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Scaling Up

How Saxon Klein Scales Up $5m-$20m Businesses 

The best businesses are sellable – and they run without you. Smart business people believe that you should build a business to be sold even if you have no intention of cashing out or stepping back anytime soon. We can show you how to build in the qualities that allow your business to be sold at any moment for the highest price buyers are paying for businesses like yours. 

We can help you create value in your company to maximise value. Services range from developing your value proposition, to driving revenue, to increasing the value of your business. 

We show you how to isolate and develop business processes. Owning a process makes it easier to eventually pitch your business for investment or sale - and it puts you in control. We show you how to be clear about what you’re selling so that potential customers will be more likely to buy your product. 

 

Top Ten Reasons Scaling Up your Business Can Benefit Your Company

 

Increased Market Share:

Scaling up allows businesses to capture a larger share of the market. For instance, Airbnb started as a small website offering short-term living quarters and breakfast to guests. Through scaling, it transformed into a global platform, revolutionizing the lodging market.
Economies of Scale:

Larger operations can reduce cost per unit, enhancing competitiveness. Wesfarmers, originally a farmers' cooperative in Western Australia, leveraged its scale to diversify and reduce costs, now one of Australia's largest private employers and retailers through its ownership of chains like Bunnings Warehouse and Kmart.
Enhanced Brand Recognition:

Scaling up can significantly boost a brand's visibility. Canva, starting in Perth, scaled globally to become a leading online design platform, recognised worldwide for democratising design through its user-friendly interface.
Diversification of Risk:

 By expanding product lines or entering new markets, businesses can spread risk. Cochlear, an Australian company, scaled its operations beyond its pioneering cochlear implant to offer a range of hearing solutions, diversifying its product line and reducing market risk.
Attracting Talent:

Scaling businesses can offer more opportunities and benefits, attracting higher-calibre talent. After scaling up, Melbourne-based SEEK became the go-to platform for job seekers and employers in Australia and internationally, attracting top talent to its ranks by offering innovative employment solutions.
Access to Capital:

Larger, growing businesses are often more attractive to investors. Zip Co (formerly ZipPay), scaling from a Sydney-based startup to an international player in the digital payment sector, attracted significant investment, fuelling its growth and expansion into new markets.
Innovation and Development:

 Scale can provide resources for R&D. For example, CSL Limited, starting as a small biotech in Melbourne, scaled up to become a global leader in biotechnology by investing heavily in R&D to develop lifesaving medical products and vaccines.
Greater Efficiency:

Scaling up often leads to more efficient operations through improved processes and technologies. Fortescue Metals Group, headquartered in East Perth, Western Australia, scaled its mining operations efficiently, becoming one of the world's largest producers of iron ore.
Expansion Opportunities:

Scaling up opens up new markets and customer segments. Qantas, from humble beginnings in Queensland, scaled up to become Australia’s flag carrier and one of the world's most recognised airlines, expanding its routes globally.
Long-term Sustainability:

Scaling can ensure long-term business viability. Woolworths Group, scaling from a single basement store in Sydney to one of Australia’s leading retail giants, demonstrates how scale can contribute to long-term business sustainability and dominance in the supermarket sector.

 

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Top Ten Reasons Scaling Up your Business Can Benefit You Personally

Scaling up a business can have profound personal benefits for an owner, touching financial, emotional, and family aspects of life. Here are the top ten reasons:

Increased Financial Rewards:

As the business grows, so does its valuation and profitability. This financial upside can significantly improve the owner's personal wealth, offering enhanced financial security and lifestyle choices.
Personal Achievement and Satisfaction:

Successfully scaling a business is a monumental achievement. It brings a deep sense of personal accomplishment and satisfaction, knowing you've built something substantial and impactful.
Opportunities for Family: 

Growth can provide opportunities for family involvement and employment, creating a legacy and potentially setting the stage for generational wealth and leadership.
Enhanced Professional Reputation:

As the business scales, the owner's professional stature within the industry and community often grows. This recognition can open doors to new business opportunities, partnerships, and social networks.
Improved Work-Life Balance:

With the right systems and team in place, owners can delegate day-to-day operations, allowing for improved work-life balance, more time with family, and pursuit of personal interests.
Empowerment Through Delegation:

Scaling up requires delegation, which can relieve the owner of the burden of micro-managing every aspect of the business, reducing stress, and enhancing overall well-being.
Community Impact: 

A scaled business can have a more significant impact on its community through job creation, philanthropy, and local economic growth, providing the owner with a sense of giving back and contributing positively to society.
Legacy Building:

Owners can create a lasting legacy through their scaled business, something that persists beyond their active involvement, offering a sense of immortality through their life's work.
Personal Development:

The challenges of scaling a business drive personal growth. Owners learn new skills, adapt to changing roles, and overcome obstacles, which contribute to their development as leaders and individuals.
Financial Freedom for New Ventures: 

The increased financial resources from a successful scale-up can fund other passions or ventures. This freedom allows owners to explore new industries, start new businesses, or invest in others, fuelling their entrepreneurial spirit without financial constraint.

Scaling up not only transforms the business but also profoundly impacts the owner's personal life, providing financial benefits, personal fulfillment, and opportunities for legacy and community impact.

 

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How Saxon Klein Positions Your Business to Customers, Investors, and Acquirers

We identify the most valuable way to position your business to customers, investors, and acquirers by clearly defining the information a buyer is looking for. We help you develop:

  • Point of Difference
  • Segmentation
  • Segment Attractiveness
  • Ability To Win analysis
  • Strategic Positioning
  • A winning Value Proposition.

 

Point of Difference Analysis (POD)

A POD is an attribute that makes your products and services different from your competition in a way that is unique and valuable to your customer.  To a buyer, a POD is key as it helps determine why potential customers will choose you over another option.

 

Segmentation

A Segmentation Analysis divides your markets into identifiable groups of customers.  A segment is a group of customers who you can expect to respond in a similar way to a particular offer or value proposition.  They have similar values (needs or wants) and they prioritise them in a similar way.

The Segmentation Analysis shows a buyer that you have worked out how to:

  • Uncover opportunities that you could easily overlook in an undifferentiated approach to the market.
  • Exploit your strengths and create advantages.
  • Concentrate resources on customers that provide the most value.
  • Develop more targeted and efficient marketing programs.
  • Build customer satisfaction and loyalty by tailoring offerings to the values and priorities of each sub-set of your customers.

 

Segment Attractiveness

A Segment Attractiveness Analysis is a technique for identifying the segments in the market that are most attractive for your business to potentially align with.  It’s takes discipline to recognise that you can’t be all things to all people.

 

Ability To Compete

An Ability to Compete Analysis is an honest analysis of your company’s true capability to compete in each market segment. It outlines:

  • The most attractive segments that your company can compete in given its resources, and
  • The most attractive segments that your company could compete in if it also had the resources of the buyer behind it.

 

Strategic Position Analysis

A Strategic Position Analysis reviews the Segment Attractiveness Analysis and your company’s Ability to Compete Analysis to identify the ideal segments for your company to target.

 

Development of a Value Proposition

A value proposition is a promise you make to target customers to convince them to prefer you to the competition.

It distils the information developed in the stages above and creates a very clear statement of your customers’ needs, why your offering is different and why they should believe it’s better than the alternative.

Having a clear value proposition is key to developing all future communication and positioning materials as it succinctly says, “Why buy me”.

 

Investment Facilitation

We show you what you need to do to become "Investor Ready" and assisting in you in the commercial aspects of the sale process.

We assist you to identify potential investors or buyers who you might approach and conducting the initial analysis to determine whether a transaction might take place.

 

Corporate Strategy

Financiers, investors, and potential buyers all want to see a well thought-out and well executed corporate strategy. We work with you to analyse the external and internal position of your business, its customers, and its market place. We then help you plan the strategy, tactics and resources that will help you unlock the potential of your business. 

 

Updating the Business Plan

Your business plan takes the vision of your business and translates it into strategy. We work with you to update it and identify your competitive assets, relationships, and competencies. We can then document the ways in which these will be turned into your competitive advantage. The business plan shows investors and buyers that your management team understands what it takes to be successful. 

 

Developing an Information Memorandum

Your business plan remains largely an internal document. When raise capital or sell your company, we can prepare a shorter document for outside parties called the information memorandum. The information memorandum is distilled from your business plan. It sets out enough detail for potential buyers to make a decision but does not provide the level of detail contained in the business plan. It is the preliminary document used to prior to the signing of the non-disclosure agreement by a buyer.

We can draft the information memorandum for you in an industry standard format – one that buyers expect to see from experienced management teams.

 

Business Succession Planning

The feature that separates a valuable business from all the others is the degree to which that business can run itself. The question that you as the owner of the business need to answer is: Can this business run successfully without me?

If it can, then it is a business that should attract investors and buyers. We can show you how to achieve "Management Depth Assurance" - how you can increase your company’s “bench strength” by putting good people and systems in behind you. Bench strength is desirable if you have sudden health or personal problems, but it is essential if you want to raise capital or sell your company.

A succession plan gives your company the depth of management that investors and buyers want to see so that they have the confidence to purchase your business.

 

Becoming Investor Ready

A prerequisite for raising capital and for business exits at high multiples is to make your business Investor Ready. If you undertake our program, we can guide you through this process step-by-step. In this stage, we can:

  • Examine and refine your Unique Selling Proposition,
  • Evaluate the way you communicate your marketing promise,
  • Execute on your business plan, forecasts and projections,
  • Update and document all your systems and procedures,
  • Organise your valuations, and
  • Get your business into the format that investors and buyers expect to see for your industry.

This is the minimum standard that investors and buyers expect to see in a business before buying. No capital raising or business exit should proceed unless you are Investor Ready. When we are both agreed that you are Investor Ready, you can put your capital raising or business exit proposition to the market. It is important to note that we must both agree that you are Investor Ready - or the likelihood is that you will not be successful.

 

Rescues and Reconstructions

Sometimes capital raisings or business exits are derailed by a financial or event-based crisis that occurs despite the strength of the business or the talent of its management. Events that can place a business under sudden stress may be as diverse as:

  • A large swing in exchange rates,
  • An unexpected collapse of a key customer, or
  • A sudden change in the world outlook for a product. 

We project manage accountants, lawyers, and bankers for rescues and reconstructions, so you have support and advice to follow for the continued survival of your business. If your assets are likely to become impaired or trade at less than their face value, you can switch focus to short term funding, protecting various stakeholder interests and devising creative solutions. These solutions could include:

  • Trade-outs
  • Work-outs
  • Debt restructuring
  • Renegotiations, and
  • Stand-still agreements.

Quick and decisive action could get you back on track, protect your position and protect the position of your stakeholders. We stand with you, especially during times of difficulty, stress, or financial strain. We help with complex challenges, navigating risks and unlocking value under pressure, to find a path towards stability and growth.