value in your brand

There is Value in Your Brand

Every year, Forbes releases a list of the world’s most valuable brands for the year. Included companies in this list are: Apple, Disney, Coca-Cola, and others. This list contains the most polished brands, the ones that consumers believe to be the best and have the greatest brand value. Yes, these are large companies but small and middle market companies can learn a lot from these.

First, take a look at the perception of these larger companies. Consider what you immediately think of when you read the company name or see the logo. Does your company have a positive perception in the marketplace? If the answer is no, you need to find a way to change that. Not only is perception a huge factor to your customers and potential customers, but also to businesses that look to make deals with yours and for people who may be interested in purchasing your business. Always remember the impact of your reputation in the marketplace. Are you respected in the community? Do you have great relationships with your client base? Do your clients trust you? Each of these factor into the overall value of your business.

The companies on Forbes’ list are creative and innovative in their respected marketplace. They found a way to differentiate their company from their competitors to stand out. This is another way to boost the value of your company. When buyers are looking for potential target companies for purchase, they are looking for that extra marketable piece that adds value to the transaction. For instance, let’s say a buyer owns a successful website building company and is looking to buy a social media company. Many social media consultants and companies boast the same basic services. However, if one excels at providing SEO services or CRM services – that particular company made itself more valuable then its competitors and is more appealing to buyers.

Are you are looking to exit your business but just now beginning to think about these things? You may have some work to do to create a polished business that will interest sellers. If you are a new business owner looking to retire in 10-20 years, now is the perfect time for you! You should be thinking about the overall value and focus on creating a business that is attractive to potential buyers from day one. It is never too early to start thinking about an exit plan – it will pay off in the long run.

Our team can help you prepare your business for a sale. Reach out for a no-cost consultation with our LBA Haynes Strand Capital Advisors team.

succession planning untimely death

Business Succession Planning: Unexpected Death

While planning for retirement is a fun part of the succession planning discussion, we must also cover the less pleasant subject of planning for an untimely death. Most of this information also applies to a permanent disability as well. According to Forbes, three out of five business owners are left vulnerable to consequences of an unexpected tragedy.

It’s April 30 and a business owner client of mine (Bill) has passed away and his spouse calls me. The spouse (Maria) is in a panic. She has never been active in the software Bill owned. Bill died of a stroke just 3 days prior. Maria just came to the realization that she didn’t know if there was money in the bank for payroll on May 4.

Together, we went through a series of discussions that day. I was able to give her all the contacts Bill and I shared with the law firm and financial planner. I was also able to provide information for his payroll service, banker, and the bookkeeper that worked on Bill’s software company. Bill’s management team shared the same concern. Who would run the company, oversee decision making, and make sure clients did not leave?

Planning for this situation, is a challenge as people do not like planning for these unfortunate events. However, there are a number of basic questions and scenarios to consider now. This will help make the situation easier on your surviving family members and employees.

Questions and Scenarios to Consider
  • Do you have life insurance in place that goes to the business to provide a boost to the company’s cash flow should something happen to you?
    • These funds could be used to hire a CEO or consultant to run the company while things are figured out.
  • Have you thought about what you want to happen to the business if you pass away?
    • If so, have you documented it in writing and shared it with your spouse, advisors, and/or management team?
      • Things like:
        • Would you want the management team to use life insurance to buy shares from your estate and run the business as owners?
        • Do you want to leave the business to your children and have them run it? Or hire a CEO to run it?
        • Should the business be liquidated and sold through an M&A transaction? If so, how do you incentivize the management team to stay during this time?

It is impossible to plan for every scenario a business could go through but it is helpful to consider a few possibilities. It is a business that you have built and no one knows better what you want the next phase to be of your legacy, than you. Begin this process today. Have discussions and documentation to help build a succession plan that stands up to many scenarios but provides flexibility as your life and business grow and change. Let us know if you need help with your business succession planning – set up a no-cost consultation today!

succession plan getting started

Business Succession Planning: Getting Started

The best time to have a succession plan in place is the day you start your business. If you do not already have a succession plan in place, today is the day. While many business owners believe getting started is difficult, it is quite simple. The majority of people think it can wait because it’s too big of a topic to cover. When creating a plan, remember to keep it simple and aim for progress, not perfection.

First, business owners need to consider what would ideally happen under two scenarios, retirement and death. The first is easier to think about for a lot of people, so we’ll start with that one and cover death in another post.

When considering retirement, business owners should think about it at least three to five if not ten to twenty-five years in advance. According to the Department of Labor, it is never too early to start planning for retirement. First, talk with your advisors and family, 3-5 years out. Your team of advisors should include your CPA, Attorney, and Financial Planner.

Conversation Starters for Your Team of Advisors:
  • What is my business worth today?
  • How much money do I need in retirement?
  • What can I do between now and my retirement date to build the business valuation?
  • What do I want to happen with the business when I retire?
    • Am I passing it to the next generation of family?
      • Will it be a gift?
      • Will it be bought with cash or over time?
    • Am I going to sell it?
      • Who are the potential buyers – individual buyers, financial buyers, or strategic buyers?
    • Should I let the management team run it, but I will own it still?
      • Are they capable?
      • What type of incentives do I need to put in place to make this work?
  • What am I going to do in retirement?
    • Am I going to stop working completely?
    • Will I do some consulting or gig-economy type work?

This is the starting point. Of course, there are many subsets of questions that will drive the conversation. Discuss these topics with your family to ensure everyone is aligned about what retirement looks like from a timing and lifestyle perspective. These questions can lead down many different avenues. Your team of advisors will guide you down the path that best fits your goals. Business succession planning is far from one-size-fits-all plan and more like a custom “one-size-fits-one”. Build a plan to satisfy your desires, needs, ambitions, employees, and family.

Not sure if you have the right team of advisors in place to help? Contact us today!

business succession why

Business Succession Planning: Why is it Important?

You may know what business succession planning is but do you know why it’s important?

It’s January 5th and I get a call from a client who wants to sell their business. They had a great holiday break and decided they no longer want to run their business. They do not want to deal with the headaches, stress, and people issues that accompany being a business owner. As their business advisor, I make the following statements and ask a few important questions:

  • Have you met with your financial planner to see if you have enough to retire?
  • Do you know what your business is worth?
  • Your business had a really bad year 2 years ago. Remember, almost all buyers will look back 3 years. This will hurt the value in the sale.
  • Does your executive team know?
  • Have you thought about incentivizing them to stay with the buyer?
  • What are you going to do next?
  • Most buyers of businesses your size, will use a loan to buy the business, and will require you to be out of the business in less than a year.

The list continues during the next few discussions with the client. It’s clear they have not thought of any of these, however they want to sell anyway. During the process, the valuation is lowered by the bad year they had, and a few members of the management team leave as they hear of the sale. The transaction closes after months of trying to sell and going through due diligence with a couple different buyers.

This scenario happens every year. Business succession plans help make sure that if you wake up on January 5 and decide to sell, you have the opportunity to easily answer these questions and many more. Having a plan in place will help you maximize the exit value when the times comes, and also make the process of selling or transitioning much easier for the business.

Contact us for a no-cost consultation to find out if your business is ready to be sold.

inc 5000

LBAHS Makes the 2019 Inc. 5000 List

Inc. Magazine unveils its annual list of America’s fastest-growing private companies – the Inc. 5000. For the sixth time, LBA Haynes Strand appears on the 2019 Inc. 5000, Ranking No. 4291.

Inc. magazine today revealed that LBA Haynes Strand is No. 4291 on its annual Inc. 5000 list. This is the most prestigious ranking of the nation’s fastest-growing private companies. The list represents a unique look at the most successful companies within the American economy’s most dynamic segment—its independent small businesses. Microsoft, Dell, Domino’s Pizza, Pandora, Timberland, LinkedIn, Yelp, Zillow, and many other well-known names gained their first national exposure as honorees on the Inc. 5000.

Not only have the companies on the 2019 Inc. 5000 been very competitive within their markets, but the list as a whole shows staggering growth compared with prior lists. The 2019 Inc. 5000 achieved an astounding three-year average growth of 454 percent, and a median rate of 157 percent. The Inc. 5000’s aggregate revenue was $237.7 billion in 2018, accounting for 1,216,308 jobs over the past three years.

“The companies on this year’s Inc. 5000 have followed so many different paths to success,” says Inc. editor in chief James Ledbetter. “There’s no single course you can follow or investment you can take that will guarantee this kind of spectacular growth. But what they have in common is persistence and seizing opportunities.”

More about Inc. and the Inc. 5000

Methodology
The 2019 Inc. 5000 is ranked according to percentage revenue growth when comparing 2015 and 2018. To qualify, companies must have been founded and generating revenue by March 31, 2015. They had to be U.S.-based, privately held, for profit, and independent—not subsidiaries or divisions of other companies—as of December 31, 2018. (Since then, a number of companies on the list have gone public or been acquired.) The minimum revenue required for 2015 is $100,000; the minimum for 2018 is $2 million. As always, Inc. reserves the right to decline applicants for subjective reasons. Companies on the Inc. 500 are featured in Inc.’s September issue. They represent the top tier of the Inc. 5000, which can be found at http://www.inc.com/inc5000.

About Inc. Media
Founded in 1979 and acquired in 2005 by Mansueto Ventures, Inc. is the only major brand dedicated exclusively to owners and managers of growing private companies, with the aim to deliver real solutions for today’s innovative company builders. Inc. took home the National Magazine Award for General Excellence in both 2014 and 2012. The total monthly audience reach for the brand has been growing significantly, from 2,000,000 in 2010 to more than 20,000,000 today. For more information, visit www.inc.com.

The Inc. 5000 is a list of the fastest-growing private companies in the nation. Started in 1982, this prestigious list has become the hallmark of entrepreneurial success. The Inc. 5000 Conference & Awards Ceremony is an annual event that celebrates the remarkable achievements of these companies. The event also offers informative workshops, celebrated keynote speakers, and evening functions.

IPA Top 400 Accounting

LBA Haynes Strand Named Top 400 Firm

LBA Haynes Strand is one of the Top 400 American accounting firms according to INSIDE Public Accounting. The firm appears on this list for the second year in a row. The IPA 400 ranks firms by their net revenue, which the organization compiles by analyzing more than 500 survey responses from the largest accounting firms in the nation. In addition to this recognition, LBA Haynes Strand also ranks as a Best Place to Work by the Charlotte Business Journal and a Fastest-Growing Privately Held Company by the Charlotte Business Journal and INC 5000.

About LBAHS

LBA Haynes Strand is a full service accounting, assurance, tax, and advisory firm with offices across North Carolina. LBA Haynes Strand provides value-added services throughout the service delivery process to improve operations and ensure compliance with relevant regulations. We take a strategic and holistic approach to accounting that looks at more than just your business tax situation. Our team works to understand your finances, your culture, your goals, and your aspirations. With this comprehensive understanding of your organization in place, our firm is able to provide the best possible service. We help you protect and improve your organization’s fiscal health and well-being — for now, and for the future.

INSIDE Public Accounting (IPA)

IPA’s annual rankings of the 400 largest firms in the U.S. range from the multi-billion-dollar Big 4 to firms of roughly $5.5 million in net revenue. The list includes firm headquarters, MP, net revenue, ranking in the previous year and percentage change. The rankings are compiled from data gathered in the annual IPA Survey and Analysis of Firms. The annual survey attracts participation from 550 firms.

succession planning

Business Succession Planning: What is it?

From the day you start your business, you are focused on both present and future growth. However, many people never think of life after the business or succession planning until it’s too late. How do you know it’s too late? Typically, business owners don’t start thinking about this until a major life event occurs, they are burned out and need to sell, or someone comes knocking and wants to acquire their business. According to a Wilmington Trust Survey, 60% of business owners do not have a succession plan in place.

None of the times previously mentioned are the best time to start a succession plan or think about it, as you are under stress. The best time to put together a plan is when you start your business. If you didn’t do it then, the next best time is today!

What exactly is business succession planning? It starts with answering a series of questions with yourself, your family, your executives, and your advisors. The purpose is to make sure what you have built in your business continues on, not just for legacy, but for the people, and families, that you are providing a job to. There are a lot of critical things to think about in a succession plan. It helps you decide what happens to your business if something were to happen to you.

Does it go to management? Does it pass to your estate? Will the business just fold up and close? How is all of this planned both structurally and financially?

A succession plan is an iterative process. Business owners need to pick it up once a year and re-read to say, yes this still fits where I am in my life and where my business is, or it needs changes.

If you are a business owner without a succession plan in place, contact us to schedule a no-cost consultation.

resources

Resources for Small Business News

Are you a small business owner without go-to resources for your business news? It is important to stay on top of industry updates, events, and ideas that may impact your small business. However, we know that running a small business is no easy feat. When you have five extra minutes, you do not want to spend them sifting through news outlets, deciding what is trustworthy and worth reading.

In order to help with this, we are sharing a blog post by Meredith Wood of Fundera. Meredith provides readers with an organized list of resources including websites, blogs, and social media pages to follow. When utilizing this list, business owners will save time and have easy access to helpful advice and information.The list provided includes sources that will share the latest news and updates in capital expenses, loans, budgeting, forecasting, marketing, social media, taxes, HR issues, government standards, etc.

For example, one of our favorite suggestions in the list is New York Times: Entrepreneurship & Your Taxes. The New York Times is common reading material for most people but the particular sections Meredith mentions, we find important. The first one being Entrepreneurship and the second being Your Taxes. Both of these sections highlight subjects like small business tax, healthcare reform, and credit scores.

Click here for the 37 Best Resources For Small Business News

tax free weekend

Tax-Free Weekend in South Carolina

If you’re anything like our LBAHS employees, you have already planned your weekend shopping trip. For those who may not know, August 2nd through August 4th is tax-free weekend in South Carolina. This is an annual sales tax holiday where both resident and non-resident shoppers are provided with the opportunity to purchase certain items free of sales and use tax.

This is a great time to go back-to-school shopping and save on school supplies, shoes, and clothing. In years past, shoppers have saved between two and three million statewide during South Carolina’s tax-free weekend. We have created a small list below of exempt and non-exempt items to give you an idea of what items may be of interest to purchase during this time period.

Exempt Items – items you will not have to pay tax on
  • Clothing
  • Footwear
  • School supplies including bookbags, binders, lunchboxes, calculators, etc.
  • Computers, printers, and computer software
Non-exempt Items – items you will have to pay tax on
  • Jewelry
  • Cosmetics
  • Furniture
  • Rental of clothing and footwear

If you plan to go shopping, be sure to check out the full list of exempt vs. non exempt items from the South Carolina Department of Revenue. The Federation of Tax Administrators has also provided a full list of sales tax holidays nationwide.

Asheboro Expansion

LBA Haynes Strand PLLC Acquires Asheboro, NC Office

LBA Haynes Strand is excited to announce the acquisition of the Asheboro office of Cherry Bekaert LLP. With this acquisition, we will expand our firm’s footprint to maintain the Asheboro office location. With nearly 80 professionals across North Carolina, clients will have access to local resources and immediate support.

“Our firm has been focused on the middle market client base for more than three decades,” said LBA Haynes Strand CEO and Principal, John Bly. “We are excited for the opportunity to add quality team members in the Asheboro market, along with a strong client base. This is the next step in our firm’s growth plan.”

Cherry Bekaert partner, Brad Crumpler, has announced his retirement and will assist our firm through the transition period. Elizabeth Scott (Senior Associate) and Donna Smith (Administrative Assistant) will be joining the LBA Haynes Strand team.

Principal Chris Bunting will continue to lead the firm’s assurance department while principals Dave Recchion and Courtney Ageon will build and maintain local relationships in the Asheboro community. In addition, the Greensboro office team will be readily available to support all client needs.

Since its inception, the focus of LBA Haynes Strand has been to become a partner in our clients’ success. Cherry Bekaert clients will be able to continue working with high quality professionals committed to delivering excellent client service.

LBA Haynes Strand expanded into Winston-Salem in January 2019 and looks to grow more across North Carolina and the southeast.

dental accounting mistakes

Dental Accounting Mistakes

Simple accounting mistakes can cause major financial problems for a growing dental Practice. In order to avoid these, Practices must have an accurate and well-maintained accounting system in place.

Understand the differences between cash flow and profit.

Many dentists and in-house accounting staff do not understand financial reports and may wrongly assume profit equals cash available. This mistake could result in a Practice owner making purchases and incurring penalty and overdraft fees. For this reason, it is important to know the different between the two.

Profit is the result of revenue less expenses for a certain period of time. Cash flow is money moving in and out of the business from the beginning to the end of a month. If a Practice owner wants to know how much money the Practice has available, they are looking for the cash flow number.

Do not accidentally record transactions in a previous period.

It is important to “close the books” on a monthly basis. A common mistake is to accidentally enter transactions from a previous period. This will result in balance adjustments that do not match the bank balance or financial reports. If this error goes unnoticed, all future reports, tax documents, and cash figures will be incorrect. The mistake can become a larger issue and result in misrepresentation of cash and penalties from the IRS.

Use an industry standard chart of accounts.

When building your accounting system, a dental accountant should set up and track accounts according to dental industry standards. Our dental team focuses on establishing a dental specific chart of accounts. This way, we can provide the insight necessary to streamline and grow your Practice.

Work with a dental specific CPA.

It can take a while for owners to notice mistakes made by inexperienced accounting employees. For example, they may not realize a mistake has been made until they receive high tax bills, notice incorrect cash account reconciliations, or theft occurs. For this reason, it is crucial for Practice owners to work with an experienced dental specific CPA.

Our team of professionals wants to help you save time, money, and implement an effective accounting system. To learn how we can support your Practice, contact us!

Top 10 Mistakes in Mergers and Acquisitions

The merger and acquisition process can seem daunting to someone who has no experience and isn’t working with a broker. Over the years we have heard a number of horror stories and have compiled the following list of the top 10 mistakes in mergers and acquisitions:

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