Prosperity feature in Australian Accounting Awards

Fast-Growing firm of the year 2East Coast accounting and financial firm, Prosperity Advisers has won the prestigious ‘Fast-Growing Firm of The Year’ award at the Australian Accounting Awards 2015.

AAA_SEAL_2015_Fast-Growing-WINNERThe Australian Accounting Awards are the only industry awards designed to showcase excellence right across the accounting profession. With a broad range of categories that examine excellence across the breadth of the profession, the Australian Accounting Awards provides a platform for all industry leaders to be recognised.

Prosperity recognises that the rate of business change continues at an increasing pace and invests considerable time and resources in a disciplined planning process that keeps them at the forefront of those changes. Prosperity regards its vision as ‘true north’ as they continue to evolve their advice offering. Prosperity’s innovative approach to advice have resulted in two year revenue growth of 29% in a period where research house IBIS have reported accounting firm growth to average just over 3% per annum.

Prosperity Director of Business Services and Taxation, Megan Faraday-Bensley accepted the award on behalf of the 150 strong team. She thanked Prosperity’s clients for their continued support and added “Our strategy of embracing industry change and disruption as well as developing a culture that has enabled us to attract and retain good people has enabled us to continue our double digit growth.”

The success comes just after winning a prestigious Edge Award for HR and Cultural Innovation in Miami, USA last month. The award was conferred by the Leading Edge Alliance, the second largest international association of accounting firms with 220 member firms globally.

Prosperity CEO, Allan McKeown said “We are very proud of the collective efforts of our people across our Newcastle, Sydney and Brisbane offices. The Fast-Growing Firm of the Year Award is a wonderful recognition for the tremendous effort our team has put in supporting our five point growth strategy. Our focus is on value added service rather than number crunching tasks means our clients receive advice that is more holistic and forward looking to assist them to drive innovation and make better decisions.

Record low interest rates mean an acquisition can kick start your growth

I’m sure you’re all familiar with the term ‘acquisition’ but have you ever seriously considered it a viable component of your growth strategy? At a difficult time in the economic cycle surviving rather than growing is probably your most pressing issue. But acquisitions can be, and have long been, an excellent way to quickly increase revenues, expand products or service offerings, improve market reach and increase enterprise and shareholder value. That all sounds good but what does it really mean?

When defining an acquisitions strategy, smart companies always start with a fine-tuned business strategy. Once that business strategy is defined, they then look at acquisitions as a potential tactic that can help them achieve that strategy.

A fundamental part of every business strategy is growth, which can be achieved in a multitude of different ways. By examining key rationales for acquisition activity, it may become more evident why including acquisitions in your growth strategy warrants a closer look. The following list of acquisition benefits is not comprehensive, but it is a good start.

Scale. Greater scale provides opportunities for profit enhancement across many aspects of the company and its operations.

Market share. Control a greater percentage of the total available market. Anecdotal evidence and economic theory suggest that long-run profitability increases with market share as it gives you the opportunity to be a price maker not a price taker.

Economies of scale. Decreased per unit cost occurs as output increases. By consolidating and eliminating duplicative departments, job functions and certain processes, thereby lowering costs relative to the same revenue stream, significant improvement in margin can be realized.

Distribution channels. New or additional channels for distribution can be more quickly acquired than developed. Established distribution channels can take years to develop and are usually not easily penetrable.

High cost of excess capacity. Excess or idle capacity is a killer on margins. Every unit of excess capacity carries with it an incremental piece of overhead. Zero excess capacity equates to the lowest cost per unit.

Convergence. Products or services that incline towards each other, rather than ones that run parallel, present unique opportunities.

Cost synergies. Significant savings are generally found in production and procurement, but also present in marketing and advertising.

Intellectual property. Firms in need of IP as part of their strategy can often acquire it more quickly and less expensively than developing it.

Countercyclical balance. Firms in cyclical businesses may seek to acquire businesses that are countercyclical to absorb excess capacity or idle production.

Resource transfer. Resources are unevenly distributed across companies and the interaction of the target and acquiring firm resources can create value through either overcoming information asymmetry or by combining scarce resources.

Vertical integration. Vertical integration is the degree to which a firm owns its upstream suppliers and its downstream buyers.

So if you believe acquisition should be part of your overall growth strategy, is now a good time? Mergers and acquisitions (M&A) deal activity has taken a precipitous drop over the last few years from the previous all-time highs. Economic factors are the key drivers behind reduced deal volume, particularly the severe tightening of the credit markets.

Although the global recession and constrained credit markets may make completing acquisitions more challenging, significant opportunities remain for well-positioned companies. Firms in stable, mature industries with strong balance sheets have opportunities not seen in decades. Lower valuations, together with fewer competitors capable of making acquisitions, indicates the time for making acquisitions couldn’t be better. Interest rates are at record lows and credit is still available for strong companies making the right acquisitions for the right reasons.

Start the new year off by giving growth-by-acquisition a serious look. First and foremost, know your strategy and take into careful consideration whether the cultural aspects of an acquisition, and the affect it will have on your employees, will be beneficial to your firm’s long-term viability.

Fountainguard – Prosperity Advisers joint venture to build inroads to Chinese market

Continued investment to drive future growth of the Asia Business Desk

Leading East Coast chartered accounting and financial advisory firm Prosperity Advisers Group has bolstered its Asia Business desk expertise by partnering with Fountainguard Pty Ltd to increase its advisory capabilities to the Chinese market.

The joint venture enables Prosperity Advisers to grow and consolidate its established expertise providing a full range of accounting, financial and management advisory services with a sharp focus on the Chinese market. Prosperity has 25 years’ experience and has a history of success working with the Asian market facilitating investment between Asia and Australia. As China’s economy continues its growth, the joint venture positions Prosperity to facilitate local participation in that growth.

Martin Zhao and Don Lee, Chinese ex-pats with banking and commercial backgrounds are principals of the joint venture and will bridge a cultural gap ensuring clients receive a seamless experience. Prosperity will lead a six-person team that will visit five key cities in China next month to meet with clients and key influencers and introduce the venture.

Allan McKeown, CEO Prosperity Advisers says, “Prosperity’s growth in its Asia Business desk continues apace and the joint venture with Fountainguard is an important strategic development. Through our global advisory network, Leading Edge Alliance, we have built strong relationships with Chinese clients investing in Australian assets, and helped Australians enter the Asian market. This partnership underscores our commitment to growing our Asia Business Desk and providing a blue-chip service.’’

Martin Zhao says, “The Chinese investment market is notoriously difficult to enter and Don and I were impressed with Prosperity’s success and approach. The partnership between Fountainguard and Prosperity will enable Allan and his team to really build upon their existing relationships and create multiple opportunities for clients; we are excited to be working with a progressive advisory firm to build their capabilities in China.”

“The relationship with Fountainguard is a key differentiator for Prosperity Advisers. While we regularly visit China and have personal relationships with our Leading Edge Alliance partners there, we believe we are amongst the first financial advisers to secure a strategic partnership to directly build a Mandarin-speaking on the ground presence with the Chinese market.

“Our Asian based clients have invested tens of millions of dollars into Australia and will continue to do so in the future. These investments have included property, resources and active businesses. The significant ‘Investor Visa’ market has enormous untapped potential.”

Kogan is coming to get you!

Well maybe not Ruslan Kogan himself, however his brash approach to business and enthusiasm for challenging the status quo through leveraging the internet is being embraced by a whole new wave of entrepreneurs.

Kogan started his business, Kogan Technologies from his parent’s garage just seven years ago at the age of 23. The growth of the business has been phenomenal. It took Kogan six and half years to sell his 1 millionth product in December last year and he reached the two million milestone just six months later. He has grown his business turnover to over $250M without using external capital. Meeting Kogan recently with a group of new age entrepreneurs provided some insight into what has fuelled Kogan’s success.

1.   Fresh thinking

The direct to consumer channel, using the internet is not new and is becoming more common place but Kogan’s construction of his business model was innovative. He found it difficult to crack the supplier market to provide him with his initial small volumes at an attractive enough price to be successful with consumers. After a long series of rejections, Kogan went away and totally redesigned a Chinese company’s poorly worded instruction manual, resetting the design and rephrasing text into user friendly English. This act of adding value to the supplier enabled him to secure that vital first order to get the business underway.

 2.   What ever it takes

Supplier delays and a hiccup with eBay his initial main sales channel placed him in a tight spot to meet a critical shipment payment. He scraped together all he could on available credit cards, including some hastily organised new ones before turning to a few close friends, who did the same and ultimately saved the day.

 3.   Next practice is better than best practice

Kogan has a strong work ethic and has enculturated his team and organisation in the same vein. “There is always a better way”, is the motto that Kogan’s staff live by. The company does not provide any formal training for senior managers. Kogan’s view is that formal training is for people who want to look like they are learning. Team members use Google to cross-skill and research issues, powered by having a strong will to learn and be pragmatic. As an employer he is dismayed at the number of applicants who are driven by a sense of entitlement rather than, the will to prove themselves and be successful.

4.    The power of social proof

Our buying behaviours are strongly influenced by what we see others do. The café half full with patrons is more likely to gain more customers than the empty one next door. Kogan has turned this behaviour to his advantage through a live feed on his website. Every few seconds the website flashes up the name of the suburb and type of purchase made through his site. “Someone in Dandenong brought a Galaxy Notebook” flashes up on his website complete with a picture of the product and a link to its details. Kogan also knows what every cent he spends on marketing is doing. He knows what people click on, what brought them in, what they searched, what links they chose, what pages they landed on and what made them stay on the site or leave. He has several full-time people in his business just doing data analysis of search statistics and he jokes that Kogan is a statistics business masquerading as an online retailer.

5.   Profit is not evil

Kogan does not hide his light under a bushel. He is proud of his personal success and the extraordinary growth of his business. He unashamedly provokes those with bricks and mortar businesses and old style thinking, gaining notoriety for himself and his business.

 Kogan has been remarkably successful in a relatively short period and seems on track for continued achievement. He has taken massive market share from long established, solid bricks and mortar businesses. He is one of many new entrepreneurs challenging the way we operate our businesses and how we deliver products and services to a new generation of consumers.

Is your business Kogan proof?

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