How do you plan your business for a long term exit? We asked Jon Hemming from Unity Management

thumb_25fe1e2ac27b0e543bd4d577af6e836607072016234548How do you design a business with a long term exit plan? When it comes times to exiting and selling your business, talking to an expert as early as possible can be the best move you make.

Eden Exchange recently spoke with Jon Hemming who is a founder and director of Unity Management one of Australia’s leading boutique business and growth consulting companies

Thanks for talking with us Jon. Firstly, what brought into the world business advisory and consulting? Can you tell us a little bit about your background and career?

It all started back in 2007 when I was working with various technology businesses and a common business owner concern was that while they were good at a technical or operational stand point they really struggled with business strategy and scaling their operations.

I had taken some time out to finish my MBA (Technology) AGSM and I was asked by two previous employers to write a comprehensive business/strategic plan. It was a great process and following on, the results they achieved were spectacular. So I decided to create a brand around that service and Unity Management |Building Better Business was born.

What markets does Unity Management focus on? What are your areas of expertise?

Our customers include some of Australia’s leading Technology, Fast Growth Hi-Tech, Online, Medical, Manufacturing, Services and Engineering enterprises.

Our expertise is built around delivering programs to build, run or exit your business with services including:
What is the most common business problem you encounter when meeting a client for the first time? How do you go about diagnosing what the problems are?

Often business owners know how to do the right activities but have lost their focus around executing what matters for the business today. In addition, business model validation is the most important aspect of business planning today. There is so much pressure on business from numerous forces that the number one step for a business owner to take is to ensure the business model is valid, feasible and has strong future potential.

Our Business Review, Business Model And Strategic Planning Programs are comprehensive programs to discover and reveal the right insights to ensure the business grows in the easiest, fastest and most sustainable way possible.

What advice do you have on making a business saleable? What’s the key message you tell your clients in preparation for a business exit?

The most important part of the business sale process is completing a Business Appraisal. This process creates an objective and fair market valuation to ensure the due diligence process is supported and the business sells at the best possible price, in a smooth and efficient manner within an acceptable time frame.

Do you have any advice for a business owner looking to value their business for the first time? How do you try and maximise this when leading up to a business exit?

Make sure you have your business valued by professional services experts and or a qualified business valuer. We also have seen how multiple perspectives on any one business can be insightful and provide a clear path to making the right decisions moving forward.

To maximise the value of your business when exiting make sure you have the right information at your fingertips. For example this can include:

Financial:
  • Financial statements, taxation returns and GST returns for the past three years
  • Management accounts to date since last balance date
  • Stock records, age and condition and method of valuation Details of receivables and payables and aged analysis
  • Borrowings and indebtedness
  • Insurance matters
  • Litigation, arbitration and other disputes
Human Resources:
  • Employees, contracts and remuneration entitlements
  • Position descriptions, CV’s, performance, length of service and attendance records
  • Detailed wage and PAYEE records
Customers:
  • Details and categories of customers
  • Business reliance on key customers
  • Any customer contracts and are they transferable
  • Reputation of product and services
Suppliers:
  • Details of major suppliers, trading terms and credit rating
  • Contracts for supply or agencies and are they assignable
Compliance:
  • Health and safety procedures and accident history
  • Environmental matters
Assets, Plant & Equipment:
  • Property, location and lease details
  • Details of tangible assets including plant machinery and equipment
  • Review age, condition and value
  • Intellectual property rights
Market Information:
  • Major competitors of the business
  • Strengths and weaknesses of the business relative to competitors
Business Systems and Software:
  • System documentation
  • Operational procedures.
In my experience, some of the things that helped the process along were:
  • Requesting the buyer to provide a detailed schedule of the information required
  • Staying in the middle to facilitate the exchange of information between the parties
  • Ensuring all the information requested and to which the purchaser is entitled is provided
  • Maintaining regular communication with both parties and their advisors
  • Following up and responding to additional questions promptly and accurately
  • Exercising patience, persistence and objectivity at all times
  • Managing the process through to confi­rmation to avoid the need for extensions of time.
  • It is important that vendors work closely with their broker to maintain the buyer’s confidence in the business throughout the due diligence period to bring the sale to a successful conclusion.
How do you think the Australian market is perceived by business buyers? Has this changed significantly over the last few years?

With one of the most transparent and well-regulated business environments in the world, Australia’s political stability and regulatory framework provide buyers and sellers with confidence and security.

In addition, the current low interest rate environment and access to technology means that the right enterprises can serve their customer in an unprecedented way. However, the ongoing global pressures have hurt businesses that have not embraced the global environment wholeheartedly.

What industry trends do you believe buyers and sellers should be aware of?

Industry trends that underpin all good business decision ultimately come from demographic trend underpinning demand for products and or services.

Hot industries to buy and sell businesses exist because of pure demand today and into the future. Sounds pretty simple but it’s all too easy to lose sight of this fact.

Some of the fastest growing industry themes include:
• ICT and fast broadband – the New Age all-pervasive utility.
• Knowledge industries – databases and multi-media services.
• Business services – outsourcing non-core functions.
• Financial services – outsourcing of transactions/investment.
• Property services – outsourcing ownership, facilities management.
• Health – outsourcing home doctoring.
• Education – outsourcing preschool and universities.
• Personal and household services – outsourcing chores, functions.
• Hospitality and tourism – outsourcing cooking and travel bookings.
• Recreation and cultural services – outsourcing leisure.
• Mining – energy minerals in particular (oil, gas, coal, uranium).
• Construction – cyclical, but growing importance of civil work.
• Transport – cyclical, but growth in road, air and pipeline, and freight forwarding.
• Biotechnology and nanotechnology – New Age technologies.
• Environmental services – testing, assessment, amelioration.

What separates a good advisor from an average one?

A good advisor can be defined by the following:
  • Understand that the primary responsibility of the advisor is improving and or sell business.
  • Are they experts who are practiced in your industry? Do they get results? Do they specialise in any other areas?
  • What kind of results have they had?
  • Do they provide a service that is both professional and ethical?
What’s the most interesting part about your job? What drives you to do what you do?

I am always curious about how successful businesses start and continually transform the customer value they create. In addition, I have been honored to work with some very talented business owners and leaders.

I am driven my continual learning through implementing what works for every unique business situation in constantly changing business environments. This makes for interesting and compelling work that is extremely satisfying.

Thanks for your time Jon

See the Unity Management full business profile here.

Unity Management is dedicated to making your business a sustainable success. We want you to be amazing.

As one of Australia’s leading boutique business growth consulting companies, Unity Management has added many millions in revenue and profits while supporting business owners and corporate executives in achieving their personal and business goals.

Jon Hemming, MBA (Technology) AGSM, is the company founder and with the team, has helped build more than 100 multi-million dollar businesses over the last decade.

The Unity Management team combine real-life experience with MBA qualifications and hands-on expertise to deliver unmatched service and results. Clients benefit from ‘big end of town’ business expertise from consultants who all have had success starting, running and/or building multi-million dollar businesses.

We teach you what works in today’s business environment and then help you implement the necessary changes to your business that realise sustainable results.

Implementation is everything. And while you may know how to create great products and services, you may not have the experience to implement the crucial changes “on your business” that take it to the next level.