Three business gurus give something back - for a fee

Three high-profile former executives are offering their advice to medium-sized private businesses as a wave of ownership change is tipped to hit the sector.

The three - former Waste Management managing director Kim Ellis, former Brambles executive director and Mainfreight director Emmet Hobbs and former Fletcher Challenge building products group chief executive David Sixton - will work with management consultancy Seqel Partners. Their counsel will be made available, for a fee, to the owners of large and medium-sized, privately owned firms.

Seqel partner Don Jaine says there are big productivity gains to be made by improving efficiencies in businesses employing between 20 and 200 people. He argues that numerous business sectors need consolidating.

For example, he estimates there are about 2000 firms from which one can buy a kitchen in New Zealand, compared with about 20 in all of Europe.

"It's Kiwi culture but it's unsustainable because new technologies now mean that bigger businesses can be better businesses," said Jaine.

He points to the annual ANZ Privately Owned Business Barometer for evidence of developing succession issues. According to the ANZ, 62 per cent of business owners are over 50 and 23 per cent over 60. Although 45 per cent want to retire in the next five years, only 11 per cent have a formal succession plan in place.

As many as 10,000 businesses could change hands in the next five years if owners' objectives are achieved, the bank says. Ellis said he, Hobbs and Sixton would tap into their networks to help business owners. Now chairman of private equity-owned Metro GlassTech and EnviroWaste and listed Seeka Kiwifruit, Ellis said the concept started on the basis of the three businessmen giving something back. If it worked they would get a return.

Meanwhile Jaine also points to Seqel's own research that shows as baby boomer business owners retire over the next 15 years there could be a leadership deficit of 40,000 people due to lower numbers of educated and experienced people in the35-50 age group. That meant there was a major issue, and opportunity, in business ownership transition.