Mergers and acquisitions

When it comes to business valuation, “it depends” is the honest answer to the question, what is the median for small business (sorry, I hate the answer too). Why? Let’s say you own a construction business doing $5 million/year in revenues and $500,000 in EBITDA (profits), or about 10% of revenues. Because construction businesses can range from $0 to $billions, valuation tracking databases have to set parameters. Databases will report multiples to get a value for smaller construction businesses, but the RANGE might look like this: 3.23x for 25th percentile 5.23x median 12.65x for 75th percentile However it really depends on the nature of the businesses selected to generate the range. If an advisor chooses large businesses, the range could be as follows: 8x for 25th percentile 12x median 20x for 75th percentile If you are the owner of the $5 million construction business with $500,000 profits, you may want a value of 20x profits, but you are likely to be disappointed. Even with the smaller range, the 75th percentile probably means companies at $15 million in revenues and 15% profits. So business owners: you need to ask about the range of value for the higher and lower percentiles, to get a fair judge of value. I can assure you that buyers (and their bankers) who use these same databases, will ask about the range. _____________________________ If you’d like to think more deeply about your business, try the LEARN MORE

In our first blog in this series, “Selling My Business, What Should I Expect,” we talked about what to expect in the sale process to a third party. If you haven’t read it, I’d suggest reading it to set the stage for this discussion on business valuation and how it fits into exit strategy. If you did read it, give it a quick reread: “A complimentary hour with David David Shavzin, Exit Strategist / M&A Advisor Value Creation, Exit Strategy, Business Sales Founder and President, Exit Planning Exchange Atlanta 770-329-5224 // david@GetOnTheValueTrack.com // 

As we noted in Glassdoor identified that companies with a well-structured onboarding program improved new hire retention by 82% and outlined the following successes: 91% felt strong connectedness at work. 89% felt strongly integrated into their company culture. 49% reported contributing to their team within the first week. Employees were 18 times more likely to feel highly committed to their organization. In contrast, organizations without an effective onboarding process experience a 31% higher employee turnover rate within 6 months, and more than half of employees who received ineffective onboarding (52%) also felt negatively about the organization as a whole. The Impact of Poor Onboarding When employees leave within the first few months, it creates several notable problems: High Recruitment Costs Recruiting new employees is expensive. It involves advertising job vacancies, screening resumes, conducting interviews, and training new hires. When employees leave within a short time, you will incur these costs again, increasing your recruitment expenses. Loss of Productivity New hires take time to adapt to their new roles and responsibilities. When they leave within a few months, they have not completed their learning curve and are unlikely to have made significant contributions to your business.  They have also taken time from peers and others on training. This loss of productivity slows your business operations. Negative Impact on Morale High employee turnover rates can affect morale among the remaining team members. When employees leave without being replaced, other team members must pick up the slack and work longer hours. This can lead to burnout and decreased job satisfaction. Jeopardized Business Exit Strategy When you plan to sell your business, potential buyers look at various factors, including employee retention rates.  A high turnover rate is a factor in the perceived value of your company, making it less attractive to potential buyers. Benefits of a Proper Onboarding Plan New hires should be provided with a comprehensive onboarding plan outlining their role’s expectations and responsibilities. This plan should include an introduction to the company culture (i.e., shared values, attitudes, behaviors, and standards that make up a work environment), a detailed role description, and training timelines should be completed. A well-designed onboarding process will help your business in several ways: Increased Employee Retention An effective onboarding program can significantly improve new hire retention rates. When employees feel welcomed and supported, and their time is structured during their first few weeks on the job, and they have scheduled progress checks with supervisors, they are more likely to stay with your company. Enhanced Productivity A proper onboarding plan accelerates new hire productivity. When employees clearly understand their roles and responsibilities and receive proper training and support, they can start contributing to your business operations sooner. Additionally, new hires should be given access to the necessary tools and resources to succeed in their role. Improved Employee Morale A positive onboarding experience can boost employee morale and job satisfaction levels. When employees feel valued and supported, they are more likely to be engaged in their work and motivated to achieve their goals. Favorable Business Exit Strategy When you have a well-structured onboarding process in place, you demonstrate to potential buyers that you have a stable and committed workforce. This can increase the determined value of your business, making it more attractive to prospective buyers. Conclusion A proper onboarding plan is crucial for retaining employees, achieving business success, and increasing the perceived value of your business in preparation for a business transition or exit. Investing in a customized onboarding program designed by FIREPOWER Teams is critical to achieving long-term success for your business. Contact Maria Forbes at maria@firepowerteams.com today.

As we delve into 2024, the Mergers and Acquisitions (M&A) landscape continues to evolve, shaped by the echoes of the COVID-era and the dynamics of the present. In a recent “Deal-by-Deal” podcast by McGuireWoods, I sat down with host Greg Hawver to dig into the trends and expectations shaping the M&A sector, particularly in the middle to lower middle market. Here’s a closer look at the key trends we discussed in the podcast and see impacting M&A in 2024. 1. Reflecting on 2023: A Year of Caution and Decline The year 2023 marked a significant downturn in M&A activities, recording one of the lowest deal-making volumes in a decade. This decline was not isolated but part of a continuing trend from the previous years, influenced by economic uncertainties and a shift in market dynamics. The year set a cautious tone, with both buyers and sellers recalibrating their strategies in response to the evolving economic landscape. 2. The Ascendancy of Corporate Deal-making A notable shift in 2023, expected to influence trends in 2024, is the increased involvement of corporates in M&A activities. With substantial cash reserves, corporates have been capitalizing on their ability to deploy capital efficiently, making them significant players in the M&A arena. This trend underscores the strategic realignment of companies as they navigate the complexities of the current economic climate. 3. Bridging the Valuation Gap A persistent theme, and one that’s expected to continue into 2024, is the disconnect between seller expectations and market valuations. Many sellers, influenced by the peak valuations of yesteryears, find themselves at odds with the current market realities. This valuation gap poses challenges but also opens up dialogues for recalibration and realignment of expectations, paving the way for more realistic and sustainable deal-making. 4. Anticipating the Pulse of 2024 The outlook for 2024 is cautiously optimistic, with the first half of the year likely mirroring the trends of 2023. However, as interest rates stabilize and valuation expectations align more closely between buyers and sellers, the latter half of the year could witness an uptick in M&A activities. This period of adjustment is crucial for both buyers and sellers to strategize and position themselves advantageously in the market. 5. The Evolution of Deal Structures and Financing The M&A landscape in 2024 is witnessing an increasing complexity in deal structures. With more equity rollovers and structured deals, parties are seeking ways to de-risk transactions. The rise of private credit is reshaping the financing of deals, filling the void left by traditional lenders. This trend highlights the need for innovative financing solutions and flexible deal structures in the current market. 6. Industry-Specific Trends and the Role of Technology Certain industries are poised to navigate 2024 differently, influenced by their cyclical nature and economic exposure. Additionally, the integration of AI and technology, especially in sectors like healthcare, is expected to drive transformation and create new opportunities. Staying attuned to these industry-specific trends and technological advancements will be key for M&A success in 2024. 7. Strategic Advice for Sellers and Buyers In this evolving landscape, being well-prepared is paramount. Sellers are advised to align their expectations with market realities and ensure their businesses are primed for sale. Buyers, on the other hand, are encouraged to cultivate relationships and explore unique opportunities, especially before companies are already launched into broad auction processes. As we navigate through 2024, the M&A landscape is marked by cautious optimism, strategic realignment, and an innovative approach to deal-making. By understanding these trends and adapting strategies accordingly, stakeholders in the M&A sector can navigate the complexities of the market and capitalize on the emerging opportunities.

I want to buy your business”. You need to step back, think, and plan. You need to understand the process and what lies ahead – before you act. Your business is likely your biggest asset and you are counting on a successful sale at the right price to move on to whatever comes next. So, you need an exit strategy!What happens without an exit strategy?No sale. Or, at a much lower price. Without a plan in place – an exit strategy that addresses the timing of a sale and value creation – business owners lose out. Too many wake up after many years in business to the depressing reality that the business is not worth anywhere near what they need or want. It may not be sellable at all. There are often significant problems in the company requiring a lot of work before a buyer would even consider an offer. Because fixing things can take a substantial investment in time and money, you need to start now.What do you need to know before starting down this path?There are six key areas around exit strategy and selling your business that you need to understand. Here, I begin with the selling process. I will get into the others in subsequent blogs.The Process of Selling a Business – When a Sale is Your Exit Strategy. It can take 9 – 12 months or more. Therefore, you need to understand what this entails for you, the preparations you need to make, and what your advisory team should be doing for you.Options: It may not look like the transition or succession planning you envisioned. Your transition may be that traditional sale to a third party, but there are many other options that may be a better fit with your succession planning and personal goals.Value – the buyer perspective. Get an estimate of value. Identify areas for value creation and for solutions to problems that may make your company simply not sellable. Look at value creation from the eye of the buyer.Value Creation and Sellability – From the opportunities and problems that you have identified, prioritize them and define an action plan. Which initiatives and investments will give you the biggest potential value increase and which will remove glaring deal breakers? Examine everything from financial management to technology to The Value Track, Atlanta, GeorgiaCo-Founder and Past President, LinkedIn

That is a question many businesses have faced over the years. Today, there are businesses that saw big increases in sales during the early days of the pandemic (2020 – 2021), but 2022 softened and 2023 seems kind of flat. This is especially true in many retail businesses “selling things”. Why? Because many consumers switched to buying services (travel, etc.), after redecorating their house, or buying power sports equipment, etc. Since leisure travel is almost back to 2019 levels, and inflation surged (at least for a while), there is only so much money to go around. As a business owner who wants to sell in such a scenario, you have to show financials from 2018 to 2022, and then estimate 2023 and 2024. If you can show that overall business growth from 2018 to now, then buyers may see this sales dip as part of the normal business cycle. That said, as a seller, you should be prepared for a price that reflects the business as it is, not what it was in 2020-2021. You also may see buyers put earn-outs into their offers, that are based on your forecast for 2024 and 2025. This give your the opportunity to get more money over the next year or two, versus what you may get at the closing table. So the answer to my question is “yes”, you can sell a business when sales take a dip, but you have to be flexible and show that there are growth opportunities for the buyer.

“Opinions are like boats on the sea of knowledge; while they can guide us, it is important to navigate with caution and consider multiple perspectives.” Are you in the process of evaluating or updating your current website? If so, you’ll soon be drowning in stakeholder feedback. When conducting a site evaluation and content review, it’s best to gather stakeholder feedback early in the process and build your solution around an informed, agreed-upon strategy. However, gathering those perspectives can be overwhelming and an administrative nightmare. Fear not. In this article, we will help you navigate the turbulent waters of conducting a  What Are the Benefits of Conducting a Website Audit? First, let’s start with a quick overview of why you should conduct a website audit before putting pen to paper or mouse to monitor: 1. Identify and fix technical issues: A website audit helps uncover any technical issues affecting your site’s performance, such as broken links, slow loading times, or mobile responsiveness problems. Addressing these issues can improve the user experience and ensure your site functions at its best. 2. Enhance SEO performance: An evaluation also allows you to identify areas where your site can be optimized for better visibility in search engine results pages (SERPs), such as improving keyword targeting, optimizing meta tags, or enhancing site structure. By optimizing your site for SEO, you can attract more organic traffic and improve your search rankings. 3. Analyze content effectiveness: A website audit helps you evaluate the quality and effectiveness of your website content. You can assess whether your content aligns with your target audience’s needs and preferences, identify gaps or areas for improvement, and ensure consistency across your site. This analysis can help you create a content strategy that resonates with your audience and drives engagement. 4. Assess user experience: In an audit, you can evaluate the site’s navigation, layout, and overall usability to identify any pain points or barriers hindering visitors from engaging with your site. Improving the UX can enhance user satisfaction, increase conversions, and encourage repeat visits. 5. Benchmark against competitors: Another great benefit of a website audit is that it enables you to compare your site’s performance and features against your competitors. You can identify areas where you may be falling behind or where you excel. This benchmarking analysis can help you uncover opportunities for differentiation and improvement to stay ahead in the competitive landscape. By conducting a website audit, you can gain valuable insights into your site’s strengths and weaknesses and take actionable steps to improve its overall performance and user experience.   How to Capture and Organize Stakeholder Feedback During a Website Audit? All captains need a logbook. When gathering, managing, and implementing stakeholder feedback, you can use several tools and methods to streamline the process and make your life much easier. Here are a few of our favorites: 1. Hotjar: Google Sheet can be an effective way to organize stakeholder feedback. You can create a column for all the URLs of the website pages being audited. Then, you can add columns for the feedback links with descriptions, the point person responsible for making the change, and due dates. You can also include a column with a drop-down multiple-choice for the status, such as “Active,” “Pending Approval,” or “Live.” This will help you track the progress of each feedback item. 3. Project or Content Management Tools: Various project management tools can help you capture and organize stakeholder feedback. Tools like Wrike, Asana, Google Docs or Microsoft Teams can also capture and organize stakeholder feedback. You can create a shared document or folder where stakeholders can directly provide feedback. This allows real-time collaboration and easy access to all feedback in one centralized location. Your choice of tools and methods will depend on how your team communicates best, your budget, and your current tech stack. Test out a few options first to ensure they will help versus hinder the process.   Captaining a website audit has its challenges. But with the right process, people, and tools in place, you’ll be in ship-shape. If you need assistance conducting a website audit or developing your digital marketing strategy, please contact us at 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 enjoyed 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. 

In my work with family-owned businesses and various enterprises, I’ve observed a recurring theme: the unexpected pitfalls during the acquisition process. And let me tell you, nothing derails a potential deal faster than financial surprises. So, how do you ensure transparency and trust from both sides of the table? The answer lies in a Quality of Earnings (QoE) report. For buyers, the due diligence phase is akin to peeling back the layers of an onion. You want to uncover the core, understand the real financial health of a company, and ensure there are no hidden liabilities. A QoE report does precisely that. It provides a deep dive into the company’s earnings, highlighting any non-recurring items, assessing the sustainability of earnings, and giving a clear picture of the company’s financial trajectory. Simply put, it’s your roadmap to making an informed decision. But here’s a perspective many sellers often overlook: Why wait for the buyer to dictate the narrative? As the owner, you’ve poured your heart and soul into your business. You know its value, its potential, and its challenges. But perception is a powerful tool. By proactively conducting a QoE report, you’re not just preparing for the sale; you’re controlling the narrative. You’re ensuring that the story told is accurate, fair, and representative of your business’s true value. Imagine the scenario: You’re in a negotiation, and the buyer presents a list of financial concerns. But instead of being caught off guard, you’re a step ahead. You’ve already addressed these in your QoE report, providing clarity and, more importantly, solutions. This proactive approach not only builds trust but also positions you in a place of authority. It says, “I understand my business, and I’ve done my homework.” In my experience, the most successful transitions are those where both parties come to the table informed, prepared, and transparent. A QoE report is not just a document; it’s a testament to your commitment to a fair and successful acquisition. It eliminates the “what-ifs” and replaces them with “here’s how.” To my fellow business owners, I urge you: Don’t wait for the buyer to shine a light on your financials. Take the reins, be proactive, and ensure that the story told is the one you’ve lived, nurtured, and grown. After all, who better to tell your business’s story than you?

No attention to exit strategy. No attention to value creation. “I am tired, and I want to sell but I don’t know what it’s worth or how to design an exit strategy for selling my business.” We hear this from business owners over, and over again. To sell your company, to make it both sellable and valuable, you need to take the time to design an exit strategy, work on succession planning, and get focused on value creation – long before putting it on the market for sale. Two questions I frequently hear from owners: “So, what do you think, should I start my exit strategy now? They usually know the answer – they should have started long ago. The second question is: “What do you think it’s worth?” On this question, they often have some outsized value stuck in their mind. In talking with hundreds of business owners, I know that they are usually: Feeling tired and would like to get out. While they do not want to put in much more time or invest in building value, they are not satisfied with what it is worth today. Putting off a succession plan for a generation-to-generation transfer. They may feel they have time, or that their children (children often in their 30’s and 40’s) are “not ready yet”. They may fear losing an income stream as they transition out of the business. Taking no time to develop an exit strategy that could dramatically increase their business valuation when it comes time to sell. They are simply working in the business. If you think that your timing is two to three years out and that you can therefore keep putting this off, you need to understand that “two to three years” is NOW, especially if you are in your 50s, 60s, 70s or older.  The sale process itself can take 9 – 12 months, or more, from start to finish. And you can’t “time the market” for selling your company, just like you can’t time the market with your investing in the stock market. With all of what’s going on out there in the world, an exit strategy is critical to monetizing your life’s work! A sudden downturn could keep you captive in your business for another few years as you try to rebuild. By the Way, It’s NOT all about YOU! Without an exit strategy, you are not just risking your own retirement, or the next phase of life. You are putting in jeopardy your spouse, children, their families, your employees, their families and more. Not sure where to start? Consider these questions and let’s find time to discuss: Do you know the value of your business? When do you want to be completely or mostly out of the business? Can you make it through the next downturn? Do you have a solid plan for what you will do after your exit? Let’s discuss the sellability and value of your company! David Shavzin – Founder & President Co-Founder & President, 

Selling Your Business? Recognize the Three Types of Business Buyers Understanding the traits common to each buyer category can help sellers level the playing field in a business sale of any size. In middle-market business sales, the value of the deal and the path to a successful closing are shaped in large part by a factor that many sellers underestimate: the type of buyer that is evaluating your company. Looking at the more than 1,100 business sales that IBG Business’s M&A professionals have closed dating back to the 1980s, the lion’s share of buyers can be slotted into one of three major categories: Individual buyers, consisting of experienced entrepreneurs, former corporate executives or corporate staffers yearning to work for themselves, and high net worth individuals who seek an opportunity to create wealth Strategic buyers, which often use business acquisitions to achieve synergistic goals (e.g., increase market share, achieve geographic growth, or reduce competition) Financial or “professional” buyers, which are constantly in the market for business acquisitions that will achieve high returns for themselves and/or their investors. As you prepare your business for sale and embark on one of the most important transactions of your life, being aware of each type of buyer can help you anticipate what a prospect will look for in a deal and how you can respond throughout the sale process. Following is a profile of each type of buyer and a look at some of their distinguishing characteristics. INDIVIDUAL BUYERS Their Traits. Individual buyers are in it for their personal benefit. They may be serial entrepreneurs, retirees from the corporate world, a first-time owner who has had enough of working for someone else (i.e., they are looking for income and freedom), or a recent seller who is looking for his next challenge. In most cases, individual buyers target smaller, relatively affordable, well-run, low-risk businesses where they can have hands-on ownership. That often makes them welcome prospects for sellers who not only want to sell their company but also want a buyer who is looking for a turn-key operation, will preserve the company’s reputation, grow it into something bigger and better, and take good care of your employees. Risk – that is, the lack of it – can be a major consideration for individual buyers, because they are either new to business ownership, lacking in capital, or in the second half of their life and don’t want to take unnecessary chances. Risk can be a consideration for sellers as well, if the buyer is unable or unwilling to pay cash for the business and wants you to carry a portion of the purchase price. Because they have a personal stake and involvement in the deal, they are the least likely of the three types of buyers to treat the purchase as “just business”; consequently, they are often the least predictable, and they will often require the most attention due to their lack of transaction experience. Professional Help. In what we would characterize as a “Main Street” deal (as opposed to a deal at higher rungs of the value ladder), you will attract prospective buyers from the full spectrum of sophistication and integrity. An

Tax deferral options on the sale of business or property is always an important consideration.  Structured Installment Sales allow the Seller the opportunity to defer immediate tax obligation by placing any portion of their sale into an IRC Section 453 Structured Installment Sale.  The opportunity to spread tax liabilities and maximize financial returns is remarkable with this product. Visit our website today for more information and give us a call to learn how we can assist you and your clients to amplify their sale and secure their financial future. Twitter: @SIS_JCR Chad Ettmueller / Senior Vice President / 770-886-7400 / cettmueller@jcrsettlements.com

The decisions employers make regarding their benefits offerings during this period of economic uncertainty will likely have lasting impacts on their finances, their employees’ expectations, and their ability to attract and retain talent — all of which can affect the organization’s overall health. To ensure continued success, employers should critically evaluate each and every area of operations, including employee benefits. Zeroing in on this particular piece of the operational puzzle can help you uncover opportunities for cost savings that could potentially impact your organization’s bottom line. The following recommendations offer actionable strategies employers can implement today to maximize their benefits program and support operations in lean times. Re-Evaluate Plan Designs To bolster the overall cost-effectiveness of their operations, many employers are taking this opportunity to re-evaluate their health plan designs and offerings to ensure maximum savings. Some organizations are shifting to self-funded or partially self-funded health plans, while others are leveraging health reimbursement arrangements or health savings accounts to incentivize employees to make financially smart healthcare choices. Our Building a Year-Round Communications Strategy.     Create a Comprehensive Benefits Package During tough economic times, employers may have to cut back on benefits. But organizations can still support employees with mental health resources, financial wellness programs, and a wider range of voluntary benefits. Thinking outside the box and leveraging cost-effective employee benefits can help preserve the quality of your offerings while freeing up funds for other operational areas needing additional support during an economic slowdown.

By Allan Tepper Often, parties interested in making a purchase are serial buyers, hence their advantage. But for midsize sellers, this will probably be the one and only time they sell. Sellers spend the better part of their lives building a company so they can now cash out and ride into the sunset. Unfortunately, mergers and acquisitions can be very challenging—and I’m not even talking about what happens after the deal. I’m solely focusing on the deal itself. There are many pitfalls and traps that await, especially if this is your first time. Here are five items that will help sellers obtain the value they created: Project Over Personality If you don’t get a good feeling from the buyer in the first few minutes, you should give passing some real consideration. In the end, the outcome of pending mergers and acquisitions will hinge on whether you can keep both parties focused on the project (i.e. the deal). Regrettably, the matter can shift to center on the personalities involved with the deal. And that’s usually the beginning of the end. It may start as a “chemistry” issue between two individuals, but it can quickly devolve into a lack of trust. You began the deal with plenty of trust, but what happened? Well, you just learned the price changed. Maybe it’s legitimate, but now your antennae are up. As soon as the win-win deal becomes a perceived win-lose, it’s no longer about the deal. Now, it’s about you versus them. Unfortunately, the lack of trust diminishes value. So, how can you avoid those barred-knuckled conversations? Say what you mean and mean what you say. The letter of intent is a great place to start. Make sure the critical aspects of the deal are captured in the letter. The letter will be turned into a contract, so if there are missing parts and surprises once the lawyers get involved, the deal may crater. Plan To Win For sellers, planning is the absolute key to success. Your goal is to win the war, not a battle, so start planning early in the process. What do you want to accomplish by selling your company? Do you want to sell to a private equity firm or a strategic competitor? Would you want a position in the merged company? How long will you stay after the deal closes? You will need to know the answers to these questions to guide you through negotiations. Even the smallest details matter. For example, gather all your required documents in the deal room to make sure the process goes smoothly. We had a client that had several contracts where the executed version could not be found. Failing to plan means planning to fail. Good planning should avoid seller’s remorse. Fix Your ‘Hair’ Negative items—things that give buyers consternation—need to be disclosed right away. Bad news, also referred to as “hair” in M&A speak, doesn’t age well. Worse yet, don’t create an opportunity where the buyers find out about the negative stuff first. This is not a birthday party; surprises are bad for business. When you present the negative news, make sure you include how it is being addressed. If the buyer thinks he is purchasing $5 million in inventory, he will be surprised to learn $3 million is obsolete. So, take a write-down to ensure the buyer gets quality inventory. Then, communicate your solution. Of course, performing due diligence on the buyer can go a long way. Sometimes, seemingly negative issues can be turned into positives. For example, if 80% of your revenue is coming from one company in a specific sector, it could be seen as a negative for your company, but it could be viewed as the missing piece for a larger company with a diverse customer base. Use The Right Numbers Numbers are the quickest way to build reputation and trust. They also are the quickest ways to kill the deal. The Chief Financial Officer should play the role of facilitator, gathering all the key players on the sell side. At that point, the CFO should go through the key numbers of the business that are important to the deal. Then, the other key players should highlight their key numbers that dovetail back to the CFO’s numbers. And then everyone should memorize their numbers. In my experience, many companies fail to do this part. Do you know what happens when the warehouse manager says you have $3.5 million in inventory, the CEO says it’s closer to $2.5 million and the CFO says it’s $3 million? The buyer runs out the door. Developing the right policies and procedures will also help you arrive at the correct numbers. Closing your books quickly and accurately is more about trust than accounting at this stage. Don’t allow poor quality of information to erode value and crater the deal. Quality Counts Earnings before interest, taxes, depreciation and amortization (EBITDA) is a measure of cash flow. And that’s important because it plays a large role in determining your company’s valuation. Every industry has a multiple, which will be used with your EBITDA to determine fair market value. But here’s where it gets interesting. Even the most scientific equations contain elements of art. You should conduct a sell-side quality of earnings analysis to create an adjusted EBITDA. For instance, you may want to add back the CEO’s salary because the acquiring company already has one. The purchasing company, however, argues that they will need to hire someone to fill a part of the role left by the outgoing CEO. You should consider the past and the future when thinking about what quality of earnings means. If you are selling an event production company that derives a large part of its revenue by hosting several annual events on set dates, what happens if those dates change? How much would quality of earnings dip? If you are selling a company that owns ski resorts, how will climate change impact future earnings? Forward-looking statements carry many shades of gray. Analyzing quality of earnings will remove a big part of the mystery and increase the chances for a successful merger. (

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How would it feel to shorten the time to productivity? Why does someone need to do their job the way they do? How can people become productive faster? Introduction: As a small business owner, you wear many hats. You’re the visionary, the marketer, the accountant, and often, the HR department. However, having the right people in the right roles is key to your success. It’s not just about filling seats; it’s about aligning talent with the demands of each department. This is where Kolbe comes in – a powerful tool that can help you unlock your team’s natural strengths and optimize your business’s performance. The Problem: Mismatched Skills and Frustration We’ve all seen a detail-oriented person struggling in a fast-paced, idea-generating role or a creative mind bogged down by rigid processes. Mismatches like these lead to frustration, decreased productivity, and, ultimately, higher turnover. This is especially damaging in a small business where every team member’s contribution is crucial. You might be tempted to use traditional methods, like resumes or personality tests. While these have their place, they don’t always get to the heart of how someone naturally gets things done – the key information the Kolbe A™ Index provides. Enter the Kolbe A™ Index: Understanding Your Team’s Conative Strengths The Kolbe A™ Index isn’t about measuring intelligence or personality. It measures a person’s conative strengths – their instinctive method of taking problem-solving action and getting things done. It reveals how they prefer to: Fact Finder: Do they need to gather data or rely on intuition? Follow Through: Are they good at meticulously executing plans, or are they more adept at improvising? Quick Start: Do they prefer to start new processes or refine existing ones? Implementor: Are they good at taking something complex and making it simple, or are they adept at handling intricate details? The Kolbe Index places you on a spectrum for each mode of action and gives you a number (ranging from 1-10) for how you naturally prefer to act within each mode. Map Roles to Kolbe Strengths: Now it’s time to analyze the demands of each department and role within your business. For instance: Marketing: You might look for individuals with high “Initiator” and “Fact Finder” scores. Operations/Production: This might be an area for those with a stronger “Follow Through” style. Sales: Those with a strong mix of “Initiator” and “Implementor” could excel here. Accounting/Finance: Look for those with a high “Follow Through” preference and a strong preference for “Fact Finder”. Open the Dialogue: Have open and honest conversations with your team. Share their Kolbe results (with their permission) and discuss how their strengths align (or don’t align) with their current role. Make Strategic Adjustments: Consider making adjustments based on the Kolbe results and those conversations. This might mean moving someone to a different department, shifting responsibilities within a team, or modifying a team member’s workflow to better utilize their strengths. It’s critical to remember that this is not a tool to punish or demean anyone but to place them in their best role, where they can thrive. Embrace Team Diversity: Each Kolbe profile offers unique strengths and values. A team of people working in the exact same way is not as effective as a team that balances diverse strengths. Benefits of Using Kolbe in Your Small Business: Increased Productivity: People who work within their natural strengths are more efficient and engaged. Reduced Frustration: Fewer mismatches mean less frustration, which leads to improved morale. Lower Turnover: Happier employees are less likely to leave. Improved Team Collaboration: When people understand how their teammates approach work, they can collaborate more effectively. Enhanced Problem Solving: A well-balanced team with diverse Kolbe profiles can tackle challenges more creatively. Better Decision-Making: Understanding the different ways each person naturally approaches a problem can lead to better decision-making in the long run. Rethink your Growth and Exit Planning: As a small business owner, you’re constantly looking for ways to optimize your operations and create a thriving work environment. Using Kolbe is not about forcing square pegs into round holes. It is about understanding the natural approach of your team and putting everyone in a place where they can thrive. Investing time and resources to understand your team’s conative strengths will pay dividends in increased productivity, happier employees, and, ultimately, a more successful business. So, take the first step, explore the power of Kolbe, and watch your team’s potential flourish. Call to Action: Are you ready to understand the power of your team’s strengths? It is important to have a Certified Kolbe Consultant guide you on how to use this data to attract, engage, and develop your team so you can grow and exit on your terms.

Listen to this post as a podcast: Click here to talk to Bloomwood about your finances. Are you ready to take control of your finances and maximize your after-tax income? If so, you’re in the right place. I’m Billy Amberg, founder of Bloomwood, and today, we’re going to explore a financial case study that affects everyone—whether you’re just starting out on your wealth-building journey or you’re a seasoned investor with substantial assets. The 1% Financial Advisor Fee: Is It Worth It? The financial advisory and wealth management industry invests massive marketing dollars to convince you that paying a 1% portfolio management fee is worthwhile. But is it really? Let’s break it down. For those with financial advisors who provide significant value through tax planning, estate planning, and comprehensive financial strategies, paying 1% can be justified. If you have a complex trust or unique investment needs, that fee might also make sense. However, if your advisor is merely managing your portfolio, responding to your questions reactively, and failing to offer proactive financial planning, then you are overpaying. Many advisors hold periodic meetings about investments, but that alone doesn’t justify the 1% fee. Why Paying 1% for Just Investment Management Is Too Much To understand why paying 1% for basic investment management isn’t worth it, we must first explore key investment principles. One of the best ways to structure your investments is by using the Three Buckets Approach: Cash Reserve Bucket: This is your safety net, typically covering 6 to 12 months of living expenses in case of an emergency. It also provides liquidity for investment opportunities, such as purchasing real estate. Fixed Income Bucket: If you need stable income to support your lifestyle, especially in retirement, this bucket consists of low-risk investments like bonds, ensuring steady cash flow. Long-Term Growth Bucket: Everything else belongs here. This is where equities and growth-focused investments come into play, aligning with long-term wealth accumulation. Understanding Risk Tolerance and Why It Matters Less Than You Think Many investors are familiar with risk tolerance questionnaires used by financial advisors or platforms like Vanguard. While these assessments provide insight into your comfort level with risk, they are not the ultimate determinant of investment strategy. For example, a young professional with limited financial resources who fears market volatility might lean toward ultra-conservative investments. However, avoiding equity exposure could mean they never accumulate enough wealth to retire. An advisor’s role should be to educate and coach clients through investment realities rather than just accommodating risk aversion. Why Beating the Market Is Nearly Impossible Many financial advisors attempt to justify their fees by claiming they can outperform the market. However, history shows that even professional fund managers struggle to consistently beat benchmark indices like the S&P 500. Consider this: The NASDAQ (Technology Index) has significantly outperformed the S&P 500 in recent years. The S&P 500 itself remains a difficult benchmark to beat even for top-tier investment professionals. The only funds consistently outperforming the market are quantitative hedge funds like D.E. Shaw, Citadel, and Two Sigma—which charge exorbitant fees and require massive investment minimums. If professional fund managers can’t consistently beat the market, how can an individual financial advisor do so? The answer is simple: they can’t. The True Cost of Active Management vs. Index Funds Rather than paying a financial advisor 1% to actively manage investments, many investors can achieve better results with low-cost index funds. Vanguard, for instance, offers index funds with fees as low as 0.05% per year. Additionally, for just 0.30%, you can get a Certified Financial Planner (CFP) through Vanguard, which is more than a third cheaper than the typical advisor fee. How to Determine If Your Advisor Provides Real Value Before you continue paying a 1% management fee, ask yourself: Is my advisor providing value beyond just investment management? Am I receiving proactive tax planning, estate planning, and financial strategy sessions? Can my advisor point to tangible financial benefits I’ve received beyond portfolio returns? If your advisor’s only contribution is managing your portfolio, you are likely paying for underperformance. Paying 1% for an actively managed fund that fails to beat the market is counterproductive when low-cost index funds offer superior long-term results. The Bottom Line: Are You Getting a Fair Deal? If you’re paying 1% for asset management, it should come with significant added value, including tax planning, estate planning, and personalized financial strategy. At Bloomwood, we focus on delivering real, tangible benefits beyond just managing investments. If you want to learn more about investing and getting massive value through financial planning, check out our other content: Kickstart Your New Year with Smart Financial Planning: A Comprehensive Guide Tax Planning: How Buying Tax Credits Can Cut Your Tax Bill and Boost Profits Disclosures Bloomwood does not make any representations as to the accuracy, timeliness, suitability, or completeness of any information prepared by any unaffiliated third party, whether linked to or incorporated herein. All such information is provided solely for convenience purposes and all users thereof should be guided accordingly. We are neither your attorneys nor your accountants and no portion of this material should be interpreted by you as legal, accounting, or tax advice. We recommend that you seek the advice of a qualified attorney and accountant. For additional information about Bloomwood, please request our disclosure brochure as set forth on Form ADV using the contact information set forth herein, or refer to the Investment Adviser Public Disclosure website (

We know that a way higher-than-acceptable percent of those who sell their company have many regrets a year later.  A piece of that is how well did they plan life beyond the sale?  Purpose is a huge part of that, and we have many XPX members who are retirement coaches and help people plan for purpose.  That is incredibly important. And there is so much more.  How is that person going to thoughtfully, proactively remain healthy, minimize their health-related risk factors, stay mentally sharp, have a robust social network since so much of their current social network is wrapped up with the business, partners, clients, etc. And then what about knowing when and how to include family members so that inevitable changes in the future are fully planned?  We have XPX members who plan the financial, the estate, the insurance pieces which are all important.  There is a much deeper personal side that is rarely planned and leaves families not knowing what to do when a crisis happens, health declines, a spouse is lost, or other unexpected events. All of this can be planned, and when it is, the future is brighter and more secure. Selling the business just opens the door to new phases of life that are just as fulfilling and engage those prior business owners in new ways to engage with their community, their family, and their unique interests. Purpose is not busy-ness.  In a future article we will talk about how very important that differentiation is.

Listen to this post as a podcast: Click here to talk to Bloomwood about your finances.   Quantum computing and artificial intelligence (AI) are two transformative technologies that have the potential to reshape industries and solve some of the world’s most complex challenges. Together, they form a dynamic duo capable of driving breakthroughs in fields ranging from healthcare to manufacturing. In this post, we’ll explore the synergy between quantum computing and AI, the challenges involved, and the exciting future ahead. What is Quantum Computing? Quantum computing offers the potential to solve problems that classical computers struggle with, such as those in drug discovery and material science. Quantum computers operate using quantum bits, or qubits, which can exist in multiple states simultaneously (superposition). This ability to represent both 0 and 1 at once allows quantum computers to solve problems much faster than classical systems. How AI is Transforming Industries Artificial intelligence, particularly machine learning, is already transforming industries such as healthcare, finance, and defense. By analyzing large datasets and making predictions based on that information, AI systems are helping organizations make more informed decisions and predictions. In fields like healthcare, AI is improving diagnostics, personalizing treatment plans, and advancing medical research. In finance, AI-powered algorithms are being used for fraud detection, risk assessment, and market prediction. The Challenges of Building Stable Quantum Computers Despite its potential, building stable quantum computers remains a significant challenge. Quantum states are incredibly fragile, and any disturbance can cause errors in calculations. This makes developing reliable quantum computers a difficult task. Furthermore, quantum encryption is a concern, as quantum computers could eventually break current encryption methods. Researchers are already working on developing quantum-resistant encryption to address these challenges. The Rise of Quantum Sensing Quantum technology is not limited to computing. Quantum sensing is emerging as a powerful tool for detecting small changes in physical properties such as magnetic fields, gravity, and time. This could lead to breakthroughs in medical imaging, environmental monitoring, and navigation, with applications in everything from precision healthcare to transportation. The Economic Impact and Job Creation The growth of the quantum and AI industries is expected to generate over $1 trillion by 2035, creating hundreds of thousands of jobs across various sectors. By 2030, it is predicted that 250,000 jobs will be created in the quantum sector, with that number rising to 840,000 by 2035. These technologies will not only fuel economic growth but also provide opportunities for innovation and creativity across a range of industries. How Companies Can Capitalize on Quantum and AI Advancements Companies looking to thrive in the quantum and AI space must: Adopt early: Be early adopters of quantum and AI technologies to establish themselves as leaders. Create value: Apply these technologies in ways that solve real-world problems in industries like healthcare, finance, and manufacturing. Innovate rapidly: Keep pace with technological advancements and remain adaptable in a fast-moving market. Invest in infrastructure: Have the financial strength to fund R&D and build the necessary infrastructure. Leverage marketing: Effectively communicate innovations to the public and industry stakeholders.   Key Companies to Watch in the Quantum and AI Space Tech Giants Leading the Way Companies like IBM, Microsoft, Apple, Amazon, and Nvidia are heavily investing in quantum computing and AI technologies. These tech giants are positioning themselves for long-term leadership by developing cutting-edge solutions and forging strategic partnerships in the space. Industry Disruptors Smaller companies like Square, Chime, Clario, and Anduril Industries are harnessing AI and quantum technologies in unique and innovative ways. Particularly in finance, healthcare, and defense, these disruptors are pushing the envelope on what’s possible with these technologies. Innovations in Telecommunications and Manufacturing Telecommunications: The Future of Quantum Communication In telecommunications, BT is exploring quantum communication to enhance the security and efficiency of digital networks. IQ Go is leveraging AI to improve network management, optimizing resource allocation and improving network reliability. Manufacturing: Virtual Models for Optimization In manufacturing, companies like Forge are using AI to create virtual models of manufacturing processes. This allows them to simulate, optimize, and improve production lines with digital twin technology, resulting in greater efficiency and cost savings. Democratization of Quantum and AI Technologies One of the most exciting developments in the quantum and AI space is the democratization of these technologies. Cloud-based services now allow small businesses to access powerful quantum and AI tools without needing their own hardware. This mirrors the early days of the internet when once-exclusive technologies became available to the broader public, sparking innovation across industries. Quantum Startups Making Waves Several startups are making significant contributions to quantum computing. For instance: Reggetti Computing combines quantum and classical computing in a hybrid approach to enhance performance. IonQ is pushing the boundaries of quantum computing with trapped ions as qubits, offering high fidelity and long coherence times. Zapata Computing provides platforms for quantum algorithm development, making quantum computing more accessible to those without deep expertise in the field. Key Concepts in Quantum Computing To fully appreciate the potential of quantum computing, it’s essential to understand some key concepts: Superposition: Qubits can exist in multiple states simultaneously, allowing for parallel computations. Entanglement: A quantum phenomenon where qubits are linked, enabling instantaneous communication and increasing computational power. Fidelity: The accuracy with which qubits can be manipulated. Coherence Time: The duration for which a qubit can maintain its quantum state before it decays. Will Quantum Computers Replace Classical Computers? While quantum computers are powerful, they are not meant to replace classical computers. Instead, they are designed to tackle problems that classical systems cannot handle, such as complex simulations and optimization tasks. The future will likely see a hybrid approach where both types of computers complement each other, each playing to its strengths. Responsible AI Development As AI continues to evolve, it’s crucial that we develop it responsibly. This means addressing issues like bias, transparency, and accountability. For example, if an AI system is trained on biased data, it may perpetuate and even amplify those biases in its decision-making. In fields like healthcare and finance, transparency is essential. We must ensure that AI decisions are understandable and explainable, particularly when they have a direct impact on people’s lives. Similarly, accountability is key: if an AI system causes harm, we need to determine who is responsible. The Future of AI and Quantum Computing As we look ahead, the future of AI and quantum computing is filled with possibilities. These technologies have the power to revolutionize industries, create new economic opportunities, and solve some of humanity’s most pressing challenges. But with great power comes great responsibility. We must ensure that these advancements are used ethically and transparently to benefit society as a whole. The quantum era is here, and it’s full of opportunity. Whether through AI’s ability to enhance communication or quantum computing’s ability to solve complex problems, these technologies are set to transform our world. Check out our other recent article on investing in quantum computing! 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.

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.

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