Jul 31, 2024
Jul 31, 2024
1 min read
Business growth
“Conflicts look bad. I always prepare touchy agenda points with my 2 senior leaders before leadership team meetings. This way senior leadership presents a united front,” recently mentioned the CEO of a 200-people company. Most leadership teams have too few open, healthy conflicts. This makes them less effective, reduces decision quality, and ultimately slows down business growth. How can you step outside of your comfort zone and mine more healthy conflicts? Healthy conflicts help propel your business forward Many CEOs stick to their comfort zone: you avoid some conflicts and embrace other, based on your natural conflict style – not based on what is best for your business. Artificial harmony created by conflict avoidance is treacherous, as this
Wealth managers and financial industry observers have pointed out that we are in the midst of a
How many decisions do you make every day? According to Cornell University
The Red Sea disruption forcing ships to go around Africa creates a new Supply Chain reality. It can lead to late deliveries of inventory resulting in disruptions affecting business globally. One of the noticeable issues is the Reuters report, “Tesla, Volvo Car in Europe Pause Output of Certain Car’s models.” Besides the production disruptions, late inventory arrival can result in order cancellations, often creating excess inventory which affects the warehouse. Besides the additional labor cost, it often results in using a 3rd party warehouse or purchasing/leasing additional warehouse space. These disruptions can lower profit margins and cause cash flow issues. Today’s reality of business disruptions makes companies realize that their outdated ERP Software, should be replaced with new integrated ERP/WMS Software that has a Warehouse Management module enabling companies to avoid business disruptions by having the features below: • Inventory availability after it was allocated for production or future orders. • Real-time Analytic information reflecting sales activity, what products should be ordered, and when. • From which vendor to purchase based on analytic information of promised delivery dates. • Customers’ buying patterns of products ordered. If the customer’s current purchases are less than in the past, the reason for this should be investigated. • If the accounts receivable overdue payment days have increased, the customer’s financial stability should be evaluated. Selecting New Software Before the software selection search starts, a committee should be established. Its members should be key people from each department and a requirements list should be developed. • The end users can provide important information that will be needed when the demos are conducted and they will have emotional investment once the software implementation starts. • The developed requirements list should be addressed at each demo. • All the demos should be a “workshop style” rather than a “slide show” with “bells and whistles.” • Not having the “workshop style” demo often results in purchasing the wrong software that does not meet the business’s unique requirements. • Having to change the business model to meet the software requirements will result in business disruption and the end users having a large learning curve. • Software functions that are beyond the users’ ability to learn will result in long implementation, and the project might be eliminated. • Before the decision to purchase the software is made, a visit to the software provider’s client in the same industry should be arranged. • Three people should be met at the vendor’s client site: the CEO, CFO, and IT manager. • The main question the above people should be asked: “How good is the software house hotline support?” • This is a crucial factor that should be considered. Not having good hotline support will result in severe business disruptions when an issue occurs and immediate support is not provided. Issues Arising from Multiple Software Often companies that have legacy software choose rather than replace it with new integrated ERP/WMS Software that has Warehouse Management they choose to buy it from Warehouses Software Vendor and have it integrated with the legacy software. Doing it will result in the issues listed below. • Stand-alone warehouse software can result in integration issues resulting in inaccurate inventory. • Having multiple software platforms creates issues when it’s upgraded. • Excess user efforts accessing multiple software results in business disruptions. • Often when one of the vendors has a software upgrade it might result in integration issues. • When having to contact multiple hotlines, vendors often don’t take responsibility resulting in business disruption. Case Study: Multiple Software • Large Food Manufacturers/Distributors decided not to upgrade their legacy software and purchased four software platforms from different vendors hoping it would enable them to meet their business requirements. • It resulted in the users having to access multiple software platforms resulting in excess efforts retrieving the needed information. • When one of the software platforms was upgraded sometimes it affected the main software platform or the other platform resulting in business disruptions. • When connecting the software hotlines each vendor claimed it was the other software vendor that caused the issues. • After a few incidents the management team decided to purchase new single database software that will have all the software modules needed supported by one vendor. • Before starting the software, a search committee was established having key end users for each department and a requirements list was generated. • The list was presented to each software vendor who gave the demo and made sure that besides addressing the business requirements the end users could master it without a large learning curve. Benefits of Single Data Base ERP/WMS Software • The end users without having to access four different software platforms instantly find the information needed. • The customers were able to place orders on smartphones and have a web portal where they could view various needed information. • Inventory in the warehouse is picked by using Voice Pick which has multiple language capabilities addressing today’s labor reality and RF Guns. • Streamlining the operation resulted in lowering operating costs and improved customer satisfaction. Overseeing Software Implementation Manufacturers and Distributors, who had outdated software, experienced production, and inventory control issues. It resulted in shipment delays leading to products being returned, excess inventory in the warehouse, and penalties affecting the accounting department which had to issue credits and adjustments, often missing the vendor’s early payment discount date. When the shelves were consolidated to receive new inventory, products sometimes were misplaced and were not found until the physical inventory took place. This resulted in excess inventory becoming obsolete. To resolve these kinds of issues, new ERP/WMS Software was purchased from the company we represent. The computer manager designated to oversee the software implementation was related to the president. Unhappy with the decision, feeling that the 20-year-old software he developed met the company’s requirements, he decided that purchasing the new ERP/WMS Software was the wrong decision and became an obstacle to implementing the software. His behavior resulted in implementation delays. The users, seeing his attitude, lost interest in the project and did not practice what they were taught. The president, with whom I had a long-term working relationship, asked me to meet him for lunch and expressed his concerns about the ERP/WMS Software going live on the targeted date. I asked the president to assign a different person to oversee the project. To prevent a family rift resulting from this action, I suggested the person be called the computer manager’s “assistant.” Extensive individual training should be given to the manager to enable him to get over the fear of learning the new software. After the training ended, the manager got comfortable with the new ERP/WMS Software, assumed the project’s responsibilities and the end users practiced what they were taught every day. Case Study: Benefits of the New Software Twelve months after the company went live with the new ERP/WMS Software, the president invited me for lunch again and told me: “I would like to thank you for helping resolve the issue I had with my relative. It prevented a family rift. The new integrated ERP/WMS Software streamlined the production and enabled my company to ship the products the same day, The company operating costs were lowered and the inventory accuracy is 99.6%.” Key Person Overseeing Implementation The large Distributor who bought the ERP/WMS Software from the company we represent had a computer manager who was eager to learn the new software functions. As soon as the project started, he addressed the users’ concerns about learning the new software and made sure they practiced daily. It resulted in going live on the estimated date and budget. The end users, before having the new ERP/WMS Software, had to access multiple software platforms to retrieve needed information. They were happy being able to retrieve information instantly without having to access multiple screens. this resulted in decreasing their workload and improved customer service. Implementing Software without Parallel Run • Before the Software implementation is conducted, the business requirements study should be conducted and a test environment should be established. • The legacy software data should be downloaded to the test environment daily and verified for accuracy. • Data verification will eliminate the need to run parallel software. • The end users should be trained in a test environment that has the information they are familiar with. • Software vendor key personnel should be assigned to each department i.e. accounting, warehouse, and purchasing. Going Live with New Software • Company-wide tests should be conducted in which the end users create errors in the “test environment” and then be able to correct their mistakes. • If the users cannot correct their mistakes, the going live date should be postponed and additional training should be given. • After going live with the new ERP/WMS Software, the training and technical staff should remain on-site to assist with any issues that might arise. ERP/WMS Software Case Study Attending the event at a major accounting firm I met the large Food Manufacturer/Distributor CEO who was the keynote speaker describing his experience of going live with the new ERP/WMS Software he bought from the software company we represent. “I had a sleepless night before we went live with our new ERP/WMS Software concerned about shipping the daily 800 orders to our customers who depend on us. I was relieved that we didn’t have any issues because the ERP/WMS Software House training and technical team were at our location. If any of the users had an issue, it was immediately resolved. The training and technical team stayed at our location until they were convinced that our users were proficient. I was also pleased that our ERP/WMS Software house Hot Line support personnel are all technical. When my users call, they get an immediate response, and any issues they experience are immediately being resolved.” About SMC & Dani Kaplan: Since 1980, Dani Kaplan has worked with Manufacturers, Distributors, and Food companies as a trusted advisor helping them lower their operating costs, streamline their operations, and control the inventory. Dani can be reached at Dani.kaplan@smcdata.com
“I should demote myself!” joked the head of sales. “It looks like I am better at selling than at managing a sales team.” We were looking at his team’s individual sales numbers. He was selling more when he was a regular salesperson than his whole team today. We too often promote the wrong person into a senior leadership position. The reason is: the promotion criteria we use are poor predictors of people’s leadership potential. How can you better identify potential senior leaders and avoid painful mistakes – so you can grow faster and with less pain? Why are we so bad at promoting the right people into leadership positions? We are all biased. We tend to overestimate specific traits we mistakenly believe indicate leadership potential. Common biases include: Past successes. Unfortunately prior performance is not a good predictor of leadership performance.
The other day, a marketing expert asked me for “a hook” to explain what I do. I replied, “I sell smaller companies to larger companies, I am an M&A Advisor”. The truth is that I often say no to a lot of owners who ask me to sell their business, or hear no from a lot of buyers who take a look at my clients. So painful. You see, many business owners are really accidental entrepreneurs. If you are a business owner, maybe you got good at something working for someone else. Then you got ticked off at your boss, or the company goes out of business (because THAT owner failed to build business value), and someone hires you to do a job. That job turns into two, then 10, then 50, and so on. Before you know it, you have to hire employees (ugh), and you have a business. You work every day – Sundays too. 60, 80, 100 hours a week. Skip vacations. Miss your kids’ birthdays and soccer games. Whatever it takes. Why, because “no one else can do the job better than you”. 25 years go by and you feel an ache in your back, or your hip, or your head, and you say – “maybe I can sell this thing”. So you ask your CPA for some names of brokers or M&A advisors and make some calls. Then you get stabbed in the heart, when people like me tell you that your business is not really a business – it’s a job with employees, and late invoices. Hard to relive 25 years – isn’t it? If you want to change this outcome – there is hope, BUT it takes time and money to make your business sell-able. It starts by swallowing your pride and doing the work ON your business. You can turn things around over a few years, and come back to me with real profits, proven systems, and a key manager or two that you trust to run the business. That is when I say, “I can sell your business”. And the pain starts to go away. Maybe you even start to smile – again. It can happen, but it’s your choice: “Whatever it takes” or “Whatever happens” Which do you choose? ********************************* If you are a business owner who’d like to think more deeply about your business, try the
Homogeneity among your leadership team is like a decadent creamy chocolate cake: it feels tempting, but when you resist it, you get in much better shape. Increasing diversity on your leadership team leads to better decisions – and better financial results. However we have a natural tendency to surround ourselves with people similar to us: diversity is harder. How do you know whether your leadership team is diverse enough? Why is diversity important? Plenty of research has demonstrated that increasing diversity on your team enhances your top and bottom lines. Among others, as this
The Annual Government Contractor Awards celebrate Small Emerging Contractors Advisory Forum (SECAF) members and other government contracting organizations that have demonstrated a commitment to industry excellence. Award categories showcase companies of all sizes, plus key projects and outstanding executives. Your clients and exit prospects in the GovCon industry can benefit from the exposure that comes with being considered for one of these prestigious awards. This event is attended by many organizations and private equity firms with interest in acquiring smaller government contractors and nomination can give your clients visibility before the larger acquirer community. Award winners will be selected from a group of finalists in the following categories: The SECAF Government Contractor of the Year award recognizes companies that have shown a compelling and profound commitment to excellence in financial performance. There is one award per revenue category: SECAF Government Contractor of the Year (under $7.5 million in revenue) SECAF Government Contractor of the Year ($7.5 to $15 million in revenue) SECAF Government Contractor of the Year ($15 to $27.5 million in revenue) SECAF Government Contractor of the Year ($27.5 to $50 million in revenue) The SECAF Award of Excellence award highlights organizations that represent excellence within their respective communities, the government contracting industry and towards employees. To qualify for this award, organizations must have under $50 million in revenue and be an active SECAF Member. The SECAF Government Project of the Year award recognizes companies that have delivered an exemplary program with significant value to the federal government. To qualify for this award, organizations must be an active SECAF Member. The SECAF Executive of the Year award is presented to an Executive (such as a CEO, President, Founder) who has shown a profound commitment to excellence to their company, the community, the government contracting industry and towards their employees. There is one award per category: SECAF Executive of the Year (Under $25M) SECAF Executive of the Year ($25M to $50M) Visit for more information.
“You don’t belong here: you are a fraud! Why would smart people ever want to listen to you?” whispered the manager to the salesperson. Galvanized by this wake-up call that he desperately needed, the employee rose to the occasion and exceeded all expectations. Does this sound realistic? Of course not! Who would feel upbeat by such senseless, demotivating speech? This scenario obviously never existed – and yet the speech is 100% authentic: I heard it from a sales executive last week. It wasn’t directed at a team member though: it was directed at himself. Your inner critic: your #1 judge. We all have an inner voice that continuously judges us. Its main message varies from person to person; in next week’s newsletter, we will see how to identify your inner voice’s main messages. In this week’s newsletter, we will discuss its negative impact on yourself and on your ability to grow your business, and what to do about it. One of my client CEOs’ inner voice calls him a “loser who sets the wrong example to his team and will never be a successful entrepreneur” when he doesn’t take over what his team members fail to accomplish. My inner voice calls me “lazy and complacent who will fail as an entrepreneur and a father” when I am idle for more than 2 minutes, even on vacation – and makes me feel guilty and shameful every single time it happens. Our inner critic pretends to be helpful and necessary to our success, but its long-term impact is unequivocally negative. Why do we keep listening to our inner critic, even though it is obvious that its message is utterly uninspiring and demotivating? What can we do about it? How does your inner critic afflict your performance? Our inner critic constantly finds faults with self (for past mistakes or current shortcomings), with others, and with circumstances. This judge sounds helpful at first sight by shedding light on our shortcomings. While it has the appearance of a helper, it is a bully that blackmails us with shame and guilt, with pretty dramatic consequences in the long run. It tells you: “Without me pushing you, you will be unworthy of love / attention / success.” Your inner critic negatively affects you in three significant ways: Your inner critic has a long-term damaging impact on your own performance. Your inner critic acts like a radioactive armor: it pretends to be protective but its long-term impact on your performance is always disastrous. Let’s get back to the two examples above: Client CEO: To respond to the guilt of not being the ideal leader his inner critic describes, this CEO feels the pressure from his inner critic to micro-manage his team when they don’t deliver, at the risk of becoming his company’s #1 growth roadblock – with the negative consequences on his team and on business growth that you can imagine. In response to my guilty feeling of missing out on learning opportunities for my children (and hence of not being a good father) if I am idle on vacation, I take them on high-tempo sightseeing trips (“We only live once, let’s get the most out of it”, right?) – with, here again, the exact opposite long-term impact on my effectiveness as a father. “The inner critic is harmful because it triggers our self-protection mode, MIT Sloan sr lecturer Giardella says in
If the value of your company would suffer in your absence, the biggest threat to its marketability might be you. “Buyers generally aren’t interested in paying top dollar if the business is overly reliant on the owner for its success.” That excerpt from a long-ago IBG Business article (“article on industry rollups), the company may be worth its book value and little more. Solutions in Print. While Gerber does a masterful job of describing the problem, the real value of The E-Myth and its progeny is that they provide therapeutic steps that can help an entangled business owner execute a pivot, breaking free of their comfort zone and morphing into a more valuable leadership role, maximizing business viability and value separate from their incessant presence and hands-on involvement. In addition, Gerber’s 1995 sequel, The E-Myth Revisited, provides a business development process that serves as a framework for developing turn-key systems throughout an organization to produce predictable results and grow in a sustainable way. Guidance in Person. It should go without saying that we think the E-Myth series is a valuable read for business owners who, looking to sell some day, have decided to get serious about preparing their business to stand on its own two feet. And that’s where IBG often enters the story. For us, the business is the product. To help shape a good company into an attractive acquisition target, we often start our preparatory work two years before the company is ready to go on the market, focusing on such priorities as: cleaning up and recasting financial information; improving cash flows; selling off or disposing of unproductive assets, product/service lines, and inventory; diversifying client and vendor concentrations attracting and developing key employees and fostering an effective management team on which a new owner can rely; identifying and protecting intellectual property and other intangible assets (trademarks, patents, copyrights, and any other proprietary information) that set your company apart from competitors; documenting key processes; and identifying and building on the business’s competitive advantages and attractiveness to the best-fit buyer. In the process, we invariably invest time and energy in the owner, helping them prepare mentally and emotionally for the rigors of the sale experience, and identifying roles in the company’s management and operations that the owner should no longer fill if the business is to achieve optimum value. As a business owner, it’s important to recognize that the value of your company lies not just in its assets and profits, but in its ability to exist independently of its owner. This means taking steps to establish a structure, management environment, and culture that can thrive with or, ultimately, without you. That’s a tall order, one that you don’t need to tackle on your own. To find out how we might help, contact an
Ever heard of the 5x fallacy? Hint: It has to do with business valuation. Using a multiple of X. Try this among your peers, other business owners, and ask your CPA. 1.Ask: What is a good multiple I should use to estimate the value of my business? You will get all sorts of answers, 5 times EBITDA or 2 times revenue, all sorts of “benchmarks”. 2.Ask people at your industry association. What do they think is a good multiple for a quick estimation of value? 3.Next, assume you were going to buy out a competitor, similar to you in size, and profit. Ask yourself, how much would I spend my own cash for it? Or put another way, if you were to buy a similar business like yours to grow your business thorough an acquisition, to add $ X in added profit, with a reasonable rate of return on your money, what would you be willing to pay for it, in real after tax money? What we see, people are NOT willing to pay anywhere close to as much for another similar business as they think their current business is worth. Even if the business is a good strategic fit. They want to get a deal, buy at a discount, pay as little as possible. The reason is not greed. Its because you can’t really be sure of “hidden” features in the target business. You don’t know what will “pop up” after you buy it. It’s been private and therefore not transparent. Some people call this the skeletons in the closet. This is why asset sales oftentimes are a protective move for buyers. Don’t buy the business, and assume the unknown liabilities. This can help mitigate some things, but still does not fully cover the risk of buying a private business. So in reality there is a higher risk premium required with private business transactions and to offset this you need to pay less to cover the risk, or at least to try to offset it if you are buying or investing in a private business. Multiples don’t accurately account for this risk premium. Too vague. Most of the unknowns ( risks) are because private business is just that, private. The customer base loyalty is not necessarily easily transferable for example. The operations, people, staff, managers, etc. are doing things their way, not necessarily how best to manage a business as a financial investment. There are always inefficiencies in processes and management. The goal is to identify them and have a reliable way to measure the impact of these inefficiencies on the value of the business. It is not always obvious or easy to do. Therefore using or relying on any sort of multiple of revenue, or EBITDA. or other financial metric is NOT anywhere close to giving you any real world idea what a business is worth on the open market, at time of sale or transition. My suggestion. Don’t ever use multiples ever. It’s not real, it will lead to bad decisions and bad long term personal planning if you are relaying on a liquidity event ( sale of some sort of cash out) to fund your retirement or other financial goal. On the positive side, value growth can be manufactured using a formal process, over time. You can manage and control value build. Do an assessment of your business ( selling or buying it’s the same process), of the operational risks and intrinsic risks to uncover where value gaps exist in the enterprise. Use a dedicated formal process of evaluation with data that is real, and comparable. Look deeply under the hood at how the business is managed. Do you ( or your purchase business), have things buttoned up, contracts in place with vendors, HR, and documented processes for all operational areas. Good financial reporting that ties profit to each activity is critical as well. Most private business do not do this all that well. There are always gaps and higher risks embedded in most private business. Intrinsic risk is not easy to quantify. Using a formal process to evaluate things in terms other than a financial metric like 5X, or other meaningless ” rules of thumb”. Value can be manufactured and realized systematically over time.
Your best competitive advantage is your people. But are you truly empowering your team to drive sustainable growth? As a strategic workforce planning and onboarding expert, I’ve seen firsthand how critical it is to align your employees’ strengths and passions with well-defined roles. This not only boosts employee ROI and retention but also unlocks innovation that accelerates success. Yet many businesses miss this opportunity. Without an intentional approach to talent development, you risk disengaged teams and stalled growth. Don’t let that happen to your company! FIREPOWER Teams offers a customized 90-day onboarding concierge service for small businesses ready to ignite their full potential. We work closely with you to attract and retain top talent through strengths-based role design, onboarding plans, and leadership analytics. Where people meet process, our mission is to facilitate success at every level of your organization. Want to empower your team to drive sustainable growth? Let’s connect! Please send Maria an email at maria@firepowerteams.com
Whether you are advising a company preparing for a future sale, or working with a new acquisition, it is helpful to understand the value that independent board directors can bring – for M&A, growth, strategy, and more. See more at:
INTRODUCTION Effective sales strategies are crucial for success in the dynamic landscape of modern business. Business owners recognize the pivotal role that sales teams play in revenue generation and customer acquisition. As a result, they must invest in training programs to enhance the skills and capabilities of their sales force. Two complementary approaches are “Sales Skills Training” and “Sales Training Platforms.” The first half of this article focuses on the distinction between “Sales Skills Training” and “Sales Training Platforms,” the second half focuses on which types of Sales Training Platforms and Sales Skills Training align better with certain types of businesses. I’ll also leave you with a table listing the various sales-related business attributes (relationship vs. transactional, long sales cycle vs. short, etc.) to illustrate which types of sales training platforms align best with your business. Sales Skills Training: Fostering Personal Mastery Sales Skills Training programs, often illustrated by the offerings of Dale Carnegie, Franklin Covey, Huthwaite’s SPIN Sales Training, and many of the Sandler Sales Training programs, typically focus on honing an individual sales representative’s skills and capabilities. These programs often focus on developing interpersonal skills, communication techniques, and emotional intelligence. While some emphasize developing a relationship and becoming a “trusted advisor,” most promote more direct sales techniques to motivate a customer to sign. The core premise of most sales skills training is to equip sales professionals with the training, tools, and finesse to navigate diverse customer personalities and tailor their approach to identify and quickly develop solutions that meet specific customer needs. Dale Carnegie’s program, known for its enduring legacy, emphasizes relationship-building as a cornerstone of successful sales. It teaches participants how to establish rapport, handle objections gracefully, and foster genuine connections with prospects. Sandler Sales Training takes a more direct approach, emphasizing the importance of customer pain points while probing and quantifying the impact of inaction while trying to persuade the customer to take quick action. Both are effective given specific circumstances but are not interchangeable because they rely on different approaches. Each is most effective when aligned with the type of sale you’re executing. For example: Is it transactional- or relationship-based? Is it an indirect sale with a standard contract or a complex deal with a highly engineered solution, customized agreement, and multiple decision makers/influencers? Sales Training Platforms: Systematic and Comprehensive Approach Contrasting with, and yet supplementing, the individual-centric Sales Skills Training described above, Sales Training Platforms like Miller Heiman’s “Strategic Selling,” Holden International’s “Power Base Selling,” and Wilson Learning’s “The Counselor Salesperson” all provide a more systematic and comprehensive approach to sales training. These platforms offer structured methodologies and frameworks that guide sales teams through various stages of a more complex, relationship-based sales process. Individual Growth vs. Team Alignment One of the primary distinctions between Sales Skills Training and Sales Training Platforms lies in their focus on individual growth versus team alignment. Sales Skills Training programs prioritize enhancing personal skills, allowing sales representatives to refine their ability to engage and persuade clients effectively. These programs are particularly beneficial for developing rapport and trust one-on-one. In contrast, Sales Training Platforms emphasize a collective approach. They provide a unified framework that ensures sales teams operate cohesively, following a structured process that aligns with organizational goals. This team-oriented approach is especially relevant when dealing with complex, multi-stakeholder sales scenarios where coordinated efforts can make or break a deal. Adaptability vs. Systematic Consistency Another key difference revolves around adaptability versus systematic consistency. Sales Skills Training programs often equip sales representatives with a toolkit of interpersonal skills, allowing them to adapt to various customer personalities and situations. These programs empower sales professionals to think on their feet and adjust their approach as needed, fostering flexibility. Conversely, Sales Training Platforms offer a consistent methodology that guides sales teams through standardized steps. While this approach may appear rigid, it can be highly effective in maintaining quality control, especially in organizations with a large and diverse sales force. It provides a common language and process that everyone follows, ensuring a streamlined and predictable sales process. Conclusion One of the most critical aspects of developing an effective sales training program for your business starts with understanding the distinction between Sales Skills Training and Sales Training Platforms. While Sales Skills Training focuses on enhancing individual sales representatives’ interpersonal skills and emotional intelligence, Sales Training Platforms offer systematic methodologies that guide teams through the sales process with consistent and coordinated efforts. Both approaches have their merits, and the choice between them should be based on an organization’s specific needs, go-to-market strategy, and the complexity of the deals they pursue. Ultimately, whether through the personal mastery cultivated by Sales Skills Training or the systematic consistency of Sales Training Platforms, the goal remains the same: to empower sales teams to achieve unparalleled success in a competitive business landscape. If your business needs a comprehensive, customized sales training program to elevate your Sales Team’s performance, let’s
Popular
What's Trending
Depending on who you are talking to, Private Equity is either the Great Satan or the savior of small and mid-market companies in the United States. The stories depend a lot on the personal experience of the speakers. Once a vehicle for high-risk investment plays in corporate takeovers (see Bryan Burrough’s Barbarians at the Gate,) Private Equity has morphed into tranches where specialists seek opportunities in everything from a Main Street entrepreneurship to multi-billion-dollar entities. What is Private Equity? The term itself is relatively generic. According to Pitchbook, there are currently 17,000 Private Equity Groups (or PEGs) operating in the US. The accepted business model for our purposes is a limited partnership that raises money to invest in closely held companies. The purpose is plain. Well-run private businesses typically produce a better return on investment than publicly traded entities. The current Price to Earnings (or PE – just to be a little more confusing) ratio of the S&P 500 is about 27.5. This is after a long bull market has raised stock prices considerably. The ratio is up 11.5% in the last year. That means the average stock currently returns 3.6% profit on its price. Of course, the profits are not usually distributed to the shareholders in their entirety. Compare that to the 18% to 25% return many PEGs promise their investors. It’s easy to see why they are a favorite of high net worth individuals, hedge funds and family offices. As the Private Equity industry has matured and diversified, they have even drawn investment from the usually more conservative government and union pension funds. Private Equity Types Among those 17,000 PEGs the types range from those who have billions in “dry powder” (investable capital,) to some who claim to know of investors who would probably put money into a good deal if asked. Of course, which type of PEG you are dealing with is important information for an owner considering an offer. private equity moneyThe “typical” PEG as most people know it has a fund for acquisitions. It may be their first, or it may be the latest of many funds they’ve raised. This fund invests in privately held businesses. Traditionally PEGs in the middle market space would only consider companies with a free cash flow of $1,000,000 or greater. That left a plethora of smaller businesses out of the game. For a dozen years I’ve been writing about the pending flood of exiting Boomers faced with a lack of willing and able buyers. I should have known better. Business abhors a vacuum. Searchfunders Faced with an overabundance of sellers and a dearth of capable buyers, Private Equity spawned a new model to take advantage of the market, the Searchfunders. These are typically younger individuals, many of whom graduated from one of the “EBA” (Entrepreneurship By Acquisition) programs now offered by almost two dozen business schools. These programs teach would-be entrepreneurs how to seek out capital, structure deals, and conduct due diligence. Some Searchfunders are “funded”, meaning they have investors putting up a stipend for their expenses. Others are “self-funded.” They find a deal, and then negotiate with investment funds to back them financially. Both PEGs and Searchfunders seek “platform” companies, those that have experienced management or sufficiently strong operational systems to absorb “add-on” or “tuck-in” acquisitions. The costs of a transaction have bumped many seasoned PEGs into $2,000,000 and up as a cash flow requirement. Searchfunders have happily moved into the $500,000 to $2,000,000 market. In the next article we’ll discuss how PEGs can promise returns that are far beyond the profitability of the businesses they buy.
Sep 4, 2024
Sep 4, 2024
3 min read
Early last month, the Occupational Safety and Health Administration (OSHA) proposed the Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings rule. The aim is to curb heat related injuries or death which OSHA identifies as “the leading cause of death among all hazardous weather conditions in the United States.” The proposal places new responsibilities on employers: establishing heat thresholds, developing Heat Injury and Illness Prevention Plans, regularly monitoring temperatures, and establishing safety measures when heat thresholds are met. This rule is yet to be finalized however, it is a sign of what’s to come. The standard applies to all employers except for the following: Work activities for which there is no reasonable expectation of exposure at or above the initial heat trigger. Short duration employee exposures at or above the initial heat trigger of 15 minutes or less in any 60-minute period. Organizations whose primary function is the performance of firefighting and other certain emergency services. Work activities performed in indoor work areas or vehicles where air conditioning consistently keeps the ambient temperature below 80°F. Telework (work from home). Sedentary work activities at indoor work areas that only involve some combination of the following: sitting, occasional standing and walking for brief periods of time, and occasional lifting of objects weighing less than 10 pounds. Heat Thresholds There are two heat thresholds which will trigger employer action: An “initial heat trigger” means a heat index of 80°F or a wet bulb globe temperature (defined below) equal to the National Institute for Occupational Safety and Health (NIOSH) Recommended Alert Limit; and A “high heat trigger” means a heat index of 90°F or a wet bulb globe temperature equal to the NIOSH Recommended Exposure Limit. The “heat index” is calculated by measuring the ambient temperature and humidity. Wet bulb globe temperature is a heat metric that considers ambient temperature, humidity, radiant heat from sunlight or artificial heat sources and air movement. Employers may choose either method of measuring the temperature. Heat Injury and Illness Prevention Plan (HIIPP) Requirements If an employer does not fall under the exceptions, it must develop a HIIPP with the input of non-managerial employees and their representatives for occasions when the heat threshold is surpassed. This plan may vary on the worksite but must be written if the employer has more than 10 employees and use a language employees will understand. The HIIPP must contain: A comprehensive list of the type of work activities covered by the HIIPP Policies and procedures needed to remain compliant with the standard. Identification of which heat metric the employer will use heat index or wet bulb globe temperature. A plan for when the heat threshold is met. Along with creating the HIIPP, employers must designate one or more “heat safety coordinators” responsible for implementing and monitoring the HIIPP. The HIIPP must be reviewed at least annually or whenever a heat related injury or illness results in death, days off work, medical treatment exceeding first aid, or loss of consciousness. Employers must seek input from non-managerial employees and their representatives during any reviews or updates. The definition of “representative” is not defined; if this is broadly defined, this could be a major complexity employers must face. Identifying Heat Hazards Employers must monitor heat conditions at outdoor work areas by: Monitoring temperatures at a sufficient frequency; and Track heat index forecasts or Measure the heat index or wet bulb globe temperature at or as close as possible to the work areas. For indoor work areas, employers must: Identify work areas where there is an expectation that employees will be exposed to heat at or above the initial heat trigger; and Create a monitoring plan covering each identified work area and include this work area in the HIIPP. Employers must evaluate affected work areas and update their monitoring plan whenever there is a change in production processes or a substantial increase to the outdoor temperature. The heat metric employers choose will affect the thresholds. If no heat metric is specified, the heat metric will be the heat index value. Employers are exempt from monitoring if they assume the temperature is at or above both the initial and high heat trigger, in which case they must follow the controls below. Control Measures When Heat Triggers are Met When the initial heat trigger is met, employers must: Provide cool accessible drinking water of sufficient quantity (1 quart per employee per hour). Provide break areas at outdoor worksites with natural shade, artificial shade, or air conditioning (if in an enclosed space). Provide break areas at indoor worksites with air conditioning or increased air movement, and if necessary de-humidification. For indoor work areas, provide air conditioning or have increased air movement, and if necessary de-humidification. In cases of radiant heat sources, other measures must be taken (e.g., shielding/barriers and isolating heat sources). Provide employees a minimum 15-minute paid rest break in break areas at least every two hours (a paid or unpaid meal break may count as a rest break). Allow and encourage employees to take paid rest breaks to prevent overheating. At ambient temperatures above 102° F, evaluate humidity to determine if fan use is harmful. Provide acclimatization plans for new employees or employees who have been away for more than 2 weeks. Maintain effective two-way communication between management and employees. Implement a system to observe signs and symptoms of heat related problems (e.g., a Buddy system). When the high heat trigger is met, employers are additionally required to: Provide employees with hazard notifications prior to the work shift or upon determining the high heat trigger is met which includes: the importance of drinking water, employees right to take rest breaks, how to seek help in a heat emergency, and the location of break areas and water. Place warning signs at indoor work areas with ambient temperatures exceeding 102° F. Other Requirements Training: all employees and supervisors expected to perform work above the heat thresholds must be trained before starting such work and annually. What’s Next? The rule is yet to be published in the Federal Register. Once this happens, there will be a 120-day comment period when all members of the public may offer OSHA their opinion about the rule. Whether this rule comes to fruition may also depend on which party wins the White House. Furthermore, if finalized this rule would likely be challenged in the courts, which now have more discretion to overrule agency rules following the US Supreme court case of Loper Bright Enterprises v. Raimondo and Relentless Inc. v. Department of Commerce (overturning the Chevron deference decision). Employers should review their heat illness prevention policies to maintain compliance with regulations. If you have questions, call competent labor and employment counsel. 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
Private equity leverage can dramatically increase ROI, but it can also be a trap. In our previous
Today we are highlighting the FIREPOWER Owner Sweet Spot Sessions! We’re about to embark on a game-changing conversation that will revolutionize the way you approach your business. It’s time to shift gears and start envisioning the future of your company in a new personal role. The Small Business Universe: Common Concerns of Owners Similar concerns echo throughout the small business universe. Maybe you feel like you’re lacking the right leadership, or worse, you don’t have any leadership at all. Perhaps your workforce has hit a plateau, or you’re dealing with the frustrating challenge of high turnover. And let’s not even get started on the never-ending cycle of decision-making, where it feels like you’re carrying the entire load on your own. What is the Work that Only You Can Do? We’re here to share a secret to successfully moving your business into the future. It all starts with a simple question: What is the work that only you can do? It’s time to tap into your natural talents and abilities that have fueled your business success from its inception and then refocus your efforts in a new way. Now, brace yourself for a little revelation that’ll bring a smile to your face. The answer to that question is much less than what you’re currently doing. Yes, you heard it right. You’re probably sporting way too many hats, it’s time to bid farewell to those unnecessary responsibilities and rediscover your true sweet spot. Enter the FIREPOWER Owner Sweet Spot sessions. These sessions are crafted to help you pinpoint those burdensome responsibilities that are holding you back from doing the work your company desperately needs from you. We’re here to lift that heavy weight off your shoulders and set you free to focus on what truly matters in achieving your future goals. Deciphering the best use of your time is the key to solving both short-term challenges and long-term business goals. It allows you to stay fully engaged in the work that only you should do, helps your teams to know your true superpowers, and ultimately unleashes your full potential to lead your company into the future. At FIREPOWER, we truly get the challenge, we live it every day. We understand the struggles you face as an owner. Juggling numerous roles and tasks can be incredibly overwhelming and downright draining. But here’s some fantastic news – it doesn’t have to be that way. By identifying your unique strengths, you can reclaim your valuable time, restore your energy reserves, and reignite your enthusiasm for your business. So, are you ready to unlock your Owner Sweet Spot? Then it’s time to bid farewell to all the hats you’ve been wearing, delegate those unnecessary responsibilities, and rediscover the true value you bring to your company. Our owner-focused approach led by Maria Forbes, will expertly guide you through the process, empower your team, and take your business to unprecedented heights. Conclusion Remember, sustainable growth flourishes when you harness the potential of your team and become laser-focused on the work that only you can do. The number of hats you wear will shrink, while the quality of your life expands. It’s time to embrace the FIREPOWER within you and achieve the success you’ve always dreamed about. Together, we can make it happen! Fuel your people power, Maria Forbes with FIREPOWER Teams
In previous communications, we’ve discussed the significant changes brought about by the SECURE 2.0 Act. Effective implementation of many provisions within the act relies on guidance from the IRS and DOL. IRS Notice 2024-02 and IRS Notice 2024-55 offered clarification on several crucial aspects of SECURE 2.0. Guidance is helpful as plan sponsors make decisions regarding both required and optional provisions in the act. Here are some key provisions to consider: Automatic Enrollment Requirement SECURE 2.0 mandates automatic enrollment features for 401(k) plans established after December 29, 2022, effective in 2025. The IRS guidance clarifies that a plan is deemed to be established when the employer adopts a 401(k) plan, regardless of the plan’s effective date. The notice also provides further clarity for plan mergers and spin-offs. Mergers: If a plan established after December 29, 2022, merges into a 401(k) plan that was established prior to that date, the ongoing plan will generally be subject to the automatic enrollment mandate unless the merger is: 1) a result of a business acquisition, and 2) the plans are merged by the last day of the plan year following the year of the transaction. Spinoff plans will be treated as a pre-December 29, 2022 plan as long as that portion of the plan had been established before that date. Higher Salary Deferral Catch-up Limits for Ages 60-63 For 2024, the salary deferral contribution limit is $23,000. If a 401(k) plan permits catch- up contributions, those age 50 and older can also make catch-up contributions up to $7,500. Those limits are expected to increase in 2025 based on cost-of-living adjustments to be announced later this year. Beginning in 2025, plans may also take advantage of a provision in SECURE 2.0 that would permit participants age 60-63 to make higher catch-up contributions. For those plan participants, employers may increase the catch-up limit to the greater of: * $10,000 (which will be indexed for cost-of-living adjustments in later years) or * 150% of the regular age 50 catch up deferral limit. De Minimis Financial Incentives Employers can now provide “de minimis” financial incentives to encourage employee retirement plan contributions. These incentives must not exceed $250 and are available only to employees who have not previously elected to defer contributions. The incentive can be provided incrementally over time, contingent on the employee’s continued participation. Employees receiving these incentives are subject to regular tax, withholding, and reporting requirements. Terminal Illness Distributions SECURE 2.0 introduced a new exception to the 10% penalty on early distributions for terminally ill employees. The IRS notice defines a terminally ill individual as someone who has been certified by a physician to have a condition or illness that can be reasonably expected to result in death in the next 84 months. This exception does not create a new type of distribution; rather, employees must still qualify for another permissible distribution from the plan. While this provision will be optional for employers, if a plan opts out, employees may categorize a distribution as a terminal illness distribution on their own tax return. If an employer does elect to recognize terminally ill distributions, the plan must obtain a specific certification from the physician rather than relying on an employee’s self-certification. Hardship Distributions with Self- Certification Most plans that permit hardship withdrawals allow such withdrawals only if the hardship satisfies one of the “safe harbor” reasons. Such reasons include the purchase of a principal residence, amounts needed to prevent eviction or foreclosure on a personal residence, qualifying medical expenses, tuition, funeral and burial expenses, certain expenses to repair the employee’s principal residence, and expenses and losses related to a federally – declared disaster. SECURE 2.0 provides that a plan can adopt employee self-certification rules. That means a plan sponsor may rely on an employee’s written self-certification that the distribution is for one of the plan’s safe harbor hardship reasons and is not more than the amount required to satisfy the financial need and they do not have alternate means that are reasonably available to satisfy the hardship need. The participant is expected to maintain records that support the hardship. Many plan sponsors are adopting self-certification. Emergency Personal Expenses Distributions SECURE 2.0 permits a 401(k) or other defined contribution plan to offer emergency personal expense distributions. If the option is offered, eligible employees can withdraw up to $1,000, or their vested balance (if less) for “unforeseeable” or “immediate” personal emergency expenses once each calendar year. Self-certification is available. The distribution is not subject to the usual 10% tax on early distributions. Also, emergency expense distributions can be repaid to the account within a three-year window. Another emergency expense distribution can’t be made within the three-year window unless the previous distribution is fully repaid or contributions equaling the distributed amount are deposited. Domestic Abuse Victim Distributions SECURE 2.0 permits a plan to offer domestic abuse victim distributions. This type of distribution may be made to a participant within a one-year period beginning on the date when a participant becomes a victim of domestic abuse by a spouse or partner. The maximum distribution is the lesser of $10,000 or 50% of the participant’s vested account. The $10,000 limit is subject to future cost of living adjustments. Self-certification is available. The distribution is not treated as an eligible rollover distribution for tax withholding purposes; however, the participant may repay the distribution any time during the next three-year period. The distribution is taxable, but there is an exception from the 10% early withdrawal penalty. (Note that plans which are subject to the spousal consent requirements for distributions may not be able to adopt this provision.) The IRS has also delayed the deadline for SECURE 2.0, SECURE, and CARES amendments until December 31, 2026. This gives them additional time to issue further clarifying guidance. As always, we are committed to keeping you informed as things develop.
Previous
Next
Explore the Knowledge Exchange
Make XPX Part of Your Business Plans
Explore
Learn
Account
Connect
Help & Support
© 2024 XPX Global LLC. Privacy Policy Norms & Principles Site Map Terms of Use
© 2024 XPX Global LLC. All Rights Reserved.