Sep 21, 2023
1 min read
New York
Supply Chain
There is significant evidence that supply chains have “normalized.” Delivery times are fast and overall demand is low. Many companies are now looking at “longer-term” supply chain planning and changes. Some of these changes include multi-sourcing and digitizing supply chain operations. Geopolitical events and resulting tariffs/sanctions could quickly change the supply chain landscape, however, so it is more important than ever to be nimble with respect to strategic and tactical planning.
Sep 20, 2023
1 min read
Tri-State
When preparing (hopefully in advance!) to sell your business, it helps to understand what buyers will looking for and asking about. While revenue and financials are well-known areas of due diligence, for companies in the product space the efficiency and riskiness of operations and supply chain are also fair game. Buyers are concerned about a target company’s ability to complete products to satisfy customers and drive revenue. This depends on a robust supply chain and manufacturing strategy. They will consider questions such as: what do you build and buy?; why?; where?; and, what risks are associated with that (geopolitical, tariff, logistical)? While many people know that potential buyers will ask questions about customer concentration, some do not realize that savvy buyers will also ask about supplier concentration in order to better understand the risks of dependency on a few (or one!) suppliers for critical materials needed to generate revenue. In cases where there are limited suppliers available, buyers will want to know how that risk is mitigated. They may be interested in whether you have too few suppliers (creating risk) or too many (leading to high managerial overhead and low influence with each supplier). Supplier relationships and total cost of ownership – payment terms, inventory programs, whether you have been paying your suppliers on time, etc. are all areas that buyers may look into. Buyers are also interested in inventory levels of both finished goods, work-in-progress, and raw materials. This can be a major drain on cash flow. Obsolete inventory (which has been in stock for a long time and has no likely future use) also raises concerns. Inventory accuracy may be a concern – if they think they are buying $2M in inventory but there really only is $1.5M from a physical count, that will lead to some discussions. It is wise to expect a possible inventory count and prepare in advance with your own counts to assess and improve accuracy. It is best to think like a buyer and prepare early to set up supply chains and operations that will impress potential acquirers and not raise red flags. By deliberately thinking through manufacturing and supply chain strategies and addressing potential risks, companies can best situate themselves for successful exits. Please feel free to reach out to Lustig Global Consulting (
Aug 21, 2023
2 min read
Atlanta
Increasing revenue when preparing for a future sale (or pretty much anytime!) is great but an equivalent savings in operational costs, such as supply chain and manufacturing, can provide an even greater increase in company sales price since valuations are often based on multiples of EBITDA. A $1M increase in sales may improve EBITDA by several hundred thousand dollars while a $1M decrease in supply chain and manufacturing costs usually improves EBITDA by almost that full amount. There are a number of ways to tackle optimizing these costs. A first step is to look at the current manufacturing and supply chain strategies and how they align with the company’s overall strategy. Are these areas part of the core competencies that are essential to maintain in-house? Are there other possible operational strategies that are worth considering? With that guidance, companies can then look at their options. Are they buying the right things from the right suppliers (and the right number of suppliers) at the right time (think inventory levels) at the right prices and on the right terms? Do they have the right mix of what they fabricate, assemble, test, package, and distribute themselves vs. through suppliers? Are the in-house process optimized for best cost, inventory, and quality? Assessing these areas provides great potential for increasing the company’s values. For more information please go to
Jul 24, 2023
1 min read
Atlanta
Expense Reduction Analysts (ERA) are looking at numerous ways to help companies save money and improve processes in an inflationary environment. One of ERA’s most successful verticals in assisting companies with their freight costs. Need: Business leaders are looking at unique ways to combat inflation and reduce freight costs. Solution: ERA’s freight specialists put forward 10 unique ideas to combat rising freight costs as a catalyst to initiate a conversation with decision-makers and promote our expertise. Value: Decision makers who utilize ERA’s group of experts will save more than with their internal teams alone. Please take a look a the attached PDF. Reach out if you have any questions or if I can be of help.
Jun 29, 2023
1 min read
Tri-State
Managing Today’s Reality of Excess Inventory: The Domino Effect of Having Out-Dated Software Systems. Not having real time information on the fast-moving products. Not having accurate information of the inventory level in multiple locations. No method of tracking Vendor Reliability of ON-TIME deliveries. What are the Results of Excess Inventory? Late shipments will result in production disruption. Order cancellations will result in excess inventory. Reduction of Profit from reduced sales price to move excess inventory. Cash on hand reduced as funds are tied up in unsold inventory. How to Manage the above issues! Replace the outdated software with real time software needed to: Better manage everything related to sales and inventory The Benefits Resulting from Real Time Software! Understanding inventory turns to maximize inventory at item levels. Knowing Vendor Reliability to achieve better product availability! Understanding the inventory availability when managing multiple locations. For additional information visit our website
Mar 18, 2023
1 min read
New York
A major theme of this edition of ProfitSense was accounting, as host Bill McDermott welcomed two CPAs, Bradley Carroll, CFO of Progressive Lighting, and Gary Clayton, CFO of Superior Business Management. Bradley discussed his move from a CPA firm to in-house practitioner, the significant problems associated with logistics and sourcing products internationally, and more. Topics Gary addressed included enhancing the value of the business, major challenges business owners face today, and why misclassifying employees is so high-risk for such small savings. ProfitSense with Bill McDermott is produced and broadcast by the
Jun 14, 2022
1 min read
Atlanta
Apr 18, 2022
2 min read
Atlanta
With the supply chain and labor shortages caused by the pandemic, the blockage of the Suez Canal (remember that?), and the ongoing war between Russia and Ukraine, prices have gone through the roof. And while the Fed may claim some of it is transitory, many of us know exactly what it is: Inflation! But what exactly is inflation, what does it mean for a business, and what can a business owner do about it? In this article, we’ll define inflation and discuss some strategies for dealing with its ramifications. What is inflation? Inflation is an increase in prices not tied to an increase in quality. Inflation is when food prices go up for no reason at all; if package quantity went up to the same degree as food prices, then the price increases would not be an example of inflation But when we get away from simple things like food, it gets a bit murkier. If a car price goes up because the car is rare, is that inflation? How about putting out better but more expensive models…is that inflation? If cars are hard to come by because of a chip shortage, is that inflation? How about when the price of a commodity goes up because the price of fuel went up? Is that truly inflation? Or is it what the Fed would describe as transitory – something that will reverse itself when the price of oil comes back down? (Incidentally, the question of when the price of oil will come down is up for debate.) Our firm recently held a webinar with an energy analyst who opined that energy prices might stay high for some time (fact check and include link)) But, beyond defining inflation, the real question is – what does this mean for my business? How do I react and keep my business, reputation, and pricing power? Tips for Dealing with Inflation I recently had a conversation with a food service provider. He was facing a dilemma; commodity prices like flower, oil, and onions were up 80-150%. Labor was up significantly too. How can he keep selling food at a price people can handle while continuing to make a profit? Here is some of what I shared (and other things I did not share that may be interesting to a broader audience). Not all products are created equal. The cost for components of one product went up modestly while the cost of ingredients of the other went up much more significantly. Understand your margin by product and you can know where you need to raise and where you can absorb slightly tighter margins. Create efficiencies. If labor costs are up, what can you do to reduce the amount of labor inputs? Maybe hire robots for a piece of the process. Maybe buy certain items ready made from a larger vendor who can get economies of scale. If certain onions are up more than mushrooms, start offering mushroom salad as a standard and charge an extra fee for onion salad. Be thoughtful about inventory. Having extra inventory will cost you more money and you ultimately have to chare the customer more to cover your carrying costs. On the other hand, with prices increasing weekly, you may save significant money by buying things today rather than next month. Loss leaders are an option. Certain products might be unprofitable when viewed individually; however, if they enable you to sell other more profitable products, you might profit on a customer interaction even if you do not profit on each individual component. Consider buying in bulk. If you get a slight discount today and lock in your prices for the next few months, you are probably ahead of the game. Unless of course prices start rapidly falling, in which case you have price stability but are behind the 8-ball. Keep a long-term view while making sure you stay liquid and solvent. If you believe that commodity prices will come down (I do, but unfortunately, I do not know when), realize that there could be an opportunity to build or solidify those long-term relationships today and make the profit tomorrow. Keep an eye on the competition but know your numbers. Know where your business’s “line in the sand” is located. If you go past there, you will end up regretting it. Don’t let your competition entice you to chase unprofitable volume. You may not “make it up in volume…” Compete on things other than price. Provide a better dining experience, off hours delivery, customization, or something else your customers value that doesn’t cost you too much to provide. You will raise prices, but they’ll keep coming back for other reasons. Don’t just focus on margins. If you used to produce product for $5 and sell it for $10 but now it costs you $10 to produce, you can sell it for $15 and while you’ll have a much tighter percent margin (33% vs 50%), you’ll still be making the same number of dollars in profit ($5). Your competition may continue to mark it up 100% (so if the cost is $10, they’ll charge $20). Consider a loyalty program. If you do have to raise prices, consider instituting a loyalty program to “give something back.” While “points” are often left unused, you still build loyalty and if customers do come back for the freebies, you are giving my favorite type of discount – the one you only give when they come back. Monitor closely. If you do choose to operate on tighter margins, be very careful of waste and spillage. With tighter margins, every lost “unit” eats up a bigger piece of your profits. It’s been an interesting decade so far, these 2020s. When we are all grandparents, the kids are not going to believe this, but until then, keep paying attention to what is going on and make sure you are thoughtful about the scenarios in which you find yourself. Be intentional about your business (and life too!) and make sure to have good facts so you can make the right strategic decisions to help you weather this storm. — Gershon Morgulis is the founder and managing partner of Imperial Advisory CFOs. Imperial’s 8-CFO team provides owners and other executives of growing businesses with part-time CFOs and other consulting services which enables businesses to make better and more confident business decisions.
Apr 12, 2022
5 min read
Long Island
Take Control of Insurance Pricing Premiums continue to increase for certain commercial insurance lines, while coverage terms have become more restrictive. Companies that take a passive approach — simply responding to quotes from underwriters — frequently receive coverage that’s both inadequate and overpriced. Watch this video to learn how organizations can leverage data to proactively drive the insurance placement process, reducing their cost of risk typically by 10% to 25%.
Mar 16, 2022
1 min read
Long Island
file:///C:/Users/Ken%20Nixon/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/G0KS0M5L/21-Q4%20US%20MFG%20Newsletter%20Garr%20Cantrell%20-%20211221.pdf
Feb 11, 2022
1 min read
Tri-State
Feb 7, 2022
1 min read
From appliances to sofas, Americans aren’t used to empty shelves or waiting weeks for their purchases. But the pandemic continues to disrupt the supply chain, shuttering factories, creating logjams at ports, and exacerbating a truck driver shortage. This event will bring together regional leaders – L.L. Bean CEO Stephen Smith, Massachusetts Port Authority CEO Lisa Wieland, and Boston Public Schools food services executive Laura Benavidez – in a discussion led by Globe business columnist Shirley Leung on how they’re dealing with supply chain woes, the impact on our fragile economic recovery, and whether this is a new normal.
Dec 16, 2021
1 min read
Tri-State
We are hearing and reading a mix of information from economists and suppliers in a wide range of industries. Some state that they expect supply constraints to loosen by the end of the year and prices to plateau. Others tell us that even though some of the commodity indices show price relief, it will still take 6-9 months for those lower prices to work their way down to industrial consumers. The most optimistic outlook is that things will soften a bit by the end of the year, while the pessimists indicate that we may not have relief until late Spring / early Summer of 2022.
Nov 16, 2021
1 min read
Tri-State
Every business owner envisions a growing business, running smoothly without drama and having massive amounts of cash flow and profits. The problem is that with growth comes increasing complexity. Oftentimes, you need to add people and improve processes. Deciding not to add people and processes can create choke points in our business that cause it to become increasingly inefficient or ineffective. It breaks my heart to see businesses not living up to their potential. There’s a fix for those choke points, but sometimes we see them or sometimes we don’t. Or if we do see them, we may not know the right fix.
Sep 28, 2021
1 min read
Atlanta
Popular
What's Trending
In every internal transfer, whether to family or employees, the owner/seller has to make the harvest or grow decision. We’ll presume that your business has already reached a point where its value meets or exceeds your financial objectives as the owner. If growth is required in order for you to afford your next act, then that decision is less strategic than it is driven by your lifestyle requirements. If the company has already reached a substantial level of success, however, you may still be tempted to maximize cash flow until your departure. Deliberately reducing your cash flow by starting a process of equity transfer may not sound very appealing. The obvious question is “Why would I sacrifice my personal income in order to finance their acquisition of my company?” Why not harvest? The answer to that question revolves around the strength of your desire to control the process. Although staged internal transfers of equity almost inevitably require that the owners surrender some personal income at the outset, there is considerable psychological value in dictating the timing, method, and eventual proceeds of your exit. When compared to the listing and sale process of presenting the company to third-party buyers, an internal transfer allows the maximum of owner control. There is no exposing the finances of the company to strangers. It doesn’t require negotiating, sometimes against professional negotiators, or against low-bid opening offers. Since internal buyers are already familiar with the organization, it can circumvent the often excruciating process of due diligence. IAs a seller, you can look at your up-front funding of initial equity purchases as a sort of insurance policy. No lender will fund 100% of an employee purchase, and family purchases are rarely financeable. Transferring equity to the buyers, whether it is fully paid for or via a subordinated note, allows them to finance the balance of the purchase. The “insurance” factor is usually understood. In return for sacrificing some cash flow now, an owner can leave on a chosen departure date with 70% or more of the proceeds in hand. The longer you wait, the higher the probability that you will have to owner-finance the entire transaction. Why not grow? There are also a few arguments against a growth strategy. The chief one among these is time. If you are pressed for time due to the influence of one of the
Dec 9, 2024
4 min read
San Antonio
A Rollovers as Business Start-ups (ROBS) strategy for starting or buying a business has numerous benefits, including ready access to cash flow and
Dec 6, 2024
1 min read
Atlanta
“What is an Exit Plan” is an article I wrote ten years ago. It was just brought to my attention and I realized I never posted it to Awake for some reason. Here, with some updating, we celebrate its 10th anniversary. Exit planning is the buzzword for those who consult to Baby Boomer business owners. Business brokers, wealth managers and other professionals are adding “exit planning” to their marketing messages. It’s a logical reaction when over 5,000,000 Baby Boomers (about 3,000,000 in 2024) are preparing to leave their businesses. Not surprisingly, when a business broker creates an “exit plan,” it usually involves listing the business for sale to a third party. An attorney’s planning focuses on the legal documents that allow the transition of the assets of a company to new ownership. An accountant or financial planner will look closely at tax and inheritance issues, and an insurance broker offers products that reduce the risk of interruption or disaster. All these are important to the successful implementation of a plan, but each professional focuses on his or her specific skill set. If your shoulder hurts, you could go to an orthopedic surgeon, a neurologist, a general internist, a chiropractor, or a physical therapist. Each will have a treatment approach for a painful shoulder. Each will be different, based on his or her specialty. Each will reduce the pain at least somewhat, although some of them may or may not address the underlying cause. Similarly, there are many professionals who claim competence in exit planning. Each has a different area of expertise, and what they term exit planning tends to focus on those areas. A comprehensive exit strategy encompasses legal, tax, and risk management issues, but it also examines the operational issues of the company whose value is the underlying driver for everything else. Why do an Exit Plan? Before drafting the first document or embarking on a plan to spend the money from a sale, the business must first realize the proceeds of a transaction. That means it must find a buyer who will pay for it. That buyer could be a third party, but it might also be an employee, an employee group, or family members. Any third party considering the purchase of a business will do extensive due diligence. Their willingness to pay a premium for a company will depend on its track record of revenue growth, the stability of its margins, and how well-established its systems and customers are. If the company is larger than about twenty employees, they will look for supervisory and management talent who will stay after the sale. Regardless of size, a business that is highly dependent on the owner for revenue or making all key decisions will be deeply discounted or even impossible to sell. An exit plan should look at these factors and help to make the adjustments needed to realize full value. Selling to employees or family is often an attractive option because it allows the ownerto choose a retirement date, and price is less of an issue than financing terms. Unless you are willing to accept a promissory note for most of the price and feel secure that your successors can maintain payments over a long period, a plan for this kind of exit should begin at least three, and preferably five to eight years before the planned transfer date. What is an Exit Planner? An exit plan needs legal, tax, risk and wealth management expertise to be successful, but it also requires a practical examination of the operational strengths of your business. Selecting one professional to manage the efforts of everyone, and to help keep you on track, is a wise investment. In America, the average small business owner has nearly 75% of his or her net worth in the company (still true in 2024). The single biggest financial transaction of your life deserves special attention. ==================== This article was originally published by John F. Dini, CBEC, CExP, CEPA on
Dec 5, 2024
3 min read
San Antonio
Jennifer Abruzzo, the National Labor Relations Board’s (NLRB) General Counsel, is continuing her campaign against non-compete agreements. She just issued a memo announcing her office will seek more remedies for employees who are required to sign non-compete agreements. This follows previous statements in which she said non-compete agreements, which affect about 20% of US workers (30 million people), are unlawful. She has expanded her argument to include “stay-or- pay” provisions, stating they restrict workers’ job opportunities which (somehow) discourages unionizing. Non-Compete Agreements The NLRB is currently considering the legality of non-compete agreements under the National Labor Relations Act (NLRA) in a case involving an Indiana HVAC company. In a 2023 memo, Abruzzo explained why overbroad non-compete agreements are unlawful. She explained they hinder an employee’s ability to exercise their rights under Section 7 of the NLRA, which protects employees’ rights to take collective action including unionization. Abruzzo’s agenda has faced setbacks. In April 2024, the Federal Trade Commission (FTC) largely noncompete agreements, with some exceptions, however the ban was subsequently
Dec 5, 2024
3 min read
Tri-State
As small business owners and leaders, we’re no strangers to the daily grind of comparison and competition. It’s easy to look at the success of others and wonder if we measure up. But this Thanksgiving, we’re taking a page out of Heather Holleman’s novel1, “Seated with Christ: Living Freely in a Culture of Comparison,” and the transformative words of Ephesians 2:6: “God raised us up with Christ and seated us with Him in the heavenly places in Christ Jesus.” In the hustle to prove our worth and carve out a place in the market, realizing that your seat at the table is already secured is revolutionary. This isn’t about your turnover, your team size, or the number of followers on social media. It’s about recognizing the value you bring to the table just by being you, backed by the firepower of your determination, creativity, and the unique vision only you possess for your business. The Overlooked Seats Comparison is the thief of joy in business, and it’s also the thief of innovation and growth. The environment of inauthentic seats fuels comparison, the moment you and your team stop eyeing the lane beside you is the moment you turbocharge your path forward. Your business isn’t like anyone else’s—for a reason. The individual strengths and talents within your team are your biggest asset, waiting to be unleashed. Recognize and harness the power of these unique capabilities to drive people-powered change. A Secure Seat on The Team Your team—the one you’ve built, trained, and grown—holds untapped potential. Just as we are seated with Christ in a place of honor and security, so too should our team members feel valued and vital to our mission. This Thanksgiving, let’s take a moment to express genuine gratitude for the diverse skill set each member brings to the table. When people feel valued, they’re more engaged, productive, and innovative. And that’s how a small business not only survives but thrives. The Power of People-Powered Change FIREPOWER Teams is founded on the belief that the power of a small business lies in its people. “Fuel your people power” isn’t just a motto; it’s a mission statement and a call to action. Reflect on how you can empower each team member to contribute their best this holiday season, fully aware that their seat at the table is as non-negotiable as yours. Thanksgiving is a time of gratitude, reflection, and community. As business owners, it’s a prime opportunity to reassess what we’re thankful for and how we express that gratitude through our actions and leadership. Let’s enter this season with a renewed commitment to value ourselves, our team, and all our unique contributions. Let’s reject the ceaseless comparison and instead focus on fostering an environment where everyone feels seated at the table—secure, valued, and ready to make a difference. The entrepreneurship journey is rarely easy, but with a team that genuinely feels like their efforts matter, there’s untold strength to be garnered. Your business, team, and vision have a secured seat at the table. Let’s give thanks for that incredible opportunity and the journey ahead. Conclusion Remember, the most sustainable growth comes from within. Thanksgiving is a time to rekindle our appreciation for the value we each bring to the table, reminding us that when we work together, there’s nothing we can’t achieve.
Nov 22, 2024
3 min read
Atlanta
“The purpose of middlemen in the marketplace is to provide time and place utility.” I remember the light bulb going on in Economics 101 when my professor said that. Suddenly, I understood the concept of added value. Someone had to get the product to the customer. “After all,” the professor continued, “The footwear manufacturer in Massachusetts can’t sell a pair of shoes directly to someone in California. They can’t manufacture and handle thousands of customers. It would be a nightmare, and completely unprofitable.” The fact that Massachusetts was still known for shoe manufacturing gives you some idea of how long ago this took place. So long ago, in fact, that Zappos wasn’t even a word yet. The independent shoe retailer gave way to the department stores. In turn their shoe business was decimated by the specialty chain retailers. In fact, most shoe departments in Macy’s and others are actually chain operations within the store. Shoe sales moved into sporting goods stores and discounters. While the industry shifted multiple times, they all still provided time and place utility. Then came the Internet. Now the manufacturer can sell directly to consumers. In fact, they can eliminate several layers of middlemen, along with the mark-ups. Lately my area has been swamped with billboards saying “Mattress Dealers are Greedy. TN.com.” TN.com turns out to be My friends at Digital Pro has survived (and thrives) by their differentiation and service. The large, bright showroom is full of computers where they can show customers the effect of adjusting color balance or editing. They can print your lifetime memories on almost anything, from a key chain to a large metal panel. They can still give you prints made with permanent liquid ink, not the water soluble powder used by most printers. In addition, they can do all of this online because they’ve invested in the technology necessary to keep up with the “convenience-based” competitors. As the cost of digital printers fell, professional photographers invested in their own machines. Digital Pro Lab has replaced their business with consumers who want to discuss their special moments, choose how to preserve them, and hold the results in their hands before they pay. In an industry where the number of time and place based outlets has fallen by over 90% in the last decade, Digital Pro Lab has beaten the big boys with product differentiation and service. When the time comes for planning an exit, they will have options. This article was originally published by John F. Dini, CBEC, CExP, CEPA on
Nov 13, 2024
4 min read
San Antonio
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