Welcome to the fifth edition of the Kleinhardt Bulletin. 

You might have noticed that since last month the world is not quite the same as it used to be. The financial crisis and market volatility certainly dominates global media and forms the basis of many a conversation around town. So what really is going on?

Our friends at Commsec Economic Insights have released a very useful Q&A on the financial crisis from a financial market perspective which we have incorporated this month. We also take a look at change as a constant, happiness and who should you tell when you're going to sell your business?

I hope you enjoy...

A wise person once said that "the only constant, is change!"

Certainly this is the case in the business world. Markets are constantly subject to change; fashions are fickle and fleeting, and consumer tastes and preferences are volatile. Innovative competitive practices are forever appearing; regulatory regimes are ever expanding; environmental, political, social, and cultural views and circumstances are ever changing.

Many of these changes we are alert to; some we are not. Many we respond to; some we do not. The challenge for better business managers is to:

• Recognise the constancy of change
• Establish protocols and practices that (ideally) pre-empt, assimilate, analyse and interpret the implications of change
• Ensure organisational structures are sufficiently flexible to enable the business to remain dynamic, and capable of rearrangement if necessary
• Ensure implementation of well thought out response strategies.

Usually our responses are on a case by case basis. But the sheer constancy, pace and extent of changes inevitably means that we should periodically revisit the "big picture" and objectively review the effectiveness of continuing business structures and practices. Often this highlights the need for some significant structural adjustment. Therein lies the next significant challenge; how to best manage the implementation of the proposed changes.
 

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Who do you tell when you're going to sell? Once you've decided to sell and initiate the sale process, one early dilemma you may face is who should you tell? And when? And what should you say?

In a nutshell, you want the business sold but don't want anyone to know it's for sale.. or maybe just the actual purchaser. This ideal breaks down when we want to create a competitive process. There are circumstances when it may be attractive for owners to offer the business for sale to one purchaser only.

For the majority of situations, here is advice we offer regularly: First consider and rationalise the risks. Who can hurt you?

Typically the risk areas are staff and customers. Eg customers may leave you, staff may leave you and competitors may be predators poised to seize both. Although such concerns may be well founded, in many cases owners can become paranoid about these risks.

Generally, the more hands-on the owner is, the more risk there is when a change is proposed. So, first assess and rationalise the risks involved. Remember Mark Twain indicated he had faced many problems in his life, most of which never actually happened.

Often the actual risks are minimal and the real issue is the owner coming to terms with selling. Some owners don't want to believe they are actually selling, because it creates too many unknowns or issues. Not telling anyone allows them to shut it out of their minds and forget they are actually doing it.

Advice: "There is nothing wrong with selling your business! Every successful business person will do it some day."

The biggest concern is that someone who trusts you might find out from others. This could place you on the back foot and make you wish you had told them earlier. Although Confidentiality Agreements are signed by prospective purchasers, you must assume they are of no value and that prevention is the best cure, just as with safety. Kleinhardt adopts this approach to confidentiality, which is why we offer to pass every respondent's details by our clients for approval before they can receive an Information Memorandum.

Even if you don't tell your staff, they may know or find out anyway; and usually from the owner. 90% of communication is non-verbal, so you never have to say anything to actually tell them! 
  

Are you interested in pursuing international project opportunities?

Many overseas projects or entire programs are handled by the large firms called "Australian Managing Contractors" (AMC's), who engage subcontractors to carry out the work.

Advance Cairns, with support from the Queensland Department of Tourism, Regional Development and Industry, will be holding an event on Nov 7th to introduce you to these firms who may be interested in utilising your services in projects.

The AMC's will provide valuable insight regarding:

• The sectors they operate in and services provided
• The expertise currently sought after
• How regional organisations can engage with them

Meet with representatives from AusAid, SMEC, JTA International, GRM International, Uniquest and QUT

Why You Should Attend

• Following the brief AMC presentations, you will have the opportunity to join our "speed business meetings" so that you can meet one-on-one with AMCs of interest and provide information on your specific capability. Please bring your corporate profile.
• You will be able to establish linkages with your local colleagues to bid for future projects
• You will have a better understanding of the processes involved in bidding for international projects.

Event Details
Tropical Expertise - Business Matching for Global Opportunities Expo
Friday, November 7th 2008
The Reef Hotel Casino
8:30am to 12:30pm
Cairns

Upon registration, you will receive information regarding the attending AMC's and suggestions for how to prepare to get the most out of the one-on-one sessions.