Many business owners lack exit strategy
The Commonwealth Bank Local Business Banking division has released a new report revealing that under half of Australian small business owners have a viable exit strategy.
The report shows that only 47 percent of small business owners have an exit strategy, such as selling the business upon retirement, and of the owners without a strategy, 22 percent simply plan to walk away and lock their doors.
It appears that Generation Y owners are ahead of the game, with two-thirds already having a viable and profitable exit strategy. However, business owners aged 60 and over are not so prepared, with one in four planning to simply close the business.
The most staggering statistic in the report is that 60 percent of business owners who plan to simply shut their doors are still reinvesting profits into the company to build and develop the business. Of these, half are working over 50 hours a week – far above the national average of 36.9 hours.
Arnie Selvarajah, General Manager of Commonwealth Bank Local Business Banking, said: “An issue for many owners is that their businesses are dependent on their personal presence, making them difficult to sell. Small business owners should plan ahead if they want to build a saleable business and capitalise on their hard work.”
Making your business saleable
So what can business owners be doing to ensure their business is saleable?
Commonwealth Bank Local Business Banking came up with seven feasible tips:
set to have technology exchange by late 2008
Australia is set to have its own technology stock exchange similar to the NASDAQ in the US and AIM in the UK.
The Asia Pacific Technology Exchange, or APTEX, is a joint venture between NSX limited, the owner of the National Stock Exchange of Australia, and Enterprise Pacific Ltd and will be launched later this year with an expected 20 companies set to be listed.
One such initial listing will be Armatex, headed by former racing driver Frank Matich and with Gerry Harvey as a significant investor. The company has patented a new wood-coating system that allows for new, lightweight packaging applications and is currently being commercialised.
Gerry Harvey, said access to a specialised technology exchange was just the boost smaller companies needed to help them take Australian technology to the rest of the world.
The chairman of Enterprise Pacific, Geoff Mullins, said he expected the new exchange to have 200-300 companies listed after three years and these should include companies from all around Asia, including Korea, Malaysia, Thailand, Singapore, Papua New Guinea and Fiji.
Mullins has estimated total market capitalisation of the companies to be initially listed on the exchange between $320 and $590 million.
Richard Symon, chief executive officer of NSXA, said: “APTEX will increase coverage of the small to medium business sector as well as being a springboard for covering Asia Pacific markets. As a specialist exchange we expect APTEX to become a focus in the region for established technology businesses as well as those seeking to take innovation to the market place.”
Blue Cove backs 3D social networing platform
Australian VC firm Blue Cove Ventures has invested $2 million in Simmersion Holdings Pty Ltd, a 3D software and services company. The funds are being used to launch a new virtual worlds social network and technology platform, Mycosm. The technology allows users to create their own unique 3D world through which they can play online games, share media, make money and socialise with friends. The investment will enable Mycosm to move into private testing over the coming months and Simmersion Holdings is encouraging people to register for an invitation on their website www.mycosm.com.
Blueprint secures ANZ deal
Blueprint Management Group, one of Australia’s leading outsourced direct marketing services companies, has sold significant shareholding to ANZ’s private equity arm. Co-founders Trevor Folsom and Creel Price said they were delighted by the deal with ANZ, which will allow them to continue to implement Blueprint’s major growth strategy, particularly through its leading brands Financial Advice Centre and Customcall.
STOP THE PRESS
In the aftermath of the Rudd Government’s first budget the provision of any further Commercial Ready and Commercial Ready Plus Programs Grants have been terminated. Anthill has already received a number of concerned emails and letters regarding the impacts the grant withdrawals may have on Australian start-ups. It has been announced that all current grants will be honoured, however no further applications, even those already in the late stages, will be accepted.
NICTA toreceive $25m funding over five years
Australia’s premier ICT Research Centre, NICTA, has received a boost with the NSW Government announcing it will provide them with $25 million in funding over five years from 2007-2012.
The funding was announced on 10 April by NSW Minister for State Development Ian Macdonald.
NICTA has amassed a technology portfolio of 60 patent applications and has created four new companies employing over 50 individuals. It has also been estimated by the NSW Department of State and Regional Development (DSRD) that NICTA has generated an estimated $168 million in benefits for NSW in its first five years.
In response to the announcement, NICTA Chairman Neville Stevens AO said: “The ongoing support from the NSW Government is critical to the development of a world-class strategic research facility that puts Australia at the leading-edge of global ICT research.”
The latest announcement means NICTA will have received a total $45 million from the periods of 2002-2012, following an earlier allocation of $20 million from 2002-2007.
In a statement regarding the latest funding Minister McDonald said: “This is a direct investment in NSW and Australia’s innovative future. Information and communications technologies underpin our modern services economy and help drive the future competitiveness of this state.”
NICTA’s researchers are developing technologies aimed at meeting current and future needs of the community. NICTA is currently working on ways to improve the traffic condition in NSW and throughout Australia by developing a Smart Transport and Roads (STaR) project.
NICTA CEO Dr David Skellern said “NICTA’s research is about problem-solving based on breakthroughs in knowledge and fundamental innovation. It is ‘use-inspired’. It is not research for research’s sake. We work with industry and Government to identify problems that are best solved by ICT breakthroughs and apply our expertise to develop knowledge and technology to solve those problems.”
Asurpex secures funding
Australian born global provider of strategic workforce solutions Asurpex announced on 9 May that it has secured $4 million in its first investment round by leading Australian VC firm Starfish Ventures. Asurpex, which was created in 2002 and has been self-funded and profitable to date, will use the additional funding to continue their global growth, particularly in the US. Stacey Chapman, co-founder of Asurpex, said: “The US is a great market for us, and accepting venture backing means we are really well placed to accelerate our growth and, of course, to build on success we have with early customers like Starbucks and Aetna.”
Australian ocean energy group secures $6m capital funding
In other capital raising news, BioPower Systems Ltd, Australia’s ocean energy group, has successfully raised $6 million in private equity funding.
The private equity investment round was cornerstoned by Lend Lease Ventures, with additional investment from CVC REEF and CVC Sustainable Investments. BioPower has already received a $5 million Australian Government REDI grant and aims to use this, along with the private equity funding, to run pilot test programs for its bioWAVE™ ocean wave power system and bioSTREAM™ tidal current power system in Tasmania. BioPwer CEO Dr Tim Finnigan commented: “We are very pleased to have Lend Lease working closely with BioPower Systems on developing commercial opportunities for our ocean power conversion systems in Australia, Europe and North America.”