Corporations can solve our society’s biggest challenge

It came as a surprise to the team at One Light Charity Foundation when their research exposed the single biggest social problem to solve in the local to the global community.

It was found that the vast majority of extreme social challenges have their cause or effect in homelessness itself or the fear of becoming homeless.

The causes:  Think how losing a job, a business, a farm or income causes unemployment which causes poverty and domestic stress leading to homelessness. The same for severe illness like cancer, or a serious accident, or mental health issues, all of which cause loss of income leading to poverty. Domestic violence often cause single parent families to flee and become homeless. In summary most extreme social conditions like unemployment, poverty, sickness, mental health, domestic violence, substance abuse, victims of floods, droughts and fires and many others often cause homelessness.

The effects:  Once individuals have lost confidence in themselves, families, friends, and in government they end up sleeping rough on the streets, in public buildings or in cars. The effects of these harsh conditions and the breakdown of the family unit leads to extreme humiliation and loss of self-belief, alcohol and substance abuse, violence, starvation, child abuse, sex slaves and trafficking, violent crime, self-harm and sometimes ultimately suicide.

It is evident that the causes and effects of homelessness is central to our social challenge, the common denominator of our extreme social problems that we must solve. This problem has existed since the beginning of human kind and has never been solved.

We all know somebody who is or has been through a traumatic experience of loss of regular income caused by job redundancy, business collapse, sickness, mental health etc. Couple this with no financial reserves, a domestic break up or no welfare benefits then homelessness quickly becomes a reality. It is this gripping fear of homelessness and loss of self-belief that often causes deep depression, domestic violence and substance abuse. Hundreds of millions of people are caught up in this cycle and suffering in silence at any given point in time. Some are fortunate to receive help to bounce back but many do not. We were told by the Salvation Army that tens of thousands of Australian men are destitute living in their cars and cannot provide for their families.

It is quite disturbing that in most western countries, like Australia, the homelessness challenge is not a local council responsibility but a state level issue, competing for state funds against roads, police, education and hospitals. The state government public housing departments simply do not have sufficient budget to meet the demands for temporary shelter.

The recent death of a nine-month-old Gold Coast baby who was living homeless with her parents on a famous beach is a case in point. Nearby residents complained to the local council of the baby’s crying every morning and still nothing was done to help the vulnerable and destitute family.

The supply of temporary shelter is just the beginning but does not in itself solve the problem. A holistic approach is required starting with providing the shelter but must be co-ordinated with food providers, op-shops, counselling, skills & recruitment as well as logistics services to get the vulnerable back to producing income and providing for their families.

The most important outcome is to establish “House of Change” temporary home facilities and services in the community so that everybody knows there is a caring place of refuge where you receive sincere help to change your circumstances, keep your family unit together, and get back on track. Only then nobody needs to endure that killer fear of homelessness.

In the end it seems that it will need to be the kindness of Business and their philanthropic leaders coupled with passionate not for profit volunteers that will need to step up to solve the epic social challenge of our time. Together the State needs to be lobbied to make available underutilised buildings for temporary shelter. To combat and eradicate homelessness is the most efficient way for big business to meet their corporate social and sustainable development responsibilities. To team up with a not for profit foundation working in this area is the most rewarding impact investment any corporation or fund can make in 2019 and beyond.
Written by Tony Wiese

How to select the right intermediary


When you are considering appointing an intermediary or advisor to help you sell or buy a mid-market company it is important to select a good one. There are a few decent advisors but there are many whom are inexperienced and purely chasing the next commission cheque. Acquiring or selling a multi-million dollar business is a serious matter and you should have the best possible representation. Based on 25 years’ experience of buying and selling companies I have developed a few guidelines to help you select the right one.

1. Business experience. There is a big difference between advisory experience and business experience. Many advisors have never started or managed a business, paid a wage or signed an office lease, and cannot fully relate to the needs or concerns of the buyer or seller. The best is to select an intermediary that is also an entrepreneur as their business acumen will often assist to overcome obstacles in the deal process.

2. Deals experience. To successfully close your transaction the intermediary personally must have a good track record of many deal closures. Some large advisory firms will allocate to a transaction a novice who may have worked on one or two “large” deals but lacks the deals closing experience or variety to overcome the complexities that arise frequently.

3. Technical Knowledge. A multi- million dollar M&A deal can be complex. A good intermediary would have spent thousands of hours mastering the necessary accounting, finance, structuring, taxation and legal requirements to facilitate and negotiate the sale, acquisition or merger of a company. Check their qualifications, knowledge and skills across this broad spectrum of requirements. Although the deal may require specialised professional advisors, the intermediary needs a high degree of technical knowledge to mediate the different positions and arguments that the parties may take. A lack of technical knowledge can easily cause a deal to collapse or not being maximised.

4. Trust. Your sense of trusting the intermediary should be a top priority. Try to understand the value system of the person and the source that drives them to do the right thing. Ethics and transparency usually become a real issue in the midst and heat of a complex deal. Remember that the intermediary is your chosen representative so you must trust them.

5. Sales & Marketing capability. In essence M&A is a sales & marketing effort. Without a seller and a buyer we have no transaction – we have nothing. To find the right business or acquirer requires a sophisticated marketing effort. Most advisors are from an accounting, finance, investment banking or legal background with little to no sales & marketing experience or capability. You need to question them on their techniques for sourcing qualified prospective acquirers and finding quality businesses. Try to understand their sales skills as you will be working closely together over months to close the deal.

6. Chemistry. A typical M&A transaction can take 3 to 12 months to close plus a further period for escrows, earn-out, lock-up or other performance obligations. You want to work with someone that you believe you can get along with through good days and tough days. Someone you can even enjoy to spend time with and inspire each other. Also someone you think will get on well with your accountant and lawyer as well as the other side of the transaction. Can the intermediary build a bridge between all the parties when things get tough? Look out for that special chemistry.

7. Grit. To succeed in the complex M & A world it is essential to be passionate with perseverance. At least 10 years of staying power is required to build belief, wisdom and confidence with substance. You want a seasoned representative that will persist with joy through the entire journey to closure. A good intermediary is the committed one that will not panic when the deal seems to go off the rails but will also not become complacent when all seems good.

8. Expert matter. You are better off to select an intermediary who is considered an expert in dealmaking of your transaction size and industry. Expert status may only be attained after a minimum of 10 years and 25 deal closures. Only an expert can sufficiently anticipate potential complications and effectively respond to sudden difficulties.

9. Grey matters. There is no substitute for life experience. M&A is about dealing with another person that must make a decision to buy or to sell the company. Effective persuasion and negotiation skills are directly linked to your ability to draw parallels with real life stories and incorporating these into the process.

10. Competitive Fire. The M&A market is extremely competitive. There are many companies for sale but few are great businesses. Likewise there are many acquirers wanting to buy but few are qualified with the means to settle. How competitive is your intermediary? Be sure to check the track record and ask how they intend beating the competition. Is there still fire in the belly and a confident determination to succeed?

Written by Tony Wiese, principal at Wiese & Stone M&A advisory

Complacency can destroy your value.


After reviewing some near fatal corporate collapses recently it made me wonder if there was a common cause. After more investigation it became clear that these companies indeed suffered the same problem – complacency by the leadership!

I was intrigued as to the reasons why complacency could set in when companies are competing fiercely in this technologically advanced age we live in. After all, we know how important innovation and creative thought is for an organisation to remain relevant and competitive.

In the early years of the organisation the entrepreneur is visionary and filled with passion. Creativity flows from this and the team innovates consistently as new ideas are tried and tested. Goals, strategies and action plans are regularly upgraded and relentlessly pursued. The grit is contagious and the senior leadership is highly motivated by purpose and passion. The results and growth is astounding and the company thrives. Management is applauded and admired. They hold each other accountable.

Then the unthinkable happens. The leadership becomes too comfortable and complacency sets in. The following questions should be honestly evaluated:

  • Do you still have the burning passion, perseverance and grit?
  • Are you as creative as you were around marketing, packaging, social media, new services or product lines, smarter supply chains and distribution channels?
  • Do you still have the capacity and motivation to drive consistent innovation?
  • Can you still beat the competition or do they now scare you?
  • Are you still thinking ahead of the curve of your industry’s latest technology, big data, artificial intelligence, machine learning, augmented reality, robotics and blockchain?
  • Is your customer experience still superior and relevant?
  • Do you still have the physical energy to run ahead and lead the team?
  • Are you relying too much on others and maybe too trusting without the necessary checks and balances?
  • Are you tired?

Brilliant individuals lose their wealth and reputation by failing to recognize complacency.

No leader escapes these complacencies indefinitely as we all grow old and tired. The same for corporates. We have to recognize when the time has come to reinvigorate, replace and renew. This may mean it’s time to sell and exit your business or expand and grow a new team.

It is this judgment of precise timing, rather than your achievements, that may determine your legacy and wealth. We have again just recently become aware in the media of brilliant individuals whose reputations are in tatters or whom have lost billions of dollars because they did not timely recognize the signs and act for change.

We cannot become complacent for too long and expect premium multi – million dollar outcomes.

Written by Tony Wiese, principal at Wiese & Stone M&A advisory

How to attract a premium for your business

Wiese & Stone

We live in unprecedented times. New technologies disrupt existing business models on a daily basis and the public has all but lost their trust in big business, politicians and the media. For the first time in history a majority new generation is growing up with no gods or no God but worship the religion of data, social media and technology. Every day we read how artificial intelligence, machine learning, blockchain, crypto and robotics are rapidly transforming life as we knew it and rendering many businesses obsolete.

However, if you embrace this revolution taking place right now and leverage its benefits you may be immensely rewarded.

How does a business owner navigate through this revolution and attract the premium?

The place to start is to understand the strategic rationale of the buyer. Understand her motivation for wanting to do the acquisition. In most cases the buyer will either be a growing corporate or smart high net worth entrepreneur that participates in this new world. Their priority will be to meet the expectations of shareholders. These expectations can be extremely demanding and will include a superior return on investment, great social impact, environmentally friendly, and high ethics. Acquisitive champions desire to be profitable good citizens of society, embracing technology and restoring the trust of people.

The next step is to evaluate how you can transform your business into a data rich customer centric focus. How can you apply technology and artificial intelligence to predict and measure every important move and desire of each customer? Is there a more efficient way to generate new customers or to service existing customers?

An important element for buyers is trust as they cannot afford any kind of scandal or embarrassment in the media or society. Trust is hard won but easily lost. The latest annual Trust Barometer report produced by global communications firm Edelman shows trust in Australian business has fallen another 3% over 2017 to just 45%, lower than the global average of 52%. What they will due diligence is whether your business processes, products, services and numbers can be trusted. The following can assist to be a trustworthy business:

  • Assemble a board with a minimum of two independent directors qualified in corporate governance processes
  • Arm yourself with expert advice on big data, artificial intelligence, blockchain and other industry specific technologies
  • Implement rigid documented quality control processes for every material step in the production process or service delivery
  • Personally get involved to ask customers why they are leaving or complaining and fix those defects
  • Understand your financial reporting and ensure your key numbers are always delivered accurately and timeously
  • Always plan cash flow far ahead so you get no surprises. Remember the wise words of Churchill: “Plans are of little importance, but planning is essential”

The final preparation is to enhance your business profile in the local community and ensure minimal damage to the environment. Be seen out there to sponsor community events and get involved in your favourite charities. Reduce your business carbon footprint and measure it through a carbon neutral agency.

Business valuations these days are still determined by the old fashioned discounted cash flow model but a solid premium is available for good businesses that can demonstrate they are great by also being trustworthy, having social impact, and caring for the environment.

Written by Tony Wiese, principal at Wiese & Stone M&A advisory