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In this five-part podcast series, we have hosted exit planning expert Mike Trabert to discuss the five stages of a value maturity cycle that will help position your business for a successful transition. A partner at Skoda Minotti, Mike leads the firm’s Value Acceleration & Exit Planning and Transaction Advisory Services groups. He is a certified valuation analyst and the author of new e-book The 5 Stages of Value Maturity. Over the past several months, we have covered the first four stages in a value maturity cycle: Identify Value Protect Value Build Value Harvest Value Manage Value Today, we will be discussing the final stage of the value maturity cycle – managing the value of your business. Although getting your company’s financial house in order is certainly a crucial step, it’s just as important that small-business owners focus on putting together a detailed plan for their personal financial matters after exiting a business. Two key components of this step are estate planning and financial planning tasks. Essentially, this involves taking the time to review and make any necessary updates to important records – such as estate documents, insurance policies, and retirement accounts/pension beneficiary designations, to name a few – every three to five years, or when a major life event occurs. In addition, you’ll need to prepare a detailed budget and personal net worth statement. This will help develop a good understanding of your long-term spending needs in retirement and, based on that, determine the minimum selling price for your business in order to fund those needs. As part of this financial model, it’s important to think through the many aspects of estate planning, such as who will handle the role of executor/trustee, how and when any heirs will receive their inheritance, custody arrangements for children and any charitable goals you may have. In addition, you’ll need to consider whether you are subject to estate taxes. Lastly, be sure to develop a plan for your life after exiting the business. Although this is often neglected by many small-business owners, it’s important to think about how you’ll spend your time post-transition – whether it’s starting a new business, consulting for other companies, getting involved in the community or working on a hobby. To learn more, listen to this week’s podcast with exit planning expert Mike Trabert!

In this five-part podcast series, we’re hosting exit planning expert Mike Trabert to discuss the five stages of a value maturity cycle that will help position your business for a successful transition. A partner at Skoda Minotti, Mike leads the firm’s Value Acceleration & Exit Planning and Transaction Advisory Services groups. He is a certified valuation analyst and the author of new e-book The 5 Stages of Value Maturity. Over the next few months, we will cover each of these five stages in a value maturity cycle: Identify Value Protect Value Build Value Harvest Value Manage Value Now that you’ve identified the actual value of your business, proactively taken steps to protect that value and developed a strategic plan for continuing to build value over the long run, it’s time to move onto stage four of the value maturity cycle – harvesting value. At this point in the process, your small business should be primed and ready for the transition of ownership. In order to achieve this, you will need to identify the succession option by which you will transition your business, position that option in a way you see most appropriate and then harvest your desired value. On a basic level, transition options are categorized as either internal or external: Internal Options Family or Intergenerational Transfer – As the name suggests, this means the ownership is transferred to one or more family members. Most often, children will be next in line to inherit a family business. Management Buyout – This occurs when existing managers acquire a large portion or the entirety of a business, either from the parent company or from private owners. Sale to Existing Partners – With this option, success of the business transition is closely tied to whether there is a solid buy-sell agreement in place. Employee Stock Ownership Program – This means that employees of the company will use pre-tax, borrowed funds to acquire shares from the owner. External Options Third-Party Sale – This occurs when an owner sells the business to a strategic/financial buyer or private equity firm through a negotiated sale, controlled auction or unsolicited offer. Recapitalization/Refinance – Under this scenario, the owner finds new ways to fund the company balance sheet, usually by bringing in an equity investor or lender to act as a partner in the business. The owner can then sell a minority or majority position. Orderly Liquidation – Although this isn’t the first option for most owners, it works best when the asset value exceeds the going-concern value – in other words, when the sum of the parts is worth more than the whole. When considering your transition options, it’s important to take time to consider their respective pros and cons and weigh each option against your business, financial and personal goals before determining which route is the best fit. To learn more, listen to this week’s podcast with exit planning expert Mike Trabert!

In this five-part podcast series, we will be hosting exit planning expert Mike Trabert to discuss the five stages of a value maturity cycle that will help position your business for a successful transition. A partner at Skoda Minotti, Mike leads the firm’s Value Acceleration & Exit Planning and Transaction Advisory Services groups. He is a certified valuation analyst and the author of new e-book The 5 Stages of Value Maturity. Over the next several months, we will cover each of these five stages in a value maturity cycle: Identify Value Protect Value Build Value Harvest Value Manage Value Once you have identified both the actual and target values of your business and proactively taken steps to protect that value over the short and long term, it’s time to move onto stage three of the value maturity cycle – building value. In order to prepare your small business for a transition, you’ll need to close the gap between its actual and target values – and building value will help you do just that. In addition, by focusing on growth over time, you will in turn attract more potential buyers for your company. Although there are short-term actions you can implement, it’s important to remember that the process of building value occurs over a longer period of time – usually many years, or even decades. This requires having a strategic plan in place that will help guide your business in building that value. Essentially, this will involve enhancing and protecting both the tangible value (e.g., property, equipment) and intangible value (e.g., employees, customer relationships, work culture) of your company. However, the main focus should usually be on increasing intangible value, as it’s often more highly rated when valuing a business. As you work toward building the value of your company, it’s important to keep these guidelines at the forefront of your mind: Be disciplined in your approach, and plan/reassess accordingly Document your processes and procedures to ensure intangible assets stay with your business upon transition Account for all details relevant to executing your strategic plan Ultimately, you must be able to measure your progress in terms of how your small business’s value has increased based on the action steps you have taken to build that value. To learn more, listen to this week’s podcast with exit planning expert Mike Trabert!

In this five-part podcast series, we will be hosting exit planning expert Mike Trabert to discuss the five stages of a value maturity cycle that will help position your business for a successful transition. A partner at Skoda Minotti, Mike leads the firm’s Value Acceleration & Exit Planning and Transaction Advisory Services groups. He is a certified valuation analyst and the author of new e-book The 5 Stages of Value Maturity. Over the next several months, we will cover each of these five stages in a value maturity cycle: Identify Value Protect Value Build Value Harvest Value Manage Value Once you have identified the value of your business, it’s time to move onto stage two of the value maturity cycle – protecting that value. Essentially, this will involve proactively addressing and minimizing existing risk-related issues, and mitigating potential risks for both the near and long term. This process can usually be carried out over a three-month timeframe. As a business owner, there are three main types of risks to consider – otherwise known as the “three legs of a stool” – business, financial and personal. Ultimately, the goal is to systematically de-risk your business in each of these areas, which will enhance its attractiveness to potential buyers. After all, risk translates directly to value – meaning the riskier a business is, the less a potential buyer will want to pay. Conversely, a business with little to no perceived risk will command a higher premium. Once these risk-related issues have been identified, business owners will need to consider what proactive steps can be taken to address and mitigate those risks – and how the management team will be involved in the process. Finally, it’s important to bring in an outside expert who can help guide the de-risking of your business. To learn more, listen to this week’s podcast with exit planning expert Mike Trabert!

In this five-part podcast series, we will be hosting exit planning expert Mike Trabert to discuss the five stages of a value maturity cycle that will help position your business for a successful transition. A partner at Skoda Minotti, Mike leads the firm’s Value Acceleration & Exit Planning and Transaction Advisory Services groups. He is a certified valuation analyst and the author of new e-book The 5 Stages of Value Maturity. Over the next several months, we will cover each of these five stages in a value maturity cycle: 1. Identify Value 2. Protect Value 3. Build Value 4. Harvest Value 5. Manage Value For part one of our podcast series, we are diving into the first stage of value maturity – identifying the value of your company. Although many small-business owners pour their blood, sweat and tears into building a company from the ground up, few make exit planning an integral part of their day-to-day business operations. As a result, there is often a sharp disconnect between the perceived and actual value of a company. In fact, 56% of business owners believe they know the value of their company, but only 18% have had a professional valuation in the last two years. Considering the vast majority of a business owner’s net worth is tied up in his or her company, this can have a devastating impact when it comes time for a transition. In order to identify your company’s value, you’ll need to view it from the buyer’s perspective instead. For instance, how does your company score in terms of business attractiveness and transition readiness? This can be based on a variety of factors, including the management team, established systems, growth strategy and associated risks. By getting an accurate gauge on value, business owners will be better equipped to make informed decisions that will prepare the company for its next growth chapter – ultimately leading to a more successful transition for all involved. To learn more, listen to this week’s podcast with exit planning expert Mike Trabert!  

At Evolution Capital Partners our purpose is to serve and inspire small business owners that we identify as Evolutionary leaders: continuous learners trying to build something bigger than themselves, something having a sustainable impact on the employees and communities they serve. Recently, I was inspired by our guest on an episode of The Second Stage: Author, entrepreneur and visionary, Isaac Lidsky. Mr. Lidsky’s new book Eyes Wide Open: Overcoming Obstacles and Recognizing Opportunities in a World That Can’t See Clearly is an inspirational read packed with best practices and mindsets that allows greatness to be achieved.  You can listen to our interview with Mr. Lidsky below. My goal in discussing the book is to tell you how it made me feel and what it made me think about personally. Here it goes. Isaac Lidsky, are you kidding me? This guy starred in hundreds of TV commercials, was one of the lead characters in a national TV program (Saved by the Bell: The New Class), graduated from Harvard (math & computer science) at age 19, co-founded a tech company, graduated from Harvard Law, clerked for two U.S. Supreme Court Justices and then erected a $150 million construction company, all while building a family. Ok, I’m feeling like I need to step up my game x 10……. Then when you find out Isaac is blind you start looking at the world in an entirely different light! Personal Balance Sheet: For over 25 years, I’ve created a monthly personal financial balance sheet for myself and my family. I literally started this on green bar paper, putting my assets, liabilities, thoughts and plans on a piece of paper. Over time, I went from paper to Lotus 1,2,3 and now Excel.  I include trend lines, projections, comments, analysis and I actually look forward to working on it.  It lets me know if I have made progress toward my goals. Isaac takes personal balance sheets to a whole new level – he incorporates the review of core values and non-financials goals. So back to the drawing board for me….and I’m excited to do it!  I encourage everyone to track personal goals in a way that will make you look forward to it every month or quarter! Eyes Wide Open is about seeing with your heart, not your eyes. It reminds me of the Albert Einstein quote: “There are two ways to live:  You can live as nothing is a miracle; or you can live as everything is a miracle.” Isaac takes the phrase everyone has heard before, when life gives you lemons, make lemonade and asks you to consider an alternative in life. He asks readers to learn to see lemons and choose to make lemonade.  It is about seeing and taking action. Think of everything as a miracle – it is extremely refreshing. There were many, many more nuggets in the book, but would encourage you to read and let me know your thoughts and take-aways. I look forward to hearing from you! Isaac was kind enough to take time out of his busy schedule to chat with Jeff and me about his life, book and goals. Here is our conversation:  

The decision to take on an add-on acquisition is a big one and should not be taken lightly. You need to make sure company and employees are ready for this kind of strategic endeavor. Growing your small business through acquisitions offers many benefits to the overall value of your company, as long as you’ve chosen the right company to acquire. But how do you know whether that company is a good fit? In this audio segment, Jeff Kadlic talks about the factors to look for in potential add-on businesses to determine if they will compliment your operation and generate an attractive revenue. Kadlic highlights the opportunities for organic company growth or growth through acquisitions. He also touches on the potential risks and benefits of taking on an add-on acquisition. Looking for more information? Check out our resources section and blog for more information about acquisitions and small business practices. Or contact Evolution Capital Partners at (216) 593-0402 or by using our online contact form.  

Think it’s time to take on a new acquisition? Add-on acquisitions can help your small business grow, position your company as a dominant player in its competitive field and increase the overall value of the company. But how do you know if your company is ready for this kind of strategic endeavor? There is a lot of work that goes into developing an investment case to determine if an add-on acquisition will compliment your business and if it will generate an attractive return. In this audio segment, Jeff Kadlic talks about preparing your small business for an add-on acquisition and how The 5 Pillars of Business Freedom(SM) fall into the preparation process. Looking for more information? Check out our resources section and blog for more information about acquisitions and small business practices. Or contact Evolution Capital Partners at (216) 593-0402 or by using our online contact form.  

With 2016 winding down, we feel it’s a great time for small business owners to reflect on their successes and failures (or better stated, growth opportunities) in the past year, and then begin developing new strategies that build on these experiences in the year to come. In keeping with the spirit of this show, cultivating cultures of continuous learning, we’d like to share not only our own reflections and experiences over the past year, but those of some of our post popular guests in this two part series. We have had the opportunity to speak with a wide range of incredibly talented individuals, all of whom offered their time, talents and perspectives to help entrepreneurs create the ideal environment for a thriving business. We hope, as in all of our episodes, to provide a few key takeaways to help guide you on your journey as you plan, grow and prepare for an eventual—and prosperous—exit from your business.  

With 2016 winding down, we feel it’s a great time for small business owners to reflect on their successes and failures (or better stated, growth opportunities) in the past year, and then begin developing new strategies that build on these experiences in the year to come. In keeping with the spirit of this show, cultivating cultures of continuous learning, we’d like to share not only our own reflections and experiences over the past year, but those of some of our post popular guests in this two part series. We have had the opportunity to speak with a wide range of incredibly talented individuals, all of whom offered their time, talents and perspectives to help entrepreneurs create the ideal environment for a thriving business. We hope, as in all of our episodes, to provide a few key takeaways to help guide you on your journey as you plan, grow and prepare for an eventual—and prosperous—exit from your business.  

On today’s episode of The Second Stage we welcome Bill Hubbard, Owner and Founder of Hubbard Business Counsel, to shed light on the newest of the crowdfunding options for both business owners and investors, Reg CF or Title III. In effect as of May sixteenth of this year, Title III allows businesses to raise equity capital online from non-accredited investors, unlike the previous forms of crowdfunding. We will discuss both the opportunities and challenges investment crowdfunding poses for business owners, as well as resources and internal steps to prepare your business, should you decide investment crowdfunding is right for you. Join us to learn more!  

We are thrilled to welcome Joan Crain, Global Family Wealth Strategist, BNY Mellon Wealth Management, this week to The Second Stage. Joan works closely with wealthy families and their advisors to provide comprehensive and customized wealth planning solutions. We will speak with Ms. Crain about steps one can take to ensure a successful navigation of the transition from an active owner/operator to a business investor, post exit. Ms. Crain notes that it is extremely important for a business owner to carefully consider both lifestyle and psychological changes that accompany the transition from entrepreneur to investor. She will touch on the significance of having a good team of advisors in place, who the team should consist of, and the role each plays. Join us to learn more!  

We talk often about the importance of great financial metrics and reporting as you establish and grow your organization. And it doesn’t stop with just having solid financial practices in place, but must be accompanied with a culture of transparency and accountability to empower your employees for better decision making. Today’s guest however takes the concept of being financially sound one step further, as he shares the importance of teaching your employees how to manage their own personal finances and the impact to not only their own life, but that of the organization. Mr. Clint Greenleaf, founder and CEO of Greenleaf Groups and founder of Greenleaf Book Group, speaks passionately about entrepreneurship and personal finances. He shares his own experiences working with employees and how implementing a brown bag lunch series, Personal Finance 101, was just the beginning of what became an ongoing education and modified version of open book management. Join us to hear the results.  

At a certain point in the lifecycle of every business, there comes an awkward phase of organizational development where the complexity of a business is overcoming its team’s capabilities as leaders and the systems they created. Too big to be small, and too small to be big, this wilderness phase is what Doug Tatum’s bestseller refers to as “No Man’s Land,” a critical transitional stage in the metamorphosis of a growing company. And just as every teenager thinks they’re the only one struggling with fear, doubt, and the pressure to grow up faster, so every business owner needs to understand that this phase is normal and in fact manageable. A serial entrepreneur and 20 year member of the Entrepreneurs’ Organization, we are excited to welcome back Rich Manders to discuss how leaders can identify that their business is at this pivotal point, where complexity is growing at an exponential rate, and more importantly, how to overcome the transition.  

As business owners grow their organizations, attracting AND retaining the right talent is crucial. Without the right team in place with everyone understanding their individual and team roles and how they fit into the organization, it is hard to reach desired company goals. So where does one begin when it comes to ensuring employee success? Does it start with employee onboarding or before? Who is responsible for onboarding? How do you measure the effectiveness of acclimating new hires? These are just a few of the questions we will answer on today’s episode of The Second Stage with our guest, human resource expert and President of Organizational Architecture, Mark Fiala. Investing in talent is a significant undertaking for any company, especially small businesses. So join us on today’s episode to learn best practices when it comes to employee retention – it starts even before an individual’s hire date.  

A journey every business owner MUST take, exiting your business can either be the most rewarding or the most deflating. The part of an entrepreneur’s journey not often highlighted, the question is, what defines a great exit and how can it be planned for so that the entrepreneur leaves on his or her own terms (with satisfaction and a sense of accomplishment) and not by happenstance (with remorse). Here to join us is author Bo Burlingham, his new book “Finish Big” focused on this very subject. During our discussion we will walk through what Bo defines as the four phases of exit (Exploratory, Strategic, Execution and Transition), including what each of these phases entails. There is a process every entrepreneur can take to ensure that the factors important to them personally and professionally are dealt with in the best possible manner. And these factors can include everything from company culture to simply the involvement or lack thereof of the entrepreneur upon exit.  

Growing your small business is a challenge, no matter the size or industry, with many owners identifying access to capital as one of the biggest hurdles in achieving their goals. But typically access alone is not the stumbling point. Knowing how to identify the right kind of capital, along with finding the best capital partner to fit your needs rank high in the hurdles category. To help us address these points, along with how and where to start on this journey, is Founder and CEO of Star Mountain Capital, Brett Hickey. During today’s discussion we will touch on the importance of timing, planning and knowing your long term goals -both professional and personal- before setting sail. Join us to learn more!  

Kim Ferenchak, Practice Leader of Executive Risk at Oswald Companies, joins us on today’s episode of “The Second Stage” to discuss privacy and data security risks and how to ensure your business is prepared as well as protected. Business practices have evolved as we move further and further into the digital world, making it easier to not only start a business, but conduct business on a day to day basis – think better customer experience and data access - however with this comes strategic risks over cyberattacks. Ms. Ferenchak will help us understand exactly what private information is, the primary exposures that may cause harm to a business or business owner, and what elements of a cyber risk management program are imperative to ensure protection. In addition to knowing what to look for when identifying ways to get ahead of cybercrime, Ms. Ferenchak will also address what, if any, insurance solutions may be available to protect your business and its customers.  

As you plan to sell your business, remember (1) you can never start too early and (2) don’t go it alone. Finding the right professional (s) to help you through the process is essential. Here to join us for today’s discussion on selling your business is the co-founder of Divestopdia, John Carvalho. Sharing his knowledge and expertise as a seasoned M&A professional, we will speak with John about some of the more difficult issues he frequently sees during the sale process and ways to possibly avoid these common pitfalls. We will also discuss not only why identifying the right advisor is so crucial , but tips and resources for finding the advisor or partner that best fits your needs as you go through this important phase in your business’s life cycle.  

An important element of a great business many overlook is assembling a diverse advisory board, committed to developing your organization and exchanging knowledge. The right people bring innovative ideas, create opportunities and help a company move forward faster toward its stated objectives (or ones they didn’t even think possible). In fact, having the right people involved can be more important than having capital, because good ideas and good companies can attract low-cost capital. And it is important to note that an advisory board is different than a board of directors, focused solely on governance. The advisory members bring experience and views not found within the business, who are prepared to challenge the expectations, capabilities and vision of the organization. We are thrilled to welcome back Jeff DeGraff, the Dean of Innovation, to help us explore this topic in depth, providing suggestions for attracting those individuals that will push your organization to new heights.