Business Solutions - Client Success Stories
Datatel Communications
Bannister Downs
Seertech Solutions
Mackenzie Marine & Towage
Cropper Parkhill Solicitors
AEH Group
Datatel Communications
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Datatel Communications, a leading electrical and data communications contractor in Western Australia, appointed RSM Bird Cameron as its advisor just four months ago but already the business has restructured and is gearing up for growth. RSM Bird Cameron moved swiftly to develop an action plan for the business, according to director Paul Johnson:
‘We had a brainstorming session and wrote a lot of stuff on the whiteboard and out of that RSM Bird Cameron came back with a hit list of all the various things that had to be done and who had to do them and by when. ‘In the past we’d considered changing our company structure to employ an operations manager to look after the day-to-day running of jobs and the team of technicians, but with RSM Bird Cameron’s strategic plan we fast tracked that and now we’ve got Michael, our new operations manager. I focus on winning the work and Michael and his guys get the work done.’
Business planning
Paul is delighted with the results, as the sales pipeline is already building afterjust six weeks: ‘Yes, there has been an impact. I’ve made contact with clients I haven’t spoken to in years and we’ve already picked up work. In the past we didn’t do marketing or business development. As the work came in, we’d get it done. But now, having the time to decide what sort of client we do want and target them has been excellent!’
With more time to concentrate on the strategic direction of the business, Paul says the directors are becoming more selective about how they channel their resources:
‘There’s been various opportunities that have come up in the last two or three months. Instead of shooting off on a tangent, it’s been “Okay, let’s grab the idea. Does that fit in with our strategic plan? Does it tick all the boxes?”
We’ve actually eliminated a couple of opportunities already, we’ve gone ahead with some and we’re exploring a couple of others. Before this, we would have gone on gut feel, been side-tracked into spending a lot of time on what seemed like an exciting new opportunity and not moved ahead with our overall plan.’
Relationship with RSM Bird Cameron
Even though it is early days in the relationship with RSM Bird Cameron, Paul is excited about the prospect of developing formal planning processes in the business:
‘What’s happened so far has been excellent and we’re excited about moving forward with this. We call it turning it into a “proper” business in inverted commas, where we have a board reporting on results every month, not just the profit and loss, looking at more than that, planning the business.’
Paul has already recommended RSM Bird Cameron to a colleague because he is so convinced of the benefits of the firm’s advice:
‘He’s a one-man-show plumber, and he’s not thinking big. I said to him the other day he should organise to sit down with RSM Bird Cameron and run through what his long term goals might be for the business, and put something in place right then. If we had done that 13 years ago, we could have fast-tracked things significantly. What we’ve done in 13 years we could have easily done in five years ifwe had a plan for it!’
- Paul Johnson, Director Datatel Communications
Bannister Downs
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If you’re lucky enough to enjoy a cappuccino or mango smoothie made from Bannister Downs Farms’ award-winning milk products, you can be sure your morning pick-me-up is made from the purest produce and processing methods.
Three years ago the owners of Bannister Downs Farms, Sue and Mat Daubney, embarked on their dream of bringing the finest milk products to consumers. Bannister Downs Farm is nestled in the rolling hills and gentle valleys surrounding Northcliffe in Western Australia, just over four hours south of Perth.
The Daubney family’s dairy farming business extends back over 80 years. What’s the difference exactly? Bannister Downs Farm has its own milk production factory, which employs a lower temperature pasteurisation method that is a little slower than large commercial processors. The result is better-tasting milk with health benefits.
The farm’s products are packaged in Ecoclean, a leading international sustainable packaging technology. According to Sue Daubney, the business challenge was to leverage their main asset, the farm, to set up a factory that would produce the Farm Fresh Milk and All Lite Milk products to their exacting specifications. Obtaining funding was only the first hurdle the owners would ace.
‘Initially, the bank wouldn’t lend us much money because it was a new business with no history. I think they gave us a $50,000 overdraft and that was it. So we built the whole factory, did everything, with no capital funding, really,’ Sue said.
Business planning
Sue and Mat found that formal business planning helped them balance their two businesses, so the farm could support the milk production factory financially in the early stages of its development while at the same time remaining viable:
‘We’ve got two companies that operate independently but are interrelated, so while the farm was suffering at the cost of the other, you could actually see how they were progressing forward,’ Sue said.
‘In the first three years of operation the factory would take raw milk, and although it was recorded on the ledger, it wasn’t actually being paid. The farm was cushioning it so the factory could get up and running before it was profitable. And when you’re doing that for three years,you are sort of just trudging through! It’s really hard work, so it was good to have a third party perspective and feedback.’
According to Sue, it was formal business planning and reporting that helped the owners keep their eye on the big picture vision, even in the toughest times:
‘Each year there was progress on the balance sheets of both companies. Dairy farming is a pretty shattering experience at the moment and it really hasn’t improved in the last 10 years. So to be having further drains on the dairy farm when it was trying to support a new business, it doesn’t make farming a very positive experience. But if you can see overall progress, the big picture, you can cope!’
Now, instead of only focusing on the companies’ profit and loss statements on a day-to-day basis, Sue regularly analyses in-depth financial reports prepared by RSM Bird Cameron that provide a more balanced, long-term view of the companies’ performance against plan:
‘Planning has assisted us in the management of the business considerably. Before that I really just worked off the actuals from the P&L. I would have a sort of mental perspective on how we were travelling. But with these reports, you can see the real progress from balance sheets.
‘It’s probably a worthwhile process every six months to sit down with someone else. If you don’t have somebody else guiding it or instigating it, then some things you never get round to doing.’
Relationship with RSM Bird Cameron
In the last two years Sue has worked with RSM Bird Cameron, she has been impressed with the firm’s ability to help formalise management practices and benchmark progress in the business:
‘Yes, RSM Bird Cameron has definitely added value. It was really good timing when we went to them. It was actually our bank that suggested it. The firm formalised our management practices, and that’s been really good for benchmarking the focus of the business.’
Sue has recommended RSM Bird Cameron to her colleagues because she is impressed with the energy and experience of her key advisor, who is backed by the resources of a full-service firm. ‘Yes, I have recommended RSM Bird Cameron. I said that we had met Craig Ridley, Business Solutions Director, who has a lot of energy for what he is doing and a lot of experience. 'Although my initial concern with RSM was that it was going to cost a lot of money, there are also benefits in having a large firm that has all those resources right at hand. So if you want to set up a self-managed super fund, it’s all there, templated, the latest, the greatest, because all the research has been done.’
The Future
Thanks to hard work and effective planning, Sue and Mat are looking forward to a bright future: ‘It really has turned a corner, probably July last year, but up until then, the determination that we had to make this work…at times we were paying wages out of our own personal savings, that’s how tough it has been, and that’s pretty tough!
‘I’d say in the last six months, six out of seven days it’s a good thing. I have a great deal of pride with a workforce like the one we have here. Our employees take ownership of the business and the products, and I see that as my greatest achievement. I see our employees so proud and so loyal, and that’s really fantastic!’
- Sue Daubney, Founder Bannister Downs
Seertech Solutions
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In just five years CEO and founder of Seertech Solutions, Paul Hardwick, has expanded his Oracle Learning Management Solution (LMS) and hosting services business to three continents. The business entrepreneur contends the key to success is building a scalable business that has perceived value, coupled with a conservative approach to managing growth.
‘Our strategy from when I started the business was to be a big company. We were thinking global, thinking big, and so we went to find partners who were going to be able support us through that journey, and that was the discussion I had with RSM Bird Cameron.’
The company fast tracked its international footprint by acquiring companies that were not able to survive the GFC:
‘We’ve got customers in Europe, the United Kingdom and South-East Asia by consolidating companies that weren’t able to provide the services that we can at the cost point we can. They went bankrupt through the GFC and we took them over,’ Paul said.
Like many successful SME enterprises, Seertech Solutions is founded on the principle of delivering niche, high-end services that delight customers:
‘Our core strategy is to leverage Oracle’s platform. They have a learning management system. We have innovated around that product and given ourselves a competitive advantage,’ Paul said.
‘Essentially, we take the Oracle LMS, we put it on the cloud [internet], so to speak, and then provide specialised consulting services and number of software extensions called iLearning Plus that sits on top of the Oracle product. It streamlines a lot of the functions that Oracle provides. Oracle has all the core components, but some of the functionality doesn’t align for all organisations, so we just leverage that.’
Exit planning
Although the company is only a few years old, its CEO is ever mindful of maintaining a flexible approach to exiting the business:
‘Yes, we have a couple of exit strategies. It depends really on the success of the business and then looking at what our options are at the appropriate point.
‘We started the business and there’s a core group of people here who obviously want to make money, but they’re all passionate about what they do. This is a vehicle for all of us to follow some of that passion.’
Paul has identified three potential exit strategies for the company: continuing to run it as a profitable business; selling part of it as a trade sale; or listing the business, depending on future growth and development.
The main issue, according to Paul, is to build a scalable business that has perceived value:
‘We’re starting to put in place a lot of things that support scalability, and the ability to scale creates perceived value, for example, removing key man risk, bringing in new resources and standardising our support for customers. Some of these things are critical for growth, profitability and attractiveness to external parties.’
Relationship with RSM Bird Cameron
Apart from compliance services, over the last four years RSM Bird Cameron has provided a range of advisory services to help the company expand its operations internationally:
‘We get a lot of advice from RSM. The firm has global offices, so we’ve used their global network and that’s a critical piece for us, because being able to have someone here ring one of their guys in, say, the Netherlands or the United States and connect us with the right people that are going to be able to service our need, particularly as a small organisation. They tend to align us with the right people at the right level to meet our budget and our need,’ Paul said.
According to Paul, RSM Bird Cameron’s services add value because they are cost-effective:
‘Absolutely, RSM Bird Cameron has added value. Well, I mean, these things can be very costly. We’ve moved from a trust to a corporation, and now we have three global entities all feeding back into a corporate structure here in Australia that minimises our tax.’
‘Some of those things could actually kill organisations trying to transition from a small to a medium enterprise, but they have certainly saved us. I wouldn’t have done a number on how much it is, but they would certainly have saved us a significant amount of money.’
Paul has recommended RSM Bird Cameron to his colleagues because of the consistently high quality of service he has received from the firm:
‘Yes, absolutely, I have done so. Obviously, I leave that to everyone’s personal judgement, but I always tell them about the service we have received. I feel that RSM have provided a consistent level of quality service over our lifetime, and their advice has always been spot on.’
The Future
Like many successful SME owners, Paul’s optimism about the future relies on his confidence in the business rather than external market conditions:
‘It’s interesting, who knows, really? We run a very conservative approach to growth and expansion, so we weathered the GFC very well, not because we foresaw it, but because we were in a very good financial state. We were able to transition and manage our business through that very successfully.
‘I’m optimistic about our growth potential because we have a very small market share and we have a very niche product, so there’s plenty of upside for us there. Really, the world can throw whatever it likes at us and it wouldn’t really phase us too much!’
- Paul Hardwick, CEO and Founder Seertech Solutions
Mackenzie Marine & Towage
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Fours years ago Sean Mackenzie, managing director of Mackenzie Marine & Towage, a commercial marine business based in Esperance, Western Australia, watched the bare boats that tow barges along the Bay of Isles and questioned why they were hired exclusively from Southeast Asia.
Sean translated this idea into a business venture, and now four years later the new division in his company has already achieved its targets two years ahead of plan:
‘The division of vessels is called bare boat charters, this is on the hire side of our company. They are commercial vessels, construction, dredging, towing barges back and forth. So when we started that side of the business nobody in Australia was dry hiring vessels, everybody was bringing them out of Southeast Asia. That’s where I thought "Why aren’t we supplying our boats to the marketplace instead of bringing over the Southeast Asian boats?"
Today, the company has 12 employees. Sean has grown his bareboat fleet from zero to six vessels in three years and will continue to expand the fleet:
‘Well, we reached the target plan at the end of last year. We have our six vessels now and have two more under construction, so we’ve achieved exactly what we wanted to achieve. That was initially a five-year plan. We achieved the target in three years and right now we would just like to sit back and better analyse the market. We would like to put some equity back into the vessels for future planning and growth.’
Mackenzie Marine & Towage was founded nearly 30 years ago as a family business. The company secured its first tug service contract at Esperance in 1972.
Sean says the family has a long tradition in commercial fishing and marine life:
‘It was a family business. My grandfather and father were both commercial fishermen and both had careers in tug services – then my father’s brother also started in the industry and now myself.’
Succession planning
According to Sean, succession planning underpins the strong position his company enjoys today:
‘Our succession planning started when my grandfather retired from the company.
‘We didn’t have anything in place at that time and my father and uncle then had to decide how they were going to pay for his retirement. Since then we have started working towards my father’s and uncle’s retirement, so we would be in a stronger position for the company.
‘When this time comes we know we won’t be draining all the resources to help them retire.’
Today, Sean says the company’s succession plan includes employees in key roles:
‘We do that even as far as our staff are concerned, our office managers and supervisors. The idea is that if one person like our office manager does all the banking, we get somebody else trained up, so that if she should leave or if anything should happen to her, there’s somebody else that can step into that role and keep things running smoothly. That includes me. Without me the business will continue to run because we’ve strategically planned for it.’
Sean sees long-term security as one benefit of planning his business, but the key benefit is the driving force of the vision that is set out in the plan:
‘It’s security. If you only plan on being in a small business for a couple of years then you probably wouldn’t have to worry. But if you’re looking for long term growth, it’s beneficial for everyone if the business doesn’t financially struggle because something happens or if somebody leaves who is strategic or key to the business. There should always be movement so you can keep operating.
‘Without a plan you don’t have a vision into the future. You’re obviously not driving your business hard enough if you don’t have a plan.’
Relationship with RSM Bird Cameron
RSM Bird Cameron has provided services to Mackenzie Marine & Towage for 16 years. As a young leader of the business Sean appreciates the fresh, innovative approach of his key advisor, Craig Ridley:
‘They’re probably the main advisors I use.
‘I’m fairly young and I’ve really only been driving the business for three years so I have relied heavily on my advisor, Craig, and he is fairly young too. He can see what I want to achieve and what I need to get there. He’s able to help drive me to get to that point. I’ve been involved in the business for 21 years but only driving it for three years.
‘Especially as you start to grow and need to find finance and funding from other areas and how to benefit from the taxation system. We also moved from a family trust into a company. There was a huge transitional period there where the trust could no longer help us.
Changing over was a huge challenge and without the help of someone who really knows what they’re doing like RSM Bird Cameron, you’re lost!’
Sean has no hesitation recommending RSM Bird Cameron to colleagues and friends because of the firm’s innovative approach and the accessibility of key advisors:
‘I would be happy to recommend RSM Bird Cameron, most definitely. I’ve found them very forward thinking, very innovative in the way that they approach different problems. And they’ve always got the door open to you. It doesn’t matter when you’ve got a problem, you can get a hold of them and they can help you out with it.’
The Future
With the company’s strategic positioning as a niche service provider to the Western Australian mining sector, Sean is optimistic about the future:
‘I’d say very optimistic, simply because the area that we’re involved in heavily, which is iron ore, mining and gas, that’s going to rage ahead in the next five years. And now is the ideal opportunity to go ahead and take it with both hands and do something with it!’
- Sean Mackenzie, Managing Director Mackenzie Marine & Towage
Cropper Parkhill Solicitors
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Sydney based law firm Cropper Parkhill Solicitors provides a comprehensive range of legal services to large and small businesses in most industry sectors. The firm has a long tradition of practising law in Sydney, its origins dating back more than 80 years. Today, the firm delivers cost-efficient services to businesses and individuals.
As a firm of long standing, Cropper Parkhill Solicitors has overcome the barriers that face newer enterprises. However, recently the business embarked on a project to ensure a smooth transition for partners who wish to retire from the partnership.
Exit planning
Partner John Simpson says that planning an orderly exit from the business has occupied the minds of the partnership for some time:
‘We’ve constantly contemplated it! Have we reached a solution to it? Not quite!
‘I have had discussions with RSM Bird Cameron over the years regarding succession planning and their input has been invaluable. In fact there is a project we’re working on right now, which is looking at opportunties to bring people into the organisation who are younger and have an interest in ownership, or alternatively to merge with another firm that recognises the value in our client base and will allow us to exit over time. RSM Bird Cameron has helped us in finding innovative ways to tackle these challenges.’
According to John, the main objective of exit planning is to initiate an orderly process that maximises retirement wealth for equity owners:
‘Well, if you don’t do anything there will come a time when retirement will be involuntary because of factors beyond one’s control like illness or death. If you haven’t made any plans, you’re likely to end up with not much.
‘In terms of the goodwill we’ve built up over the years, we’re trying to put some plans in place for an orderly progression so we can maximise what we get out of it.’
Succession planning
Most of the firm’s work in succession planning is on behalf of its own clients, although Cropper Parkhill Solicitors undertook succession planning on its own behalf two years ago when a partner elected to leave the firm:
‘The succession planning in our business was initally triggered by a partner wanting to leave the firm. Our partners met to determine an equitable departure and we asked RSM Bird Cameron to review what we were proposing and to oversee the "mechanics" of the exit plan. They were able to prepare information in a clear and concise manner which allowed the exiting partner and his advisers to consider all the proposed ramifications. Everybody probably had different expectations and RSM Bird Cameron assisted us in delivering a plan that all were happy with.’
In general, according to John, the main goal of succession planning is to plan an orderly progression to accommodate the unexpected wishes of partners or shareholders:
‘The ideal is that you try and put the structures in place that are going to work most efficiently so long as the owners, whether they be partners or shareholders, are enjoying working with each other. But you’re also planning for what happens in the event somebody wants to leave, sell their share, or is incapacitated or dies.’
Relationship with RSM Bird Cameron
RSM Bird Cameron has provided compliance and planning services to Cropper Parkhill Lawyers for nearly 20 years.
According to John, RSM Bird Cameron adds value to his partnership because of the director’s in-depth knowledge of his business:
‘Yes, RSM Bird Cameron has added value in a number of ways. Jamie O’Rourke, Business Solutions Director, has got to know the people here and our business well, and because of that knowledge, from time to time he offers proactive thoughts on things we could do to improve our business, whether it’s minimising tax or better business structures.’
John recommends RSM Bird Cameron to his clients because the firm offers the benefits of a larger firm with a personal approach and a more cost-effective fee structure:
‘I regularly recommend RSM Bird Cameron. I’m introducing some new clients to them right as we speak! They’ve got the full range of professional experience and expertise that clients may require with contacts interstate and internationally, but not the same fee structure and the lack of personal contact you get in the big firms.’
- John Simpson, Partner Cropper Parkhill Solicitors
AEH Group
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As a diversified private investment group, today AEH Group looks like a very different business from the architectural practice founded by John Playoust in 1961, but the Playoust family’s vision of protecting value, enhancing wealth and delivering high quality products has survived the test of time.
John’s four children play an active role in driving the future of the business as company directors. According to managing director of AEH Property, Nicholas Playoust, the family business is intimately shaped by the siblings’ shared vision for the future, with the next generation of family members never far from mind:
‘The last ten years has largely been about corporatising the business. Essentially, the business has moved from being solely dependant upon our father’s oversight to being shared between the four children, of whom I’m one, and dividing up responsibilities in the business with respect to that.
‘The challenge for us, which is something we work on quite a lot, is thinking about the next generation from us. There are seven grandchildren between us and they range in age from being one to 15, so with the older ones it’s only a matter of years before they’ll be of age to have some sort of involvement. So part of our challenge is really the next generation.’
Governance and the role of external advisors
With an increasingly complex business structure to manage, the directors benchmark the Group’s governance and reporting against small listed companies, while maintaining a philosophy of clear communication and decision-making:
‘First of all, we run the business with a high level of governance and reporting, which we like to benchmark against small listed companies, but without becoming overly bureaucratic or cumbersome. The key thing is that family members are all involved with the business in a day-to-day sense, one way or the other. We like to keep our decision-making relatively simple within that governance framework so there is good access to each other to discuss ideas and make decisions fairly quickly.
The other main ingredient to building shareholder value is external advisors, who help the directors steer the business into new market segments such as retirement villages, commercial property and investments in alternative asset classes:
‘We run an advisory board that sits alongside our main board of directors. This board is comprised of two executive directors, an independent chairman, a lawyer and RSM Bird Cameron’ Nicholas said.
Relationship with RSM Bird Cameron
As a key contributor to AEH’s governance framework, RSM Bird Cameron has delivered a range of compliance and advisory services to the Group over the last six years. According to Nicholas, the firm’s services support day-to-day operations as well as ‘big picture’ strategic planning:
‘We look to RSM for their financial oversight and experience, we look to them for structuring advice on both big picture questions and also particular deals. They provide a very important finance function to our firm. We outsource a lot of our financial management to them.’
Nicholas says RSM Bird Cameron adds value because partners maintain a consistently high standard of service delivery, regardless of the type of the advice:
‘Absolutely, RSM Bird Cameron has added value. The relationship we have with them gives us fantastic access to the senior people within the firm. The advice is at the highest level in terms of structuring, taxation and general financial advice. They assist us with making financial, investment and strategic decisions and also in the execution of these decisions from a day-to-day- point of view and in building our financial system.’
Nicholas has no hesitation recommending RSM Bird Cameron because of the firm’s hands-on, professional approach and ability to deliver strategic advice:
‘Without hesitation, it’s their professional service, hands-on service, service oriented, and also their strategic input.’
The Future
Consistent with the findings of the thinkBIG 2010 report, Nicholas sees small glimmers of optimism in the economy over the next 12 months. However, he agrees that raising finance will continue to be the major hurdle for developers in the property sector:
‘In terms of the outlook, we see some signs of optimism. We think things will improve over the next 12 months, but towards the end of that time.
‘In the property sector, the key issue is really bank lending, particularly for our scale of development work, and it’s very difficult to come by. The banks are talking about loosening up their restrictions but there is very little sign of activity at the moment.
‘Our focus is on residential and retirement villages, and particularly in the more affordable end, and that’s where we think there’s going to be some good opportunities.’
- John Playoust, Managing Director AEH Property