United Arab Emirates-based payments solutions provider OMA Emirates has agreed to acquire Mumbai’s MobiSwipe Technologies Pvt. Ltd for an unknown amount. It would appear that the company is looking to broaden its overall portfolio in the MiddleEast, Eastern European and APAC regions. Source: PaymentWeek

Jeff Immelt, the CEO of General Electric, once said that he has only two items in his job description:  One is to retire with the value of the company exceeding that when he took over and the other is to find a successor.

Succession planning acknowledges that your team members will not be with a business indefinitely. It provides a plan and process for addressing the changes that will occur when they leave.

You often hear of public companies ‘grooming a successor’ for the CEO position or other lead roles, where the purpose is to create leadership continuity so that it remains business as usual when the current leader retires.

The same need exists in privately held businesses although you must go further to consider not just retiring from your job but your exit strategy options as an owner.

Succession planning is not just for business owners who are expecting to exit an industry in the near future.  It is never too early to start planning.  Those business owners that do start early will find they have the greatest amount of control over the timing, nature and profitability of their exit.

A succession plan helps your organization in the following ways:
Maximize your exit options: Plan and put the wheels in motion for selling the business on your terms.
High performer retention: Reward and retain talented team members by including them in your succession plans.  Demonstrate your loyalty by promoting from within.

Recruiting effectiveness: By clearly understanding your workforce needs in advance, succession planning creates the opportunity for you to pro-actively initiate recruitment and to do a thorough job.

As you would expect, many of our clients have been through the process of putting in place a succession plan or selling their business, so if this is something you feel you should be considering, feel free to get in touch.

Murray Fulton, Auckland, New Zealand

When it comes time to sell their businesses, the first question that most owners ask is: “How much can I get?” It makes sense. Owners are eager to cash in and be rewarded for all of the hard work they have poured into their businesses over the years.

But the reality is that for many businesses, the initial valuation will be a much lower number than their owners want to see. In order to net enough from the sale (after taxes and fees) to fund the rest of their lives, most owners will have to work to boost the value of their businesses – sometimes significantly.

One great way to create value is to build recurring revenue into your business model.

The Benefits of Recurring Revenue

Recurring revenue is guaranteed revenue for some period of time (for example, through a product subscription). Because this type of revenue does not require the same level of sales and owner effort as one-time revenue, it typically results in much higher profit margins and is always highly coveted by buyers. The evidence shows us that businesses with recurring revenue models have higher valuations than those that don’t. In 2012, Adobe went from a one-time purchase model of its software to a monthly subscription model. Two years later, its market cap was $35.5B versus $16B – a 115% increase.

Examples of recurring revenue include:

  • Service or maintenance agreements
  • Consumable product or replacement part contracts
  • Subscriptions for products, services, or information
  • Memberships

Recurring revenue is stable and predictable income, and as such results in higher customer lifetime value. In addition, recurring revenue can help your business weather economic recessions and is likely to simplify your business operations in many ways.

Understanding the Value of Your Business from a Buyer’s Perspective

Companies on a growth trajectory that can demonstrate increasing cash flows through new customer acquisition, current customer retention, and increasing market share are always much more attractive to a buyer than those that have shown little growth. Buyers want to know that revenue and cash flow are growing at a steady rate and will continue to do so in the future. And a recurring revenue model can be a great way to increase the value of the business in the eyes of a potential buyer. In Cashing Out of Your Business – Your Last Great Deal, we discuss 8 key drivers of business value that owners need to focus on before selling their businesses:

  • Increasing Revenue & Profits
  • Future Growth Potential
  • Accurate Financial Statements
  • Solid Management Team
  • Quality Products & Services
  • Strong Sales & Marketing
  • Eliminating Business Risk
  • Putting Systems & Processes in Place

Adding a recurring business model is one of the best ways to address a few of these value drivers, boost profits, and enhance future growth potential — thereby increasing the value of a business in the eyes of a prospective buyer.

Even well-established businesses can usually add some kind of recurring revenue to their model and reap these rewards. It may require that owners think “outside the box” or change how they have operated historically, but it will pay off in the long term. Buyers will pay more for quality companies and those that have growth potential.

By assessing your business objectively, you will be able to identify areas for improvement so buyers will see your business in the best possible light. Planning in advance will give you time to improve your business and maximize its value. As a result, you will improve your chances of selling and obtaining the highest price for your business.  Source: Axial

 

Despite Sub-Saharan Africa having the lowest rates of internet penetration, Africa now has its own domain name which gives the continent a ‘digital identity

Addis Ababa — In the beginning was .com, followed by a host of other .somethings, but on Friday, 32 years after the world’s first domain name was registered, the African Union (AU) has launched .africa.

Africans who want to register a website will be able to apply for a .africa domain name in the coming months, which outgoing AU commission chairwoman Nkosazana Dlamini-Zuma said would allow the continent’s people and businesses to better reach the world.

"With .africa, I would say Africa has finally got its digital identity," said Dlamini-Zuma, who will hand power to Chadian foreign minister Moussa Faki Mahamat next week after four years at the helm of the continental body.

Sub-Saharan Africa has one of the lowest rates of internet penetration in the world, according to the World Bank, with only about 22% of people online compared to the global average of 44%. The AU has vowed to increase broadband internet penetration by 10% by next year as part of its "Agenda 2063" development proposal.

As Africa’s largest economy, SA dominates African presence online, holding 1.1-million of the 2-million website registrations on the continent, said Lucky Masilela, CEO of ZA Central Registry, the SA-based company that will oversee .africa.

High fees are an obstacle to many people who want to register a website, Masilela said. In some African countries it can cost as much as $250 (€235) but Masilela said .africa addresses will be available at a cut-rate price of just $18 to anyone on the continent: ".africa is going to be a market disruptor and will assist in lowering the cost of domain names."

The AU is hoping proceeds from the domain registrations will help cover some of its administrative costs and fund the AU commission. The domain is due to be available to the public in July but it remains unclear how strong demand will be. Source: Business Live

Gregory Gettinger, a Ph. D. graduate from the University of Vienna in Marketing and Technology (1987), and a Business Case Study Program graduate from Harvard and Stanford Universities (1988 and 1990), Dr. Gregory Gettinger begins his career with PepsiCo International as a Marketing Trainee and Franchise Manager in Vienna.

From 1989 to 1995, he acquires his first experience in the packaging industry as Managing Director with Frantschach AG (today: Mondi), a business generating 40 million Euros in sales, where he leads a heavy restructuring and turn-around case.

Shifting industries to tackle the media giant, Gettinger joins Bertelsmann AG, a 20 billion Euro sales company.  As MD Marketing and Sales of Premiere GmbH, he directs the development of the first Pay TV in Germany, achieving 2 million subscribers within four years.

His next step takes him in 1999 to the position of Managing Director with M-real Deutschland GmbH, assuming responsibility for 700 million Euros in Sales and Marketing.

In 2006, Gettinger joins the Corporate Executive Board as Executive Vice President of M-real, and takes over responsibility of their Publishing business, where he develops and implements a new strategy, and executes significant cost reduction programs.

Gettinger expands his directorate to the Commercial Print business in 2007, combining it into a new Graphics business area with 9 mills and a turnover of 2 billion in sales.

As of January 2009 merge between M-real Graphics and Sappi, Gettinger became a Member of Sappi Fine Paper Europe’s Executive Board and officiated as Director of Procurement, Supply Chain and Specialities.

From 2012 onwards Gregory Gettinger focuses onto his biotech company, which he founded in 2002. Today Gregory also consults a wide range of companies in various fields. Besides the consulting business, he owns and manages his a very specialized biotech business, which focuses on converting minor grade feedstocks into biodiesel.

Dr. Gettinger joined CBA as associated Consulting Professional in February 2016.

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