By Leon Gettler, Talking Business >>

IGNITION is the worlds first client engagement and commerce platform for professional services, and today it serves more than 100,000 clients worldwide.

Yet the business was only created in Australia in 2009 by accounting entrepreneur, Guy Pearson.  How did it get to this level – in just 14 years – of being a global business helping accounting, bookkeeping and professional services businesses streamline how they engage clients … and get paid?

Mr Pearson said the key to setting up a global business was to “go early”.

“We went early, earlier than most,” Mr Pearson told Talking Business. 

“I’ve watched a few businesses go straight from landing a few hundred or 1000 customers in Australia in B2B business software and head overseas. They would land over there and they will have raised a big chunk of money to build a much bigger team, where they were obviously going to have success – and then they get over there and tend to squander all the money that they raised

“We went early, on to the US, UK Canada. As a result we got to our first hundred customers. And as those businesses grew and the cloud adoption curve shifted in the B2B landscape in those countries, we were able to follow that on with investment and drive that right up,” Mr Pearson said.

“We already had 50 customers from each of those regions before we had any presence there. So we thought there was interest. The research said the market was big enough to support our software. There weren’t any competitors.

“But typically, the only way you can prove all of that is to get someone over there who can speak to customers, partners, industry bodies and everything else in their time zone and then go in and shake their hand.”

Going beyond the cloud

Mr Pearson said the biggest problem facing accountants tended to be that they had moved to the cloud, successfully, but had not gone to the next stage of building up the advisory side of their business. Many accountants have problems communicating with their clients, he said.

“If you’re an accountant and you’ve got clients, you’re either too busy, or you have not put in the systems and spent enough time doing the research and development of your firm and have the tools in place to actually have conversations with your clients,” Mr Pearson said.

“I think there is the opportunity to have the correct conversations.”

Professional services people needed to be more proactive in their conversations with clients, he said.

Going beyond ‘compliance income’

Mr Pearson said the accounting sector was reasonably resilient, being underpinned by ‘compliance income’.

“The fall off will be with small business clients imploding,” he warned. Ignition helped to provide indicators early, so the hard discussions could be raised by accountants.

“Now accountants who have those conversations with their clients will probably avoid all of that – and their clients won’t go under,” Mr Pearson said.

He said communicating, and especially having direct conversations, was the only way to keep clients on board.

One of the issues for accountants, and other professional services firms, was the frustratingly long cash cycles. Simply, it can take a lot waiting of time before they are paid.

The way to deal with that, he said, was to have the conversation with the client up front.

“Make sure you get a promissory of paying some of your fees at least,” he said.

Doing that would ensure the firm could stay resilient in a tough period, Mr Pearson said.

www.ignitionapp.com

www.leongettler.com

Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at www.acast.com/talkingbusiness.

https://play.acast.com/s/talkingbusiness/talking-business01-interview-with-guy-pearson-from-ignition

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Business leaders on the growth path should seriously take a look at quality acquisitions, according to commercial lawyer Joanna Oakey, the author of Buy Grow Exit.

By Joanna Oakey >>

THE REASONS for buying a business (or into a business) vary. You might be starting out in business, replacing a job with a business, or you might be acquiring a business for the growth of your existing business –a supercharged way to grow and gain uplift in the value of your business.

Acquiring an existing business rather than starting from the ground up, or building from within (‘organic’ growth), can give you instant access to established systems, and customer and supplier bases.

It can also be an extremely powerful move even if you are looking at exit, as strategic acquisition can have an immediate impact on business value. Here is a snapshot of the main benefits.

CLIENTS, COSTS AND ECONOMIES OF SCALE

Pursuing an acquisition strategy offers the ability to add to your client base immediately, thus increasing your total revenue. 

It also comes with an ability to increase profit by stripping out costs – for example, reception, administration, accounting, marketing – either partly or fully absorbing them into the existing business’ overheads. 

This won’t be possible with all expenses, however where costs remain there can be cost savings due to economies of scale – you now have the purchasing power of two businesses.

These factors alone can achieve significant acceleration of profit and economies of scale.

INCREASED WORKFORCE AND ACCESS TO EXPERTISE

Especially in a tight labour market, acquisitions can be a great way to add new expertise to your business and increase your overall workforce size.

Each team member comes with industry knowledge, skills and experience – all of which are valuable in propelling the business to greater success.

These employees are also likely to have an existing network of industry contacts, which further widens the business’s potential reach and impact.

A LEVERAGED WAY TO PROVIDE SERVICES AND PRODUCTS

You may be seeking a target that will complement your existing products or services (for example, adding financial advice into an accounting practice), or simply to add in to your existing service or product mix.

When you can offer better solutions through more holistic services, it can present a massive opportunity to increase the leads and revenue for each business separately – and produce a better, more complete customer solution for both sets of client bases.

If you are acquiring additional service lines or products, you will also gain the ability to upsell and cross-sell between the old and the new offerings, which can provide quick gains and increase the value within each additional type of service or product business you are adding.

INCREASE YOUR MULTIPLIER FOR EXIT

Value at sale is often based on the multiplier that is applied to your earnings (eg, two-times or 2× profit), and that multiplier generally increases with the size of the business.

For example, micro businesses can sell as low as 1× earnings, whereas larger SMEs can attract multiples of at least 3× or 4× earnings depending on the industry.

By acquiring and becoming a bigger business, you’re likely to increase your multiple (eg from 2× to 3×) and therefore your overall business valuation too.

Sometimes the amount you will gain in this respect outweighs the cost of acquiring – for example you may  buy an existing business for $1m but add $1.5m to your existing business value.

ACCESS TO NEW MARKETS AND MARKET SHARE

Adding a business in another location instantly allows the existing company to increase the geographical reach of its existing products or services – gyms and health care businesses are a great example of this.

Sometimes it can also enable the business to gain a foothold in an entirely new area not previously serviced by either entity.

When you acquire a business that is related to or complements your own products and services, you can also increase your share of the market by taking out competitors. Ultimately, the larger market share is generally tied to improved value through increased efficiency and easier brand recognition in the market.

Years of organic growth can be achieved in a single deal through a strategic acquisition. Whatever your reason, and whatever the size of your acquisition ‘target’, the fundamentals remain the same: prepare, understand key value in the businesses, understand risks, follow a strong process and structure strategically.

Done the right way, I believe acquisitions truly provide the ultimate opportunity to build extraordinary wealth. 

About the author

Joanna Oakey, author of Buy Grow Exit, is the founder and managing partner of commercial law firm Aspect Legal. She is also the host of the successful business podcasts Talking Law and The Deal Room. Ms Oakey brings decades of experience-based insights from working with business owners (and their advisors) on acquisitions, exits and general commercial legal matters. www.buygrowexit.com.au

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By Leon Gettler, Talking Business

ARTIFICIAL INTELLIGENCE (AI) will become the norm in medicine, according to franklin.ai, the joint venture between harrison.ai, the clinically-led healthcare AI company and Sonic Healthcare (ASX:SHL), the global medical diagnostics company.

Franklin.ai general manager Peter Dassos said AI would improve the ability of doctors and pathologists to diagnose conditions such as cancer.

“When I think of AI in the health sector, I think of it providing peace of mind with every single diagnosis,” Mr Dassos told Talking Business.

“I’m considering it as a peer review on every single patient case.

“You don’t have to look far globally to see health care systems are under pressure and need support and I think intelligent software solutions, AI driven, are part of the key to transforming not only access to health care but the quality of health care across a range of specialties.”

Mr Dassos cited cancer as an example of where 100 percent of cancer pathologies required some form of laboratory pathology. Rather than looking at a subset of findings for a given case, the AI can provide pathologists with a broad number of findings, he said. 

“The real benefit of comprehensive AI is that it can analyse a tissue sample, not just for one or two or three abnormalities but for a broad range of abnormalities. That’s one of the key differentiators we’re looking at delivering with our AI solution.

“It’s the ability to broadly add a specimen or multiple specimens and share those insights with the doctor.”

AI IS LIKE A CLINICAL COLLEAGUE

Mr Dassos said AI was like doctors having a colleague that they could tap on the shoulder for a second opinion on every single case, rather than cases that may be of interest,

“That benefit of almost a 100 percent second opinion or 100 percent peer review on every analysis performed,” he said.

Mr Dassos himself comes from an engineering background. He studied engineering at the University of New South Wales and his final year thesis focussed on understanding cochlear implants in brain MRIs and how that could impact diagnosis.

With that background in medtech and biomedical engineering, he spent a decade at Resmed launching cloud and software solutions and then transitioned into harrison.ai with the primary goal of setting up franklin.ai.

Mr Dassos said AI models fed off complex data sets and franklin.ai was in the process of building a large team with diverse skill sets. \

These included the AI component, the front end team of doctors, and a platform engineering team that is working on “all the technology under the hood”. There is also a clinical team, regulatory affairs and quality assurance components.

The findings will be scientifically validated and published in peer-reviewed journals.across the globe.

“I believe this concept of augmenting doctors with AI insights is going to become the norm in modern medicine,” Mr Dassos said.

“This concept or paradigm of a second pair of eyes on every single case is going to apply not just to pathology but to a number of areas across modern medicine.”

Mr Dassos pointed out that the Royal College of Pathologists of Australasia was reporting on current and projected pathologist shortages.

“When I think of global health care shortages, across medical specialties, and I think of that ability to provide that second pair of eyes or an instant second opinion, I think of peace of mind for doctors and patients, and I think it will absolutely become the norm as part of a doctor’s daily workflows,” Mr Dassos said.

www.franklin.ai

www.leongettler.com

Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at www.acast.com/talkingbusiness.

https://play.acast.com/s/talkingbusiness/talking-business32-interview-with-peter-dassos-from-franklin

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AUSTRALIA’s courier, express and parcel (CEP) market has been forecast to grow to $15 billion by 2025 – according to a Mordor Intelligence report – thanks to an online shopping boom worth $47.9bn last year. This is projected, according to IbisWorld research, to increase 8.9 percent this year alone.

It is in this environment that Richard Thame has strong ambitions for CouriersPlease (CP), having joined as CEO in February this year.

“Australia presents a significant growth opportunity for the CEP market, largely due to the surge in online purchases, its readiness to adopt innovation, its established trading ties with South East Asia, and a relatively stable economy,” Mr Thame said.

“This is despite the increased operating costs for the industry on the back of rising oil prices, supply chain disruptions and the challenge of scaling up fast to meet demand.

“The industry is also going through much change and consolidation, presenting an opportunity for CP to build on its strengths as a reliable, innovative and sustainable delivery provider with a 40-year heritage.” 

Mr Thame said in the coming three years the most successful industry players will be those that “digitise their operations, outside of physical deliveries; can pivot quickly to respond to external economic, supply chain and environmental changes; and can disrupt the traditional delivery model to deliver an enhanced customer experience”.

“The challenge for large, recognised carrier networks is to evolve their traditional models, by leveraging their national footprint, large warehousing network and fleet, brand recognition, industry and customer relationships, and deep understanding of the industry – all of which take many years to establish.”

Singapore Post advantages

As part of the Singapore Post (SingPost) group, Mr Thame said CP was able to offer customers a range of services from warehousing, logistics technology, parcel delivery and logistics optimisation.

He said the CP franchise model sets it apart from other providers and means that customers are dealing with fellow business owners rather than delivery drivers.

Mr Thame said CP’s strong metro fleet would help it continue capitalising on the growth of eCommerce in capital cities, while its expanding regional fleet will “provide a better service for the many Australians that have moved to regional areas in recent years”.

Over the next three years, Mr Thame said he would focus on building CP’s capability to meet rapidly growing demand – including in new areas – continuing its strong growth, and transforming the company into one that is sustainable, has a flexible workforce, offers customers more choice and has a stronger digital footprint.

“The customer experience will be an important litmus test for the success of the CP growth strategy,” Mr Thame said.

He said CP was also eyeing global growth.

“We want to tap into global e-commerce trade – up to now, we have been leveraging the SingPost network to deliver to other markets. Working with SingPost, we will launch CP cross-border deliveries, for customers importing products into Australia and providing our current local customers with cost effective access to global markets.”

Revitalising CP franchise model

Locally, Richard Thame plans to revitalise the CP franchise model, which is backed by more than 800 franchisees across 847 active territories.

Passionate about franchising and innovation, Mr Thame is also a director of the Franchise Council of Australia.He has held leadership positions at franchise brands McDonalds and Thrifty, in addition to Fastway Couriers where, as managing director, he led the sale of the company to Aramex and implemented innovations such as the Blu Couriers crowdsourcing platform.

Prior to joining CP, Mr Thame led transformational change as CEO at Snap Print and Design.

Sustainability will remain an important part of the company journey, he said. SingPost has recently announced a 2050 net-zero emissions goal for its global network, and since 2020, CP has been developing sustainable initiatives towards that goal. The company offsets 100 percent of its operational emissions, backed by a LowCO2 certification from The Carbon Reduction Institute.

“From a growth perspective, we will place great emphasis on the customer experience,” Mr Thame said. “We will be delivering a comprehensive product suite with a fully digital customer experience that includes self-service products, recognising that we are an extension of the brands that we deliver each day.”

Mr Thame is enthusiastic about building on the growth and success that CP has achieved. With a passion for working with teams, customer experiences, growing franchisees, and leveraging technology platforms, his vision for CP is clear.

“It is an exciting time to grow one of the country’s most successful and respected parcel delivery companies, in a rapidly changing environment,” Mr Thame said. “In the last two pandemic years particularly, CP has cemented its reputation as one of Australia’s most reliable and sustainable carriers.

“Its efforts in sustainability, innovation and operational performance, and its highest-ever growth, have been recognised through multiple award wins, and have resulted in a rapidly growing franchisee network, a wealth of new talent joining its executive ranks, and strong revenue growth. I look forward to taking the business to the next level.”

www.couriersplease.com.au

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