Exit is a stage in your business cycle that is eventually unavoidable. Strategy is a crucial step in helping you realise your business’s true value, so you can reap the benefits.
Unless you’re planning on keeping some interest in your business, the point at which you exit is your last chance to make the most of the years of hard work, so getting the strategy right is critical. For the serial entrepreneur, every exit is the opportunity to extract value.
Creating value in this area calls for an understanding of business valuation. Our professional background in chartered accountancy consulting allows us to identify the parts of your business where value can be optimised. We then develop strategies for your business to realize this value as part of an exit transaction.
Our intimate involvement commissioning the MGI NZ Private & Family Business Survey 2007, which covered more than 5,000 New Zealand businesses, has given us a complete picture of the circumstances impacting on business owners. With this knowledge, we have developed an range of exit options to suit you, even in an environment of greater supply than demand. With our help, you can sell your business for the best price, and achieve the lifestyle you always wanted.
In 2006, Grant was a part of ground-breaking New Zealand research conducted by Australasia’s foremost academic authority on succession planning, Prof. Kosmas Smyrnios of RMIT University. This research was reported in the MGI New Zealand Private & Family Business Survey 2007. One of the major findings, and the greatest cause for concern, was the reality confronting business owners:
| |83% have indicated their intention to retire
in the next 10 years.
This creates a stampede of owners trying to sell their businesses. Such an over−supply could seriously
challenge your ability to achieve the value you want for your business, unless, of course, it’s “Investor Ready” or exit ready.
In response, Domain Associates developed Investor Ready to combat the looming threat. With many business owners putting off selling or retiring until the global economic recession passes, that oversupply will be compressed into a narrower window, which accentuates the problem. You won’t want to defer your exit at the expense of your desired lifestyle. Even if you feel fit, active and healthy at the traditional retiring age, you will still want your business to be investor ready, so you can take advantage of unforeseen opportunities and be ready for any eventuality.
Investor Ready Program
In modern business there are a bewildering number of best practices, legal requirements and standards.
For an owner−managed business some of these seem unnecessary at times. However, when you come to sell your business these procedures, practices and requirements can become critical in the eyes of a
Accordingly, it pays to be prepared for the purchasers’ or successors’ due diligence process. This will enhance your business value and smooth the way for an exit process. Domain Associates have developed a comprehensive Investor Ready Program, which covers the key areas of a business. This serves as a business health review, which is important to implement before starting the sales process.
As members of the Exit Planning Institute, we maintain best-practice professional advice and service for business owners contemplating their exit, either now or in the future.
Investor Ready Service
A change in ownership is a decisive step for any business proprietor. With twenty years of assisting our clients through this process, we have developed our unique Investor Ready Service.
The Investor Ready Service is designed to ensure your business capitalises on its strengths and opportunities, and identifies and builds on its unique characteristics. Our initial work will give you a simple report, which identifies the key areas in your business where additional value can be extracted.
We then work with you and your staff to ensure your business benefits from the strategies being implemented. A strong, vibrant business will weather ownership changes with ease.
To assist you in making your business ready for investment, we tailor a plan from our 21-step Investor Ready Program that includes:
- Linking the Plans (succession, business, and retirement);
- Creating and extracting the value;
- The preparation of strategic/business plans;
- Strategy development workshops;
- Implementation of corporate governance strategies;
- Performance reporting;
- Sourcing of debt or equity investment.
Strategic financial analysis
In an age of increasing attention to Corporate Governance, it is critical that governance and management has the right information at the right time. Our reporting package includes a ‘dashboard’ of key performance indicators in a concise reporting format with an emphasis on ‘early warning indicators’. These cover both financial and non-financial aspects.
If you are looking to sell or retire from your business, our reporting package will ensure all your performance indicators are actively managed towards your targets, and your governance issues are taken care of. Prospective investors will appreciate the concise information you can provide through the ‘dashboard’.
Domain Associates expertise can help guide and facilitate your business through major equity or funding transactions.
Depending on the nature of the transaction, we can help you prepare prospectuses, offer information statements and memorandums. It is critical that these documents satisfy all regulatory requirements and adequately represent the opportunity to investors or acquirers, while at the same time safeguarding your intellectual property.
We work closely with you, your trusted businesses advisors, like your accountant or lawyer, to assess the
most appropriate corporate structure for your business. This will also help navigate your taxation exposure during the business realisation process. You can enter into any transactions confident in the knowledge that all documentation has been properly drawn up and presented.
The sale of a business is usually the biggest financial decision you will make in your life, and you will want to get it right. Typical considerations include:
- price optimization;
- minimal business disruption;
- managing due diligence;
- continuation of the business;
- employees’ morale & motivation (post deal).
If you’re a shareholder of a private company, Domain Associates’ advice will help you make the most of the sale of your shareholding. Since each business situation is unique, the sales process will be adapted to your particular circumstances. Domain Associates provides tailored strategies to help maximise your shareholder value while minimising business disruption.
As members of the Exit Planning Institute, our team will assist you through all stages of the sale process. Our international network also means we can provide an extensive network for marketing your business globally.
We have considerable experience in conducting business and share valuations and can assist you with:
- transactions involving the acquisition or sale of businesses and/or assets;
- succession planning;
- debt and equity raisings;
- group restructures;
- dispute resolution.
Produced in accordance with the proven Economic Value Added methodology, not accounting profit, our
valuation models should be an essential ingredient in your transition decision making.
Succession Planning has been a hot topic in recent years with the oversupply of baby-boomer businesses. Succession is often referred to in the context of generational (parent to child) succession. In reality, only 13% of businesses make it to the third generation*, because business thinking and approach can be fundamentally different between generations. However, with clear strategy and supportive planning, the strengths that generational businesses have can be used to realise optimum value.
Our specialist expertise in this area has been drawn upon by newspapers and periodicals in articles aimed at equipping people with understanding as they wrestle with these issues. Let Domain Associates help you plan your business succession, and bridge the generation gap successfully. We are members of the Exit Planning Institute.
Governance is about keeping management ‘on point’ and focused on the execution of your business strategy.
There are two main areas where we can help your business maximize its value:
- Achieving separation between strategy and implementation within small-medium businesses that have commonality between the board and management.
- Maintaining dedication to that strategy under the pressures that assault the business.
A board can help a growing business maintain accountability; it’s the lighthouse that steers a business clear of the rocks. Domain Associates have a holistic approach to governance that can minimize the value erosion of your business and maximize the effectiveness of your business strategy.
* MGI NZ Family & Private Business Survey 2007