maximise the value of your business dec 2012
DESCRIPTION
TRANSCRIPT
![Page 1: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/1.jpg)
Maximise the Value of Your Business
Craig West
![Page 2: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/2.jpg)
Did you know?
![Page 3: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/3.jpg)
51%Of business owners plan to use their business
as their primary source of funding retirement
43%Aim for a lump sum and a third expect an
ongoing income stream
![Page 4: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/4.jpg)
The average age of a family business
owner is 56 years.
61%Would seriously consider selling if
approached.
![Page 5: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/5.jpg)
Baby Boomers – the 18 year wave
![Page 6: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/6.jpg)
Since 2008, almost half of business owners over age 50
have delayed their retirements due to the GFC.
![Page 7: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/7.jpg)
If you turn 50 today, your life
expectancy is now 32 more years.
31%of retired business owners do not
have an adequately funded retirement.
![Page 8: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/8.jpg)
Why Business Succession and Exit Planning?
55% of all business exits are due to death, disability,
bankruptcy, receivership,liquidation or simply closing
the doors.
![Page 9: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/9.jpg)
![Page 10: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/10.jpg)
Covey says “ if you want to have a successful enterprise, you clearly define what you’re trying to accomplish…. the extent to which you begin with the end in mind often determines whether or not you are able to create a successful enterprise.”
![Page 11: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/11.jpg)
![Page 12: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/12.jpg)
Australia’s mid-range market of companies, with revenues ranging from $10 million to $250 million are actually the biggest contributors to our economy .
27,000 businesses.
3.2 M full time jobs.
Generating 33 % of total revenue and
accounting for 1 in 5 dollars borrowed .
![Page 13: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/13.jpg)
Business Survival Rates – 2008/09Exit %7.6%
7.1%
9.9%
19.5%
TOTAL
Non-employing
Micro/Small
Mid-Range
Big Business
15.4%
Total Number of Businesses Exiting the Market: 319,867
![Page 14: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/14.jpg)
Business Succession and Exit Planning
Combining the Business, Financial and Personal goals of business owners to design and implement a strategic exit.
![Page 15: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/15.jpg)
![Page 16: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/16.jpg)
![Page 17: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/17.jpg)
Stage 1: IdentifyStage 2: ProtectStage 3: MaximiseStage 4: ExtractStage 5: Manager
![Page 18: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/18.jpg)
![Page 19: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/19.jpg)
Stage One:Identify Value
![Page 20: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/20.jpg)
Financial Analysis
![Page 21: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/21.jpg)
![Page 22: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/22.jpg)
Non-Financial Analysis
![Page 23: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/23.jpg)
![Page 24: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/24.jpg)
Benchmarking
Total income per fee earner
Net profit per fee earner
$- $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000
$269,858
$88,894
$41,592
$25,595
$384,352
$80,477
$63,969
$50,224
$251,971
$162,002
$48,676
$34,431
Income KPI's
High Turnover Firms
High Profit Firms
This firm
![Page 25: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/25.jpg)
![Page 26: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/26.jpg)
Due Diligence
Checklist of all vital information:
• Financials, tax returns, BAS.• Legal – licenses, leases , employment
agreements.• Policy & Procedures / Systems.• Intellectual Property – patents, trademarks.
![Page 27: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/27.jpg)
![Page 28: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/28.jpg)
Stage Two:Protect
![Page 29: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/29.jpg)
Structure Review
ASSETS
RISK
![Page 30: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/30.jpg)
Decrease Risk
Non- financial analysis
Owner dependence
Reverse due diligence
Advisory board
Key people
![Page 31: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/31.jpg)
What do you want from your business in 5-10 years?
![Page 32: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/32.jpg)
Stage Three:Maximise Value
![Page 33: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/33.jpg)
1. Exit options
2. Job vs. Business
3. Boutique or Scale
4. Expansion or Efficiency
5. Decrease risk
6. Improve earnings – 5 * 5 * 5
7. Ownership Thinking
![Page 34: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/34.jpg)
![Page 35: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/35.jpg)
Strategy
![Page 36: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/36.jpg)
![Page 37: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/37.jpg)
![Page 38: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/38.jpg)
Income vs Equity
“The proper man understands equity – the small man, profits”
Confucius551 – 479 BC
![Page 39: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/39.jpg)
Maximise Value
Job vs. Business
Can you leave your business for days, Weeks, months?
How can you add value to your business?
![Page 40: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/40.jpg)
Adding Value
![Page 41: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/41.jpg)
Efficiency or Expansion
![Page 42: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/42.jpg)
Not sure which level to pull or which switch to touch?
![Page 43: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/43.jpg)
The 5 x 5 x 5 ProcessIncreasing Business Profit & Value
How does it work?
5% improvement in three key areas of your business
![Page 44: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/44.jpg)
EARNINGS
Gross Profit + 5%
Reduce Expenses – 5%
Increase Sales + 5%
![Page 45: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/45.jpg)
Here’s an example:
![Page 46: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/46.jpg)
![Page 47: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/47.jpg)
Secure Funding
• Many plans fall over at this point• Age & Financial situation?• Internal succession funding• Equity Partner / Investor
![Page 48: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/48.jpg)
Did you know that over 72% of Gen Y want to own their own business…
but not on their own!
![Page 49: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/49.jpg)
Ladder to Equity1. Income
2. Incentive – commission
3. Profit Share - % profits
4. ESOP – Equity
5. Control / Management
![Page 50: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/50.jpg)
Peak Performance Trust
A structure to allow employees to think and act like business owners by matching the performance of the business with their ability to build equity.
![Page 51: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/51.jpg)
Peak Performance Trust to fund:
• Profit share based on performance• Profit used only to fund purchase of
business by same key employees• Employee retention• Improved performance and increased
value
![Page 52: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/52.jpg)
Stage Four:Extract Value
![Page 53: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/53.jpg)
![Page 54: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/54.jpg)
Strategic Sales
"Price is what you pay Value is what you get "
Warren Buffett
1 + 1 = 3
![Page 55: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/55.jpg)
Strategic Value Drivers
![Page 56: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/56.jpg)
August 2011 – Archer accepts $1.2B for MYOB
The acquisitive private equity fund bought MYOB in February 2009 for about $500 million, and then boosted earnings by stripping out costs, raising prices and aggressively growing its customer base.
The deal is understood to have been valued at a multiple of 11.3 times EBITDA.
MYOB is used by more than 1 million SME’s in Australia and NZ.
![Page 57: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/57.jpg)
Siri wasn’t made in Cupertino. It was actually acquired in a deal rumoured to be worth close to $200 million.
It only took only one phone call to turn Siri's Dag Kittlaus's life around. Before the call, he was the head of a Silicon Valley start-up and afterwards, he was a multimillionaire working with Apple.
![Page 58: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/58.jpg)
Sale to a listed company
![Page 59: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/59.jpg)
ASX – PE ration (multiple)
![Page 60: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/60.jpg)
Private to Public Arbitrage
Historical ASX average 13.73 x
Private companies average 2.5 x
The value gap is called “private to public arbitrage”
![Page 61: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/61.jpg)
Listed companies have a 22 year high in CASH
![Page 62: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/62.jpg)
Offshore buyersThe total value of transactions increased 35% over the
previous year to US$736 billion.
8.8 * EBIT average
![Page 63: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/63.jpg)
AUSTRALIANBUSINESS
PTY LTD
$500K Profit EX
ITTRADE SALE
@ 2 x = $1 million
STRATEGIC SALE @ 4 x = $2 million
SALE TO LISTED CO @ 7 x = $3.5 million
To achieve a higher sale price, it’s much smarter to focus on HOW to sell and WHO to sell to, rather than trying to increase profit.
![Page 64: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/64.jpg)
Net proceeds is the important $
CGT – small business concessions.
Structures – who owns assets – before and after
Other costs - legal, accounting, other fees.
![Page 65: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/65.jpg)
Equity Matrix
100% owned
20% owned
![Page 66: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/66.jpg)
![Page 67: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/67.jpg)
![Page 68: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/68.jpg)
Stage Five:Manage Value
![Page 69: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/69.jpg)
Strategic Financial Projections
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
Jun-
11
Sep-
11
Dec
-11
Mar
-12
Jun-
12
Sep-
12
Dec
-12
Mar
-13
Jun-
13
Sep-
13
Dec
-13
Mar
-14
Jun-
14
Sep-
14
Dec
-14
Mar
-15
Jun-
15
Sep-
15
Dec
-15
Revenue
Revenue - Dept A Revenue - Dept B
0
5
10
15
20
25
Jun-
11
Sep-
11
Dec
-11
Mar
-12
Jun-
12
Sep-
12
Dec
-12
Mar
-13
Jun-
13
Sep-
13
Dec
-13
Mar
-14
Jun-
14
Sep-
14
Dec
-14
Mar
-15
Jun-
15
Sep-
15
Dec
-15
Headcount
Headcount
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
Jun-
11
Sep-
11
Dec
-11
Mar
-12
Jun-
12
Sep-
12
Dec
-12
Mar
-13
Jun-
13
Sep-
13
Dec
-13
Mar
-14
Jun-
14
Sep-
14
Dec
-14
Mar
-15
Jun-
15
Sep-
15
Dec
-15
Profit / Dividend
Net Profit Dividend
0%
10%
20%
30%
40%
50%
60%
70%
Jun-
11
Sep-
11
Dec
-11
Mar
-12
Jun-
12
Sep-
12
Dec
-12
Mar
-13
Jun-
13
Sep-
13
Dec
-13
Mar
-14
Jun-
14
Sep-
14
Dec
-14
Mar
-15
Jun-
15
Sep-
15
Dec
-15
Margin / Div Ratio
Net Margin Div payout ratio
![Page 70: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/70.jpg)
Successors Exit Options
![Page 71: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/71.jpg)
Smooth transition
Incoming CEO or Partners
Gradually increasing involvement
![Page 72: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/72.jpg)
Smooth transition
Existing CEO or Partners
Gradually reducing involvement
![Page 73: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/73.jpg)
Strategy for successful succession:
systems / processes
![Page 74: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/74.jpg)
Communication Strategy
• Implementation Success
• Shareholder / Key Management Communication
• Buyer Communication
• Staff Communication
• Client Communication
![Page 75: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/75.jpg)
Case Studies
![Page 76: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/76.jpg)
Client Case Study:Real Estate
Real estate office in NSW
Combined commercial office and residential sales : Central Coast
3 owners
Not in a rush to exit
Business Value approx. $2.4 m
14 employees
![Page 77: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/77.jpg)
Client Case Study:Outcomes• Implemented Peak Performance Trust
• Engaged and motivated 5 key staff with equity plan
• Reduced risk – staff retention
• Restructured
• Asset protection & risk management
• Tax and CGT advice
• Wealth outside business structure
• SMSF to hold appreciating assets
• Risk minimization
• Insured for unplanned events
![Page 78: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/78.jpg)
Recent Typical Project:Insurance Brokers
• 5 month time frame
• 3 existing partners, one potential, two possible
• 5 year plan to sell down
• Accelerate sale by partial sale to VC / Private Equity
• 18 months of ongoing coaching/consulting
![Page 79: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/79.jpg)
Outcomes
• Pre-documented sales programmed over 8 years
• Maximum Equity Value for outgoing shareholders
• Motivated Staff – with a predetermined program to transition
- Ladder to equity
• Recruitment / retention tool
• Accelerated thru initial sale to Austbrokers
![Page 80: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/80.jpg)
Client Case Study:Manufacturing
C-Mac GM Steve Grylak, with the national award for best ESOP for SME’s / Succession at the Employee Ownership Conference and awards dinner last Thursday 10th May. C-Mac has bucked the growing national SME trend to wind up on owner retirement (The Exit Generation Needs Help – SMH 19 Sept.2011) with the introduction of an employee owned share plan ( ESOP) offered to all its employees. The engagement of employees as owners has already seen an 18 % hike in productivity at the plant.
![Page 81: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/81.jpg)
Client Case Study:Clearwater Filter Systems
Sale of a family owned private company at 9.5 times earnings to JWI.
Key Factors:
• Listed company as buyer.• Offshore buyer .• Strategic sale – expansion from NZ to Australia.• 5 year exit strategy.
![Page 82: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/82.jpg)
Client Case Study:Sydney Software Business
• 60 year old owners - focused on reducing involvement and gradual sale.
• Peak Performance Trust involving 8 key staff.
• GM now running business – “semi retired” owners.
• Business Value now over $6 Mil.
• All other assets separated and protected.
• “truly a good story of transitional management”
![Page 83: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/83.jpg)
Strategic Advisory
At start of engagement ( August 2011 ):
• Heavily reliant on the three owners• Owners frustrated at staff disengagement • Unclear about the vision and future of the business• Owners goals - semi-retire while continuing to grow the value of their business • Owners personally exposed to potential liability
![Page 84: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/84.jpg)
Strategic Advisory
Key Actions:
• Overall strategy & vision defined• Improved people management & communication• Ownership Thinking implemented – move towards a business of business
people• Non-owner GM appointed to take the business to the next level and reduce
the reliance on owners
![Page 85: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/85.jpg)
Strategic AdvisoryOutcomes:
• Staff understand and are aligned with the vision and • Management and staff are clearer about what’s expected of them• Staff are in the loop of what’s going on in the business through monthly company-wide
information sessions• The two owners who are closest to their planned retirement age have appointed and are
grooming their successors• All employees have been educated in business ownership, are now receiving information
about the performance of the business and will soon have a self-funded incentive plan to replace their ‘christmas bonus’
• Less ‘me’ focus and more ‘we’ thinking in the culture: phasing out entitlement and bringing staff on-board to a culture of purpose, visibility and accountability
• Employees are sharing the insomnia and stress of running the business
![Page 86: Maximise the value of your business dec 2012](https://reader038.vdocuments.us/reader038/viewer/2022103110/54b538044a7959fa5d8b4571/html5/thumbnails/86.jpg)
What Next?
Further information on our website:
www.successionplus.com.au
Complete feedback form to be added to our newsletter
Arrange a free 90 minute review