Luke Towers

Succession Matters Managing Director and Succession Adviser Adam Smith has announced Senior Adviser Luke Towers has been appointed Partner with the Perth based insurance advice business.

Established in 2013 by Adam Smith, Succession Matters has been helping individuals and business owners to secure their futures with frameworks and solutions that safeguard income, wealth transfer, principal exit / succession and continuity aspirations. Succession Matters joined national risk specialist AFSL Bombora Advice in December 2022.

Commenting on the Partner appointment, Adam Smith said, “I could not be prouder of Luke for his dedication to providing clients the highest standards of advice and service, as well as his personal commitment to ongoing professional and personal development displayed since joining the practice.

“The Partner appointment has provided the foundation for the continuity of the practice. It also reflects the commitment of Succession Matters to provide business owners with quality planning strategies, in particular focused on unforeseen contingencies that may result in the involuntary exit of a business partner.

“Furthermore, since joining the practice, Luke has played a key role in the growth and success of Succession Matters, and will continue to do so as a Partner”.

Luke Towers joined Succession Matters in October 2020. Prior to joining the practice, he was an insurance adviser based in Perth with Capital Partners Private Wealth Advisers.

Luke responded, “I am excited to be a Partner in a practice that is going from strength to strength, helping clients address an important topic that we are passionate about.

“It’s a privilege to be trusted by clients as we protect their business interests and family members, utilising insurance funding strategies. I’m looking forward to working with fellow Partner Adam Smith as we continue to develop and deliver solutions for clients and their advisers”.

Adam Smith affirmed that Succession Matters believe in the value of specialisation, and collaboration with like-minded financial planning practices is paramount.

He said that the Partner appointment was affirmation of the firm’s commitment to creating career pathways and opportunities for advice practitioners / principals to join or consider a strategic alliance.

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Craig West

Australasia’s largest succession and exit planning advisory firm, Succession Plus is building its international presence with Capitaliz, a digital tool designed to service the baby-boomer generation seeking to unlock value in their businesses prior to retirement.

Capitaliz was launched in September 2021 following a 2020 capital raise by Succession Plus capital. The launch of Capitaliz converted the 21-step business succession and exit planning process and Business Insights Report, into a real time online platform for unlisted mid-market businesses.

Now distributing to the US and Canadian markets, Capitaliz has already achieved rapid commercial success, signing a major 12-month project representing more than US$1.4 million in revenue and accrediting 12 North American based advisers.

Capitaliz has also entered international partnerships with the Exit Planning Institute and the International Business Brokers Association, which both represent significant adviser constituencies. Capitaliz Founder Craig West will present at their annual conferences in USA in May and the tool will be promoted to their audiences via digital marketing, webinars and member training programs.

Further, the valuation model used by the Capitaliz platform has been verified for use in the USA market by the National Association of Certified Valuators and Analysts. Capitaliz has also been chosen to participate in the NSW Going Global export programs for Singapore and the UK which will provide access to international markets and a source for future growth.

According to Succession Plus Founder Craig West, Capitaliz’s success in the US and Canada aligns with the broader demographic trend sweeping the world as baby-boomers sell their businesses and plan for retirement, generating a major inter-generational transfer of wealth. He said the OECD predicts in the US and Canada alone, more than 12 million SME’s are owned by baby-boomers, with their businesses estimated to be valued at greater than US$10 trillion.

“Most baby boomers who have grown their own businesses face the overwhelming reality that they are unprepared to unlock the value held in their privately-owned business assets and without a plan, the value of their business will retire as soon as they do,” said West.

Competitive advantages of Capitaliz include the provision of consistent valuations, benchmarking and non-financial metrics to make like for like comparisons while the quarterly Value Potential Index tracks key metrics which influence SME valuations.

To use Capitaliz, advisers must become accredited through the Capitaliz Academy, which includes eight core units of theory and practice and is an estimated 20 hour time commitment. This accreditation strengthens the consistent valuation method delivered by Capitaliz and ensures a quality client experience.

“Investing time in business succession and exit planning is one of the most important financial decisions a business owner will ever make,” said West. “For business owners, a large proportion of their wealth is tied up in the business and related assets and the extraction of that wealth is a key component to adequately funding their retirement.”

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Craig West

Sentry Group CEO and Chairman Murray Hills and Succession Plus founder Craig West have announced that the national licensee group and leading business succession and exit planning specialist have teamed together to assist the rapidly escalating need by SMEs for assistance with their retirement and exit objectives.

Recent surveys and studies by Swinburne University of Technology Melbourne, Melbourne University and Succession Plus have confirmed that succession planning continues to be a major challenge and concern for Australian SMEs, especially Baby Boomer business owners.

“The depth of challenges facing Baby Boomers seeking to retire in the coming years is enormous with the greatest being trying to sell a business in a buyers’ market”, said Murray Hills.

“For many of these business owners, their retirement nest egg is tied up in the enterprise and if they are unable to maximise the value and then extract it on sale will face the prospect of a very gloomy existence in their twilight years”.

Adding his voice, Craig West said that it basically comes down to poor preparation on the part of business owners who fail to commence the retirement journey while time is still on their side.

“As a result, business owners are walking into retirement with far less than they could have – and in the worst case scenarios simply switching off the lights and entering into retirement with nothing from years of hard work, dedication and exertion in their businesses”.

Commenting on the alliance with Succession Plus, Sentry Executive Director and Head of Business Solutions, David Newman said the purpose was to support the licensee group’s advisers assist their small business clients to effectively deal with protecting the value of their enterprises and extracting value upon exit.

Succession Plus has developed an extensive program for Sentry advisers that comprise workshops, training and development, visits and consulting with adviser SME clients. The first program to be rolled out as part of the Sentry Succession Plus alliance focuses on Employee Share Ownership Plans (ESOPs).

Craig West continued, “For the hardworking business owner who has dedicated many years to his / her business and seeks to exit and retire, ESOPs can be the answer with benefits including a succession solution for the proprietor and certainty for the employees, customers and suppliers.

“The thought of a business being sold, merged or closed often fuels disquiet among employees with disgruntlement, insecurity and potential for key employees to jump ship heightened”.

“ESOPs allow for an orderly transition of ownership, the owner can scale back his / her involvement whilst employees are motivated to go the extra mile through increased morale that increases productivity, performance and engagement”.

Last week Craig West embarked on a national roadshow event that is sponsored and supported by Sentry and promotes ESOP as business succession and exit planning solution.

The roadshow will visit all mainland capital cities with the program divided to accommodate maximum participation:

• Part A – for business owners will delve into ESOPs, their benefits and why they should be considered as an exit and succession option
• Part B – for financial planners and professional advisers (accountants, lawyers, etc.) of the legal and taxation considerations for the effective implementation of ESOPs

“We are proud to support and sponsor the Succession Plus ESOP national roadshow and confident that the event will be of immense benefit to SMEs and advice practitioner attendees”.

“In addition, we are excited about the long term prospects the alliance with Succession Plus will provide as the Sentry advisers that focus on servicing the needs of the SME sector will benefit with increased clients and enhanced relationships with accountants, lawyers, finance/mortgage brokers etc.”, concluded David Newman.

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Craig West

As stock markets and economic indicators locally and across the globe continue to improve and whispers are getting louder that things are getting better, now is the time for SMEs to plan for the year ahead and especially, for baby boomer business owners to revisit their succession prospects and exit aspirations said Succession Plus CEO Craig West.

One of the interesting things observed by West has been the dramatic increase in mergers and acquisitions, capital raising and IPOs for Australia’s major corporates (largely listed companies).  “The level of activity has increased quite dramatically over the last six months and if you read any of the financial press regularly it is not unusual to find a story about a private equity firm making an acquisition, a new listing being announced, a merger between two major businesses or other corporate activity”.

“This kind of activity has not been seen in the market at anywhere near this level for several years (and probably not since the GFC)”.

This is significant as the private capital markets (corporate activity, acquisitions, et cetera with Succession Plus’s typical clients) will generally lag approximately 12 to 18 months behind the ‘big end of town’.

“Whilst in our sector of the market we have already seen an improvement in activity (partly led by the increased availability of capital), we can expect this increased activity to really peak in approximately 12 months”, continued West.

“This area, like nearly all other investment classes is cyclical and business owners should be doing everything they can to take advantage of this predicted increase in activity.  Contrary to the doom and gloom associated with the oversupply of baby boomer owned businesses in the market and the downward force that will apply on prices – this is simply not our experience, but that comment needs to be qualified by saying that good, well – prepared & successful businesses will always sell (in any market)”.

The opportunity here is to ensure your business is all of those things and therefore attractive to as prospective buyer as the market upswing continues.

West concluded, “Ultimately, the best advice for any business owner at any stage of the business life cycle is to take time and carefully assess all factors in relation to either their business growth or exit objectives.  For those seeking to sell, assess all pertinent data and then develop the strategy to sell the enterprise to the right buyer – at the right time – for the best price”.

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Craig West

The benefits of Australia’s Free Trade Agreements (FTAs) with Malaysia, New Zealand, USA, Singapore, Thailand, Chile and Korea (announced in December 2013 but not concluded) go far beyond the removal of tariffs on goods and services traded between Australia and its bilateral partners said Craig West, CEO & Founder of Succession Plus Pty Ltd, author of Enjoy It-Business Succession & Exit Planning and President of the Australian Chapter of Exit Planning Institute (EPI).

With over 50,000 businesses coming onto the market for sale each year, Australian SME owners should consider these countries as not only export destinations but also as a source of prospective buyers or investors.

Sighting as an example the Malaysia Australia Free Trade Agreement (MAFTA) that celebrated its first anniversary in January, Craig West said the Malaysian Government is transforming the nation’s economy under its Economic Transformation Program (ETP).  In doing so, Malaysia is propelling itself into a dynamic, modern, innovative and globally competitive nation through increased domestic wealth and consumption, as well as commercial success in international markets.

Malaysia also has a thriving SME Sector and together with a rising middle class, high net worth individuals and capital rich companies looking to international markets for new investment opportunities.

Australia is well positioned to capitalise on Malaysia’s economic strategy and the extent to which Australian companies will be seen as a destination for Malaysian investors depends largely on our ability to engage with, and tailor opportunities for the Malaysian market.

“It is not unusual for an Australian business operating in an overseas market to be the focus of investment, merger or takeover interest by local businesses and competitors,” said Craig West.

“Australian businesses have a well deserved reputation for excellence, innovation, consistency and reliability, together with our high quality of life and multi-cultural population, underpins the attractiveness of Australian enterprises as a target for outbound investment or acquisition”.

The Australian economy is entering unchartered waters with an estimated 50,000 SME businesses coming onto the market for sale each year as Baby Boomers seek to give up work and sell their enterprises to fund retirement lifestyles.  Studies have confirmed over 30% of business owners are relying on the sale of their business as the primary source of retirement funding.

According to the MGI Australian Family & Private Business Survey (June 2013), the average age of family business owners is 58 years (with 37% in their 60s), and are delaying retirement hoping their enterprises will regain lost value following the GFC.

Craig West continued, “With supply exceeding demand in Australia for SME businesses, it makes sense for business owners to consider the dual benefits of exporting their goods and services overseas under FTA arrangements and promoting their businesses for sale or investment internationally”.

The Australian Federal Government currently has FTAs and related bilateral arrangements under negotiation with China, Japan, Indonesia, India, the Gulf Cooperation Council (consisting Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates) and many others.

All national governments encourage companies to broaden their horizons and make strategic investments overseas, and to invest in industries that enhance and develop their nation’s own capabilities.  Most share a number of common sectors that include: Education, Healthcare, Technology, Building & Construction, Clean Energy, Tourism and Financial Services.  Australia has proven expertise and capabilities in all of these areas and this represents significant opportunities for companies who position themselves for this wave of new investment potential.

Many wealthy overseas entrepreneurs and high net worth individuals are becoming increasingly interested in migrating to Australia to satisfy a number of long-term retirement, succession and quality of life objectives for themselves and their families.  At the same time, the Australian Government is encouraging high net worth individuals to apply for permanent residence under the new Significant Investor Visa (SIV) program which is designed to attract investment into Government Bonds, Complying Managed Funds and Australian Private Companies.

With tens of thousands of overseas students being educated in Australian Universities annually, and wealthy overseas entrepreneurs looking to diversify their business interests and developing a succession plan for their children and future generations, Australia is well placed to attract private investment from those looking to adopt a “one foot in, one foot out” policy between their country of residence and Australia.

Many ASEAN based companies have achieved extraordinary growth in their domestic markets over the past decade but are reaching the point where future double-digit growth can only come from expanding overseas.  By investing in or acquiring international businesses, they are able to gain access to a global customer base, tap into new sources of product development, innovation and knowledge, and generate new revenue and profits from overseas.

The Australia in The Asia Century story is only just beginning and is a potential game-changer for Australian entrepreneurs and business leaders that can capitalize on these opportunities – especially those seeking a prospective buyer or investor for their SME business.

“However, irrespective of the source for a potential buyer, SMEs need to plan their business exit well in advance if they hope to extract the highest value.  The result of not having an exit plan or seeking a last minute buyer when an owner turns age 64, will only result in a potentially poor price being offered for the business – or more disastrously, none at all”, concluded Craig West.

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Succession Plus announce an intensive one day planning conference.

Instead of the start of a New Year being an opportunity to implement a carefully considered succession and exit strategy, far too many SME owners (especially the Baby Boomers) will do so without a plan in place as they fail to understand that successful exits begin years in advance in order to derive the best outcome said Craig West, Succession Plus Pty Ltd Founder and CEO, President of the Australian Chapter of Exit Planning Institute (EPI).

Commenting further, Craig West said “Generally speaking business owners are very good in their respective industry or market niche but not particularly proficient at management and certainly not skilled at maximising the value of their venture.  In particular, they struggle to comprehend and appreciate the issues associated with succession and transition and it can also be an emotionally charged subject for them with concerns on many levels that need to be addressed.”

“However, if the business is to be a legacy retained within the family or the funding source for a life in retirement, those issues must be addressed and the appropriate strategy implemented as soon as possible.”

Disturbed by this situation, and to assist business owners to start 2014 on the right foot, Succession Plus has developed a comprehensive program for an intensive one day strategic planning conference to be held in Sydney on February 7, 2014.

The Succession Plus Conference is a free event and attendees will obtain insights on tackling succession planning and how best to effectively commence and approach the process to best meet their individual circumstances.

Conference attendees will participate in a dynamic interactive day of presentations and discussions.  In addition, the program will encourage SME attendees to network with fellow business owners, share experiences and engage with the speakers during the breaks and the networking session at the end of the day.

The program will also address improved business performance and includes a keynote presentation from former Australian Rugby Union Captain and CEO of Centric Wealth, Phil Kearns who has  himself recently managed a successful $100M+ sale.

Leading SMSF expert Grant Abbott principal of NowInfinity and author of The SMSF Strategy Guide will provide an insight into the importance of incorporating robust retirement strategies into business succession and exit goals.

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SMEs need to improve their exit strategies.

The recently launched book Enjoy It-Business Succession & Exit Planning by author Craig West, Succession Plus Pty Ltd Founder and CEO, President of the Australian Chapter of Exit Planning Institute (EPI) has been very well received and acknowledged as an invaluable resource for SMEs seeking to maximise their exit or retirement potential.

Although extremely grateful for the very positive response the book has received as Craig West travels across Australia at book launch events in the main capital cities, the lack of exit and retirement preparedness by SMEs continues to be a major concern for the strategic business adviser and his team of consultants.

“The average age of Australian business owners is 58 (with 37% in their 60s), and are delaying retirement hoping their enterprises will regain lost value following the GFC.  To compound the dilemma of these business owners, due to their age and other factors, they are in the high risk group for heart disease, cancers and other age related conditions”, said Craig West.

According to the MGI Australian Family & Private Business Survey (June 2013), the average age of family business owners is 58 years.  Almost half of business owners surveyed see themselves working in the business beyond 65 years of age, with over 33% saying they will be relying solely on the sale of their business to fund their retirement.

Currently, 34% do not have any adequately funded retirement plan (up from 17% in 2006).

It is estimated that over the next decade the retirement of family business owners will see the transfer of approximately $1.6 trillion in wealth, which surely must make succession planning one of the most significant issues facing SME owners.

Yet incredibly, despite 75% of business owners surveyed admitting their businesses are not sale or succession ready; 52% do not intend doing anything about it over the next 12 months.

With estimates of 50,000 businesses for sale each year for the foreseeable future, the small business market may become flooded, which will put further pressure on business values.

Many SMEs will have no option but to simply close the door and walk away from their businesses.

In the current market the best chance of success is to be prepared and plan ahead.  If SMEs ’Begin with the end in mind’, they are much better prepared for making the right decisions along the way, following the steps towards their long term vision.

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The project has been a long term goal of author Craig West and he confirmed it was written in response to the many business and retirement issues that SME owners are confronting as they rapidly near retirement age, especially the Baby Boomers.

Many business owners expect the sale of their business to fund their retirement, with 33% reliant on it as the primary source.  However, with so many SME owners in weak financial positions following the GFC, it is more important than ever for this group and sector to implement plans now that will extract the highest possible value from their enterprises – yet 75% do not  have an agreed succession or exit strategy!

According to Craig West business succession and exit planning has never been more complex or important than it is today as it has been estimated that over the next decade the retirement of family business owners will see the transfer of approximately $1.6 trillion in wealth thus making business succession and exit planning one of the most significant issues facing the Australian economy and the SME sector.

Commenting on the book, Craig West said it was written with a straightforward approach and in non technical language in order to make it easily comprehensible and understood by those business owners seeking to maximize their exit potential.

Enjoy It-Business Succession & Exit Planning is designed to provide a useful starting point for those business owners seeking a logical roadmap to exit and retirement, and the smart strategies required to amplify their commercial exodus options.

Craig West’s book advocates preparing early so that owners have a deeper understanding of the potential value of their business, and have the time to make positive changes to increase chances of a good sale.

Enjoy It-Business Succession & Exit Planning can be purchased online from the Succession Plus website: www.successionplus.com.au and Amazon: www.amazon.com

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SMEs need to stop the day-to-day and focus on succession planning.

Reflecting on the disturbing trends that were identified in the June 2013 MGI Australian family and private business survey, Succession Plus Pty Ltd Founder and CEO and President of the Australian Chapter of Exit Planning Institute (EPI), Craig West said that far too many SMEs were jeopardizing their retirement plans and futures through lack of planning and focus on the issue.

Craig West pointed to several disconcerting findings in the MGI survey that included:

• The number of business owners in the 60 to 69 year age bracket has increased by 16% in the last three years from 21% in 2010 to 37% in 2013
• 58% of family business owners indicate that the younger generation is not interested in actively managing the business
• The most concerning fact that 33% are entirely reliant on the sale of the business for cash to fund their retirement and yet 75% have not agreed or documented any proposed succession strategy.

“Any business, financial analyst or commentator would see the inherent danger within these numbers and that is simply that there is an increasing number of people approaching retirement age who are badly prepared for succession or exit but whose retirement funding will be at least partly and in many cases entirely dependent on them achieving some level of successful exit strategy”, said Craig West.

“Given that many business owners spend the vast majority of their time day-to-day actually running the business (red tape, bureaucracy, compliance and regulation have made that far more demanding and far more time-consuming than perhaps was the case 20 years ago) then they don’t have the strategic focus required to implement such a strategy”.

During his presentations and workshops, Craig West regularly quotes Steve Covey’s second habit, “Begin with the End in Mind”, to illustrate to business owners that they must be focused on determining their exit strategy and working towards it as a key aspect of managing the business.

Craig West continued, “Many advisers in this space also need to understand that a business succession  or exit plan is not a project or document – it is a process and that often takes anything from 18 months to 5 years. In fact the most successful exit strategies have been implemented at least 3 to 5 years prior to exit”.

For the business owner, the comfort and certainty provided by a definite and defined process towards an exit may be the trigger needed to allow them to commit to the decision.

“In terms of national wealth several recent research studies have estimated the value of privately held business in Australia to be something close to $3 trillion and if the exit and succession plan for those business owners is not managed correctly that wealth simply evaporates and disappears”.

“This challenge if not met will lead to a significant retirement funding gap for a large number of baby boomers approaching retirement”, concluded Craig West.

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