Page 25 - DCOM205_ACCOUNTING_FOR_COMPANIES_II

Accounting for Companies – II

notes Since 2002, Saxton has expanded rapidly, opening speakers’ bureaus in Sydney and
Brisbane; a total management business for celebrities; and acquiring a training business. The
expansion has been funded by cashflow. Winston says: “We only invest in good businesses
then we add the Saxton infrastructure and expertise to help the businesses grow.”
With six businesses with overlapping interests, Winston stresses the importance of
streamlining office systems and creating a non-threatening environment. “When we
acquire a business, we need to put that office on our system and merge our two databases.
To avoid conflict as to who owns the client, we deal with that at set-up - so ownership is
clear and the service delivery is consistent.”
A team culture is maintained through weekly telephone conferences and a clear rewards
system. Winston says: “Each week, two members of the team are responsible for listing the
week’s highlights and acknowledging an individual’s outstanding contribution.”
Although the businesses are spread over three states, the administrative and support
staff mostly work from the Melbourne head office. The businesses are encouraged to
share information and the rewards of success are also shared. Winston says: “We have an
intercompany referral rewards system. A consultant in Melbourne might assist our training
company with leads; we reward this through commission sharing between the offices.”
Winston says it is a big challenge to find great speakers. “Clients want to hear from people
who are new and fresh but [who] have been in business a long time.” To find speakers,
Winston stresses the importance of networking and listening to what is happening in the
industry. “Speakers are usually referred by somebody we respect.”

the result
Each year since 1988, Saxton Management Group has experienced steady growth of at least
30%. The stable of speakers has increased ten-fold in that time. Winston says: “In Australia,
you need a large shop front. In the United States, an agency can be successful with the likes
of Bill Clinton and a few other high-profile personalities.”
Streamlining the office systems and ensuring that the same database is used in all
six businesses have saved time and effort. Winston says: “Now when a consultant has
information to update or a phone number is changed, it can all be done from one location.
Everything now takes one hour instead of two.”
Questions
1. Discuss the issue behind the story.
2. Identify the solution and consequences of the problem.

Source: http://www.ceoonline.com.au/case_studies/succession_ipos_acquire/pages/1_16_2199.aspx

1.3 summary

l z There are numerous issues that a purchase should consider when buying a business.
These issues may vary depending on the type of business and complexity of the purchase
transaction.

l z Purchasers must bear in mind that different types of businesses have different statutory
requirements relating licensing and that these statutory requirement must be complied
with before business operations commencing.

l z As the purchase of a business requires considerable financial obligation purchasers should
be satisfied that the business is not only viable but also operational.
l z Initially, the purchaser should ascertain whether they are purchasing the shares in a
company that owns the business or they are purchasing the business and the assets.

20 lovely professional university