December 2023 - Bay of Plenty Business News

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14 BAY OF PLENTY BUSINESS NEWS December 2023 LAW “You want to be prepared, deliberate and intentional – don’t give your accountant and your lawyer a back-of-a-napkin proposal” Looking to exit your business? Don’t leave it too late The prospect of buying or selling a business is top of mind for many people now the general election is over. Election pledges to lower tax cost and compliance, change employment law, improve cash flow, cut red tape and provide better access to capital for small business owners, have left people buoyed at the prospect of better economic times ahead. Commercial law specialist Andy Martin says a good window is now available for people to prepare their business for sale – but warns many owners leave it far too late to connect with their advisers. “You want to be prepared, deliberate and intentional – don’t give your lawyer a back-of-a-napkin proposal and tell them to settle it in two weeks. You may have negotiated a perfect exit but nine times out of 10, people who take a bit more time, have a deliberate focus and are willing to take advice will achieve far better outcomes.” Andy worked for Buddle Findlay in Auckland for 15 years before moving to Tauranga earlier this year to join Cooney Lees Morgan’s Corporate and Commercial team as Special Counsel. He has a broad corporate and commercial advisory practice, with a focus on mid-market mergers and acquisitions. He says Cooneys has already noticed an upturn in corporate commercial legal activity and he predicts that trend is likely to continue under the new government. “There’s a lot of small to medium business owners who have been waiting for the uncertainty of an election to dissipate before making big decisions as they want a bit more confidence around the economy. And there will be buyers and investors who were sitting on their hands for the same reason.” But Andy warns there’s still not a lot of government money to go around and the economic environment won’t change overnight. “The country is hugely in deficit and will be for another few years, so there won’t be a bottomless lolly jar for helping SMEs. But generally, business owners appear to have more comfort that their interests may be slightly higher on the agenda and have a more positive outlook.” Andy says a number of factors suggest that merger and acquisition activity in the SME space is rebounding and could be poised to rise in 2024, with one of the key factors being an increasing focus on exits and sell downs by business owners as part of their generational succession planning. However, while interest rates are forecast to start easing next year, the current high cost of capital means buyers will continue to be selective with their investments and acquisitions. So now is the time to work closely with your accountant and lawyer to get everything in order. “As always, business owners need to work on their business as well as in it. Businesses have been operating in a tough economic environment for the last two or three years and may have not had particularly good growth, or could even have suffered a bit of a decline. They’ll be wanting to restore their trading performance and increase their enterprise value.” Andy says owners who wish to exit within the next year or two should start looking at ways to improve their business now so it’s more attractive to buyers – both from a financial perspective by improving trading results, and also from a legal perspective by examining their business structure. “Speak to your lawyer and accountant early. The earlier, the better. It doesn’t have to be an in-depth discussion. Just start a conversation and get a realistic idea of what’s ahead of you.” Accountants can help frame ANDY MARTIN, Special Counsel, Cooney Lees Morgan up financial reports to improve a potential valuation, while your lawyer will help assess what you ultimately want to achieve from a sale. Important issues to consider include whether your business is more suited for selling as a share sale or an asset sale, the extent to which a founding vendor needs to remain in the business to make sure the value is realised for the purchaser, and the risk profile that a vendor is prepared to accept because every sale and purchase agreement is different. Owners should consider whether critical areas of the business need to be reviewed or restructured. “There’s usually low hanging fruit you can do straight away, like considering if you need to secure key customers and suppliers with contracts, making sure you own your IP, resolving outstanding disputes and examining your leases. Is there anything else you can do to make your business better over the longer term, and therefore more appealing to potential buyers? A strategic review with inputs from your professional advisors may prove invaluable.” Helpfully, Andy has written a comprehensive article on what to consider before selling your business which is available now on Cooney’s website. “I recommend allowing at least three to 12 months to properly prepare your business for sale. At the end of the day, it only takes one buyer and one seller to make a transaction happen. Talking to your advisers early can help achieve the most productive deal.” Thinking of selling your business? If you’re interested in digging a bit deeper into how the process of preparing and selling your business might look, I think you’ll find my article “6 Things To Consider Before Selling Your Business” really helpful. If you’d like to start a discussion about your full or partial business exit, whether that’s imminent or part of a long-term plan, contact me or another member of our Corporate & Commercial Team. Andy Martin | Special Counsel: 07 927 0588 or amartin@clmlaw.co.nz 6 Things To Consider Before Selling Your Business 247 Cameron Road, Tauranga | cooneyleesmorgan.co.nz
December 2023 BAY OF PLENTY BUSINESS NEWS 15 PROPERTY INVESTMENT FUNDS Steadfast governance in times of economic flux This year, PMG Funds officially welcomed Dr Wayne Beilby as Chair of the Board after five years as Independent Director. His wealth of experience and intimate knowledge of PMG has been highly valuable to support resilience and continued growth. Wayne shares his thoughts on the importance of good governance and strategy when navigating challenging economic environments. A year of challenge and opportunity The echo of shifting economic tides has resonated across New Zealand’s investment landscape in 2023, presenting both challenges and opportunities for investors. According to Wayne, it’s exactly these types of turbulent seas that differentiate the skilled sailors from the less experienced ones. “PMG’s reputation for growing wealth has been built on 30 years of prudent, hands-on management and meaningful relationships with investors, tenants and partners. “Our sound governance and strategy now offer our four generations of investors a sense of stability, as they can trust in Scott and the team to steady the waka through challenging economic times.” Building investor confidence through guardianship Wayne’s background in governance and leadership across the risk, financial management and corporate law sectors means he is wellpositioned to lead the board and executive to deliver PMG’s longterm vision. “It’s important to have strong leadership and a clear vision for where you want to go,” says Wayne. “When I stepped in as an Independent Director six years ago, the purpose of my role was to provide objective insights into the discussions in the boardroom – a fresh pair of eyes, if you will. As Chair, in a way that is still what I do, however I’m now more focused on driving the strategic direction of the PMG business to ensure continued long-term growth. “PMG’s governance framework is anchored in resilience, adaptability, and a commitment to ethical practices, acting as guardians of investors’ wealth, tenants’ business success, and the staff’s success and wellbeing.” “I see a lot of genuine care and personal drive by the team to achieve results for our investors, ensuring that the funds are as robust as they can possibly be. This means regularly reviewing the portfolio asset allocation, diversification of fund assets and levels of gearing,” says Wayne. A sustainable vision for the future PMG’s proactive stance on Environmental, Social, and Governance (ESG) factors stands as another example of its visionary governance approach. PMG’s engagement in sustainability initiatives predates industry norms. Wayne believes this not only reflects a commitment to responsible investment practices, but more pragmatically also positions its funds to perform well under potentially more stringent environmental regulations, contributing to improved environmental performance and reduced costs for tenants. Beyond sustainability and sound strategy, PMG also places emphasis on diverse expertise, backgrounds, and age within its leadership team. Acknowledging the influence of rapid technological advancements, Wayne highlights the necessity of diverse perspectives to navigate the evolving landscape, ensuring PMG remains adaptive and innovative in its strategy and management approach. Resilience is built on strong foundations This commitment to essentially doing the right thing means that many investors view PMG as a safe pair of hands, while also offering a means for keen commercial property investors to tap into a typically tougher investment market. Wayne (of Ngāti Pukenga, Ngāti Ranginui and Ngāi Te Rangi) likens PMG’s relationshipbased, collaborative approach to investment and commercial property management to the te ao Māori worldview. “In some ways Denis McMahon, who started PMG back in 1992, unknowingly built a business on Māori principles of guardianship and family – and I believe this has been a key to setting us apart, and enabling our resilience,” says Wayne. “I have seen them take a careful stewardship approach’ to balancing short term costs with ensuring long term performance, but always remaining committed to PMG’s vision and principles.” “I have full confidence in Scott and the team’s ability to continue to provide ease of access to commercial property investment for more Kiwi investors, so they can enjoy the benefits of regular and sustainable income, with the potential for growth in value over time.” DR WAYNE BEILBY Chairman of the Board, PMG Funds Disclaimer: The information in this article is of a general nature and was current as at Wednesday, 22 November 2023. It is not intended to be regulated financial advice for the purpose of the Financial Markets Conduct Act 2013 and does not take your individual circumstances and financial situation into account. PMG does not provide financial advice. Please seek advice from a licenced financial advisor before making any investment decisions. We've been using our property and investment smarts to help Kiwis get ahead for over 30 years. Providing four successive generations of investors with cashflow through regular returns and a pathway to financial freedom through long-term capital growth. Better still, we’ve done this by providing New Zealand businesses and their staff with quality, sustainable premises from which to make their mark on the world. Reach out to our team today for more information. 07 578 3494 pmgfunds.co.nz The information in this advertisement is of a general nature and was current as at 22 November 2023. It is not intended to be regulated financial advice for the purpose of the Financial Markets Conduct Act 2013 and does not take your individual circumstances and financial situation into account. PMG does not provide financial advice. Please seek advice from a licenced financial advice provider before making any investment decisions.
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December 2023 - Bay of Plenty Business News

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