Succeed Magazine Issue 6

U N L O C K B U S I N E S S VA L U E • M A X I M I S E P E R S O N A L P R O F I T S

SUCCEED

FEatUring ... groom for improvement: the leadership hunt can come from withinJaychem’s perfect family chemistry The day raydar went fishing

[08]Welcome to your own reality show

[17]The Godfather of all decisions

[24]Life beyond the driving range

[22]Thought about the future lately?

WirED For SUCCESSEuro Corporation’s men of steel

The experts’ guide to succession planning

SUCCEED.nEt.nZ iSSUE SiX

BCG_BCG_AUD1AUD1614614

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SUCCEED magazine is provided for information purposes only. The advice in these pages doesn’t take into account your particular needs or financial situation. We encourage you to talk to a professional advisor for advice tailored to your specific circumstances.

SUCCEED Issue SixContents

06 groom For improvEmEnt With the demand for leadership exceeding supply, the solution for who will replace you may come from within. Plus: Welcome to the ultimate reality show all about YOU.

CaSE StUDiES

10 mEn oF StEEl How one phone call changed the McKenzie

world—not to mention future proofing the future.

14 Family ChEmiStry Just because you grow up with a business doesn’t

mean you’ll be part of it--unless you ask really nicely.

18 rayDar When you throw a line in the water, make sure you

have the capabilities to land the ‘big one’.

aDviCE?

13 thE SUCCESSion trail There are bandits, varmints, rough spots and

other dangers out there. It pays to ride with the experts.

21 WEalth oF knoWlEDgE payS DiviDEnDS

Finding the right people to give you answers is important when selling a business.

24 Driving SUCCESS There’s little better than driving a golf ball straight

down the range...unless, that is, you happen to be driving an Audi.

opinion

17 Accountant’s View the godfather of all decisions

22 Banker’s View the future of your business starts now.

26 Insurer’s View is your most important asset really protected?

yoUr FUtUrE BEginS toDay

– arE yoU rEaDy?

The ‘Readying your business for tomorrow’ seminar series will be running in Auckland, Christchurch and Wellington

in early 2012.

Practical advice, resources and your questions answered from the leading expert’s in

succession planning.

Register your interest now by emailing [email protected]

Succession is a journey.

Where are you headed?

Ready your business for tomorrow. Order your copy today. Great succession plans don’t happen by accident. This year Hayes Knight are encouraging even more business owners to take the right steps towards planning for a successful future. The “Readying Your Business for Tomorrow” workbook is a practical guide to planning the next stage in your business life. To order your complimentary copy please email [email protected].

U N L O C K B U S I N E S S VA L U E • M A X I M I S E P E R S O N A L P R O F I T S

SUCCEED

6 SUCCEED / Issue Six 7SUCCEED / Issue Six

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groom For improvEmEnt

In a vastly changed economic and societal climate, succession planning is also a completely different landscape. Dwight Whitney explains.

Once, baby boomers could not have been blamed for thinking that when it came time to pass on their life’s labours to the next generation, any number of potential purchasers would be waiting, allowing them to retire with their nest eggs. Circumstances have put paid to that. The global economic collapse, the more rigorous approach to available credit, the failure of many finance companies and a cooling down of risk appetite mean that for many the traditional retirement windfall just isn’t there.

Nor is the talent. The demand for leaders—particularly those with the skill set to buy and build a business—greatly exceeds supply.

So more and more the hunt for successors is now occurring within businesses. Companies need to build leaders who will become an integral part of the business, and who are great candidates to lead management buy outs or other forms of succession development.

Here is where grooming has come into its own. Hayes Knight’s Business Improvement Director Aaron Wallace

says that management buy-outs are a tried and true method of maintaining business momentum and a bona fide succession model. It’s important, though, to dedicate a mix of resources to ensure those managers buying ‘in’ fit the bill. Generational Succession Planning can also include elements of ‘grooming’ but with blood being thicker than water, a commitment to cherish and grow the operation probably already exists.

James Phillips, Head of Key Segments for ASB’s Commercial Banking, says MBOs have traditionally featured certain funding and structure characteristics.

“They use large amounts of debt and as a consequence the business becomes highly geared, making the capital structure involved very important. They therefore tend to favour certain types of businesses—those with large amounts of cash, as the worry is that leverage ratios can be driven beyond prudent levels. High gearing does tend to encourage cash flow management. Subsequent to the buy-out, management tend to look at cost reduction activities as opposed to revenue generating strategies. So that can alter the complexion of a particular operation.”

Structuring aside, James says ensuring that people have a vested interest in the success of a venture—over and above it simply being a job—further helps to galvanize commitment.

“When someone has a stake in the game, it tends to steady their hand on the tiller.”

Aaron concurs. “We’ve found that managers and senior people that then become owners of an operation tend to be harder working and more vigilant. They often are more innovative and can better implement cost cutting strategies over revenue enhancement initiatives. They have a more critical eye on deferring acquisition and capital expenditure until exposure and leverage are reduced. They’re more mindful following related versus unrelated diversification and they tend to be more proactive and ‘timely’ in making strategic decisions mainly because, as shareholders, they’re less likely to let bureaucracy impede taking affirmative action.”

Determining candidates for grooming can be done in two ways. Either they’re appropriately qualified to take over as owner of the business, or they are financially able to fund a purchase.

With the latter, says James, it may require that the business be sold to a team who between them have the knowledge to operate it, and the funds to pay for it. Funding can be through cash, some sort of leveraged buy-out or even the creation of types of share plans.

The nature of a management buy-out is such that often the vendors and purchasers are going to work in tandem for a period of time albeit with different ‘positions’.

Says Aaron: “All involved should have agreed on the end objective. During the transition period there will be a period of cooperative management and operation. This is necessary to maximise the outcome for all of the participants.”

the ‘heir Unapparent’ Bringing in an outsider for the top job poses risks. Wharton Business School’s Ann Klein explains: “If you go outside, there’s a huge learning curve to understanding a company’s strategy and culture. Somebody new coming in from the outside is very dependent on those left in the company for orientation, perspective and information. That’s potentially problematic.”

“What you would like in an ideal scenario is careful succession planning that grooms people internally. One reason is you want to maintain the intellectual capital of the organisation. Another is that you want to motivate people in the upper levels of the company to stay and excel because they might get to lead the company someday...or even buy it.” Hence the phenomenon of grooming from within.

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Episode One: Judgement day • You select a successor, and make it known to that person. • You ensure a management information system exists for the successor,

so that all sensitive information, systems etc are available to the purchaser on the vendor’s exit.

• In grooming a candidate, you are: a. patient; b. willing to let the prospective purchaser make mistakes; c. skilful at using the mistakes as a leverage tool for the

learning process; d. good at communicating; and e. establishing reasonable expectations for the purchaser • At all times, even though there might be tipping points of frustration and

doubt, you maintain and promote an environment of trust and respect.

Episode Two: Spotting the ‘right stuff’ • You’ll adopt a grooming process. The feasibility stage will be spread

over a period of time, and you and your successor will be working together on the business and strategic plans.

• The grooming process should include an assessment of operational, specialist and financial skills. The ‘anointed one’ should be undertaking their own review to satisfy themselves that any changes they wish to implement would be sustainable.

• Encourage the use of external advisers to assess the potential success or otherwise of the venture.

• Pitfalls and the unexpected can happen. These include: - The need to maintain the purchase on an ‘arm’s length’ basis - Employees entrenched in the business may not be aware of external

technology, and the current technology in the business may have been superseded

- The need to have a sustainable business plan for the future

Episode Six: Overcoming the final hurdles

• At this stage, your requirements should be identified so that everyone knows that what the result needs to be. Again, it may be that during the transition phase you’ll want to sell down on an instalment basis, reducing the level of the borrowing commitment.

• By this stage the dynamics of the buy-out should be crystal clear. • The buy-out team member’s equity shares need to be agreed.• The customer base needs to be preserved during the transition.

You should ensure that the customers know the purchasers.• Similarly, the buy-out team will require the suppliers’ continued

support to maintain the business. You should ensure that the management team are familiar with key suppliers and help them build strong relationships.

Episode Five: Show me the money!• The grooming process gives candidates insight into what really

drives you in the business, allowing for a funding scenario to reflect each parties’ needs. As the time gets closer to sorting out formal arrangements, the team either does this themselves or gets an adviser to assist—bearing in mind that an external party can be more impartial, and provide the arm’s length required.

• Similarly, an external negotiator can strengthen the bargaining power of the management team, as they will not be directly seen to be jeopardising the owner’s return.

Episode Four: Where’s this business going?

• Grooming means the purchasers will be involved in development of any business plan, taking ownership of various issues, and are becoming aware of the key aspects of the business. The planning process will also allow them input to the direction of the business.

• Producing a business plan will also help everyone understand the skill sets of those involved and where further training or skill development is required.

Episode Three: Creating the ‘dream team’

• A team should be appointed, with sufficient breadth of commercial skills to complete the transaction.

• Financiers need to be satisfied that the buy-out team has the skills required to maintain and run the business.

• Potential purchasers need to know at an early stage the likelihood of obtaining the level of finance required to fund the acquisition.

• The team should prepare a summary document including copies of the current business plan, cash flow and funding projections.

• Bear in mind that it is not necessarily essential at the early stage to get full details of the finance structure.

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(>) yoUr UltimatE rEality ShoWImagine your own ‘reality television’ show. You, the vendor, are the main player and, alongside you are the other ‘judges’ —your accountant, your lawyer, your banker and your financial adviser.

It’s time to meet the contenders for New Zealand’s Next Top Management Grooming.

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1 0 SUCCEED / Issue Six 1 1SUCCEED / Issue Six

Maurice McKenzie is a man of many words and even more action, who relies on ‘golden gut’ feelings to weigh up a situation. “There are opportunities galore out there and the

only way to go is headlong into them and make things happen.” Maurice knows his way around wire, fencing, steel and sleeve-

rolling-up, as well as what it takes to make a sale and gain margins. He left the Hawkes Bay for a position at Fletcher Challenge subsidiary Wiremakers some decades back and his common sense approach—when given the nod as export manager—provided huge dividends for the company. He knew next to nothing about exporting so taught himself the ins and outs, and doubled the exports in two years.

The Rural News once reported how the head of a tertiary institute marketing course called him to help write a course on international marketing. “It’s no use asking me,” said McKenzie whose modus operandi is simply to fly to a target market and start selling, “I don’t have a degree.” Replied the academic: “That’s ok, I can get plenty of people with degrees, but I want to know how it’s done.”

Then a reshuffling at Wiremakers saw the replacement of respected colleagues. It took one cappuccino and a few moments quiet thought for Maurice to phone his wife to say that he was going out on his own.

He created what is now Euro Corporation—a 100% New Zealand owned manufacturer and distributor of trade quality steel and wire products for use in the rural and construction sectors. It was a family affair. His wife Daphne did the accounts, and the objective was always to have his two sons also part of the business, with one clear caveat.

“There’re too many stories about families that don’t talk to each other anymore because of business. Uncontrolled businesses break up

[CASE STUdY 1—EUROCORP]

men of Steel When an out-of-the-blue call came for the McKenzie family, a whole host of succession issues came to the fore. Someone wanted to buy them—were they ready to sell and on whose terms?

Euro Corporation is a premier manufacturer, distributor and exporter of reinforcing steel, fencing wire, fencing systems and nails, under the brands EuroSteel, XFENCE®, EuroFence, ProFence, and EuroNails. Head office is Auckland-based with manufacturing plants in both Auckland and Christchurch. Succession strategy: Family may always be the focus, but don’t ignore strangers bearing gifts. Particularly if their involvement makes your involvement all the more enriching.

… BriEFly

about the Business

United we stand: Euro Corporation’s Maurice McKenzie (centre) with sons Greg and Randal are committed to keep Euro Corporation growing for themselves and their new investors.

There’re too many stories about families that don’t talk to each other anymore because of business. Uncontrolled businesses break up families and relationships.



families and relationships. Yes, my plan was to have them work with me but always for us all to remain friends. I made it very clear that if fire ever broke out in our relationships that would be the end of it.” Son Randal, who is now managing director, was considering university and asked his father what path he should pursue. “I said become an accountant. Whether you remain one is academic but whatever you do—be it a sheep farmer, mechanic or running your own operation—you’ll have to understand numbers. He took my advice and got a great position at one of the Big 5 firms.”

Second son Greg is sales director and shares with his father a love of people and sales. After a stint at Coca Cola he accepted his father’s invitation to join the business.

A disagreement became the launching pad for success. “We started off selling pneumatic builders’ guns. We found that getting paid was a challenge and various merchants we approached didn’t really want to know us so our foundation looked shaky. Out of frustration one night Greg said to me ‘this company is never going to work so why don’t you just give the guns away and let’s forget it?’ This was the last thing I wanted to hear so just walked away. However, next morning in the shower, it dawned on me that this was a great idea. If we do give these nail guns away, people will need consumables which we can sell them.”

Maurice went directly to a pallet company to test his ‘eureka’ moment breakthrough. The first person wanted 20 of them—which was, as Maurice says, ‘potentially $20,000 down the Swanee’. The sales proposition he crafted—“if I gave you the nail guns and you had to buy the nails off me, providing I kept you reasonably competitive, would you be in?”—proved a resounding success. From that day the company grew and diversified.

At this stage Euro Corp was a lean, mean operation so when Randal suggested he join the business the initial reaction was lukewarm.

“Facetiously I said ‘look, I don’t need an accountant, I’ve already got one robbing me now so I don’t need you’. He said he’d be happy to do other things. As it happened, Greg was keen to do his OE so I told Randal that there was only one job going and that was Greg’s. I said if he wanted to do the sales job, ‘here’s the keys to his second hand car and get going’.”

Maurice said it was the best thing his son could have done.“He learned pretty damn quick about how sales work. As a

result he’s probably our best skilled marketing person and really understands the business.” He became general manager and when Maurice decided to ‘scale down’ his involvement in the business he

appointed Randal managing director.In 2004 Euro Corp established a Christchurch company with

the capability of making wire and fence components for the agricultural sector. This operation was able to be ‘bolted’ to the existing business and it became a model for expansion. As well as holding a strong local presence, Euro Corp became a significant exporter servicing more than twenty countries.

Maui Capital, a private equity company, called as they were on the hunt for acquisitions and Euro Corp came up on their radar. Further enquiries about the business only prompted their enthusiasm. Initially, says Maurice, the emotion wasn’t returned.

“My reaction was a straight out ‘no’ but then I realised the decision wasn’t solely mine as the rest of the family had shareholding, and also a possible opinion on what was the best way to proceed. I went home and told my wife who said it shouldn’t necessarily be about the money but more about what I wanted my involvement to be. Also what our sons wanted out of business and life.”

Out of nowhere, critical succession planning issues came to the fore with the opportunity to potentially craft an agreement that could be a win: win for all parties.

Ultimately, says Maurice, what his sons wanted would dictate his own decision.“If they had said ‘no we want to keep the business and not have any other involvement’ I would have respected that and that would be the end of the dialogue.

It turned out they wanted to remain and grow the operation but anything that could ease their situation with mortgages and a young family was worth considering. We were also all pragmatic enough to realise that while our collective shareholding would be smaller, with the backing and growth plans being brought to the table by an investor, our actual return in the future could be considerably larger. So these sentiments dictated the discussions with Maui.”

In November 2010 the deal was done and Maui acquired a 67% stake in Euro Corp. Rather than change the culture and direction of the business, the new shareholders instead made Maurice and his sons an integral part of their growth plans.

“I guess they value our opinion. They often ring me up and of course they use Randal a lot, and ask ‘what do you think of this?’ It may have nothing to do with Euro Corp but just the fact that we’ve done what we’ve done they come and ask our opinion and sometimes they use it, sometimes they don’t.”

“Because it’s a family business and something we’re passionate about and in our blood, I think for them to keep us involved was a smart thing to do.”

Out of nowhere critical succession planning issues came to the fore with the opportunity to potentially craft an agreement that could be a win: win for all parties.

thE SUCCESSion trailMake sure you ride with the experts who’ll take you in the right direction—like Hayes Knight

Succession planning is just like a journey. For those that don’t know the pathway, the road signs and the rules, it can be anything from inefficient to an absolute quagmire. Rather than second guess yourself, or the process, it pays to have people along for the ride who can help guide you through both the smooth and rocky parts.

We consider ourselves as succession planning pioneers. We have a variety of skills but our expertise is built around preparing a business for ‘market’ related to the sale and exit process. This can take many forms.

Our experience and on-going work has seen our team accumulate a wealth of knowledge across the entire succession lifecycle, from the journey of preparation through to the actual event.

Again, business owners may think they know the ropes about many things but, trust us, this is new territory and it often is NOT ‘business as usual’. Rather than go it alone, we’ve found those who ask for help find the process all the more rewarding.

Here are some things to think about to get a fix on the key matters to consider.

The Journey(>) Governance—Owners are putting their hands up to learn

how to run their businesses with more structure. They’re appreciating that a governing body—to which an owner is ultimately answerable to—is becoming a pillar in leading edge businesses and a great discipline to have. Our attendance at these meetings is on the steady increase, particularly where continuous improvement is recognised as a must-have to keep the DNA of the operation alive and functioning.

(>) Strategic Planning & Growth—A buyer needs to know that the business they’re acquiring has a strong future; after all it’s the future cash flows they are buying. New ideas, market knowledge and unlocking potential are key improvement factors that people will be on the lookout for. There is always a high demand for experts in these areas. Bringing somebody on board with these skills, well in advance of a transition, will positively enhance the value of the business and ultimately the sale price further down the track.

(>) Business Structuring—This is not just about efficient tax structures; it is also about structuring a business so that you can sell off certain divisions to different parties, in stages. It’s about

having options. It’s about making a business attractive both to the seller and the purchaser and allow for various ‘life stages and options’ to be put on the agenda.

(>) Audits & Reviews—Independent opinions as to the truth and fairness of financial statements lend incredible weight to the validity of a business’s results. A review of the rigour of internal controls and systems also helps shore up the mechanics of how those numbers are derived. Audits are lending powerful third party support to the succession journey.

The Event(>) Funding Assistance—Preparing cash flow models or critiquing

a financial projection is fundamental to whether lenders will accept a request for funding assistance. Independent reviews and an assessment of the credibility on those numbers make all the difference.

(>) Negotiations—We help mediate deals and more often than not secure a stronger outcome for our clients. Many business owners feel uncomfortable running this process and ask for some expert support come deal time.

(>) Due Diligence—This is about reducing the knowledge imbalance between buyer and seller. The buyer needs to know the risks and better understand what they are buying. We help buyers successfully break down this information gap whilst adding an independent assessment to support bank funding needs.

(>) Valuations—How much is my business worth? Getting an independent appraisal that will stack up in a negotiation is critical. Drawing a line in the sand is the starting point to securing tomorrow’s investor, be it an internal or external party.

If there’s a tough question, we ask it. If there’s a tough solution, we find it. The easy part is getting us involved to help you lead the way.

To find out how Hayes Knight can help your business prepare for succession contact:

aaron WallaCE Business improvement Director [email protected] T: 09 379 7013 M: 021 711 501 W: hayesknight.co.nz

hayesknightnz

[CASE STUdY 1—EUROCORP CONT.]



Cousins Paul and Richard Jancys and Richard’s sister Katherine

Samplonius are an example of a family who work together, and do it well.

They, and Jaychem co-founder Ed Jancys are key players in one of New Zealand’s fastest growing contract manufacturers of health, hygiene, personal care and animal health remedies.

The three say that being brought up involved in the operation (school holidays

were spent helping out at the factory)—combined with their different skill sets—means they can move comfortably between being family members and those responsible for managing a complex, demanding and highly technical venture.

Jaychem, like many other New Zealand business stories, grew out of adversity and started out in humble settings. In 1979 Lithuanian-born brothers Ed and Rudy Jancys both faced redundancy. They started mixing potions together in Ed’s garage.

Says Katherine: “I remember watching Uncle Ed and Dad mixing up a potion—such as a shampoo—and then bottling it, throwing it in the back of a car and taking it off to a customer. That’s how the business worked in those days. From there they decided to take on a lease and a premise just down the road and the enterprise continued to evolve until what exists today—a 30,000 sq ft plant, 30 employees and a growing client and product base.”“Most of all the business gave

them freedom to control their destiny and also the time to pursue their own interests. More particularly, being in a

partnership and having two people running it took away any worry and strain. There were a couple of them to share the burden.”

Paul reinforces the fact that his father and uncle weren’t necessarily the most methodical of planners but were instead doers.

“For them it was more about doing something for themselves—getting ‘stuck in’ and seeing what they could achieve. They were very much ‘hands on’, we look at employing people with expertise to do

certain roles. That leaves us with the ability to look at ways to continue to grow the operation.”

Katherine as Technical Director, was first to join the business over 17 years ago after graduating with a BSc. “It was definitely a family affair that allowed me to work around having a baby. My father also loved having someone to train up. The only talk of succession was comments such as ‘I want you guys to take over the business’ but that was about the extent of it. There wasn’t any sense of a formal succession plan or process being mooted.”

Richard, with expertise in business process design, came on board seven years ago. His entry was more organic than organised.

“I went to university, travelled and then worked in the corporate world in Europe. Eventually returning home I approached my Dad and Ed about entering the business. At first they weren’t too enthused and said the timing wasn’t ideal. Instead of being thwarted I couched my involvement along the lines of ‘let’s see how it works, let’s see what I can contribute’ and it evolved from there.” Paul, who trained as an accountant with expertise in finance and administration, came into the business just over

[CASE STUdY 2—JAYCHEM]

Family ChemistryBusiness succession planning conjures up images of tight methodology, due diligence, ruthless process, and enormous complexity coming together in a carefully defined path. In the case of Jaychem Industries Limited, flexibility, fate and a touch of serendipity also came into the mix.

Jaychem are contract manufacturers of health, hygiene, personal care (cosmetics and toiletries) and animal health remedies. An extensive range of their own healthE branded products including topical antiseptics, surgical antiseptics for skin disinfection, skin emollients and protective preparations predominantly marketed to hospitals complete the mix.Succession strategy: The door has always been open to family members—but the death of one founder, and the desire among three relatives entering the venture for a more structured succession pathway, really got the process humming.

… BriEFly

about the Business

The perfect chemistry: Ed Jancys with son Paul (far left) and nephew and niece Richard and Katherine’s combined talents have created one of New Zealand’s fastest growing contract manufacturing companies

“If you have any say or control in the matter, do your best NOT to take over the reins in the middle of an economic downturn. It is character building but also scary.”



three and a half years ago. His entree, and the commencement of a more formal approach to succession planning, coincided with the death of Richard and Katherine’s father, Rudy Jancys.

“At the time I was in the United Kingdom and I was working in construction for an engineering firm. My Dad (Ed Jancys) kept ringing asking me to come home and become involved in the business. Eventually I said okay then just showed up one day and started working.”

Succession planning in earnest started with advice from Luke van den Hurk from accountants Hayes Knight and lawyers developing an initial shareholder’s agreement to cater for the two generations working in the business. It needed to take account of, and balance out, any possible competing interests.

Work was done on developing the new company structure that defined roles and responsibilities as well as issues to do with direction.

The four directors all concurred that the document and overall process had to accommodate change, regular review and appropriate modification. Says Richard: “Businesses change; people change so it’s important to have structure but also a degree of fluidity to enable everything, and everyone moves in the same direction.” The paperwork was ready when factors outside anyone’s control

came knocking...in the form of a massive recession.

Katherine says that the timing, and overall effect was remarkably unfortunate but in hindsight was a good thing.

“We had this huge building, we have the lives of close to 30 others to think about, we had our own family issues to contend with, but it very quickly galvanized us all into working together and making decisions together. The aim was to keep the patient breathing.”

Paul agrees that adversity was not all bad.

“We identified what was best for the longevity of the business, and worked towards that. We made certain changes, we went out and got new business, and also sacrificed our incomes to put money back into the business.”

Richard says that they all agreed to put the more formal aspects of the succession planning on hold for six months—“either we wouldn’t have a business or it would be different enough that it would warrant some revisiting. We all knew that being a family business means you have to dig deep to protect everyone’s position. It’s not a case of working for somebody else and if that fails you can always go elsewhere. There’s also history behind it as our fathers were the ones who started the venture. We didn’t want to be the generation to see it all come to an end.”

With the recession behind them, and now riding a wave of growth and diversification, Jaychem is on an upward spiral that allows Ed, Katherine, Paul and Richard the opportunity to further cement the succession journey. One thing they will consider is engaging an independent director to ensure outside advice remains in their corporate DNA.

“An independent view is often a fresh one,” says Richard. “People in this position can see things that you haven’t necessarily thought of. In the early stages when I came into the business I had lots of ideas because I came from a different world. That different perspective helped Jaychem to diversify and grow.”

Certainly it helped in creating the succession plan and document. “Rather than being full of things that might be out of self interest, or have elements that would benefit one party over another, they worked on behalf of us all. They had no hesitation in telling you that was a stupid idea, or that was a great one. They also provided counsel on how others may have tackled similar challenges and what the four of us in the business needed to think about,” says Paul.

The trio’s advice about succession is two-fold: “In hindsight, starting to formalise the planning process sooner rather than later might have been advantageous. Also, if you have any say or control in the matter, do your best NOT to take over the reins in the middle of an economic downturn. It is character-building but also scary.”

They had no hesitation in telling you that was a stupid idea, or that was a great one.

[CASE STUdY 2—JAYCHEM CONT.]

The Godfather of all decisions: When is the best time to succeed? “There just wasn’t enough time.” Who would have guessed that this classic quote from Marlon Brando in the Godfather trilogy would be echoing through many boardrooms today? Especially from those wishing they’d started the succession journey earlier. Hopefully their businesses don’t end up ‘sleeping with the fishes.’

Accountant’s View

Perhaps a higher value and a smoother transition could have been achieved if their exit was better planned and proactive steps were taken at the outset. Baby boomers are getting older and health concerns are starting to plague the initial timeframes laid down by owners of all ages. For many, the luxury of time is a limited resource. Hands are getting forced and for some they’ve simply run out of time to groom their businesses, or even their successors, for a sale on their terms.

As business advisers, we’re witnessing a rise in the demand for stronger governance and the formation of advisery boards to lead a business to a more secure and profitable trading platform, whilst building longer term financial sustainability to ultimately create a more attractive proposition for tomorrow’s owner.

There has been a shift towards engaging independent skill sets onto a management board to lend valuable input to the organisation’s steering committee. Some think of this as a combination of ‘growing

up and coming of age’ that is being employed by many of our leading enterprises as they take a corporate trailblazing role. In the process of asking the big questions, inevitably succession matters come to the fore.

Continuing the analogy, episodes of TV series like The Sopranos, Sons of Anarchy and Underbelly highlight the need for a successful leadership team in what are fictitious businesses.

In a somewhat comical and even ironic way, these story lines emphasise the need for collective management to get a more powerful outcome. Not surprisingly, key characters want to be part of succession planning.

What we can take from this is that planning should always be at the forefront of an executive’s mind and that there should be people available to lead an organisation should there be an unplanned exit of a key person. What would happen to your business if you had a serious illness tomorrow and had to quit immediately? Would it operate as profitably long-term, would it command the price you demand with minimal

effort, or would your estate be left with some severe issues to work through?

Hesitation by an owner to act on the finer details of a succession plan is adversely affecting a successful transfer opportunity. Reluctance by a working owner to surround themselves with an independent board that consciously pushes their comfort zone and demands change is adversely affecting shareholder value and annual take home profit. It’s time for SMEs to get on board with the governance and succession program. This is a realisation many mature executives have already discovered and a lesson tomorrow’s leaders have recently learned.

We’re certainly seeing a difference in results between those businesses that practise this discipline and those that don’t. Sure, succession’s just part of the mix in a governance programme, but dealing with the issue before you need to is about creating choices and doors of possibility. Unplanned amalgamations or takeovers/buyouts because a more

attractive business model has been created mean the exit process can be fast-tracked.

Think of it this way: The final paper in a practical lifetime business degree is Succession 101. Planning the succession process is semester one and taking action is semester two. Welcoming an advisery board could be part of the course materials. Doing nothing and hoping for a compassionate pass is like a ‘did not sit’ or fail. Just like a business degree, you have to turn up to have any chance of success. If steps are taken, there will be enough time and the chance of a successful exit will be dramatically increased. In Godfather terms, “the family will be looked after”.

That allows for a happy ending.

aaron WallaCE Business improvement Director [email protected] T: 09 379 7013 M: 021 711 501 W: hayesknight.co.nz

hayesknightnz

Hayes Knight



A good old fashioned recession will always help one to focus on

business matters and viability. Especially if you happen to be in an industry, namely advertising, that is often perceived as a ‘nice to have’ service in times of trouble.

This situation, and having been owner of an ad agency known as Raydar Creative for nearly 18 years, made Darryl McClay stop and reassess what possibilities might exist on his business radar.

“Two years ago the market went through some major changes, the end game being that I knew the Raydar

Creative ‘offer’ and structure would need to adapt to the new realities or risk going backwards. In the process of taking a cold hard look at my situation, I reached the conclusion that I’d have trouble taking the big step needed of growing the team beyond what I saw as a ‘safe’ figure of 10. The combination of both scenarios told me that it was time for a change.”

What that would entail, Darryl admits, was not

something that he had contemplated before. He figured the process might help to uncover multiple possibilities so keeping an open mind was imperative. He started ‘project change’ by looking for other ‘kindred spirit’ smaller agencies. The plan being that he’d bring them all together—under the Raydar umbrella—to widen the offer and resource capacity and thus the ability to compete with the bigger agencies. “I had a core team of highly talented and experienced staff and solid processess so I backed our ability to bring others into our business and to make it work”

Having baited the hook, he suddenly had not just a series of smaller agencies on the line but one big one in the form of one of Australasia’s major communication and advertising giants The Clemenger Group.

Raydar had worked alongside Colenso (a Clemenger Group agency) on the Frucor Beverages account for many years and both agencies had a mutual respect for the other’s reputation and working capabilities. While

he did think that at some stage in the future he wouuld explore the possibility of becoming part of a larger group it wasn’t in Darryl’s immediate plans for his business.

“There was an element of luck in terms if timing and the fact that I became known to the group while in the process of looking around for other smaller agencies. I’m a big believer that if you stay focused and work hard that, in time, great opportunities will present themselves. That turned out to be the case. They had another agency in Alphabet Soup operating in a similar space. The thought was the two might combine.”

With intentions on both sides now clear, the ‘business’ part of the equation kicked in and those with the expertise investigated ways to structure the deal.

Enter Hayes Knight’s Matt Bellingham who, says Darryl, was a key part of keeping the prospect on the line.

“I knew Matt had expertise in the area as we had discussed the process years earlier. Matt took the time to get a full understanding of me, my business and our industry. He asked the right questions and had clarity on the issues that were most important to me when it came to the discussions with The Clemenger Group.”

“I was genuinely happy with the outcome as while two

Having baited the hook, he suddenly had not a series of smaller agencies on the line but one big one in the form of one of Australasia’s major communication and advertising giants.

Raydar: With clients ranging from Frucor Beverages, Kellogg’s, Heinz Wattie’s, KFC, Pizza Hut, Mercedes Benz, Pacific Blue, The Laminex Group... and the list goes on... Raydar is a mid-size agency with big credentials. Post purchase by The Clemenger Group, and having been merged with Alphabet Soup, the Auckland-based communication agency is poised for growth and expansion. Succession strategy: Cast out a line and you never know what you might catch. Make sure you have sound advisers to help you land the entity that takes your bait and comes on board.

… BriEFly

about the Business

[CASE STUdY 3—RAYdAR]

the big one that didn’t get awayAt the tender age of 43 darryl McClay came to the conclusion he was too risk adverse to take the step from small boutique creative agency to becoming a larger agency capable of competing with the multitude of big agencies in the competitive world of advertsing. Setting out in search of a suitor he initially trawled for minnows but ended up landing a whale.



companies will rarely agree on every issue Matt made sure that the key things I wanted were included. He negotiated clauses that benefitted me when I hit my targets and removed some risk for the purchaser. At the end of the process both parties were in accord and we were told that it was one of the best run and smoothest acquisitions they had made in recent times.”

In January 2010 ink was applied to contracts and the acquisition was complete. Remaining involved with Raydar had always been on Darryl’s wish list. The fact the new owners wanted him to remain in the ‘mix’ only made the deal sweeter.

“At 45 I would like to think I’m just starting to hit my straps as a businessman and leader and I know that I still have plenty to learn. Keeping a minority shareholding was very important to me and the powers that be supported and facilitated this.”

One issue that was identified as a possible challenge was the transition from ‘sole owner’ to ‘minority owner’ and how that might affect Darryl’s style and continuing ‘love’ for the business.

“People around me asked this question a number of times to make sure I was being realistic about the changes. The way the group works does allow me the autonomy I like on a day to day basis. The key difference is that we have a more structured approach to the business planning strategies and the big decisions. I appreciate having such experienced people working with me at a board

level within The Clemenger Group and I see the benefit of that for growing the business. On some levels it’s actually a relief to have others share the load and add their perspective. I think I’ve adjusted pretty well given that it’s been 18 years since I last had a boss.”

Looking back at what has been achieved is positive for Darryl and in many ways the best of all possible worlds. His financial situation is more secure, he gets to go to Raydar each day, and his horizons have been broadened by being part of such a sizeable group. Moreover, key things like culture and the Raydar ‘vibe’ remain intact.

“I’m proud that we have carried the company culture and values through. This was

really important to me and I wasn’t sure that it would be achievable given that my team has more than doubled in size.”“Being part of a world class communications group has broadened my learning capacity and opened up access to resources from around the world that I simply could not get my hands on as a small independent agency. Ultimately our clients benefit from that which is great. I’m even more aware of the need to continue to move forward and to evolve our offering. I have a bigger ship now and this presents plenty of challenges. It also presents bigger opportunities that excite me and keep me focused.”

What you need to have on the radar when looking at changing your business structure and mix.(>) Get an expert involved as early as possible. That person

should have a strong track record and ideally specialise in company acquisition, sales, negotiations and mergers.

(>) Have a plan and options available so when a suitable opportunity comes your way you are part of the way there.

(>) Have clarity around what you want while remaining open to opportunities.

(>) Explore each option based on its own merits and don’t be afraid to invest time and money in opportunities that look promising in a way that you may have not considered before. Business owners take risks every day, consider this a calculated financial risk that you have the opportunity to pull out of should you consider it unsuitable. But make sure you have a cold, hard look first.

(>) Understand that you will have to give up some things but at the same time look at the positives, the things you will gain.

(>) Once the opportunity is on the table, and you have had the right advice, revisit what it is that you want from it again.

(>) Listen to your intuition and gut feeling.

(>) Take time to select the “right” partner.

[CASE STUdY 3—RAYdAR CONT.]

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WEalth oF knoWlEDgE payS DiviDEnDS Selling a business is a life changing experience. One day you are at the helm with all the answers. The next, when the ink on the deal has dried, you may find yourself in uncharted territory. The key thing is to find the right people to give you the answers and help you chart a new course.

True, you’ve been running a profitable operation for years; you know all about your markets and customers and when asked about the secrets of success you had all the answers. But then everything changed. You sold the business, banked the cheque and suddenly you’re faced with the burning question: “What do I do now?”

This is a common scenario, when the wealth creation vehicle changes hands and all that you’re left holding is a cheque. This is likely to be the starting point that will see you decide how to turn this sum into an income that will sustain you from here on in.

For those who are not prepared, and for those asking questions for the first time such as “where do I turn?”, “who do I speak to?”, “what is the best strategy to pursue?” the moment can be daunting.

It needn’t be, especially if part of your preparation for selling focussed on this area of enquiry. The time to make decisions and learn about this new world of wealth management needs to start well before the sale has started. Like all well run businesses, a plan needs to be in place.

I recently met a very successful business owner who had sold their business. The money was in their business account, waiting. They knew they needed to get some advice but they didn’t know which way to turn.

Their knowledge of the wealth management industry didn’t match their savvy when it came to business matters. To their credit they recognised this gap and set about learning all they could about why they should be investing and what the various options were. But they were consumed by the sheer amount of information that they had to take on board, and they eventually fell prey to overload.

The trick is to start early so that the process doesn’t take on a life of its own and become unmanageable. An important first step is to build up a relationship with a wealth professional that you can trust. Look around and ask for a referral. Spend time meeting professionals from different areas, such as banks, trust companies and stockbrokers. They all offer something different but understanding how they can add value will help you decide on the best fit for your needs.

Also be aware that from 1 July 2011, the Financial Advisers Act

2008 came into force. This means that anyone providing financial advice needs to be authorised by the Financial Markets Authority. As such there is a strict set of criteria and code of ethics that must be followed. If the wealth manager you are considering doesn’t have AFA status then it’s best to go to someone who has.

The concept of asset classes is one that you’ll hear about, and it pays to understand the differences. The four main asset classes are cash, fixed interest, property and shares. Investment products are often made up of a mix of these. The reason for the ‘mix’ is that each one provides a different result and, over time, will produce greater or lesser returns. Having a balanced investment means that you should have an allocation with all the asset classes. The percentage will depend on what your investment goals and needs might be. This will more likely than not be related to your attitudes towards financial risk versus reward.

It’s important that both concepts are included in assessing your choice of investments. There needs to be a focus on risk, and this must be balanced by the reward you’re hoping to receive.

Make sure you deal with someone who asks questions. There needs to be discussion and debate about an investor’s attitudes to risk and return, to establish their risk profile. Like any relationship, time should be taken to ensure your wealth manager knows you well enough to provide correct, accurate and relevant financial advice. The conversation should be about how they work and then it should focus on you, the investor. What do you have and why? Where do you want to be and why? The rest is up to the wealth manager to help you understand how you are going to get there.

After working all your life to build up a successful business it is vital that great decisions are made and to do this dealing with a professional in key. But don’t wait for D day. Start the process now. It will reap benefits in the long run.

Jonathan BEalE head of private Banking and Wealth [email protected] W: asb.co.nz

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SUCCEED / Issue Six2 2

SUCCEED.nEt.nZASB Bank Limited PPU36214

Who looks after you while you look after business?Most businesses insure their physical and financial assets. But few have a plan to cover their team. And if your business depends on you or other key employees being on the job to make things happen, insurance is a very good idea.

ASB business insurance from ASB Bank Limited can help fill the gaps and keep cash flowing if an accident or illness means you or key staff are unable to work.

If you’d like to find out more, just call 0800 272 222 and arrange a meeting with an ASB Business Insurance Manager.

The availability of insurance cover is subject to your application being approved. All applications are subject to individual consideration. Special conditions, exclusions or premium loadings may apply. For full details, please refer to the policy documentation, which is available from ASB Bank Limited. The insurer of ASB’s life and health insurance products is Sovereign Assurance Company Limited.

are you protected against losing your most valuable assets?Managing a business often brings greater freedom and earning potential, but it also comes with more responsibilities, risks and the need to plan for all eventualities.

Insurer’s View

Most New Zealand businesses understand the need to manage the risks they face every day. Business premises, vehicles, equipment and stock are usually insured against fire, flood and theft, but many businesses forget about their most valuable asset—the people who keep the business going every day.

Protecting businesses against the loss of their owners or employees is an important function of any business insurance policy. Understanding and managing the risks a business could face if it were to lose one of their owners or employees for a longer period of time can help protect against the consequences.

In general, businesses are facing three basic, insurable risks: Loss of a business owner, loss of a key person and debt repayments.

Business Ownership: Losing a shareholder or business partner If a shareholding director or business partner is unable to work for a longer period of time, it can have a serious impact on a business. Would your business survive if one of the owners

were to fall seriously ill, become totally or permanently disabled or die unexpectedly?

Who would take their place, look after the daily business and decide which direction your business should take?

Key People: Losing your most valuable assets We are all aware of the fact that employees are our most valuable business asset. In any business, there are key people that play an essential and valuable part. Losing these people for a longer period of time due to illness or an accident can really put your business at risk.

Would you be prepared if something would happen to a key person in your business? How would losing them impact on your business?

Options are available to protect your business against the loss of a key person and the revenue they generate.

Business Debt: Meeting loan repayments Often, businesses need to rely on loans to be able to afford certain resources or assets. If you, your business partner or a key person would be unable to

work for a longer period of time, it could become very difficult to keep up with financial commitments.

Have you considered your ability to pay back debt if something would happen to you, your business partner or a key employee?

The ability to borrow and repay loans is often dependent on the income generated by a key person. If that person becomes unable to work, business insurance could help repay any outstanding debt or help you meet your ongoing repayments.

It’s not a case of ‘Can you afford it?’ but ‘Can you afford to be without it?’The risks outlined above are very real, and can have a huge impact on your business. There are a

number of insurance policies available that can protect you against those risks so you can worry about your employees getting better, with the confidence that their absence from work will not put your business at risk of closing down.

ASB’s Business Lifestyle Security Plan is a total insurance solution designed for businesses. We can work with you to develop a personalised recommendation specifically for you and your business.

If you would like to find out more, just call 0800 272 222 and arrange a meeting with an ASB Business Insurance Manager.

the risks are very real Two out of five people will be unable to work for six months or more because of sickness or an accident at some time between the ages of 30 and 65.(1)

13.96% of Adult Males (15 - 65) currently have a disability that has kept them off work for six months or more.(2)

12.69% of Adult Females (15 - 65) currently have a disability that has kept them off work for six months or more.(2)

67% of businesses have to close due to the injury of a key person (3)

ASB

Sources: (1) ACC BERL Report, June 2010. (2) Statistics New Zealand, 2006 disability report. (3) ACC research, June 2006. The availability of insurance cover is subject to your application being approved. All applications are subject to individual consideration. Special conditions, exclusions and premium loadings may apply. ASB Business Lifestyle Security Plan insurance is underwritten by Sovereign Assurance Company Limited (‘Sovereign’). For full details of the products and benefits offered by the ASB Business Lifestyle Security Plan, please refer to the policy document(s) which are available from ASB Bank Limited or Sovereign.

SUCCEED / Issue Six24

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3Critical success factorsIn today’s climate, these

are the factors that make a difference; (>) Management—quality

of the management team is vital, as is locking them in via an effective remuneration and incentive scheme. For smaller businesses reducing the reliance on owner/founder is also important.

(>) Governance and Ownership—developing a robust corporate governance structure will bring fresh perspective and experience to any business. Introducing independents directors and/or an advisery panel will greatly assist in preparing the business. Tidying up ownership structures and shareholder agreements is also important.

(>) Legal Contracts—customer contracts, supply agreements, staff contracts, insurance, premises, are all covered by an investor’s legal due diligence (DD). Getting legal advice and a review of the business will identify potential issues to be resolved.

(>) Financials—engage your accountant to review your company structure and financial accounts, separating out any personal or related party transactions. Quality Management Information Systems (MIS), an accurate and detailed financial model showing three to five years of financial forecasts is also a

valuable exercise. Audit and tax issues also need to be reviewed.

(>) Growth Strategy—being able to articulate a well thought out and realistic growth strategy, including a robust business case that documents the plan, is critical.

(>) Risk Analysis—undertaking a risk assessment will help to identify what the main issues facing the business are, the probability of them occurring and potential impact. Other useful analytical tools are SWOT, Porters 5 Forces, and basic value chain analysis.

(>) Marketing Material—prepare a succinct investor presentation and an investment memorandum.

4 Seek and you will find out Being investor-ready can

be a time consuming and costly process. Employing the services of a reputable adviser will help with a lot of the heavy lifting and not distract management from running the business.

A good adviser will assist in establishing a timetable, managing the clean up including DD, help prepare the investor memorandum and presentation, identify who the likely investors or buyers are, present the business in the best possible light, provide advice on structure and valuation and where appropriate, lead negotiations.

5 Banking your futureHow your bank can help?

Actually in a variety of ways.

(>) Your bank has established and long standing adviser and investor networks and will be happy to make introductions and open doors for their customers.

(>) The bank can assist with the capital raising process including structuring and arranging capital markets issuance, introducing potential investors, and delivering total capital solutions.

(>) Your bank will provide feedback on capital structure and optimising your funding model so that it is aligned with the strategy of the business.

(>) Similarly, it will ensure there is sufficient working capital to support growth plans.

(>) Then there are the issues of managing risk—the bank can reduce FX, Interest Rate and Commodity price risks through Global Markets hedging.

(>) Prior to engaging with investors, negotiating a stable financing with your bank can enhance the sale process and potentially boost enterprise value through agreeing an efficient financing package to support the sale of your business.

Talking to your bank about your strategic plans, capital raising requirements and future ownership will help you succeed.

hEnry WithErS Senior vice president at aSB [email protected] W: asb.co.nz

Being investor-ready means preparing your business to make it an attractive proposition for future owners and investors.

Even if you don’t have any immediate plans, embarking on the process of improving your business will often assist in driving shareholder value and enhancing your bottom line.

As a starting point you should have a clear idea as to who the likely investors are and what your business needs to look like from their perspective. Developing an achievable growth strategy and determining the critical success factors for your business are important steps.

1Who are the likely investors? Businesses require different

types of capital and attract different sorts of investors depending on the nature of the business and its stage in the life cycle, be it late stage start-up, growth or a mature company with stable cash flow. Understanding where your business is at in terms of its evolution will often help determine who the natural investors are.

For early stage businesses often the logical investors are family and friends. In addition, venture capital and angel investors are now more common and accessible in the New Zealand market. For smaller businesses, those in management are also logical investors or buyers.

For larger growth businesses and mature companies the potential investor or buyer universe is more varied. Careful consideration needs to be given as to which option best suits the scenario you want to create. Options include: (>) Private Equity—typically

New Zealand or Australian-based mid-market buy-out or growth funds are most active and will generally partner with management to grow earnings organically and via bolt-on acquisitions. Most firms have a five- year investment horizon with a preference for controlling stakes. Each firm has a different investment strategy, targeted transaction size and specific industry experience.

(>) Trade buyers—Usually domestic or international competitors looking to take a controlling stake and

build value through scale, synergies or a complimentary product/service offering. Trade buyers can also be key suppliers or customers that would benefit from vertical integration.

(>) Initial Public Offering (IPO)—For larger businesses an IPO or dual listing either on the NZX, ASX or other international exchange is an option worth considering. For the right business an IPO can create significant shareholder value. Market appetite, timing, cost, compliance, governance, resourcing and management expertise are important considerations when assessing feasibility.

In terms of finding the right parties or options, it pays to talk to your bank or a trusted intermediary such as an adviser, accountant or lawyer, as often they will have significant experience and strong investor and trade networks you can leverage. The New Zealand Private Equity and Venture Capital Association (NZVCA) is a good source of information and contact point for investors.

2Being investor-readyIn the current market,

businesses need to be leaner and adaptive. The rapidly changing competitive environment, fluctuating demand cycles and increasing cost structures are driving this. It’s important, therefore, that business owners and management teams undertake a dispassionate assessment of their business, not only to drive efficiencies and remove risk from the business but also to identify what growth options are on offer. Bearing in mind that the same competitive pressures and market forces often create strategic opportunities for those companies with the capital and operational capacity to grow.

Investors are increasingly selective in terms of what businesses they will invest in. Moreover they’re prepared to walk away if there are perceived risks that have not been adequately mitigated. Identifying and addressing the key issues or critical success factors in your business, prior to engaging with investors or buyers, saves time and face.

Banker’s ViewASB

the future of your business starts nowRegardless of whether you’re looking to raise growth capital or are thinking about selling, being investor-ready is the key to handling matters on your own terms.

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Success often comes from strange places. Eric Fasenkloet’s road to success literally began from scratch when as a young man he rummaged enough money to import an assignment of German-made turntables. He made some money, and caught the business bug.

At age 30 he bought a struggling Bond & Bond retail group back to life and over a number of decades rebuilt it into a major merchandising force. He sold it to multinational investor The Murray Group and then decided to take a two year ‘time out’ sabbatical to look at new opportunities.

The noble game of golf soon caught his attention both as a game and as a potential retailing opportunity.

Cold war window“The time I got involved with the sport coincided with the end of the Cold War. That’s relevant because suddenly you had a freeing up of metallurgists with knowledge and expertise in new metals. Rather than killing on fields of battle they instead started making a killing with new golf technology. The company that was really leading the charge was Ely Callaway.”

As well as perfecting his putt, Eric also took the time to assess the state of play within golf retailing. At the time most sales were done out of small pro shops linked to a particular course. He saw great potential in upping the stakes and developing a combined driving range and large scale retail operation as one.

In 1996 he launched The Golf Warehouse which today has grown to four ranges and six stand-alone retails outlets and now takes more than a quarter of the industry’s $50 to $60 million sales per annum. The combination of ‘drive and buy’ works—over 30 million balls are hit each year and on the back of that people have the opportunity of then buying equipment and gear.

Successful successionFrom the outset, Eric’s focus was on building the success of the business on succession planning.

“I head hunted a number of energetic young professionals who had good people skills, were honest and energetic and wanted to learn new skills. I figured they had all the golfing talent and I could

teach them about retailing and more general business skills covering HR, marketing and management.”

Among this initial ‘intake’ were pros Rhys Bishop (a former number one on the NZPGA Order of Merit) and his playing professional wife Tracey.

Tracey was groomed to become general manager and when the couple decided to have a family Rhys stepped into that role and subsequently the managing director’s role. Though it meant less coaching, it meant more involvement in the front end of the business.”

Eric is now in the chairman’s role and along with the Bishops, his two sons and two other managers make up the company’s directors. In addition he is actively involved in the buying side of the business knowing full well that smart acquisitions can then be transferred benefit-wise to the customer.

He also travels extensively—including frequent visits to the South Island—looking for new ideas but with a continuing focus on golf and keeping their market share position.

Driving SUCCESSIt’s home on the range, but also behind the wheel.

Why Eric drives audi(>) It’s an easy leap from the driving seat of business to the driving seat of an Audi, says Eric.

“Audi show the real pedigree of German engineering but in a way that is never overstated. Being in the retail business, it’s important that what I drive doesn’t seem too showy or ostentatious. For that reason Audis are perfect. They may look ‘low key’ but they’re anything but.

Like the clubs in his golf bag, he’s owned a range of Audis. From one of the original 4 cylinder models through to being the owner of the first R8 in New Zealand.

His colleagues at Golf Warhouse, Rhys and Tracey, share his love driving. Both are Audi fans and currently own an S4 estate. Perfect for loading children and golf gear.

“One of the joys and secrets of my success has been finding a car that mirrors the best parts of golf,” says Eric. “One that provides all the enjoyment of high technology and precision into something that quietly communicates ‘class’. German technology is the best and Audi is best of all.”

“There’s no question I love driving—in both my worlds.”

Eric Fasenkloet and Rhys Bishop have brought golf retailing to the fore.

asb.co.nz

Building a successfulbusiness is tough.Selling a successfulbusiness takes a fairbit of brainpower too.A business can’t rely on a departing owner’s knowledge, contacts and

reputation if it wants to command a higher market price. So if you plan on

selling or taking a more passive role in your business one day, then you’ll

need to create a future succession plan to ensure the business is going to be

successful without you. At ASB, we have a strong history of working closely

with NZ businesses to help them achieve exactly that.

create your future, call our professional services team on 0800 272 422.

Sounds like a plan to us.

ASB Bank Limited PPU36237

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To find out how we can give you help on succession planning and help




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Succeed Magazine Issue 6