10 Common Internal Control Deficiencies Found in Small Businesses

The following 10 common internal control deficiencies found in small businesses can cause the loss or damage of assets, loss of resources, and a decline in revenue. These deficiencies can easily be rectified by slightly changing or modifying existing processes or introducing basic internal controls:

1. Inadequate documentation / records
Documentation provides evidence of the underlying transactions. It is the input to establishing proper financial records. Financial documents should be pre-numbered to ensure all transactions are recorded and accounted for. This will help to prevent recording of the same transaction twice, as there should not be any duplicate numbers in your system. With proper numbering of documentation, tracing documents that relate to follow up queries/claims and questions from customers or owners of prior transactions will be easy.Proper documentation would most probably provide satisfactory answers to most, if not all, financial transaction related questions. Furthermore, adequate documentation will ease the process of compiling financial records and completing tax returns.

2. Key business cycles not properly defined 
Managers and owners don’t see the need to create written policies and procedures or just even basic flowcharts defining the key business processes, as some small business processes appear to be uncomplicated. However, this is probably one of the most unused control tools where the most value can be added with little effort. An effective procedure can align business objectives and help establish best practice operating procedures. As businesses have different focus areas, different cycles will be important to your business but for most businesses the following processes will be critical. Sales and Accounts Receivable, Cash Management, Banking Procedures, Purchases, and Accounts Payable. For a business selling goods, inventory controls will be an important cycle. Documenting key controls in each of these cycles will provide transparency and consistency. Specific roles and responsibilities in each of these cycles can easily be assigned to specific individuals. When improvements and changes are made to your processes, employees can quickly be informed, trained, and brought up to speed.

3. Lack of control with authorization of transactions 
Authorization of purchases should occur before the commitment of resources. Depending on the size of the business, levels of authority can be introduced to better eliminate the risk of inappropriate spending. For example, with orders above a certain dollar value, say $1,000, more than one quotation should be obtained which could ultimately reduce your overall expenditure. Authorizing of transactions before placing orders provides the owners/managers the opportunity to evaluate different purchasing options, and make sure items or services obtained will support the business objectives.

4. No oversight and review  
Small business owners many times get so involved in the day to day operations of the business that they tend to neglect performing basic review procedures. Business owners should take some time and interest in the financial records. This is an important aspect of fraud prevention. Not a lot of time is required to review monthly revenues, expenditure reports, inventory reports, budget vs. actual amounts, and variance reports. Having a more hands on approach will give the owner invaluable feedback on how the business is performing and where any potential problem areas or poor performance areas may exist. Review of the financial records is a critical component and input for better decision making. The frequency of the review of financial data depends on the volume of transactions and type of business, however, the review of financial data should generally be conducted on a monthly basis.  

5. Dated or ineffective information systems  
Small businesses run on lean resources and very little time is often spent evaluating information systems. Investing time in this area could add a lot of efficiencies in the long run.  List the systems in your business and the key performance measures you need from each. Working systematically though these will help you stay competitive and efficient. Many user-friendly software systems are out there which could shorten processing and operating cycles – and are not that expensive to operate. 

6. Lack of physical & logical security  
Lack of physical security of business assets and resources could result in the loss or damage to assets and resources. Access to equipment, petty cash, and check stock should be restricted to appropriate individuals and stored or locked in an appropriate secure location. Computer equipment and networks should be password protected and computer passwords should be changed regularly. Having firewalls and protective devices or software on computer systems is an important component to help prevent security breaches.  Protection of personal information and banking information are becoming increasingly important with the increase in risk of identity/credit card theft. Personal and employee data should be encrypted and stored in secure folders.

7. No formal ethical policies and procedures 
This control may not seem to be crucial for the success of a business, but without clear guidelines on the use of the business assets and expectations, in terms of integrity and ethics from employees, businesses can expose themselves to inefficiencies and misappropriation of assets.  A code of ethics is an open disclosure of the way an organization operates.  A well written and thoughtful ethics policy can serve as a communication vehicle that reflects important values and goals of the business.  It can provide guidelines of how employees should deal with potential misbehavior and/or misappropriation of assets and can provide alignment with regard to company values and commitments.

8. Job roles and responsibilities not clearly defined 
Employees are your most important assets and as a small business you are very reliant on your employees.  They are representatives with customers, suppliers, and competitors. For this valuable resource to be effective in your business you will need to provide clear direction and define appropriate roles and responsibilities for each employee.  Job roles and responsibilities should be clear and preferably be in writing.  This will ease the process of separating duties discussed in the next section.  New employees will quickly be able to reference back to their responsibilities and understand their roles better.   

9. Lack of separation of duties 
Small businesses are susceptible to fraud by their own employees as they may have a few employees with multiple roles. Each employee should have specific job responsibilities, preferably in writing to ensure there is no confusion in assigned job roles and responsibilities.  Generally, assigning different people the responsibilities of authorizing transactions, recording transactions, and maintaining custody of related assets such as cash and credit cards provides for more effective internal control and less opportunities for misappropriation of assets. 

10. Inadequate disaster recovery, backups and business continuity plans   
The importance of backups and business continuity are many times under-emphasized.  Systems can be designed so that back-ups are performed automatically and on a regular basis.  Backups should be made based on transaction volume and stored off-site.  To re-create data can be painful, time consuming, or not practical at all.  Business Continuity plans outline how recovery will be accomplished in case of a disaster.  Long term power outages or disruptions, offices not available for long periods of time, and loss of staff on a large scale are not that uncommon and can happen. Planning ahead for disasters before they strike is important to the survival of your business.  A disaster recovery plan typically consists of an emergency plan, disaster recovery plan, and a continuity plan.  

Changing your approach towards internal controls in your business in these 10 key areas, can make your business grow! Implementing control tools in these areas can be accomplished in a fairly easy manner and in a short amount of time. Consult your local accountant or auditor for advice with some of the technical financial processes and controls. Changing your focus in these 10 areas, will add a lot of value to your business over the long run!

What Industries Are Growing Through M&A?

In recent years, mergers and acquisitions have seen a rise in popularity as a way to grow a business. Why is this? Much of this can be attributed to the aging of the Baby Boomer generation. Baby Boomer business owners are looking to retire or to cash in on the businesses that they have built. They are looking for opportunities to sell and the marketplace is very aware of this. As Generation X and Y continue to develop and build on their entrepreneurial backgrounds, there are many opportunities to buy businesses and grow businesses exponentially through M&A.

Mergers and acquisitions are not prevalent in every industry. However, there are some industries that are considered very active. These are the industries focused on growth through M&A:

  1. IT/Technology Companies
  2. Construction Companies
  3. Property Management Companies
  4. CPA Firms
IT/ Technology
Why M&A?

Technology companies want to gain access to intellectual property and talent, enhance new product lines (through acquisitions), acquire innovative product lines/technologies, and finally technology companies want to enter new markets. In addition, technology companies realize that these achieving these objectives through in-house operations would be very expensive and time-consuming. M&A gives these companies instant solutions and results.

Trends Driving M&A In The Technology Industry:
  • Cloud Computing
  • Mobile Technology
  • Data Analytics
Construction Companies
Why M&A?

Construction companies want to gain access to an expanded geographical footprint with new markets, a larger workforce, increased financial flexibility, and additional service offerings. Acquisitions have been increasingly popular among construction companies as larger companies are looking to add a specialty service offering. For example, lets say you hire a contractor to come in and install new siding on your house. They do a great job and you are pleased with your decision to use their services. If you find out they just added custom garage door installation to their list of services, you will probably use them again. The increase in service offerings through mergers and acquisitions gives construction companies the ability to sell multiple times to the same client which increases revenue.

Trends Driving M&A In The Construction Industry:
  • Favorable capital market conditions
  • The shale revolution
  • Labor shortages
  • Aging and retiring population of owners
Property Management Companies
Why M&A?

Property Management Companies are using M&A in order to gain: size, proximity to new locations, economies of scale, and additional management offerings. In some cases, especially the Charlotte area, management companies are looking to grow across state lines. Rather than a Charlotte management company opening a new location in South Carolina, they will often times acquire an established management company in South Carolina. This can be seen in the state of North Carolina, when management companies based in Charlotte use this tactic to gain access into new cities, such as Raleigh, Greensboro, etc.

Trends Driving M&A In The Property Management Industry:
  • Real Estate brokers wanting out
  • Lack of succession planning
  • Competition: National players coming to Charlotte
CPA Firms
Why M&A?

Growth through M&A has steadily increased for CPA firms. Firms want to gain access to talent, new marketplaces, and new service offerings. A CPA Firm may lack the time and the talent to grow a certain niche or service offering that they see an opportunity in. The best way to achieve instant entry into the marketplace is often times through a merger or an acquisition of a smaller firm that specializes in that service/nice and has the talent in place to achieve results. These can lead to an INSTANT increase in revenue and a larger footprint.

Trends Driving M&A In The CPA Industry:
  • Aging and retiring population of owners
  • New service offerings
  • Lack or decrease of talent
  • Increase in competition

Growth through M&A is our specialty. If you are in one of these four industries and are interested in exploring how M&A can grow your business, contact us for a no-cost consultation.

4 Reasons Why Now is a Good Time to Acquire a Company

Are you considering acquisition as a way to begin or expand your business? There are a number of reasons why it is one of the best times to acquire a company:

 1. Supply and Demand

As The Baby Boomers are exiting their companies – there are lots of sellers, but there are not as many buyers as there were 10 years ago – so the selection of businesses is better than in the past.

2. Capital Availability

The Private Equity Groups, Private Investors, and Banks have more money on the sidelines that they want to put to use in the market place than ever before. In addition, interest rates are still at historic lows – so borrowing capital for an acquisition can be done very efficiently.

3. Larger Companies Are Worth More

Acquiring 1 to 3 competitors and building your current company may change the multiple you get on an exit from 4x to 6x of EBITDA. The big difference here is that you may be buying a smaller company for 3x the earnings and later as you combine it with your business and thus resell a larger business in the future, you may be able to get a rate arbitrage on your purchase. Thus, the same business you bought for more than 3x.

4. Strategic Savings

If you already own a company in the given industry and you acquire another one – the savings could be 5-25% on expenses for the combined company. This means you could add more profit and cash flow than the prior owner. There are many different expense categories that would overlap, and when you combine companies you would not have to pay it twice.

M&A Tip: As you look to acquire or buy a business make sure you are doing it for the right reasons. Don’t just say, “I want to get rich.” That line of thinking probably won’t cut it, unfortunately. You need to make sure you have wisdom, passion, and a sound plan for this business. Do your Due Diligence! The timing is right to acquire, it’s just up to you to follow through!

For more information on how LBA Haynes Strand can make your acquisition a successful one, contact our Capital Advisors team!

Property Management Companies Are Growing Through M&A

Mergers and Acquisitions have become an increasingly popular growth strategy among property management companies. In an earlier blog titled, “What Industries Are Growing Through M&A,” we mentioned property management companies as a top industry for mergers and acquisitions. So let’s dig a little deeper and learn what is being gained by M&A and what trends are driving M&A in the property management marketplace.

What Property Management Companies Are Trying To Gain Through M&A:
  • Size/Proximity to New Locations: In some cases, especially in the Charlotte area, management companies are looking to grow across State lines.  Rather than a Charlotte based management company opening a new location in South Carolina, they will often acquire other established management companies already based in South Carolina.  This is also true within the State as well (Charlotte -> Greensboro, Wilmington, Raleigh, etc.)
  • Economies of Scale: Management companies deal with many different service providers from landscapers and painters, to accountants and attorneys.  As management companies grow and manage additional communities through M&A, they are better able to pass cost savings (via economies of scale) onto their clients.  Doing so, theoretically, makes the management company more attractive in the market place as they are better able to offer attractive rates.
  • Additional Management Offerings: There are many local management companies who specialize in residential communities while others mainly do commercial associations.  Through M&A, management companies may be able to acquire residential work if they didn;t already have it, or vice versa.
What Trends Are Driving M&A In The Industry:
  • Real Estate Brokers Wanting Out: Community management is NOT a glamorous field. In lean times (2008 – 2012) many small/local real estate sales offices turned to property management when they were struggling to sell homes. With real estate “Hot” again, some real estate agents are looking to shed their portfolio of community associations to better focus their efforts on more lucrative selling activities.
  • Lack of Succession Planning: Similar to the CPA industry, some “mom and pop” community management companies simply have no succession plan, while other “younger” management companies are seeing this as a great opportunity for M&A.
  • National Players Coming To Charlotte: Up until 2008, community management in Charlotte was pretty much locally run (i.e. 20 or so management companies throughout the State and SC, perhaps). However, in the past 5 to 7 years, Charlotte has experienced an increase in nationally known management companies who often launch their local office by purchasing a locally-owned community management company.

This may be un-chartered territory for some management companies, and LBA Haynes Strand is here to help. We have a team that understands the needs and the financial issues associated with HOAs and property management companies. If your property management company is looking to grow through M&A, schedule a no-cost consultation with us and we will walk you through the steps for a successful merger or acquisition.

5 Tips to Buy Out a Business Partner

Buying out a business partner can be an intimidating venture, sometimes a messy one. However, when both parties are aware of the situation, and both parties mutually understand the process as well as the value of the company – it can be much easier.

We have identified 5 tips to make the buying out a business partner a smooth process for both parties. 

Tip 1: Make Sure To Get A Buy/Sell Agreement In Place

Make sure up front when the company is started or as soon as you read this to get a buy/sell agreement in place.  This is a legally binding document between the owners of the company.  This document agrees to certain parameters if something should happen to one of the owners, such as: death, disability, divorce, or that they simply disagree and want to leave the company.  If you have one of these agreements already – consider yourself lucky!  Without a buy-sell agreement the rest of these tips and process might be more challenging.

Tip 2: Be Rational And Realistic

Whether you are the buyer or the seller, this may feel like your “Baby” that you are selling to your other partner…..but it’s NOT.  Treat it as you would any other business transaction, keep emotions out of it, or you may find yourself in a dead end where no one can agree.  If each person has 10 things they want out of the buy out, getting 6 to 8 of those things may be realistic – but certainly not all 10.

Tip 3: Get A Valuation Of The Company

Do not simply agree on a price as the buyer or the seller.  This may lead to hard feelings in the future if the company grows exponentially or if the company fails.  Either way the buyer or seller may feel they got the short end of the stick.  A valuation will help you agree that someone independent of the company and properly licensed has provided you a fair market value of the company.

Tip 4: Get An Attorney To Draft The Buyout

You want to get an attorney that is familiar with mergers and acquisitions to draft the buyout.  Even if the parties agree on all terms, getting it properly and legally documented is critical to the process.

Tip 5: Funding Is Available

There is funding available, it doesn’t have to be out of current cash or future cash flow.  The SBA has products available that are fixed term 7-10 year notes at competitive interest rates that allow one partner out in the small business space.  This allows the owners to part ways completely and not have to stay in each other’s business because they owe each other money.  It provides a cleaner break between the two parties.

LBA Haynes Strand has the experience to provide you the fair market value of your company. Our team of Certified Valuation Analysts (CVA), are well versed in buyout situations and can help both parties seek the proper resolution they deserve. To receive a proposal for the valuation of your business – CLICK HERE – and our team will reach out within 24 hours!

How Do I Value My Company?

There are two main ways for business owners to value their company. One is through a business valuation and the other is through a calculation engagement. In a business valuation engagement, the answer is expressed as a conclusion of value. While in a calculation engagement, the answer is expressed as calculated value. For this blog we will focus on the calculation engagement.

This service does not provide a full conclusion of value, but rather a reduced calculation of the value of a company. In addition, the calculation engagement does not provide the same level of assurance as a valuation. However, it is a viable and less costly option. However, there are certainly situations where a calculation engagement is beneficial and we will list those below.

As stated in the NACVA Professional Standards, “A Calculation Engagement occurs when the client and member agree to specific valuation approaches, methods, and the extent of selected procedures and results in a Calculated Value.” The resulting calculated value should not be used for any other purpose or by any other party for any purpose.

Situations Where a Calculation Engagement Is Beneficial
  • Buying out an internal partner
  • Buy or sell insurance needs
  • To fulfill bank needs
  • To get a rough estimate of the fair market value of your company, should you be in the process of deciding to sell
What Is Delivered

This service provides the client with a 15-30 page report on the things that are driving the value of the company. It can be used as a strategic way to look at your value today and make changes over a period of time in order to drive the value higher.

How you value your company is up to you. We recommend considering a Calculation Engagement by a Certified Valuation Analyst (CVA).  Contact the CVA professionals at LBA Haynes Strand for your no-cost consultation!

Wealth Transfer: Be Rational and Be Strategic!

Wealth transfer is one of the most personal topics within the financial field. Issues like estate tax and gift planning go far beyond numbers and financial records. While there is a strategic side to wealth transfer, there is also an extremely emotional one, which needs to be handled with the utmost delicacy. If you’re looking to solidify the best course of action for your wealth, you should work with a CPA firm that understands not only the financial aspects of wealth transfer, but also the emotional and psychological ones.

Before entering into the wealth planning process, it’s a good idea to familiarize yourself with these two very distinct sides of wealth transfer – emotional and strategic – and understand that each must be taken into consideration before any concrete plans are established.

Wealth Transfer: The Emotional Side

Wealth transfer processes delve into the innermost dynamics of your personal and familial history: They may reopen old wounds, unravel intricate family histories and bring to light issues you might have preferred remain buried.

So, before a CPA firm jumps into any structural planning, it must navigate the personal side of your plans for your wealth. Dedicated solely to the safety and wellbeing of your wealth, a CPA offers you a more objective opinion – one that isn’t influenced by family history. How you transfer your wealth is ultimately your own decision, but a CPA helps to compartmentalize your thoughts, see things rationally and consider future consequences.

Wealth Transfer: The Strategic Side

Once a client’s personal matters are carefully sorted through, a CPA begins developing the best course of action for the client’s wealth. When it comes to this more strategic, tactical component of wealth transfer, a CPA typically provides three options:

Wills

A will is a legal declaration containing your instructions and wishes for your property and assets to be distributed after your passing. It is one of the most uniform options for wealth transfer and remains the most basic estate plan. The downside to a will is that estates typically fall into probate and are thus subject to estate taxes.

Gift Planning

A gift or asset transfer to children or other beneficiaries may help reduce your taxable estate. You may gift, tax free, up to $14,000 per recipient per year – or $28,000 per recipient for married couples if you combine gifts. Additional gifts require the filing of a gift tax return.

Medical Or Education Gifting

If you pay someone’s medical or education expenses directly to the service provider, you make this payment as an extra gift. For example, if you write a check for tuition directly to a grandchild’s school, you can still gift that grandchild the annual per-recipient amount.

529 College Plans Gifting

You can contribute to a child or grandchild’s 529 college savings plan as your annual gift. In fact, with college gifting, you have the option of contributing up to five years’ worth of annual gifts in one year ($70,000 per person or $140,000 per couple) to one person.

Trusts

A trust may enable you to better meet your estate planning goals. There are several types of trusts:

  • Irrevocable Life Insurance Trusts
  • Charitable Trusts
  • Revocable Living Trusts

Trusts help transfer wealth, but they also keep a portion of your estate out of the probate, therefore minimizing your estate taxes.

Wealth transfer is a process that must navigate strategic as well as emotional realms to be successful. You want to partner with a CPA firm that not only is knowledgeable about the financial side of wealth transfer, but also acknowledges the emotional aspect – and takes the time to work through the two together, always with your best interest at heart.

LBA Haynes Strand provides personalized service that reflects the high standards we demand of ourselves. Our caring, competent and client-focused staff are eager to assist you and start planning your financial future. Contact us for a no-cost consultation today!

How Well Do You Know Your CPA Firm?

How well do you know your CPA Firm? Can you honestly say that your CPA is a partner in your success and that of your business? These two questions should produce the same answer: “Well enough to be confident in our collaborative success.” If this is not your answer, you may want to think about rekindling the flame between you and your CPA firm.

The relationship you have with your accounting firm should exceed standard service. Strategic planning, a strong partnership, and prolonged efforts toward ensuring future financial success should be at the forefront of your relationship with your CPA. If a close relationship with your accountant has diminished, or was never established in the first place, perhaps it is time to start rethinking things. Mutual understanding and a shared work ethic between you and your CPA firm are necessary to achieving financial growth for your organization.

Below are the primary components of a healthy CPA-to-business relationship, as well as the level of familiarity required for each element to be effective.

Ongoing Strategic Planning

What type of employee benefits do you offer? How about retirement plans? Your responsibility is to maintain a healthy, positive work environment. Part of the responsibility of your CPA is to factor your employees into the strategic layout of your current and future business endeavors.

Value Service Agreement

A strong CPA firm demonstrates the desire to cultivate close client relationships. You want your conversations with your CPA to be just that – conversations. How much value are you getting out of a consultation if you’re constantly monitoring the clock, keeping a closer eye on your bill than on the pertinent financial data laid out in front of you? Ensure that the value service agreement offered by your CPA is agreeable to your budget and beneficial to your finances. Work closely with your accountant to determine the plan that works best for YOU.

Growth Conversations

Are you and your CPA overdue for a growth conversation? You and your accountant should work together to create a strategic growth plan based on the specific goals you’d like to achieve in the future. Would you like to expand your business, or are you trying to downsize? Are you going to leave your business for future generations? Perhaps you are looking to sell your company. Whatever your plans may be, it is vital to converse with your CPA to determine the best formula for reaching those goals and to ensure financial security. You need an accounting team that is just as dedicated to fulfilling those plans as you are.

Long-Term Vision

What are your longstanding goals in terms of business development? Is your CPA familiar with them? Whether you’ve omitted this important information, or your CPA has neglected to ask, these objectives are vital in creating a strong and stable plan for your financial future.

Constant Connection

Your financial consulting needs will fluctuate from month to month, year to year, and so on. Regardless, contact with your CPA should not slip through the cracks during periods of lesser urgency. Both you and your CPA firm need to maintain a close relationship throughout the year. Communication is key!

There are several factors that contribute to your long-term financial success, but none of them are effective unless a sturdy foundation is established between you and your CPA firm. If you don’t feel as though a real closeness exists, all subsequent interactions are going to be out of sync with your future financial plans. To set and satisfy all of your financial goals, contact a professional CPA firm or work on strengthening the relationship with your current one.

Ready to get more out of your accounting services? Contact us to begin to understand the value of working with an accounting firm that provides much more than surface-level, mechanical tax preparation.

Top 25 General Contractors in the Triad of North Carolina

Congratulations to the top 25 general contractors in the Triad as reported by the Triad Business Journal! This ranking was based off of 2014 billings in the Triad including Greensboro, Winston-Salem, High-Point and surrounding areas.

The Top 25 General Contractors in the Triad region are:

1. Samet Corp.

2. Thompson Arthur Division of Apac Atlantic

3. Landmark Builders of the Triad

4. Frank L. Blum Construction Co.

5. D.H. Griffin Wrecking Co, Inc.

6. Shelco, LLC

7. Lomax Construction, Inc.

8. Windsor Commercial

9. Brasfield & Gorrie LLC

10. Omega Construction, Inc.

11. D.H. Griffin Construction Co. LLC

12. Parr Construction, Inc.

13. Magnolia Construction, LLC

14. Davie Construction Co., Inc.

15. New Atlantic Contracting, Inc.

16. Signature Development Group, LLC

17. Wishon & Carter Builders, Inc.

18. Whiting-Turner Contracting Co.

19. Sterling Building Group, Inc.

20. LMI Builders, Inc.

21. Miles-McClellan Construction

22. Ramey, Inc.

23. H.M. Kern Corp.

24. D.H. Griffin Infrastructure, LLC

25. Holden Building Co., Inc.

To see the full breakdown of the top General Contractors in the Triad region, click here. Our team would be happy to make an introduction to one of these companies if needed. Contact us today!

Balancing Your Work Life And Your Personal Life

When it comes to work-life balance, Americans often times struggle. CBS News recently reported, “workers are leaving more than a week of paid time off on the table!” Americans take less time off than any other developed country in the world. When compared to our friends across the pond in Europe, who are legally required to take a minimum number of vacation days, Americans are seriously lacking.

Are Americans afraid to take days off? Do we fear we will lose our jobs if we do? Or are we just so busy that we can’t find the time?

The answers to those questions vary depending on the employer and the culture that has been created in the workplace. Maybe your employer offers little vacation time, and you are afraid to take days off. Are you are in a high power position and feel stressed when you do take time off? Or maybe the top executives do not use their vacation time, so the employees feel obligated to follow suit.

Balancing your work life and your personal life is something that Americans need to get a better handle on. Not just to have more fun, but to also have a healthier lifestyle. As CPAs we see all kinds of stats related to our industry and we pay extra attention to ones such as this: 62% of Big 4 CPA Firms retiring partners die within 10 years of retirement. With retirement between ages 55 and 60, this is an alarming stat – especially to us as a CPA Firm! However, we think we have a solution to a healthy work-life balance for our Principal Members and our staff.  Unlimited PTO.

The LBAHS Way

Our firm offers our employees Unlimited PTO. You probably have the same question most of our employees have when hired, “Sooo, what does unlimited PTO mean?” The answer is very simple… exactly as it sounds. Our employees do not need to feel stressed about tracking and planning their days off – we understand that life happens and our employees deserve that freedom. Employees understand work needs to be done and the system should is not to be abused. With this freedom we have found a higher rate of productivity and a happier work place environment. We have also found this as a way to attract and retain top talent, and the importance of that in today’s CPA industry cannot be understated!

If you are looking for a better work-life balance, take a look at your company’s vacation plan and see how it fits the lifestlye you want for you. If you are in a position of power, you may want to think about other options or solutions to give your employees more freedom and help them maximize their potential both in their work life and in their personal life. We found our win/win solution for our work-life balance, can you?

Top 25 Largest General Contractors in Charlotte

Congratulations to the “Top 25 Largest General Contractors” in the Charlotte, NC region! This ranking was reported by The Charlotte Business Journal and was based off of local billings in 2014. To take a look at the companies, click the individual links below.

Top 25 Largest General Contractors
  1. Turner Construction Co.
  2. Balfour Beatty US
  3. Choate Construction Co.
  4. The Whiting-Turner Contracting Co.
  5. JE Dunn Construction
  6. Blythe Development Co.
  7. Blythe Construction Inc.
  8. Rodgers Builders Inc.
  9. Shelco LLC
  10. Adolfson & Peterson Construction
  11. Vannoy Construction
  12. A M King
  13. Samet Corp.
  14. Carocon Corp.
  15. Edifice Inc.
  16. Myers & Chapman Inc.
  17. Matthews Construction Co., Inc.
  18. G.L. Wilson Building Co.
  19. Robins & Morton
  20. Hickory Construction Co.
  21. Doerre Construction Co., LLC
  22. Shiel Sexton Co., Inc.
  23. Concorde Construction Co.
  24. Bradley Construction Group
  25. Dellinger, Inc.

The Top 25 General Contractors in the Triad of North Carolina were announced last week. Click here to see those companies.

Are We Living In “The Merger and Acquisition Age”?

Could this be a term of our times? Are we really living in The Merger and Acquisition Age? According to recent business trends posted in the Kiplinger Letter, merger activity is on a roll.  Not just in the U.S. but across the globe. Merger activity in the U.S. has hit a 15 year high in the first quarter of this year with consumer-oriented firms leading the action. But that’s not the only industry finding success in mergers and acquisitions. Pharmaceutical, technology, energy, mining, and electric utility companies are also finding success.

What’s So Appealing About Growing Through M&A?

Easy. It is a way to effectively grow or even double your business overnight and the timing could not be better!

The baby boomers have been a driving force in Middle Market M&A in the late 20th and early 21st centuries. The eldest members of the 78 million-strong baby boomer generation turned 68 in 2014. The youngest boomers will turn 66 in 2030. Many baby boomer entrepreneurs will sell the Middle Market businesses they founded, and this factor will remain the driving force in M&A for at least two more decades! To put this into perspective, consider this: Based on recent data supplied by the US Census Bureau, there are just about 1.2 million Middle Market firms with sales of $1 million to $1 billion annually. Collectively these 1.2 million firms had sales totaling $9.8 trillion and carry a conservative market value of $4.9. About 800,000 of these businesses are owned by baby boomers. Between 2014 and 2029 (15 years) an average of 43,000 of these businesses per year will be disposed of… about two-thirds of these by sale. These numbers are huge and unprecedented.

Technology is also playing a large role in today’s Middle Market.  Because of the speed with which new information is being released, Middle Market firms have dramatically shortened business cycles.  New technologies and approaches launched by Middle Market firms routinely disrupt and eclipse other Middle Market firms, even Upper Market firms, and sometimes entire industries.  This has forced business owners to become increasingly proactive and infinitely more responsive to their clients and prospects, impacting not only Middle Market business operations, but also the timing, frequency, and execution of the sale of Middle Market companies.

Business can be described as an ecosystem.  As in all ecosystems the big fish eat the little fish in order to survive.  This is not a new phenomenon in M&A, but it is a more frequent one as the pace of business life continues to change.  Survival of the fittest is not just a Darwinian construct for living creatures.  It is equally applicable to business, especially the “Middle Market Sea”, which is the spawning ground for Upper Markets.

So are we living in The Merger and Acquisition Age? It certainly appears that way and it appears this trend will continue for the next few decades completely reshaping the way that Middle Market companies grow.  If you are not thinking about the M&A marketplace… it’s time to start and LBA Haynes Strand can help you.  Click the button below to download your free report and begin your M&A journey!