ACCESS Family Business - August 2019

WESTERN SYDNEY

Family Business Welcome

With David Pring

Welcome o KPMG Family Business ea ure ar icles.

I you would like o discuss hese ar icles or how KPMG can help wi h your business please eel ree o con ac me on 9455 9996 or davidpring@kpmg.com.au

Talking about FAMILY BUSINESS:

Planning or a success ul succession P A o wha makes amily-owned enerprises so special is he shared legacy.

Te sense ha people are working or a common cause and building some hing or hemselves, heir children, and maybe even heir children’s children.

Bu jus because successors have grown up in and around a business doesn’ mean hey know all here is o know abou running ha business. In ac , a recen survey by he KPMG En erprise and Family Business Aus ralia (FBA) reveals almos wo- hirds (64 per cen ) o u ure heads o amily businesses don’ eel ready o ake on he responsibili ies o leadership and ownership.

Bridging the gap Di eren genera ional perspec ives are a double-edged sword or amily businesses: hey can be a source o con ic , or a s ra egic advan age.

“Younger genera ions end o be curious, exci ed, innova ive, while perhaps he incumben has more o a ‘been here and done ha ’ mindse ,” says KPMG En erprise Par ner Agnes Vacca, who is running a amily business mas erclass on how o harness he op imism o u ure leaders and embrace he wisdom o curren leaders.

“Bu i you can ge he wo o hem communica ing openly and working oge her, you can s ra egically drive he business orward because you’re open o new echnology and in roducing new produc s and services, and complemen ing ha wi h he wisdom o he older genera ions.”

S eve Hea her, Managing Direc or and Principal Execu ive Search o Mining People In erna ional in Per h, acknowledges u ure leaders may be shor on experience – and may “know a lo less han hey hink” – bu believes his is more han made up or in o her ways.

Since his son Scot joined he business fve years ago, Hea her says he ormer has been a “condui o a whole ra o o her younger people via a direc communica ion and an unders anding o wha hose people wan and wha hey can deliver.”

Focus on training Hea her is curren ly in he pre-planning s ages o a po en ial u ure rans erence o leadership o his son or some o her person. I may be early days bu , i any hing, he wishes hey’d s ar ed inves iga ing ransi ion s ra egies even sooner.

“Tere’s a air bi o do and none o i happens overnigh ,” Hea her says. “We need o unders and i we do ake a par icular rou e wha

ha ’s going o mean – wha s ruc ures and processes need o be pu in o place, do we need o bring in somebody else in a emporary capaci y, or ge unding mechanisms in place o enable o her (non amily) shareholders o be bough ou , when hey are ready and i ha ’s wha hey wan o course? And people need more raining, more coaching, more educa ing.”

Indeed, curren leaders have an impor an role in sharing cri ical skills heir successors need o ake over and lead wi h confdence, including s akeholder managemen , s ewardship, innova ion, sales and marke ing, s ra egic planning, fnancial managemen and people managemen .

Un or una ely, despi e he ac ha leadership rans erence wasn’ ar o or some

survey responden s – more han hal (54 per cen ) were considering i wi hin he nex wo o our years, and 18 per cen wi hin he nex 12 mon hs – 43 per cen had no succession raining in place. A number o successors also el ‘in he dark’ regarding he u ure direc ion o he business.

Te ‘socioemo ional weal h’ (SEW) o a business, which measures i s non-fnancial ‘emo ional value’, is vi al o long- erm sus ainabili y and success. Un or una ely, wi hou e ec ive communica ion and succession planning, our key areas o SEW – amily con rol, iden ifca ion wi h and emo ional atachmen o he business, and he renewal o bonds hrough dynas ic succession – can be eroded during ransi ion, increasing he likelihood

he business will be sold or passed on o nonamily members.

“I really comes down o having very open communica ion,” says Vacca, “and unders anding he needs o all par ies, wha hey’re rying o achieve, and how i ’s going o improve he business.”

Sign up o he KPMG En erprise Business o Family Mas er Class series o build he skills o balance he needs o your amily and your business. Module 3: Empowering each genera ion is being held in Sydney on Augus 27 h 2019. Find ou more a KPMG.com/ au/businesso amily.

Article first published by Smart Company.

Business of Family Master Classes How can you grow your family business, while balancing the needs of the business and the family?

Find out more at KPMG.com/au/businessoffamily

Share your vision, develop your plan!

© 2019 KPMG, an Australian partnership. All rights reserved. 282160950ENT.

WESTERN SYDNEY BUSINESS ACCESS AUGUST 2019

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Family Business

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S ar ups: we’ve come a long way bu here’s more o go

n AMANDA PRICE EN U E Capi al inves men in Aus ralian s ar ups con inues o rend upwards, bu we need o go ur her, as er i we wan o become a global leader.

Inves men in s ar ups is an impor an indica or o a coun ry’s u ure economic s reng h. A echnology business can rapidly es ablish marke presence and dominance in a new coun ry – a risk bu also an oppor uni y or many global economies. ake he home ood delivery sec or or example. Tree major players have come o domina e he $2.6 billion Aus ralian marke : Deliveroo, Menulog and Uber-ea s. O hose, only Menulog was ounded in Aus ralia – i s AU$855 million sale o UK-based Jus Ea s in 2015 s ill ranks as one o our mos success ul s ar up exi s.

And success ul s ar up exi s resul in a vir uous cycle ha sees an injec ion o capial and s rong en repreneurial alen injec ed in o he s ar up eco-sys em. Jus imagine

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or a second i wo or even all hree o our home delivery businesses were Aus ralian ounded.

Ta is why we should be pleased o see he amoun o capi al inves ed in s ar ups in Aus ralia over he 2018/19 fnancial year hi a new record o AU$1.7 billion, according o he la es edi ion o he KPMG Ven ure Pulse. Tis level would have been inconceivable jus a ew years ago. In FY 2014/15, jus AU$593 million in s ar up inves men was recorded.

Te la es numbers were spurred by inves men in some o Aus ralia’s mos success ul and promising new global businesses.

Airwallex, he Melbourne- ounded fn ech ocussed on enabling cross-border commerce, workplace managemen pla orm Depu y, and cloud-based design so ware company Canva all closed rounds in excess o AU$100mil over he pas 12 mon hs.

Compared o ourselves, we are doing grea . Bu un or una ely, in oday’s world – business building is no a na ional spor , i ’s an in erna ional one.

radi ionally, here have been wo behemo hs when i comes o s ar up inves men : he US and China. In he las quar er alone, US VC-backed companies raised AU$45 billion, and nine een companies atained “unicorn” s a us (a valua ions o over $1 billion), while China saw a slowdown, i s ill saw over AU$10 billion work o s ar up inves men . In he same period, Aus ralia recorded AU$170 million.

Some would argue i ’s un air o compare Aus ralia wi h he US and China. So, le ’s look a a more comparable economy: Canada.

Be ween 1 July 2018 and 31 June 2019, VC inves men in Canadian s ar ups exceeded AU$4.4 billion – more han double ha in Aus ralia. Yes, Canada will always benef rom i s proximi y o he world’s larges echnology and s ar up marke , he US. Bu he ac ha similar sized economy o ours is seeing wice as much inves men in innova ive new businesses pu s our VC numbers in o con ex .

Suppor ing s ar ups is a s ra egic imperaive or any economy. Jobs and grow h may no have been a success ul poli ical slogan,

bu i is a serious reali y in a digi ally enabled world where billion-dollar businesses are being crea ed in record ime.

Tanks o he dedica ed work o early ounders and inves ors, Aus ralia’s s ar up secor has s ar ed o emerge. Our mos success ul s ar up, US-lis ed A lassian, now has a marke capi alisa ion ha would rank i in he op 10 Aus ralian companies on he ASX. We now have mul iple examples o high-grow h, global leading echnology ven ures ha prove i can be done.

Now i ’s ime or more capi al o be deployed, and or more resources and suppor o be applied o building Aus ralian s ar ups. Yes, AU$1.7 billion is a good s ar , bu we are only scra ching he sur ace o wha is possible o crea e he Aus ralian economy o he u ure. o receive he la es Ven ure Pulse repor , please con ac David Pring on 9455 9996 or davidpring@kpmg.com.au.

Article first published by Amanda Price, Head of High Growth Ventures, KPMG Enterprise on KPMG Newsroom.

How big da a can help rans orm re ail n DAVID EVANS n an increasingly compe i ive re ail world, in which cus omers have vas expec a ions o personalised service, making deeply inormed decisions is more impor an han ever o success. o achieve his, having advanced da a and analy ics capabili ies is he key. Tis includes a robus and me hodical way o collec ing, managing and in erpre ing da a, hen linking ha insigh o he overarching business s ra egy.

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Big data maturity in retail Te abili y o ga her and engage wi h big da a is no rela ed o he size o a re ailer, or how many ransac ions a re ailer processes.

Some rela ively small re ailers have very rich da a se s, and are able o genera e deep insigh s o guide decision-making.

Meanwhile, some very large household re ail names don’ have he abili y o ga her relevan da a on basic hings – such as where heir cus omers pre er o shop, or wha produc s hey are buying a wha imes. Tey are missing ou on a huge compe i ive advan age.

KPMG sees ha Aus ralian re ailers are

becoming aware o he benef s ha good da a and analy ics capabili ies can o er, and are looking or ways o seize i s po en ial.

Getting the most out of data Da a alone doesn’ hold he answers, so he key is o rame up he key ques ions ha are ‘keeping you up a nigh ’ abou your re ail business. Tese ques ions should be rela ed o your overall business s ra egy. You can hen use da a analy ics o help you arrive a clear insigh s ha you can ac on.

Da a is o en used in re ail or crossselling, up-selling, lead genera ion and

revenue making. However, here are immense oppor uni ies o use da a o reassess and improve business undamen als – such as cos minimalisa ion, supply chain s ra egy, s ore oo prin planning, oor space use, and more.

Tese areas can be s rong drivers o rans orma ion owards success.

Please con ac David Pring davidpring@kpmg. com.au or a copy o he brochure, o fnd ou wha big da a can do or you and KPMG’s holis ic approach o helping re ailers make he mos o big da a.

First published by David Evans, Director, Data Science, KPMG Australia on KPMG Newsroom.

WESTERN SYDNEY BUSINESS ACCESS AUGUST 2019

Business of Family Master Classes It’s time to hone your family business skills to prepare you for an exciting future of growth!

Join our new series of tailored master classes, all led by an expert KPMG Enterprise family business adviser.

To find out more and register your interest visit KPMG.com/au/businessoffamily

© 2019 KPMG, an Australian partnership. All rights reserved. 282160950ENT.

WESTERN SYDNEY BUSINESS ACCESS AUGUST 2019

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