Business Value
Jul 31, 2024
Jul 31, 2024
1 min read
Can you Offer Too Many SKUs to Your Customers? The short answer is YES! A SKU, or Stock Keeping Unit, defines each different product version that you sell and keep inventory of. There may be different SKUs of the same overall item based on size, color, capacity (think computer or cellphone memory), features, and many other parameters. For build to forecast businesses, that number of variations can quickly explode and become difficult to manage. Your customers are busy and want ordering simplified. Of course, they may need (or want) more than one variation of a product. That is reasonable and a common aspect of business – one size does not fit all! But there is a point where too offering too many SKUs is not value added either for your customer or your business. In his April 30, 2013 article “Successful Retailers Learn That Fewer Choices Trigger More Sales” in Forbes, Carmine Gallo discusses his experience and a study about “choice overload” by other authors. He writes about a retailer that “has discovered that giving a customer more than three choices at one time actually overwhelms customers and makes them frustrated…when the customer is faced with too many choices at once, it leaves the customer confused and less likely to buy from any of the choices!” Choice overload is well-documented in consumer studies but can apply in B2B as well. While customer satisfaction is important, another key concern is the often-hidden costs associated with a business offering and managing a large number of SKUs for a given product type. These costs include holding inventory, S&OP (Sales and Operations Planning) team time, small production runs, and scrapping inventory. Holding inventory takes up space, which may come with a cost or utilize racks that could be used for other products. Scheduled inventory counts take up employee time and may result in blackout periods when the warehouse is not shipping product. The more SKUs there are, including extra SKUS, the greater the potential impact. The Sales team’s forecasting and the Operations team’s purchasing reviews that are part of the S&OP process can occupy more of their valuable time if they need to consider these times. If small orders or forecasts require a new production run, this could be costly and create excess inventory. Whether from this new production or past builds, eventually it will make sense to write off and scrap old inventory, another cost impact to the company. How do you know which SKUs to focus on if you wish to look at reducing your total number of SKUs? Start by examining SKUs that have: Low historic sales over a period of time Small variations between SKUs that customers do not value Older technology or model when newer option SKUs are available This requires a true partnership between Sales and Operations. It starts with educating both teams on the costs involved – neither group may be aware of the money and time impact to the company. Periodic (such as quarterly) reviews of SKUs that meet the above descriptions should become a fixed part of the calendar. A review of the data and other available for sale options should result in the identification of SKUs which may not be needed. At that point, it is helpful to have a customer friendly EOL (End of Life) Notice process by which you inform customers of last time buy requirements for this SKU and alternates available. It is usually best to provide some time for the last time buy in the interest of customer satisfaction, although that may not always be necessary. At a company that designed and sold electronics, a robust SKU rationalization process was implemented to help address these issues. A representative from the Operations team analyzed SKUs that met a version of the above criteria and suggested candidates for the EOL process. Next, a member of the Sales team reviewed them and, where appropriate, issued product change or EOL notices to customers, providing them time for last time buy orders when needed. These steps helped reduce the work involved in maintaining these SKUs while not leading to any customer complaints. A final note – sometimes it makes sense to continue offering low selling SKUs – to support customers buying other items (hopefully in larger quantities). It may be worthwhile to encourage them to keep coming back to you for all of their product needs and this may be a way to accomplish that. But it helps to understand that this is truly the case and not assume that this customer would not be equally happy with another, more popular, SKU. Steven Lustig is founder and CEO of Lustig Global Consulting and an experienced Supply Chain Executive. He is a recognized thought leader in supply chain and risk mitigation, and serves on the Boards of Directors for Loh Medical and Atlanta Technology Angels.
Truth in pricing is a common issue when discussing the sale of a business. The selling price of their company is a point of pride for any owner. When they are willing to share the price they were paid, they usually include everything that was listed in the purchase agreement. While there is nothing inherently dishonest about that, it’s often not exactly the truth either. In our
During my first visit to one factory, I quickly noticed on a wall in the lobby a collection of cards with employee suggestions – normally a good sign of a facility’s commitment to continuous improvement and employee engagement. A closer look revealed the opposite – improvement ideas that were months and even quarters old without any response or follow up. While creating that program was a good idea, the lack of follow through likely discourages employees from contributing further suggestions. Unfortunately, that company is not alone. This all-too-common practice is highlighted in the article “Companies Often Solicit Employee Feedback but Seldom Act on It” (in the May-June 2024 issue of Harvard Business Review) which discusses a 2023 Gartner white paper “Employee Engagement: Close the Action Gap to Drive Business Outcomes” by Jen Priem. Employees want to help. In fact, “40% of survey respondents said they would rather have difficult processes fixed than receive more career development opportunities”. That interest is not always matched by a company’s efforts. Aside from the missed opportunities in quality, cost, efficiency, and safety improvements, this also negatively impacts employee engagement: “only 34% said they thought their companies would act on feedback they provide” so why would they take the time and effort to participate? Setting up an effective employee suggestion program is more than placing a box for suggestions or creating an internal software tool. To be successful, the company needs to dedicate management effort and commit to a timely, closed-loop initiative. A cross-functional management level team should be established to review the qualifying ideas. This does not need to be top management but should be leaders high enough such that they can approve and implement many ideas themselves and have ready access to higher level managers to discuss larger improvement suggestions. A coordinator, perhaps someone from the quality department or in an administrative role, can be designated to facilitate the program – helping create the methods for employee suggestions, collecting the inputs, and maybe conducting a first level sort of ideas (the entire review team does not need to spend time on the suggestion to paint the bathroom a different color!) This team should meet frequently (perhaps monthly) to evaluate and prioritize the employee suggestions that were submitted since the last meeting. Plans to implement or investigate the most valuable ideas should be developed. Someone on the team should be designated as a sponsor of each such idea to obtain updates and ensure progress even if the responsibility for investigation or execution is handed over to a functional area leader. Often, a team of employees from the impacted area(s) will be created – this helps make use of their more detailed knowledge and improves buy-in to the solution. Whenever possible, the employee who suggested the improvement should be included on this implementation team. There are different ways to celebrate the improvement ideas that were selected for implementation – monetary and non-monetary awards, inclusion in the employee’s performance review, public recognition, plant competitions, etc. The choice will depend on the company’s and location’s culture. Communication is key to a successful employee suggestion program. Leadership should consistently share its enthusiasm for the improvement idea program and what type of ideas are desired (not that bathroom color suggestion!). Leaders can also show their support by attending events associated with this program. Regardless of whether a valid improvement suggestion was approved for further action or not, it is important that a member of the team (for example, the facilitator) always provides prompt feedback to the employee on the decision and why that was the determination. This closed loop aspect is essential if the firm wants to continue receiving, and benefit from, employee ideas. Are there other sources for great ideas beyond your employees? Stay tuned…. Steven Lustig is founder and CEO of Lustig Global Consulting and an experienced Supply Chain Executive. He is a recognized thought leader in supply chain and risk mitigation, and serves on the Boards of Directors for Loh Medical and Atlanta Technology Angels.
It’s midnight. Your recycling bin is overflowing with rejected resumes. Your eyes can barely focus on the letters in front of you — and you have this uneasy feeling that you are about to invest in another candidate who just isn’t going to work out. This has been a vicious cycle over the past several years, and you find yourself asking yet again,” Why can’t I find the right salespeople?” You’ve spent an excessive number of hours and are well into six figures in budget dollars hiring, training, firing, and rehiring. You’re losing credibility in the marketplace because your customers are continually being introduced to new reps. With each salesperson that doesn’t work out, you can feel your employees questioning your leadership and the direction the company is headed. And this last candidate… they checked every single box. An ideal candidate with a promising start. Industry experience. Excellent references. High performance everywhere they went. You gave them everything they wanted only to discover they weren’t what they appeared to be. How could you have been so wrong about yet another candidate, a supposed “A-Player” who just couldn’t deliver the level of success they promised in the interview. Instead of burying yourself in another pile of seemingly perfect resumes, it might be time to take a step back. Key Article Takeaways: · Pitfalls that prevent A-players from performing in a new sales environment · How to lay out a sales roadmap to generate consistent results · Key sales leadership focus areas that pay dividends Time to Slow Down to Speed Up Some organizations seem to have it all figured out: low sales turnover; tremendous growth; happy employees doing what they love. Sure, when things go right, everyone is happy. But when issues continuously arise that take your top salespeople away from their outbound calls to chase down problems or they are struggling to know where to focus their effort, there’s likely a more significant issue at hand. By all means, keep searching for the best and brightest salespeople – the ones you know have the talent and desire to excel in your organization. But before you get too far in the process, take a step back and examine your sales readiness. · Are you setting your salespeople up for success right off the bat? · Are there things you know you could do better but haven’t had the time to fix? · Are you doing everything you should be to create a sales culture that allows anyone you hire the opportunity to see success? Structure: Another pitfall that can derail even the best A-Player is when an organization does not have the proper infrastructure to support its sales efforts. This encompasses a wide range of elements from staff structure to the necessary systems to measure and manage performance. For example, creating clear lines of accountability for all roles and functions that interface with the customer will bring clarity to performance expectations. This prevents time-consuming distractions and fosters a customer centric culture. Another area of structure involves the method in which your prospect and customer segments are designated and managed. This provides your customers with a consistent experience and enables your sales resources to be positioned in their areas of strength. These best practices create a solid platform for your salespeople to work from. Then, layering on the appropriate systems to capture sales activity, report on key metrics, manage sales pipeline, etc., allows you and your leadership team the critical visibility needed to keep a pulse on how the business is progressing toward its goals. As you assess your performance in this area, consider the consistency of your weekly one-on-one sales meetings for individual planning and mutual accountability. Given the reliance of the salesperson on their sales manager, powerful outcomes are produced when both sides are willing to be accountable to the other. Another important area to review is the level of value your sales meetings deliver to the team. Lastly, keep track of how often you participate in sales calls — both in-person and video calls, and how often you are creating powerful learning moments for your reps through these interactions. Are you struggling to find the time to apply this level of focus? Do you recognize there are times when you aren’t sure how to confidently lead and develop your salespeople? These common needs in small to mid-sized businesses were the driver behind my decision to transition my extensive VP Sales background to help top executives on a fractional or interim basis. If you’d like to have a preliminary discussion about the sales challenges you are facing, please feel welcome to contact me through any of these methods: 413-626-7040 , kdonovan@salesxceleration.com or book a call through my
Business owners, advisors, and buyers frequently have widely different impressions of value when it comes to a business. The Pepperdine Private Capital Markets Survey canvasses intermediaries who sell privately held Main Street and mid-market companies. One question is about the obstacles that prevented the sale of a business. The number one response is “Owners’ unreasonable expectations of value.” That may be self-serving or an excuse. Nonetheless, valuation is a sensitive subject. Many owners have worked in the business for 30 or 40 years. They assume it will fund their next 20 years of retirement. Their target price is set only by their desired lifestyle after the business. Different Values for the Same Business Unfortunately, many owners have an opinion about the value of their business that is grounded in the multiples of public companies. Others are based on conversations with colleagues, salespeople, and articles in their trade publications. Even those who have professional appraisals of their business may not understand that the purpose for getting your valuation may skew the results. Valuations that are done for estate planning or internal transfers of equity often have little resemblance to a company’s fair market value. Various people including H.L. Hunt and Ted Turner have said “Money is just a way of keeping score.” For many owners, the emotional tie between the perceived value of their company and their self-image of success is closely connected. Some advisors skirt this issue by recommending that their clients get a professional opinion of the fair market value of the business. While this is certainly a safe approach, it can take substantial time. It also requires considerable assembly of the underlying data for the appraiser. This can slow down any consulting project considerably and may derail it entirely. Impressions of Value A coaching approach helps the owner understand the practical boundaries surrounding the value of the company without either dictating to him or taking the project in a tangential direction. We do that by helping the client model “lendable value.” We start by explaining that most businesses are valued by their cash flow. There are certainly many areas where value can be enhanced. These include intellectual property, exclusive rights to a product, protected sales territory or long-term contracts. Owner Centricity™ or customer concentration can also reduce the fair market pricing of your business. In the final analysis, however, cash flow to pay an acquisition loan is of principal concern to a lender. SBA minimums for financing include a cash-to-debt service ratio (1.25 to 1) and required owner compensation – usually $75,000 a year for acquisitions under $500,000 and twice that for larger deals. While not all lenders follow SBA guidelines, they are a useful national baseline for looking at your value. The company may well be worth what you think it is, but finding a lender to finance it is a different problem. Understanding a lender’s impression of value before starting sale negotiations can save you considerable time and negotiation down the road.
Apr 2, 2024
Apr 2, 2024
2 min read
A common area of confusion among advisors is understanding the difference between a “Main Street” business, a “Middle Market” business and a “Mom and Pop” business. Main Street Businesses The term “Main Street” is defined by the International Business Brokers’ Association and other professional intermediary organizations as any company with a Fair Market Value of less than $3,000,000. That is about the upper limit of a business that can be purchased by an individual using “normal” 20% down financing. They are making the acquisition for the purpose of earning a living. Main Street businesses typically calculate cash flow as Seller’s Discretionary Earnings (SDE). As discussed by Scott Gabehart, the creator of BizEquity valuation software, SDE is a better measure of a business’s return on owner labor, rather than return on investment. SDE includes the benefits of ownership including salary, employer taxes, distributions, health insurance, vehicle and other perks of ownership. It also includes non-cash tax deductions such as depreciation. The average selling price for an owner-operated business in the United States is 2.3 times its SDE. That cash flow must support any debt as well as provide a living for the principal operator. If we extrapolate from the average multiple (which is accurate based on my past experience as a business broker), we would say that “Main Street” encompasses businesses that produce up to $1.3 million in cash flow. That number is pretty high, and actually crosses the threshold of where Private Equity companies typically seek acquisitions. At that level a buyer would have to have $600,000 for a down payment and about $25,000 a month to cover debt service. In reality, companies that generate more than $500,000 a year in adjusted EBITDA cash flow (not counting owner compensation) are more commonly sold for multiples of EBITDA. At that size, a multiple of four times adjusted cash flow is pretty common, and would classify a company with up to about $750,000 in adjusted cash flow as “Main Street.” Mom and Pop Businesses exitplannerssurvey.com This article was originally published by John F. Dini, CBEC, CExP, CEPA on ExitMap.com.
Jul 31, 2023
Jul 31, 2023
1 min read
As a small business owner, you face many challenges when running your own company. Financial management is one of the most critical aspects of any business, but hiring a full-time CFO can be a costly and unrealistic expense for many small businesses. This is where Fractional CFOs, like those provided by FocusCFO, come in. What is a Fractional CFO? A Fractional CFO is an industry-experienced professional who provides part-time financial management services to a company. They can help small business owners make informed decisions, manage cash flow, and improve financial performance. To maximize the value of this valuable resource, it’s important to use your fractional CFO wisely. Here are some tips to help you get the most out of your partnership. How to Maximize the Value of Your Fractional CFO [Read the full blog post here….
Since selling your business is likely the most significant and financially impactful transaction of your life, I share the Top 3 Sales Priorities every business owner must take to maximize their company’s sales price at Exit. Background – Unfortunately, Sales has been one of the most impactful, yet overlooked, aspects of Exit Planning. Exit Planning Horizon According to Laying the Foundation By now, you’ve already hired a solid management team, including an experienced COO, CFO, CPA, CMO, and CHRO. You’ve begun to forge long-term relationships with experts who will help guide you through the M&A labyrinth. You’ve likely engaged an experienced M&A Lawyer, an Investment Banker, a Wealth Planner, and a Business Insurance Broker, in your personal network of Advisors. Strategic Value of an Exit Planner One of the most important M&A professionals you can have in your corner is an experienced Exit Planner. Some will have a Certified Exit Planner Advisor (CEPA) credential. Interview a few, and find someone you like and trust. I’ve found that most tend to understand the tremendous value a Fractional Sales Leader can provide as they prepare a client for exit or transition. Three Critical Sales Priorities There are many things a business owner can do to help prepare for an exit. In my opinion, here are the three most critical Sales Priorities a business owner can take to maximize their business’s value: Confirm You Have the Right Sales Leader. Make sure your Sales Leader (CSO/CRO/VP of Sales) has a track record of achieving the company’s weekly/monthly/annual sales goals and hold that individual accountable. Has he/she consistently achieved their annual sales goals? If not, why not? If their track record of delivering results has been inconsistent, your exit may be at risk. If you don’t have the right Sales Leader, hire one. If you can’t afford to hire one, engage a Fractional Sales Leader until the transaction is complete. If you’re unsure your Sales Leader is the right one, hire a Fractional Sales Leader to help with the evaluation. It always helps to have a second set of eyes on a critical hire, and this one might be your most critical of all. Develop and Execute Your Sales Plan with a Laser-like Focus. One of the keys to achieving your desired exit is developing a realistic Sales Plan. Keep it simple and focused, while being detailed enough to provide insight across the organization. You don’t need to measure everything, instead, focus only on the variables that matter. Refer to my article,
Here are ten ways to increase the value of your business: 1. Stop chasing revenue. A bigger company is not necessarily a more valuable one if the extra sales come from products and services that are too reliant on the business owner to deliver them. 2. Start surveying your customers. It’s a fast and easy way for your customers to give you feedback, and it’s predictive of your company’s growth in the future 3. Sell less stuff to more people. The most valuable companies have a defendable niche selling a few differentiated products and services to many customers. The least valuable businesses sell lots of undifferentiated products and services to a concentrated group of buyers. 4. Drop the products or services that depend on you. If you offer something that needs you to produce or sell it, consider dropping it from your offerings. Services and products that require you suck up your time and cash and don’t contribute significantly to your business’s value. 5. Collect more money up front. Turn a negative cash flow cycle into a positive one and you boost your business’s value and lessen your stress load. 6. Create more recurring revenue. Predictable sales from subscriptions or recurring contracts mean less stress in the short term and a more valuable business over the long run. 7. Be different. Refine your marketing strategy to emphasize the point of differentiation that customers value. Be relentless in highlighting this advantage. 8. Find a backup supplier for your most critical raw materials. Consider placing a small order to establish a commercial relationship and diversify the sources of your most-difficult-to-find materials. 9. Teach them to fish. Answer every employee question with “What would you do if you owned the business?” Your goal should be to cultivate employees who think like owners so they can start answering their own questions without coming to you. 10. Create an instruction manual. Document your most important processes so your employees can do their work independently. You can write these down or use instructional video.
Did you know that 80% or more of your company value lies within four areas of your business? These four areas are called the 4 Intangible Capitals and believe it or not….they have nothing to do with your financials! Just because you are a profitable business, does not mean you are a sellable business. Now don’t get me wrong, having a growing trend of profitability over time is very attractive and WILL increase value. But focusing on the below four key areas will help you add massive value to your company. What are the Four Intangible Capitals Human Capital – this is perhaps the most important one of the four because it’s your people, your team, your employees. And people are everything to a business. It doesn’t matter if you have the best product or process, if you don’t have the right people on the bus, you are in major trouble. Working with people can also be the most difficult to navigate because everyone has their own personality, skill sets, or what motivates everyone can be wildy different. Human capital also measures the quality of talent you have on your team. One of the most difficult challenges for business owners is finding, recruiting, and retaining top talent. Ask yourself… – Why would top talent want to join my company? – What qualities and characteristics am I looking for in a key employee? – What am I doing to motivate the talent I already have in place? – In order to retain talented people, am I providing a path for growth as well as retention incentives for my team? Social Capital – this is the company culture. It’s the heartbeat of the organization and fabric that holds everyone together. It’s how your team members communicate, how you communicate with your customers, and your suppliers. It represents your brand, how your team works together, and it’s the rhythm of your daily operations. This can take years to develop in a business and can be very difficult to transition to a new owner. What I often see when a business goes to sell is they don’t always go with the buyer willing to pay the most. If they are in a position with multiple offers, they will often choose the buyer who has the best culture fit to make their interests and values align. Ask yourself… – What standards do I hold my team and employees to? – When a customer walks into the front door of my business, what is the client experience like? Am I adding value and is it consistent across the company? Customer Capital – Move your customers from being engaged with your company to becoming entangled with your company. Think about the company Amazon. I feel like there is an Amazon box on my front door step every other day of the week. Simply because of the convenience factor. We also use Amazon Prime and Amazon music via our 4 echo dots to play music throughout our house. Can you imagine a world without Amazon?! You get the point. Get your customers entangled with your company. It drives up your value. Ask yourself… – What products or services do I offer my customer that they couldn’t possibly imagine getting somewhere else? – What makes my business indispensable to them? Structural Capital – This is what makes your business run on a daily basis. This is your processes, your documentation, training programs, tools, equipment, real estate, sales process , HR process etc. This is your Standard Operating Procedures.
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What is your goal for your business? As fractional CFOs, when we first meet with our clients, this is among the first questions we ask. Your goals will inform much of our work supporting your company – whether we focus on preparing you for a near-future exit or growing and building the value of your business over time. This is what makes our fractional CFOs – many of whom are also CEPAs – a vital (and often missing) piece of the exit planning puzzle. Many business owners enlist exit planning experts as they approach the exit process, bringing in an army of resources to make the most out of what has already been built. A fractional CFO, however, becomes embedded in your business over time and, in the process, comes to serve as a value growth advisor – a financial expert who can help you
There is a common misconception that what an employee does outside the workplace, particularly on social media, is not the employer’s responsibility.
ROBS – or use funds from their existing personal 401(k) or other retirement accounts as capital for buying a business. In addition to creating cash flow and minimizing the use of debt, ROBS are an attractive source of funds unlocking value from an individual’s retirement savings to fund a business, what are the tax advantages that make considering a ROBS strategy worthwhile? First, there is the aspect of tax deferral. Financing through ROBS avoids the early withdrawal penalty normally incurred when funds are withdrawn from retirement savings prior to retirement. When you use the capital from your 401(k) to fund a new income taxes or penalties, more money is available to go into the business, thus maximizing your available capital. In addition to increasing capital efficiency, you avoid loan obligations because ROBS is not a debt product. It’s simply accessing the equity you already have built up in your retirement plan, so there’s no monthly repayments or interest like you would incur with a loan. Accessing Business Capital Through ROBS Here are some points to remember about how the flow of money works when using a ROBS strategy: The new business entity to be funded must specifically be established as a C-Corp. After a new 401(k) or profit-sharing plan is the business advisory space and how to implement a ROBS strategy. For a consultation on your business plans and objectives, please contact us at 770.740.0797 or email info2@SJGorowitz.com.
As a small business owner, your instinct might tell you to seize every opportunity that knocks on your door. Let’s face it: saying yes can be a thrilling ride into new ventures. Sometimes, you need to remind yourself of your organizational Sweet Spot. Does your team have the bandwidth, the people power, and the infrastructure to take it on? Sometimes, saying no is not just the better option; it’s a powerhouse move that aligns your business with your growth goal. Here’s the lowdown on when, how, and why flexing your “no” muscle is your smartest play. The Unmanageable Yes When you’re overcommitted and under-resourced, every additional yes is like adding more weight to an already overstretched team. If saying yes means sacrificing the quality of your work, spreading your resources thin, or burning out your team, then it’s time for a firm, resolute “no.” Remember, quality over quantity isn’t just a great saying – it’s the golden rule for sustainable growth. The Misaligned Opportunity Some opportunities seem golden on the surface, but they won’t help you achieve your business mission, vision, or values. Listen up: Your business is your compass; every decision should steer you to your true north. If it doesn’t fit, say no. It’s not just about avoiding the wrong turn; it’s about staying true to your course and your team’s potential. The Power of Prioritization Here’s a reality check—you can’t do it all. When you say no to less important things, you say yes to more focus, energy, and time for what truly matters. Embrace the art of prioritization because knowing what to decline is as vital as knowing what to pursue. Make your yes count! Cultivating Respect Saying no isn’t just about protecting your time and energy; it’s about setting boundaries. Assertiveness isn’t rude; it’s a sign of respect – for yourself, your team, and your business’s vision. When you respect your limits, others will follow suit. It signals to the world that your time, team, and resources are valuable. Conclusion Saying no is a tough decision. It’s not a negative judgment; it’s a selective choice. Think of the word no as a complete sentence and a powerful tool to guide your business to where it truly belongs. So, the next time you’re faced with a request that doesn’t feel right, plant your feet, take a deep breath, and remember that saying no is not just okay—it’s essential for your business’s health and ongoing success. Do you need to get in your Owner Sweet Spot?
GAAP traps often occur when a business owner sells a company to a third party. The transaction is commonly memorialized by a Purchase Agreement. That agreement contains certain representations (or “reps”) and warranties. Some of these are common sense and should pose no problem to someone who has operated a good business. The Accounts Receivable represent money that is actually owed to the company. Taxes have been filed on a timely basis. The seller doesn’t know of any pending litigation. The owner has the right and authority to enter into a sale agreement. There is one, however, that is frequently required by attorneys who don’t understand privately held business, and agreed to by owners and their attorneys who don’t understand what they are guaranteeing. They are Generally Accepted Accounting Principles, or GAAP. What is GAAP? To start, the term “Generally Accepted” is misleading. It could easily be interpreted as “what everyone typically does.” Nothing could be further from the truth. GAAP is determined by two organizations, the Financial Accounting Standards Board (FASB) and the Securities and Exchange Commission (SEC). Per I
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