Small Business Banter

@Claude Trimboli from @charlesandco talks about the complexities of business liquidation and restructuring. The discussion covers the critical importance of understanding cash flow, the role of early intervention in financial distress, and the emotional toll on business owners facing insolvency. 

Claudio emphasizes the need for proactive measures, mental health awareness, and the collaborative approach necessary for navigating these challenging situations. 

The discussion highlights the significance of having a solid grasp of financial numbers and the value of seeking help from trusted advisors.

Other important discussion topics include;

• the responsibilities of business owners
• proactive measures to avoid insolvency
• the importance of engaging with the #ATO
• the new #smallbusinessrestructuringregime  that allows owners to maintain control while addressing their financial challenges
• the legal obligation not to trade while insolvent
• why understanding financial numbers is crucial for business health
• Cloud accounting tools to provide better financial insights
• why and how business owners should not be defined by their financial struggles
• prioritising mental health and physical well-being

@michaelkerr

@kerrcapital 

https://treasury.gov.au/sites/default/files/2020-12/simplified-debt-restructuring-fact-sheet_0.pdf

Thanks for listening.  Visit the Small Business Banter website to subscribe, listen back, or check out any resources or information mentioned on the show.

Search @SmallBusinessBanter on your favorite podcast player to subscribe and listen to the episodes.

Reach out to Michael Kerr via the website if you need personal assistance or advice for your small business.

[email protected]

www.smallbusinessbanter.com.au

Olga Koskie from Tax Assure updates us on the ATO's plan to recover outstanding tax  debts owed by Australian businesses.

Post covid19 the ATO is now actively chasing $52B in outstanding business tax debt. 

"The ATO has had a huge public shift and an internal shift that they're back to an active collection mode."

If you're carrying ATO debt (that's been around longer than the last few months) and have treated them as a financier over recent years you're likely now in the firing line to be chased down 

The consequences of not actively managing this debt down, in conjunction with the ATO, are dramatic e.g. Director Penalty Notices, garnishing of bank accounts, statutory demands, and even bankruptcy. 

In this episode Olga talks about;

• the importance of taking proactive action
• the next steps you need to take
• who you can engage to help
• the  and seeking help to address the debt
• the need for business owners to understand their cash flow and work with specialists to develop tailored payment plans that are sustainable and match their financial situation
• Olga also encourages business owners to be kind to themselves and not feel ashamed or embarrassed about their debt.

"If you don't do anything, they won't put you on a payment plan. They will initiate recovery action against you."

Michael Kerr

Kerr Capital

Thanks for listening.  Visit the Small Business Banter website to subscribe, listen back, or check out any resources or information mentioned on the show.

Search @SmallBusinessBanter on your favorite podcast player to subscribe and listen to the episodes.

Reach out to Michael Kerr via the website if you need personal assistance or advice for your small business.

[email protected]

www.smallbusinessbanter.com.au

@James Meldrum, co-founder of @Whole Kids, shares the journey of starting and growing a purpose-driven business in the organic food industry. 

He talks about how he and his co-founder wife Monica tackled the many challenges they faced over 18 years and up until entering Voluntary Administration late in 2023. 

"We lost about a third of our revenue overnight because we were servicing the airlines with kids meals and special meals."

Like a lot of startups the business was initially self-funded with some contributions from family and friends. Later they tapped into bank lending and debtor finance to support their growth. Eventually, they conducted a successful crowdfunding campaign to bring in more investors. 

The discussion spans; 

• 3 potential sales of the business - the emotional highs and distraction they bring to founders 
• dealing with the pressures of growth
• the impact of external events like COVID-19, and 
• the importance of personal well-being. James shares his insights on the need for founders to prioritize their own mental health and find a balance between business growth and personal values
• James'  plans to help other founders and startups through his consultancy

Overall, the conversation highlights the highs and lows of entrepreneurship and the lessons learned along the way.

Key takeaways

• Why starting a purpose-driven business in a niche market requires perseverance but also a strong alignment of personal values with the business mission
• The extra challenges female co-founders need to deal with
• Focus on finding investors who understand and appreciate the business's purpose and values
• Potential acquisition discussions can be complex and require careful consideration of cultural fit and alignment of values
• Handing over a business to a good home can provide an opportunity for founders to take a step back, capitalize on their hard work, and focus on personal and family priorities
• How dealing with the pressure to constantly grow can adds complexity and stress to a business
• Focus on a growth rate that is sustainable and aligned with personal values
• External events like COVID-19 can have a significant impact on a business, and being financially strong and structurally sound can help weather the storm
• Founders should prioritize their own mental health and well-being, and seek support from trusted friends or advisors who can provide a listening ear and guidance
• Businesses can make a positive impact and thrive by aligning their purpose and values with their operations, and focusing on both profit and impact.
• Sharing experiences and lessons learned can be valuable for other founders and startups, and providing support and guidance can help them navigate the challenges of entrepreneurship

"Even if you're looking at employing someone or bringing on someone as an investor, if you think you can sit next to this person on a plane for three hours and have great in-depth conversations, then they're the right person to bring in."

Thanks for listening.  Visit the Small Business Banter website to subscribe, listen back, or check out any resources or information mentioned on the show.

Search @SmallBusinessBanter on your favorite podcast player to subscribe and listen to the episodes.

Reach out to Michael Kerr via the website if you need personal assistance or advice for your small business.

[email protected]

www.smallbusinessbanter.com.au

@Natasha Hawker  founder of @Employee Matters discusses the importance of employees in small businesses, and the impact they have on business performance. Natasha emphasizes the need for exceptional HR practices and the role they play in driving business growth and sustainability. 

She also discusses the current employment relations landscape and the importance of compliance. Natasha provides insights into the red flags that small business owners should be aware of and the benefits of outsourcing HR services. 

She concludes by discussing the significance of employee ownership and the role it plays in business success and potential sale. The conversation explores;

• the importance of investing in personal and professional development for both business owners and employees
• the need for business owners to have a growth mindset and actively seek opportunities to learn and improve
• the benefits of employee ownership and how it can increase engagement and motivation
• the significance of creating a compelling employee value proposition and fostering a transparent and inclusive work environment
• the use of advisory boards and networking with other business owners is also recommended as a way to gain valuable insights and support.

Natasha made it very clear how your employees have such a significant impact on the performance and success of small businesses. This short video beautifully categorises the 4 types of employees and provides a framework for business owners to better manage their #employeeassets. 

https://share.vidyard.com/watch/qVFVgq3EKyYakjSjQkGCEN?vyetoken=fa04c069-8443-4adb-b9b9-c9ca0dae4ae4&portalId=20625731

Takeaways

1. Exceptional HR practices are crucial for business growth and sustainability.  For more information on better managing the 7 main HR risks you should read this ebook from Employee Matters (https://app.hubspot.com/documents/20625731/view/791072601?accessId=a9b9bb)
2. Small business owners should be aware of red flags such as pay secrecy and compliance with employment relations legislation.
3. Outsourcing HR services can provide expertise and support for small businesses without a full-time HR resource.
4. Employee ownership can contribute to business success and potential sale. Investing in personal and professional development is crucial for business owners to improve their skills and knowledge.
5. Employee ownership can increase engagement and motivation among employees.
6. Creating a compelling employee value proposition and fostering transparency and inclusivity are important for attracting and retaining high-quality employees.
7. Advisory boards and networking with other business owners can provide valuable insights and support.

@kerrcapital

@michaelkerr

Thanks for listening.  Visit the Small Business Banter website to subscribe, listen back, or check out any resources or information mentioned on the show.

Search @SmallBusinessBanter on your favorite podcast player to subscribe and listen to the episodes.

Reach out to Michael Kerr via the website if you need personal assistance or advice for your small business.

[email protected]

www.smallbusinessbanter.com.au

@Ken Matthews, founder of @Matthew Steer, shares the long but successful journey from growing to selling a mid-tier financial services firm. He talks about the importance of scaling, the three stages of growth and the challenges of transitioning from a sales-driven mode to an operational mode. 

"Stepping back and becoming a CEO is a significant step and not an easy one for any entrepreneur."

Ken and I talk a lot about the process of selling, and what he sees as the most critical for getting a successful result;

1. the  value of finding the right buyer.
2. the need for consistency and a shared vision when entering into joint ownership model
3. the importance of strategic planning and financial analysis
4. using an #advisoryboards
5. knowing their retirement number
6. constantly work on improving the value of their business, and
7. the importance of having a strong support network, including mentors and advisory boards.

Ken has dealt with many business owners over many years. The triggers for them seeking his services can range from;

• recognising that their current strategies are no longer working and realising they need to become more sophisticated in their operations
• concerns about succession planning, to
• unexpected approaches from potential buyers.

Key Takeaways;

• Scaling is crucial in the financial services sector to attract and retain talent and provide a broader range of services to clients.
• Transitioning from a sales-driven mode to an operational mode requires letting go and delegating responsibilities to focus on running the business.
• When selling a business, it is important to find a buyer who aligns with the company's culture and vision.
• Joint ownership models can provide opportunities for growth and innovation, but it requires compatibility and consistency between partners.
• Advising small business owners involves conducting a deep dive into their financials, creating a strategic plan, and implementing corporate governance to drive growth. Business owners often seek help when their current strategies are no longer effective and they need to become more sophisticated in their operations.
• Triggers for seeking advisory services can include concerns about succession planning and unexpected approaches from potential buyers.
• It is important for business owners to know their retirement number and constantly work on improving the value of their business.
• Having a strong support network, including mentors and advisory boards, can provide valuable guidance and help navigate the emotional roller coaster of selling a business.

@kerrcapital

@familybusinessaustralia 

Thanks for listening.  Visit the Small Business Banter website to subscribe, listen back, or check out any resources or information mentioned on the show.

Search @SmallBusinessBanter on your favorite podcast player to subscribe and listen to the episodes.

Reach out to Michael Kerr via the website if you need personal assistance or advice for your small business.

[email protected]

www.smallbusinessbanter.com.au

@Darren Clark is the founder at @Dazlab where he and the team work with  founders, business owners, creatives, technology people, and investors to get digital products off the ground and to market. 

Darren started because he knew there was a better way to build digital products for people with great business ideas who needed help to build their vision. And he brought significant personal business experience, and some battle scars to starting Dazlab;

• co-founded a digital creative agency, called Webling, where we won many, many local and international awards over a decade.
• founded real estate startup (Kohab)  in the USA

In this episode Darren

• shares his experiences as a multiple business founder, and the impact of exiting or near-exiting businesses
• discusses the importance of building custom software to create revenue and assets for small businesses
• reflects on the lessons learned from selling a business and the process of starting a new venture
• emphasises the need for efficiency and specialization in business operations, and the importance of considering an exit plan
• highlights the value of external advice and emotional support during the sale process and the importance of building relationships with potential acquirers
• discusses the value of automating business processes and how it can make a business more efficient and profitable
• shares case studies and highlights the importance of playing to your strengths and seeking professional help when needed
• recommends @Startups for the Rest of Us podcast

@kerrcapital

Thanks for listening.  Visit the Small Business Banter website to subscribe, listen back, or check out any resources or information mentioned on the show.

Search @SmallBusinessBanter on your favorite podcast player to subscribe and listen to the episodes.

Reach out to Michael Kerr via the website if you need personal assistance or advice for your small business.

[email protected]

www.smallbusinessbanter.com.au

Host @Michael Kerr and @Martin Cattach , founder of Finance for Business, discuss the stranglehold the big four banks on small business lending, and explore alternative options for financing. 

Martin outlines alternative #financing options, especially the diverse and fast growing range of #fintechlenders for #smallbusinesses

We cover;

1. The role of #workingcapital in business growth
2. The entanglement trap that owners often find themselves in
3. The importance of understanding your financial position
4. How to get more value from your accounting software package and bank account data
5. Planning ahead to avoid cash flow problems
6. The role of fintech lenders in providing quick and flexible funding solutions

Martin shares examples of clients he has worked with and the positive impact alternative financing has had on their businesses.\

@kerrcapital

@finforbiz

Thanks for listening.  Visit the Small Business Banter website to subscribe, listen back, or check out any resources or information mentioned on the show.

Search @SmallBusinessBanter on your favorite podcast player to subscribe and listen to the episodes.

Reach out to Michael Kerr via the website if you need personal assistance or advice for your small business.

[email protected]

www.smallbusinessbanter.com.au

@MarkRubbo from @readingsbooks shares his personal take on buying and building this iconic business. We cover a lot of ground including;

• How the opportunity to buy Readings came about
• Laving the music industry (Professor Longhair) for book retailing
• The linkage of Marks business ambitions with the impact on;
  • the Australian book industry
  • the broader literary community (writers, publishers)
  • the local community
• Mark's ambition and opportunistic mindset to expanding Readings into multiple other locations, and the establishment of an online presence
• The importance of community engagement, author events and creating a vibrant bookstore
• The physical bookshops as a unique experience, with the opportunity for discovery
• Why Government support for bookshops is crucial in preserving the cultural value they bring to communities
• Transitioning out of the CEO role and ensuring a smooth succession to maintain the unique flavor of Readings
• The challenges and rewards of running an independent bookstore
• The impact of Borders Books when it opened directly opposite in Lygon St in the early 2000's
• The impact of online retailers like Amazon
• His experiences of succession planning, and advice for other small bookshop owners - to ensure the continuity of their business and to pass on their legacy.
• He also talks about his current projects;
  • The Book Sellers podcast - https://podcasts.apple.com/gb/podcast/the-booksellers-podcast/id1683259417
  • #Indigenousarts
  • #literaryprizes
  • @beyondblue
• And finally what it's really like to 'move on', and hand over day to day management

QUOTES:

"Sometimes founders rightfully wrongly put everything they've got into it and other people get to benefit from it."

"I hope Readings has been a sort of community focused business."

Thanks for listening.  Visit the Small Business Banter website to subscribe, listen back, or check out any resources or information mentioned on the show.

Search @SmallBusinessBanter on your favorite podcast player to subscribe and listen to the episodes.

Reach out to Michael Kerr via the website if you need personal assistance or advice for your small business.

[email protected]

www.smallbusinessbanter.com.au

@Earl Eddings  has started, sold and acquired multiple businesses. Along the way he's had high profile roles including as Chair of Cricket Australia, and served as Non Executive Director, Advisory Board member, Adviser and Mentor to other business owners and businesses. He's had wins. He's also learned a lot from experiences where things didn't go to plan. These experiences were however formative and continue to shape how he continues to approach his work,  the support he provides to other business leaders and business owners.   

In our discussion we cover;

• Earl's background and his journey as a business owner, including his first owned business and its sale
• Turning around businesses and the importance of planning for an exit
• The key factors to consider when selling a business, such as having a clean balance sheet and strong systems
• The significance of trust, open communication and integrity in mergers and acquisitions, as well as the importance of proper due diligence
• The importance of expert advice and representation
• Managing expectations to avoid unrealistic valuations
• Planning for an exit and the starting point, and the future vision
• Ways to increase the value of the business
• The importance of identifying potential buyers and scanning the market is highlighted
• Mitigating risks and ensuring sustainability 
• Working with the buyer and transitioning
• The use of non-binding indicative offers and deal negotiations
• Why to avoid lengthy exclusivity periods is emphasized
• The vital importance of personal aspirations and family considerations
• The role of  non-executive directors and advisory boards
• Why seeking guidance and building networks is encouraged as a way to navigate the complexities of selling a business

Some of the key takeaways;

1. When starting a business, it's important to have an exit plan in mind and be prepared for a potential sale.
2. #Culturalfit and alignment of strategic intent are crucial considerations in mergers and acquisitions.
3. Plan for an exit by starting with a clear vision of the future.
4. Identify potential buyers and scan the market to find the right fit.
5. Consider personal aspirations and family dynamics when planning for an exit.
6. Engage non-executive directors and #advisoryboards for guidance and support.
7. Build networks and seek guidance from experienced professionals.

@kerrcapital @michaelkerr

Thanks for listening.  Visit the Small Business Banter website to subscribe, listen back, or check out any resources or information mentioned on the show.

Search @SmallBusinessBanter on your favorite podcast player to subscribe and listen to the episodes.

Reach out to Michael Kerr via the website if you need personal assistance or advice for your small business.

[email protected]

www.smallbusinessbanter.com.au

@Pete Seligman talks about and #eta (Entrepreneur through Acquisition) and #searchfunds and their impact on small business owners. He's an investor and co-owner of multiple businesses. 

Pete explains the concept of search funds and how they provide a vehicle for investors to back #acquisitionentrepreneurs. 

We talk about;

• the importance of finding the right fit between the entrepreneur and the business
• current market challenges and opportunities
• how business owners should handle an approach from  a search fund or investors
• the role of #earnouts in business sales and how they can bridge the gap between buyer and seller
• the common misunderstandings in relation to earnouts, and the potential benefits they can offer
• creative deal making and risk sharing to improve the prospects for getting a successful transaction
• why business owners need to augment their existing advisors with subject matter experts for a sale process
• the importance for owners to reflect on their mission and have honest conversations with co-owners to align their goals

Takeaways

• Search funds provide a pathway for entrepreneurs to buy existing businesses instead of starting one.
• The fit between the entrepreneur and the business is crucial for success.
• Business owners should be open to conversations with search funds and investors, as it can lead to new opportunities.
• Co-investing and joint ventures can be options for owners who want to grow their business with additional capital and expertise.
• Owners should be prepared for potential exit opportunities and have a clear understanding of their role in the business. Earn outs can be a valuable tool in bridging the gap between buyer and seller in a business sale.
• Creative deal making and risk sharing are essential for a successful transaction.
• Owners should consider the potential benefits of earnouts and not reject the concept of deferred payment outright.
• Business owners may need to augment their advisors with additional expertise for a sale process.
• Reflecting on the owner's mission and having honest conversations with co-owners are crucial for aligning goals.

@kerrcapital

Thanks for listening.  Visit the Small Business Banter website to subscribe, listen back, or check out any resources or information mentioned on the show.

Search @SmallBusinessBanter on your favorite podcast player to subscribe and listen to the episodes.

Reach out to Michael Kerr via the website if you need personal assistance or advice for your small business.

[email protected]

www.smallbusinessbanter.com.au