January 24, 2013200278473
Although Scott has been presented with an impressive opportunity, I would not recommend that Scott and his wife invest in this company at this time. I do recommend, however, that Scott find a knowledgeable partner to share the expense of the business purchase and upgrades. The investment into the business not only provides the partners with a solid product, but upgrades, product developments and a directed marketing campaign will provide the business with significant growth.
Scott Golowitz is currently working 70 hours per week with a wife and five children at home and one on the way. He has a background in industrial chemicals and his wife, Jennifer, has an accounting designation. The company they are thinking of purchasing is Chemtec – a chemical company with a major product, Sparkel. This business is open from 7am-12pm, which would leave Scott with much time for his family, and creates profits of approximately $200,000 annually.
There are several opportunities available to Chemtec that new owners would be able to initiate. First, equipment upgrades would allow the company to become much more efficient. Second, research and changes to the existing product can lead to new product development, which would allow Sparkel to have a larger target market and become a more widely-known brand. There is also an opportunity for a new source of income though packaging products for other companies, which is a niche not served West of Toronto. Finally, expansion into the United States will expand the consumer base from 420,000 to 4.8 million. Better communication with customers will also create growth and consumers become more aware of the product offerings by Chemtec and the recommended placing of the product next to other cleaning products.
A consumer trend toward environmentally-friendly products opens up new marketing opportunities for Chemtec to market Sparkel as an eco-friendly...