Succession
 
Our Successes
Because of the confidentiality observed in assignments we do not seek or provide testimonials from clients. With more than 300 assignments over 20 years here is a selection of outcomes achieved.

A widow who inherited her husband’s national product distribution business with sales $25M. Following a Seminar she requested we sell the business but with net profit before tax (NPBT) of 1% we advised there would be no goodwill after 45 years in business because purchasers buy profits. We recommended the widow introduce proper Management Standards to increase profitability and create goodwill through retaining our services.

After 4 years NPBT was 7.91% on sales of $26M (without loss of any key people) and the business was valued by Deloitte in the $12-$13M range with goodwill $4M-$5M. A successful Management Buyout was completed which recognised the wealth created for the widow and her family by employed key people (see Article 5 “Professionalising Management”, Article 16 “Preparing your Business for Sale”, Article 17 “Creating Shareholder Value”.)

 A partnership of two families with a chain of retail shops in the garment industry, sales $30M, had introduced and wanted to reward second generation family members already employed. As a result of a Family Retreat involving two generations from both families (including spouses) it was agreed the role, responsibility and job description of each son and daughter would be agreed in writing as it was causing major problems through lack of clear responsibility. Because the families insisted future ownership would include all active and passive second generation members, it was agreed active members (employed in the business) would be rewarded with a generous % of additional business wealth they created by valuing the business on an agreed formula every three years. A Business Constitution was completed and signed by all family members to ensure the entitlements of Passive Family Members was protected (see Article 13 “The Retreat Program” and Article 14 “Writing a Business Constitution”.)

  An international business which had operated for over 130 years and been bought back by one family in the third generation (to make it a first generation business again) had two sons both wanting to be the future Managing Director. One had worked in the business for over 20 years and the other recently returned from overseas with definite views on changes he would like to see. As a result of the Family Retreat it was agreed the father would move from Managing Director to Chairman, the long-serving son would be Managing Director and the recent arrival a Director and Deputy Chairman. Full details of authority were clearly set out and signed in the Business Constitution (see Article 3 “Avoiding Conflict between Personal Values and Business Decisions”, Article 13 “The Retreat Program” and Article 14 “Writing a Business Constitution”). 

  A substantial diversified pastoral business where the father had unwisely convened two family meetings to agree his Succession and Future Ownership Plan. Following the second unsuccessful meeting he was heard to say, “in that case I’ll leave it to the Church” – it certainly focussed the minds by the time we held the Retreat and completed a successful Constitution. 

  A second hand plant and machinery business, sales $6M where the father had employed his two sons providing them each with a Porsche motor car (“that’s how I got them into the business”). During the interview process for the Retreat key employees all knew the dishonest practices the sons were involved in, even though they knew it was their parents’ wish they inherit the business. As a result, the Retreat was never held, the sons were terminated (and lost their Porsches) and the business was sold. 

 A national distribution business which employed the owner’s son-in-law because he was whiz kid in IT and claimed “overseas experience” in Management skills. Apart from employing him on an IT salary well outside their industry standard, he was offered an investment opportunity in the family business. It was only at the Family Retreat when everyone (including spouses) agreed future ownership should be limited to “blood line only” amongst the four children it was realised the option arrangement, if exercised by the son-in-law, would result in unequal ownership by the next generation and not recognise the "blood line only" requirement. As a result of the Family Retreat the option arrangement was settled and a payment agreed to ensure the family’s wishes were met which was clearly set out and recognised in the Constitution.

NOTE: Because of the number of continuing and assignments completed it is not possible to maintain a current synopsis of Client successes on the websites. With the prior consent of the Owner/Owners past and present Personal References setting out the steps followed and achievements can be provided