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Using 401(k) Funds to Start a Business

Greg Silberman of Ritterband tax & Accounting Solutions LLC is a member of XPX Atlanta
Greg Silberman
Ritterband Tax & Accounting Solutions LLC
4 months ago

There’s a huge demographic shift happening in the United States, as Rollovers as Business Start-ups. ROBS are rollovers that utilize your existing 401(k) retirement funds to finance a new or existing business without incurring early withdrawal penalties or buy a business, and you may not want to take on debt. The ROBS mechanism is a way to utilize your 401(k) savings to access the capital you need without incurring early withdrawal penalties.   Advantages of ROBS  Advantages of the ROBS financing method include:  Debt-free financing. With ROBS, you’re not borrowing money to put as a payment, a down payment or principal payment on a business. ROBS funds are equity you already have that ordinarily can’t be accessed because of the distribution rules of retirement plans.  Preserved cash flow. Using saved capital eliminates concerns about high interest rates that can hinder business growth.  Improved business success rates. ROBS may contribute to a business’s success compared with traditional methods of financing. Owners using ROBS are fully vested and perhaps more incentivized to make the business work. In addition, there’s no impact on personal credit.  Steps to Using ROBS to Fund a Business  Here’s how ROBS work and how to start the process.  The first step is establishing a retirement plan like a 401(k) or profit sharing plan for the acquired C-Corp business.  The third step is rolling over funds from your personal 401(k) into the new corporate 401(k). The new retirement plan purchases stock in the corporation, which provides it with the capital needed.    You can continue to make ongoing retirement contributions to the tax-advantaged retirement account as the business grows.  Points to Know about ROBS  Whenever money goes back to the 401(k), there’s a sale of the business, or the business declares dividends, that money will pass back directly to the shareholder’s 401(k) plan.   There’s the potential for a total loss. If the business fails, your stock in your C-Corp could go to zero, providing a loss to your 401(k).  There’s a cash flow and business financing options can help you set up your C-Corp and determine how to make the ROBS strategy work for you. Having a professional help you navigate ROBS’ complexities ensures compliance and 

Avoiding the Customization Trap

Laura Ferguson of The Value Builder System is a member of XPX
Laura Ferguson
The Value Builder System
6 months ago

In a recent research study by The Value Builder System™, they analyzed data from 20,000 business owners who completed a Value Builder assessment of their business and discovered that owners who have businesses dependent on them, known as Hub & Spoke owners are facing a 35% discount on the value of their businesses and part of the problem may be the degree of customization they offer. For the purposes of the study, a Hub & Spoke owner is someone who answered the question “Which of the following best describes your personal relationship with your company’s customers?” with the response, “I know each of my customers by first name and they expect that I personally get involved when they buy from my company.”  One reason customers want the owner to personally attend to their project is the degree of customization Hub & Spoke owners offer.  In fact, the study shows that Hub & Spoke owners are more than twice as likely to say they offer a complete custom solution for each customer.  Since the owner is usually the person with the most subject matter expertise inside their company, it’s not surprising customers want the owner’s full attention on their job. The secret to making a business less reliant on its owner is to stop offering a custom solution for every customer.   How Ned MacPherson Built More Value By Doing Less   Ned MacPherson is a digital marketing guru, so it’s not surprising that when he first started offering his time, it was in demand.   In the early days as a consultant, he offered all sorts of growth hacking services. But when demand outstripped his supply of time, Ned had a decision to make. He could either turn away prospective clients or build a team of consultants underneath him.  As a growth guy, the idea of treading water didn’t appeal to Ned, so he opted to build a team. However, to ensure his team could execute without him, Ned decided to focus on one service offering: post-click analysis. Rather than help optimize a website for the entire customer journey, Ned’s company would become one of the world’s leading firms on optimizing a customer’s journey after they opted in to a website.   Most digital marketing consultants offer a wide range of services, but Ned knew it would be impossible to remove himself if they offered help in too many areas. By specializing in post-click analysis, Ned and his team were able to streamline their offering. Demand for Ned’s time started to diminish as his employees became some of the world’s leading experts in a narrow slice of the analytics market.   Within seven years of starting Endrock Growth & Analytics, Ned had 70 employees, more than $2 million a year in EBITDA, and multiple acquisition offers.   

Are De Novo Banks Ready for a Comeback?

David P DeMuth
CFO Consulting Partners LLC
1 year ago

By Eric Segal The banking landscape has consolidated in the last three years. Maybe it was runaway inflation that caused cost-cutting branch closings. Or it was bigger banks gobbling smaller banks for quick market share. And let’s not forget the industry’s ongoing march toward digital transformation, which grabs more traction each month. Whatever the cause, several data points tell us that we may have reached an inflection point in the business cycle. Earlier this year, the Federal Reserve Bank of Philadelphia issued a report that found the closures of bank branches in New Jersey, Pennsylvania and Delaware has more than doubled since the pandemic. The three states lost a combined 627 branches during that time period, increasing the number of “banking deserts” to 63 areas in the region. Recent bank and branch consolidation have created some pockets of opportunity and could trigger the next wave of de novo banks. But here’s the catch: You may only need to raise $30 million of capital to open a bank, but you will need a lot more to make it successful. Crown Bank Vice Chairman Paul Fitzgerald says “due to ever increasing compliance costs, banks need to reach a critical mass sooner rather than later.  The first target is usually $100 million in assets.   Banks will not need a branch on every corner, but a well-defined branching strategy is still important.  Technology can help reach the target critical mass right from the start.” For startup banks, it’s not a straight line to success. Here are four factors a de novo bank needs to be part of the next wave: The Right Team If you have the right senior management team, they will hit the deck with existing relationships. Stocking the board with experienced directors who believe in the mission, however, could be the factor that turns a startup bank into a major success. Fostering unity on the board—with everyone on the same page supporting the business plan—would create a constructive environment. There is a period in the beginning when banks are on “probation.” When you give regulators a business plan, they view it as a contract. You are communicating to them that you will do in the first three years, which means you will have to explain every variance. If the board is not aligned on the plan, then you will have a problem. A supportive board can be the X-factor. Engaged board members will open doors and share their business relationships, which can give a de novo bank instant credibility within the community. And that’s an important thought when you consider the history of de novo banks driven by local business owners who felt their community was ignored by mergers that left their region without access to banking decision-makers. The Right Area Location. Location. Location. To be successful, you will need to launch your de novo bank in an area with attractive demographics for both consumer and commercial business, and that also has an abundance of experienced talent with industry experience. When it comes to winning over your new customers, make operations revolve around them. “When I started a bank in northern New Jersey, my office was visible from the main lobby” Fitzgerald said. “People could talk to me when they wanted. In large banks many of the credit decisions are now made out of state by anonymous back-office people. There are a significant portion of business owners who appreciate access to senior management.” Successful new banks don’t really start from scratch. The right relationships with other banks in the market could also yield participation loans, which are funded by multiple lenders to reduce risk and manage liquidity. These facilities can help startup banks generate interest income on the first day. Access to the right lending, operations, and senior management team also plays a large role in selecting the right trade area for a startup bank. De Novo banks can benefit from outsourcing some finance, accounting, balance sheet management and credit administration tasks until the core team has the bandwidth to take them on. One of my colleagues, Larry Davis, who has more than 25 years of senior financial management experience in commercial banking and manufacturing, has worked to train and mentor a de novo bank finance team with virtually no bank experience. “The regulators didn’t believe they had enough banking experience on the accounting team, so they called us,” Davis added. The Right Technology In today’s digital, on-demand world, banks must give serious thought to the right array of fintech providers, a daunting task. CFO Consulting Partners is part of the advisory board for

Whatever happened to Jim Collins’ “Good To Great” companies?

Mike Lindert of Sales Xceleration is a member of XPX Chicago
Mike Lindert
Sales Xceleration
1 year ago

Whatever happened to the original 11 companies Jim Collins featured in his 2001 book Good to Great? As part of a review I recently Key Findings. The research team discovered many lessons along the way, but one “giant conclusion” stood above the others. Their research confirmed that “almost any organization can substantially improve its stature and performance, perhaps even become great, if it conscientiously applies the framework of ideas they [the Collins team] uncovered.” Additional lessons learned from the companies that went from good to great: Celebrity Leaders. Famous leaders with larger-than-life personalities who ride in from the outside were negatively correlated with taking a company from good to great. Executive Compensation. There is no systematic pattern linking specific forms of executive compensation to the process of going from good to great. Strategy. The strategic planning process did not separate the good-to-great companies from the comparison companies. Both sets of companies had well-defined strategic plans, used similar planning processes, and spent comparable amounts of time on long-range strategic planning. What Not To Do. Good-to-great companies focused less on what to do, than on what not to do, and what to stop doing. Technology. Technology-driven change has virtually nothing to do with igniting a transition from good to great. Technology can only accelerate a transformation but cannot cause a transformation. M&A. M&A plays virtually no role in igniting a transition from good to great. Merging two mediocre companies never make one great company. Focus on the business. Good-to-great companies create alignment and motivation by focusing on running their business rather than getting distracted by large-scale change management initiatives. No Launch Event or Revolutionary Process. Good-to-great companies had no name, tagline, or launch event to signify the start of their transformation. Most were evolutionary, not revolutionary. Greatness is primarily a matter of conscious choice. Good-to-great companies were not, by and large, in great industries; some were in terrible industries. Greatness is not a function of circumstance (i.e., sitting on the nose cone of a rocketship). What I Found Interesting. Few people realize that as unfortunate as Collin’s only high-profile bankruptcy was of his original 11 Good To Great companies, a rise-from-the-ashes story emerged shortly before the Circuit City bankruptcy happened. The Circuit City management team accelerated the spinoff of another one of their start-ups, called CarMax (NYSE: KMX), which has since grown into a juggernaut that today employs 32,647 people and generates $31.9 billion in annual revenue. It’s interesting to note that even when the original Circuit City business model was failing to keep pace with their larger rival, BestBuy, their leadership team had the foresight and was able to fund and launch the next great idea – while continuing to build both businesses for a few years until they were able to safely step off the sinking Circuit City ship and onto the CarMax lifeboat they had launched. Summary – The book organizes a highly complex, multi-year research project into groups of insightful examples using a framework that supports and explains their findings. The case studies were well-researched and easy to follow, and I appreciated the handy summaries at the end of every chapter. I was impressed with the breadth and depth of the research put forth to write the book. Based on years of empirical research, data gathering, interviews, and real-world examples, it provides an understandable path for helping companies move from good to great.

IS YOUR BUSINESS RUNNING ON EOS®? HERE’S WHERE MARKETING PLUGS IN PERFECTLY!

Dina Wasmer of Incite Creative is a member of XPX Maryland
Dina K. Wasmer
Incite Creative
1 year ago

If your business performance is lackluster, take a closer look at how it’s operating. And if you’re a business owner already running your company on EOS® – the Entrepreneurial Operating System — congratulations! You’ve already taken an essential first step toward gaining clarity around your goals and organizing the milestones for how you and your team will achieve them. But where and when does marketing fit into the equation? EOS® plugs marketing strategy into a two-day Vision Building™ Agenda and seven other important topics. That’s a great start, but it only scratches the surface. A comprehensive EOS Model® provides a visual illustration of a six-piece pie chart comprised of the components it deems essential to any business, including: Vision People Data Issues Process Traction Vision Powered by Marketing Strategy & Planning Arguably the foundation for success, and the focus of this article, a company’s vision typically encompasses its core values, purpose, passion, niche, and unique value. It is designed to inspire and motivate employees to work toward a common goal. So…what happens when there’s no clarity around the vision? No focused goal and zero hopes of achieving it. EOS® corrects this by getting everyone in the organization crystal clear about where they’re going and how they’ll get there. But here’s the thing — if you only consider yourselves in this vision, you’re leaving out an essential piece of the picture — your customers. Marketing plays a crucial role in clarifying a company’s vision. Effective marketing is about understanding your target audience and communicating your company’s purpose and values to them in a way that resonates. In other words, your vision needs to align with the needs and desires of your customers. By conducting Positioning Workshop, SWOT analysis, and competitive and industry research, you will unearth existing brand perceptions, gain vital insight to determine if those perceptions will help or hinder your value proposition, and allow you to adjust your vision accordingly. What if, for example, Patagonia’s vision to “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis” lacked a sizeable enough target market that cared enough about Mother Earth to pay $299 for a jacket? It would be a company without any customers and any profit. Luckily for Patagonia, the company’s vision seems to resonate with the strategic marketing plan to your operating system, and you’ll get the insight you need to realize your vision. And stay tuned for our upcoming contact Incite Creative. We have over 23 years of marketing expertise and have worked with businesses running on EOS® and welcome the opportunity to partner with EOS Implementers®. outsourced CMO services. In short, we become your company’s chief marketing officer and do so virtually and efficiently — saving you time and money. Since 1999 we’ve had the pleasure of building and boosting brands for a core set of industries. Our thoughtful process, experienced team, and vested interest in our client’s success have positioned us as one of the Mid-Atlantic’s most sought-after marketing partners for those looking to grow their brand awareness and bottom line. Stop paying for digital and traditional services you may not need. Our retainer, no markup model means our recommendations don’t come with any catch or commission. Our advice aligns with what you need and what fits within your budget. For more information, contact us at 410-366-9479 or info@incitecmo.com. 

New RSG Workshop in MA – “Professionalizing the Family Business”

Greg Romero of Romero Solutions Group is a member of XPX Greater Boston
Greg Romero
Romero Solutions Group
1 year ago

RSG is excited to announce our new workshop titled “Professionalizing the Family Business,” which is initially available to MA-based family businesses.  Generous state funding is available since our workshop is approved through the MA Workforce Training Fund – specifically the Express Program. If you have existing MA clients or others in your network that might benefit from the workshop, let’s discuss further and/or please feel free to share.  Thank you!  Below are a few workshop highlights and the link to my workshop summary page. Workshop Summary Page: Overview: Through our workshop, we interact one-one one with your family business participants, teaching you how to further “professionalize” your organization, while preserving the company’s unique attributes, culture and history.  Our instruction covers your current state of professionalism, improvement areas, prioritization and a change roadmap, as well as important considerations for the family dynamic. Defining Professionalism: An approach to managing your operating rhythms that is organized, clear and repeatable in order to effectively execute upon your company’s big picture objectives. Benefits: Improved organizational effectiveness A more sustainable business model A healthier organization and culture Course Structure: 9 hours of interactive instruction, broken out over 3 sessions Available for up to 8 of your employees At your office and/or virtual sessions available Pricing: $6,000 flat fee with generous MA state funding that could very well allow for quick full or partial MA state reimbursement. Know your state funding eligibility and approval status quickly (typically within 3 weeks) and before you decide whether or not to take the workshop.    

Cash Balance Plans – retirement plan on steroids

Michael J Schodrof
Alex Brown
1 year ago

I’m having a lot of client dialogue on Cash Balance Plans (CBPs).  A CBP is the third sleeve of a Retirement Plan – following the standard 401k and Profit Sharing sleeves of traditional plans.  The contribution limits are substantial allowing participants the ability to contribute significant $s pretax and to grow those contributions tax deferred. The plan is particularly attractive to organizations that are top heavy with highly-compensated employees or partners, but can also be relevant for sole proprietors.  Contact me if you would like to learn more.  michael.schodrof@ubs.com    

Managing Today’s Reality of Excess Inventory

Dan Kaplan of SMC Data Systems is a member of XPX New York
Dan Kaplan
SMC Data Systems
1 year ago

Managing Today’s Reality of Excess Inventory:   The Domino Effect of Having Out-Dated Software Systems.   Not having real time information on the fast-moving products. Not having accurate information of the inventory level in multiple locations. No method of tracking Vendor Reliability of ON-TIME deliveries.   What are the Results of Excess Inventory? Late shipments will result in production disruption. Order cancellations will result in excess inventory. Reduction of Profit from reduced sales price to move excess inventory. Cash on hand reduced as funds are tied up in unsold inventory.   How to Manage the above issues! Replace the outdated software with real time software needed to: Better manage everything related to sales and inventory   The Benefits Resulting from Real Time Software! Understanding inventory turns to maximize inventory at item levels. Knowing Vendor Reliability to achieve better product availability! Understanding the inventory availability when managing multiple locations.   For additional information visit our website 

Your Most-Googled Financial Questions Answered: Should I Rent or Own My Company Building?

Bill McDermott of The Profitability Coach is a member of XPX Atlanta
Bill McDermott
The Profitability Coach
2 years ago

As a business owner, have you ever thought about whether you should own or rent your company building? It’s likely you have since it’s one of the top most-Googled financial questions in the U.S. Every business has a big dream for their business and wants to make it happen. But, along the way many business owners question the money they’re paying in rent for their company building. Further, the combination of increases in rental rates coupled with lower-than-normal commercial mortgage rates (until recently) have caused many CEOs to ponder this question. Continue reading:

Why Accountability is Vital to Your Company and How to Implement It

Bill McDermott of The Profitability Coach is a member of XPX Atlanta
Bill McDermott
The Profitability Coach
2 years ago

One of the topics I talk about most with business owners is accountability. Each situation is different, but rarely do I have a client that doesn’t struggle with accountability at some point over the course of owning their business. One client right now has run a very successful company for over 48 years. But when I asked the CEO who was accountable for sales, she told me that the business had always been run with no one accountable for sales. Recently, I was talking to a staffing firm and the CEO was accountable for everything. If no one else is accountable in an organization, then it all falls to the CEO. And then sometimes there’s split accountability where two people are responsible for the same thing. When this happens, each person typically assumes that the other person is accountable for that area. In an ideal world as a CEO or business owner, it’s really important that there be one person each accountable for the three main functions in a company: sales, operations, and finance. Continue reading:

Can you cash out using an SBA Loan?

Dominick Wallace of Wallace Capital Funding is a member of XPX Atlanta
Dominick Wallace
Wallace Capital Funding
2 years ago

Loans from the U.S. Small Business Administration can help businesses “start, build, and grow” but can they also be used to cash out? If you are a small business owner, chances are you have heard of SBA loans. If you haven’t, SBA loans are a means of funding for small businesses through the U.S.’s Small Business Administration. These loans give small business owners the chance to get financing with the backing of the federal government. The federal government guarantees the loan so if something happens, they will pay back the bank if the loan defaults. Say you invested $500,000 in the constructing and building of your business and you wanted to cash out. Could you actually cash out using an SBA loan? One couple came to Wallace Capital Funding, LLC with the same question. The couple had a long history of coaching local kids in basketball and wanted to have a basketball facility of their own as a way to give back to their community. But not just any basketball facility, they wanted to have a world-class basketball gymnasium for kids to come and train. Without taking out any loans, the couple invested $3 million of their own money and brought this multi-million dollar facility to their community. The facility turned out to be a large success and amassed millions of dollars in value. The couple wanted to see if they could cash out their investment through an SBA loan. The answer is it depends. Currently, we are looking into the method of how they invested into their business. Under SBA guidelines, there are regulations on ways and how much you cash out? Every transaction is different, and unique rules apply to your specific opportunity. The benefit of working with Wallace Capital Funding, LLC instead of a bank is that we will work with you to ensure the structure of your loan application under SBA guidelines from a business owner point of view. WCF consultants will use the Business Funding Analysis to help structure the deal properly so you can get the cash your business needs. You can also join WCF’s mailing list, which can be found on our website or give us a call at 1-800-809-5629 to learn more. For all of your business financing needs, Wallace Capital Funding, LLC can help. Whether you need funding for new equipment, financing commercial real estate, or to cover staff expenses before your contract payment comes through, Wallace Capital Funding, LLC can create a custom funding solution that’s right for you.

How to get 100% financing on a million-dollar, multi-family property

Dominick Wallace of Wallace Capital Funding is a member of XPX Atlanta
Dominick Wallace
Wallace Capital Funding
2 years ago

A valuable asset with guaranteed income without paying a dime After reading the headline, you might be asking yourself — “How can I really afford a million-dollar, multi-family property without paying anything?” With the help of Wallace Capital Funding, LLC, one client was able to make it into a reality. However, he first needed to guarantee his own financing so we could then use the Business Funding Analysis (BFA). This client originally owned ten single family homes in the Birmingham area but wanted to own his first multi-family property. The type property of interest was a rarity. With 36 apartment units, the whole property had a HAP Contract, was classified under Section 8 housing, which guaranteed our client would get monthly income directly from the government. It is like buying a business with guaranteed income. Vacancy rates are also much lower for those investing in Section 8 properties. This is because renters are more likely to stay and renew year after year. And in many markets, Section 8 properties attract a long waiting list of interested tenants. We have established how great this opportunity is but how do you get into a property with no money down? The first step is to determine if you and your business can qualify for additional funds using the BFA. If you don’t remember from our last

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How to Post a Photo and Company Logo to Your Member Profile: A Step-by-Step Guide

Cheryl Centeno of XPX Global is a member of XPX
Cheryl Centeno
XPX Global
1 day ago

Enhance your member profile by adding a photo and your company logo! It’s a great way to personalize your presence and showcase your organization. Follow these simple steps to update your profile: 1. Log In to Your Account First, make sure you’re logged in to your member account by going to www.exitplanningexchange.com and clicking on the Log In button on the top right-hand corner of the page. Remember to use the email address associated with your member profile as your username. 2. Go to Your Profile Once logged in, navigate to your member profile. You can usually find this by clicking on your profile picture or your name at the top of the page. 3. Select “Edit Photo” Look for the “Edit Photo” button—typically located near the top of your member profile’s dropdown menu (photo below). Click on it to upload or update your high-res photo.

New Years Resolutions: Why They Miss the Mark, and What to Do Instead

Maria Forbes of FIREPOWER Business Catalyst, LLC. is a member of XPX Atlanta
Maria C Forbes
FIREPOWER Business Catalyst, LLC.
5 days ago

Entrepreneurial business owners, is it time to consider a new approach to setting goals in the New Year? We’ve all been there. January 1 rolls around, and we set resolutions with the best intentions. “This will be the year I double my business,” we say. An article in Forbes 1 states by mid-February, 80% of people have made their resolutions a distant memory. Why? Because we have high ambitions hinging on mostly unrealistic and unsustainable methods, setting broad, lofty goals without a roadmap is like trying to sail a ship without a compass—directionless and daunting. There is a simple fix for this problem.  Start the road map with some pre-work. The root issue? New Year’s goals should always start with who you are, how you want to serve, and what you want to enjoy. If you start a New Year’s Resolution with what is trending in the world, in business, or in society, you will leave some or all your resolutions behind as you realize there is a misalignment between who you are and what is trending. It’s all one path! As business owners, we are bombarded with tasks that can be exhausting and lack enjoyment. Goals should be derived from envisioning a picture of your personal world: God, business, family, your unique personal desire to share creatively, and the core of who you are, so your business and your world are synced within a set of goals. What should your world look like in the New Year? Don’t compartmentalize! Your business cannot be separated from all the rest; successful business owners know who they are and how they intend to serve.  Get reacquainted with who you are, your personal talents to serve (clients, friends, family), and how you can get back to enjoying your life. Now we can talk about Business Resolutions You know what you want to achieve for your business. Now, make it a team effort. Go beyond your own efforts to engage your team in goals that are well aligned with their strengths and do it in a doable fashion that engages the spirit of growth together. The Problem with Most Resolutions Resolutions lack specificity, accountability, and, most importantly, our teams’ collective firepower. Transformative change doesn’t come from wishful thinking but from actionable, measurable steps involving everyone on deck. So, what’s the game plan? Shift from solo resolutions to team-powered actions. Set Specific Goals: Break down that big vision into smaller, achievable milestones. “Increase sales by 10% in Q1” beats “Double my business” for clear targets. Harness Team Strengths: Every member has unique skills. Use them to your advantage by assigning roles that match their strengths and watch motivation soar. Perform Regular Check-Ins: Make accountability a team effort. Frequent updates keep everyone on the same page and moving forward together. Celebrate Wins: Whether you hit a small target or make significant progress, celebrate as a team. This will help you feel more united and keep the momentum going. Making Sustainable Resolutions Remember, a sustainable resolution starts with the core of who you are as an owner, how you want to serve, and what is enjoyable to you.  Once you know what you want to achieve for your business your team can help you get there. With some pre-work, a New Year resolution might spark the fire, and then your team’s day-to-day actions will keep it blazing.

Quantum Computing Investments: Key Players, Risks, and Opportunities for 2025

Billy Amberg of Bloomwood is a member of XPX Atlanta
Billy Amberg
Bloomwood
6 days ago

Listen to this post as a podcast: www.adviserinfo.sec.gov). Please read the disclosure statement carefully before you engage our firm for advisory services. The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor.   The views expressed in this commentary are subject to change based on the market and other conditions. These documents may contain certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur.    All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed.  There is no representation or warranty as to the current accuracy, reliability, or completeness of, nor liability for, decisions based on such information and it should not be relied on as such. Bloomwood is a registered investment advisor. Advisory services are only offered to clients or prospective clients where Bloomwood and its representatives are properly licensed or exempt from licensure. 730 Starlight Lane, Atlanta, GA 30342.

What to Expect in 2025: Changes to the Three Branches of Government

Robert Brody of Brody and Associates, LLC is a member of XPX Tri-State
Robert G. Brody
Brody and Associates, LLC
2 weeks ago

As we enter 2025, businesses face a rapidly evolving employment law landscape shaped by dynamic shifts across all three branches of government. With a new president set to take office, significant developments at the Supreme Court, and the Republicans securing control of Congress, 2025 is shaping up to be a year defined by upheaval. Each branch of government will be different than any of us have seen in decades. The Executive Branch First and foremost, Donald Trump’s second presidential term is set to begin on January 20. Over the last four years, the Biden administration, known for their pro-employee policies, ushered in a wave of regulations aimed at expanding worker protections. Conversely, the Trump administration is expected to continue their pro-employer, laissez-faire approach that prioritized deregulation and employer flexibility during his first term. (Interestingly, the Trump Administration has started supporting more union issues and no one knows how that will impact his second term.) Significantly, labor and employment law developments often arise from action on behalf of various agencies such as the National Labor Relations Board (“NLRB”) and the Department of Labor (“DOL”). Because these agencies are part of the Executive branch, the president is effectively charged with overseeing them, and therefore plays a significant role in the implementation of their policies. Employers should expect Trump to utilize these agencies to implement his pro-business agenda. It is worth noting, however, that a 2024 Supreme Court decision (Loper Bright Enterprises v. Raimondo) overturned the long-standing Chevron doctrine, a legal principle that directed courts to defer to federal agency’s interpretations of law that agency is empowered to enforce. As a result of this decision, the Executive branch was effectively weakened, shifting greater interpretative authority to the Judicial branch. It will be interesting to see how much impact this change will have on the balance of power among our branches of government. The Judicial Branch Loper was not the only Supreme Court decision in 2024 that contributed to the shift in power in favor of the Judicial branch. The Supreme Court’s decision in Dobbs v. Jackson Women’s Health Organization, overturned the landmark abortion decision Roe v. Wade. Historically, courts, including the Supreme Court, follow precedent created by earlier decisions. But now the Supreme Court showed its willingness to overturn longstanding precedent based on a difference in their opinion of what is right or wrong. This shift away from strict adherence to precedent allows the Supreme Court greater latitude to reinterpret past decisions. With more flexibility to pursue a wider range of cases, as well as greater interpretive authority, the Judicial branch is shaping up to be much more powerful than it has been in the past. The Legislative Branch Lastly, in the 2024 election, the Republicans secured a majority in both the House of Representatives and the Senate. This means that the Legislative branch will have broad authority to enact their agenda over the next two years. Additionally, with Donald Trump in the White House, the likelihood of presidential vetoes decreases significantly.  This alignment will increase the likelihood that Congress will pass more new laws than is typically seen under a divided legislature. As a result, employers should closely monitor what new laws Congress enacts. Employer Takeaways Overall, the three branches of government are all undergoing significant changes. Donald Trump is likely to resume his pro-employer agenda, albeit with a slightly weakened Executive branch in the wake of the Loper decision. The Judicial branch is as powerful as ever, exemplified by the Supreme Court’s willingness to overturn longstanding precedent. Lastly, with Republicans in control of both the Senate and the House, the Legislative branch is primed for significant activity through 2026. With all these changes taking place, it is crucial for businesses to keep abreast of developments in labor and employment laws to ensure compliance and minimize legal risk in the new year. Brody and Associates regularly advises management on complying with the latest local, state, and federal employment laws. If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560.

Developing Leadership Depth for Business Exit Readiness

Marci Caudle of Tagro Solutions is a member of XPX Philadelphia
Marci Caudle
Tagro Solutions
2 weeks ago

A robust leadership pipeline is crucial for any business, but it becomes particularly vital when preparing for a business exit. Whether you’re planning a sale, merger, or leadership transition, ensuring that your leadership depth is strong can significantly enhance the attractiveness and value of your business. This HR Insight explores how strategic human resources management can cultivate leadership depth to support a smooth business transition. The Importance of Leadership Depth in Exit Planning Leadership depth refers to a company’s ability to fill key leadership roles from within, ensuring business continuity and operational stability. For businesses considering an exit, strong leadership depth reassures potential buyers and investors of the company’s resilience and future performance potential. A well-prepared leadership team can effectively manage transitions, uphold company values, and drive growth, even during periods of change. Strategies for Developing Leadership Depth Leadership Development Programs: Implement comprehensive leadership development programs tailored to your company’s needs. These programs should focus on nurturing high-potential employees with critical skills such as strategic thinking, decision-making, and change management. Methods might include formal training sessions, mentorship programs, and leadership retreats that emphasize real-world business challenges and leadership responsibilities. Succession Planning: Effective succession planning is essential for ensuring that key positions can be filled quickly and competently. HR should work with current leaders to identify potential successors for each critical role. This process includes assessing the skills and readiness of potential leaders and providing targeted development opportunities to prepare them for future roles. Talent Identification and Management: Use talent management tools and assessments to identify employees who have the potential to become future leaders. Once identified, provide these individuals with customized development plans that align with their career aspirations and the company’s strategic goals. This approach not only prepares them for leadership roles but also helps retain top talent by actively investing in their career growth. Performance Management: Align performance management systems to leadership development goals. Regular performance reviews and feedback sessions help potential leaders understand their strengths and areas for improvement, ensuring they are on the right track to taking on more significant roles within the company. Cultivating a Leadership Culture: Foster a culture that promotes leadership from every level of the organization. Encourage employees to take initiative, lead projects, or mentor others. This environment supports leadership development organically and can identify and elevate hidden talents within the organization. The Impact of Leadership Depth on Business Valuation A strong leadership team can significantly enhance a company’s valuation during an exit. It demonstrates to potential buyers and investors that the company is well-managed, has a clear direction, and is capable of sustaining growth without the original owner or current leadership team. Additionally, companies with effective leadership transitions are more likely to maintain performance levels during and after the exit process, reducing risks associated with the transition. Developing leadership depth is not just about filling positions but about creating a sustainable framework that supports the company’s long-term goals and ensures a legacy of success. As businesses prepare for exit, the role of HR in cultivating this environment becomes a cornerstone of strategic exit planning. By investing in leadership development, companies not only enhance their marketability and potential sale value but also secure a stable and prosperous future for all stakeholders. At Tagro Solutions, we bring our deep expertise in Human Resources consulting to the table, aligning HR strategies with business objectives to enhance company performance and prepare for successful transitions. Our approach integrates seamlessly with the philosophy of the Exit Planning Exchange, which fosters collaborative exchanges of information and experiences among its members. Together, we aim to empower business owners through strategic insights and actionable solutions, making the journey from business operation to exit as profitable and smooth as possible.

New York City Mayor Signs Legislation Regulating Hotel Safety: What Employers Need to Know

Robert Brody of Brody and Associates, LLC is a member of XPX Tri-State
Robert G. Brody
Brody and Associates, LLC
1 month ago

On November 4, 2024, NYC Mayor Eric Adams signed into law the Safe Hotels Act (Int. No. 991-C) aiming to promote hotel safety and boost tourism. The Act, taking effect May 3, 2025, requires hotel licenses, restructuring of employment agreements, and a number of new staffing requirements. Hotel License Requirements Hotel operators defined as persons who own, lease, or manage a hotel, and control day-to-day operations, must obtain a hotel license from the Department of Consumer and Worker Protection (DWCP) to legally operate a hotel. Hotel operators must file an application with the Commissioner of the DWCP to obtain a license. The application must contain contact information as well as details of safeguards and procedures which show the hotel is in compliance with the Act’s staffing, safety, employment, and cleanliness requirements. The application will differ if the operator has a collective bargaining agreement (CBA) with a union. If the operator has a CBA which contains the required information and references the CBA in their application this may satisfy the Acts notification rules. The notification requirement will be satisfied for the term of the CBA or 10 years from the date of the application (whichever is longer). The commissioner must be notified if there are changes to the CBA which remove references to the Act’s requirements. The hotel license may be denied or revoked if operators fail to comply with the Act, however there are a number of notice requirements for the Commissioner prior to revoking a license. The Commissioner must notify the licensee of a potential revocation in writing. The licensee must be given 30 days from the notification to remedy the violation and this notice must be in writing. A license will not be revoked if it can be demonstrated that the condition has been resolved in the 30-day period. Evidence of this correction can be delivered electronically or in person. Upon the Commissioner’s decision, the licensee has 15 days to request a review of the decision. A license will not be revoked in the following situations: service disruptions such as construction work noise; conditions that the hotel is aware of and treats within 24 hours such as bed bugs, rodents, etc.; unavailability of hotel amenities for a period of 48 hours; unavailability of utilities for a period of 24 hours; and importantly any strike, picketing, lockout, or demonstration at or by the hotel. Hotel operators must display their license in a public area.   Employment Agreement Requirements The Act requires hotel owners, with 100 or more guest rooms, “directly employ” all “core employees”, except a single hotel operator to manage operations on the owner’s behalf. This rule effectively eliminates intermediaries such as staffing agencies or management companies. Core employees include those whose work relates to housekeeping, front desk, or front service. Valets, maintenance workers, parking security, and employees mostly working with food and beverages are not considered core employees. This provision greatly impacts employers who utilize subcontractors; however some contracting agreements may be grandfathered in if they are entered into prior to the effective date and have a specific termination date. Violating this provision may serve as the basis of license revocation. Staffing Requirements In order to maintain safe conditions for guests and hotel workers, the Act implements a number of new staffing requirements. One employee must provide front desk coverage at all times (during night shifts a security guard who has received human trafficking training may take this employee’s place). Hotels with more than 400 guest rooms must have a minimum of one security guard providing continuous coverage while any room is occupied. Hotels must maintain cleanliness and not impose fees for daily room cleaning. Core employes must receive training on how to identify human trafficking within 60 days of employment. Hotels must not accept reservations for less than 4 hours. Penalties and What Else Employers Need to Know Hotel operators are strictly prohibited from retaliating against any employee who discloses a potential violation or assists in an investigation. Hotel operators are also prohibited from retaliating against employees who refuse to partake in a dangerous activity that is not part of their job. As previously discussed, noncompliance can result in a hotel operator’s license being revoked, but that is not all. Anyone alleging a violation can seek a civil action within 6 months of the alleged violation. Furthermore, the Act provides for civil penalties which vary based on the number of violations: $500 for a first violation, $1,000 for a second, $2,500 for a third, and $5,000 for subsequent violations. The Commissioner is expected to issue rules by which this law will be enforced. A timetable for their issuance has yet to be set. Brody and Associates regularly advises management on complying with the latest local, state and federal employment laws.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560  

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