been present for a prolonged period of time. They are not able to wholesale products and don’t carry a specialized range of products like this business which gives it an edge with its trade-based clientele.

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 issue:

Competing with a well-branded dealer.

Obtaining and fitting out top-class premises

The lengthy period required to build up goodwill and on-going repeat business

The time to build trust with major commercial/industrial customers.

MINOR OVERHEADS - Given the size of the annual turnover, overheads are relatively small.

FAST PAYMENT OF ACCOUNTS - A large portion of debtors are collected on a COD basis - approximately 45% with the balance on 30-day terms.

EXCELLENT CASH FLOW – A substantial portion of debtors are collected on a COD basis approximately 55% with the balance on 30-day terms.

HIGH GROSS PROFIT MARGIN - Self-propelled sales and a high gross profit margin of over 55% is indicative of a business which is both solid and in a strong growth phase.

LOW RISK - The business enjoys automatic growth across a range of market segments, has an excellent long-established reputation as the leading one-stop-shop business, and its relationship with a major brand means it can meet the prices of any competitors and still make healthy profit margins.