Mortgage Choice, Australia’s Best Mortgage Broker*, is strengthening its vision towards the future when it comes to ensuring succession planning is central to each franchise. The focus is on maximising
business growth and at the same making each franchise as viable and saleable as possible, to ensure a simple and smooth transition for both the vendor and the company.
The publicly listed nationwide company has recently upgraded its efforts with researching, gathering and transferring succession planning knowledge from internal and external sources –
franchisees, consultants and staff – to its
franchise network.
Mortgage Choice National Manager Corporate Affairs, Warren O’Rourke said succession planning ideally starts from day one of a business commencing operations and is all about building a valuable, saleable asset.
“We would like to think our franchisees will decide on the best structure for their
business and their future for when they retire or move on to a different venture. We provide them with the knowledge, skills, tools, etc, to make it as simple as possible for them to get their businesses into shape as early in the cycle as possible,” he said.
“Successful succession takes a lot of planning and business owners need to continually appraise their operations, to ensure their business is attractive to modern-day business owners, many of whom are relatively young and often vary in their approach to and perception of a practical, potential business.
“Our franchisees need to plan when and how they will exit the business, building its value while ensuring they have done everything in their power to maximise its value and make the exit as easy as they can for all parties”.
Succession planning involves many different things, depending on the type of business and who works within it. Mortgage Choice suggests business owners arm themselves with as much knowledge as possible and ask themselves questions such as below:
- Business plan – this requires ongoing commitment to fine-tuning the entire business process involving all staff and appropriate key performance indicators;
- Paperwork and business processes – is the paperwork up to date and well organised, are books and financial records self-explanatory, is the business plan clear? Are all business processes well thought out, professionally planned, well documented, constantly evaluated, etc?
- Branding – is it promoted via the owner’s name, rather than the business name? Therefore, what will people see when they think of the business? Creating a strong profile via a personal name is a great strategy for building a business but not so ideal for maximising its value at the time of sale. Reliance on one or only a portion of the business’s employees for the majority of the business can be a downfall when attempting to sell up.
- Reputation – it takes a long time to build a solid, positive reputation and only a short time to destroy it. The way people perceive a business is obviously going to have a material impact on the business sale process. How active is the business within the local community? What are customer service levels like?
- Location – lease agreements, equipment, etc. Think about the importance of the business location to business success i.e. will it hold the business owner back from selling at the price they are looking for?
- Employee relations – agreements, confidentiality, policies, etc. Are these all up to date and satisfactory to employees and complying with all appropriate regulations?
- Preparing a successor for the business – e.g. selection, training (and/or re-training), knowledge transfer, support structures, etc. If there are family members involved, the preparation may also include discussions with family and explanations to others who thought they would be the ‘chosen one’ and may perceive there to be favouritism at play within the decision making process.Employee ability to adapt to change – are all employees aware of the succession plans and their place within it. How does the business owner make them feel i.e. are they are taking the ride alongside, and it will be to their benefit also? Are they rewarded/recognised for buying into and committing to the business direction?
- OH&S history – occupational injuries and illness, etc. Problems in the past can affect the business’s reputation and therefore the price a buyer will pay for the business, so what ‘best practice’ plans are in place to make the business as safe and health issue free as possible?
- Corporate social responsibility – e.g. carbon footprint, energy efficiency, paper consumption, recycling efforts, etc. Acting in a socially or environmentally conscious way is becoming more of an issue for a wide range of people, not just environmentalists. This will affect the business’s value.
Of course, business performance will be a key factor in a potential buyer choosing one business over another but the above and many other factors need to be in place.
Business owners should be asking themselves if they have given considerable thought to what will happen to their business should they need to sell or hand it over for management by someone else.
The future is always uncertain, nothing is guaranteed, and the business owner’s plans for their own, their family’s and their employees’ future is of vital importance.
About Mortgage Choice
Mortgage Choice is Australia’s leading mortgage broker. It provides professional home loan advice on, and choice of, products offered by a panel of over 29 of Australia’s leading lending institutions and its accredited loan consultants do not charge customers for their services. Mortgage Choice does not have its own products, and consultants are paid the same commission regardless of the lender or product chosen by the borrower#.
Through its national network of over 445 franchises and over 663 loan consultants supported by Group and State Offices, Mortgage Choice writes almost 1 in every 20 Australian residential loans.
The company was listed on the Australian Stock Exchange in August 2004 (ASX sign: MOC).
Recent awards/recognition: 2007 Franchise Council of Australia Excellence in Franchising Awards Franchisor of the Year finalist, 2007 Australian Banking & Finance Magazine Awards Best Mortgage Broker, 2006 BRW Magazine Top 500 Public Companies list, 2006 MIAA Awards Retail Mortgage Broker of the Year, 2005 Australian Mortgage Awards Best Branding and Most Effective Internet Presence, 2005 Australian Banking & Finance Magazine Awards Best Mortgage Broker and 2005 MIAA Awards Originator of the Year [30+].
* Australian Banking & Finance Magazine Awards, May 2007.
12-Mar-2008