Attention Business Owners: Don’t Just Survive….Thrive!

Are you helping your business thrive or are you helping it survive? If you are a business owner you may be spending too much time focusing on how to keep the ship afloat and not focusing enough on the opportunity to shift your time and attention to helping your business thrive.  One option to assist you is outsourcing business functions to professionals.  Look outside your company for consultants, for example a CPA firm that provides bookkeeping or outsourced accounting services.  This can save you time and money, as the fee will likely be less than hiring a full time accountant on your staff.

The moral of the story: Don’t try to wear all the hats!

Business owners that try to wear all the hats simply don’t have time to focus on their business.  They are too busy focused on the mundane activities such as accounting, marketing, hr, etc. As the leader of your business, you should be spending 0% of your time crunching numbers of everyday finances, and 100% of your time finding ways to increase the overall value of your business.

Let’s examine how outsourcing your accounting function can give you a tighter grip on managing your business in its entirety:

Outsourcing Saves Time

Your accounting department shouldn’t require a babysitter. You might think it’s your duty to manage work flow, or you might just be intent on keeping a close eye on your company’s finances. Is this really the best use of your time as the leader of your business? What you should be doing is checking in to each of your departments, ensuring smooth sailing, and then getting back to running your business as a whole.  

Outsourced accounting allows you to do this by taking all accounting issues off your hands. With an outside accounting firm, you are relieved of the day-to-day oversight of your company’s finances. Your available time increases, and you feel confident in taking that time to tackle other, more important, business issues.

Outsourcing Gives You An Organized System

When you ask your bookkeeper for a specific document, they should be able to retrieve it immediately. There shouldn’t be massive amounts of time spent digging through files and searching through desktops.

If you’re like most successful business owners, disorganization conflicts with your strategically structured approach to running a business. When you have a CPA firm on your team, your files are classified by revenue, or expense or location – however YOU want them to be classified. Which brings us to your next point…

Outsourcing Puts You In Control

You obviously have control over your business if you own it, but are things being managed according to your guidelines? Are the financial policies and procedures your company requires being put into place? You may not have tremendous accounting knowledge, but you have ideas on how you’d like to see your reports compiled and presented.

A good CPA firm abides by these ideas, taking your business plans and reporting preferences and arranging them in an easy-to-read, comprehensible format. For example, if you’re not 100% in tune with 100% of your expenditures, a CPA firm might recommend a weekly, monthly or quarterly cash flow analysis, depending on your needs.

The fact that you are not an accounting expert shouldn’t prevent you from creating policies around your finances.

Leading your business means bringing about a brighter future, looking at the overall picture, and not busying yourself with daily duties throughout your departments. Even if your accounting department is performing adequately, as a leader, it is your responsibility to turn “adequate” into “effective” if you want to achieve sustainable business success. Outsourced accounting services ensure this effectiveness, and give you the time and tools you need to lead your business.

Want to learn more about the benefits outsourced accounting provides for your business?  Click here to start the conversation about your financial future with LBA Haynes Strand or click the button below to download your free whitepaper on the subject!

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!

Accounting For Growing Companies: What To Consider

Do you know the old adage of “it takes one to know one?” We believe this to be a characteristic of LBA Haynes Strand, that just isn’t available at other CPA Firms. We of course are talking about a growing company. Growing companies face all kinds of challenges: accounting, hr, marketing, operations, etc, etc. There are two areas that we see growing companies needing the most assistance in: Cash Management and Internal Controls.

Cash Management

The truth of the matter is, it takes a LOT of cash to grow a business. Think about it – when a company grows their receivables grow, their work in progress grows, they have to hire new employees, they may need more inventory to sell, different technology needs, etc. All this costs money, but it is essential to creating a business structure that is capable of handling the business growth. If you are a business owner and you are looking to grow your company, you need to be aware of this.

It is a common story in the business world that businesses grow quickly, but then fail quickly, because the business was not properly prepared to handle the growth.  Business growth does not always equal success. When you grow you must look at all sides of your business and make sure that each function is strong and able to handle the increasing workload. Cash is going to be spent quickly to do these things, but the business owners must realize that this is necessary! The trick is not running out of money and working with your CPA can help you accomplish that.

Internal Controls

We see it often that a company comes to us asking for assistance because their company’s growth is outpacing their business structure. Sometimes these companies have little to no accounting function, because they just haven’t had the time to put the right systems in place, the right internal controls in place, or put the right people in place. This is a big area of concern for us.

Internal controls are often pretty logical measures that can make the difference between the success or the failure of your business. Implementing strong internal controls early on in the growth process can save the company a lot of time and money in the long run. This will also ensure the company that they will have efficient and effective business functions, reliable financial reporting, compliance with laws pertaining to the businesses activities, and the company’s assets are properly protected. So how do you know what internal controls you need to strengthen? This is where a certified public accounting firm with a team of internal auditors comes in handy. The internal audit team will come in and learn your business, conduct testing of your internal controls, create solutions for any issues they find, and then make recommendations to the management team.

If you are a growing company and have questions about your internal controls and your accounting function, contact LBA Haynes Strand today. As a two-year Inc. 5000 fastest growing company, we understand growing companies. What better advisors to your growing company than ones who knows how to handle it themselves!  Contact us today for your no cost-consultation!

5 Tips To Protect Your Financial Future

With the ever-changing tax laws, our principal members and staff work diligently to stay up-to-date and keep you informed of strategies that can help save and protect your financial future. As you’re gathering your tax documents, consider some of the tips below that can significantly help in protecting your future!

1. Determine which type of IRA is best for you.

If you’re fairly young, expect to be in a similar tax bracket when you retire, or are concerned about cash flow during retirement, the Roth IRA might be best for you. If you’re older and expect to be in a lower tax bracket, you may be a candidate for a deductible IRA.

For a side-by-side comparison of Traditional and Roth IRAs, click here.

2. Think about the best ways to gradually transfer your estate tax-free.

Consider establishing a gifting program under which you and your spouse can transfer a combined $28,000 each year to any number of recipients.

3. Contribute the maximum amount allowable to a tax-deferred retirement plan.

This includes “catch-up” contributions if you are 50 or older.

4. Create a business succession plan.

On average, only one in three closely held businesses successfully passes on to the next generation.

Click here for succession planning ideas and ways that you can help protect your company’s future.

5. Set up a trust to meet your long-term financial goals.

To get started, view these commonly used trusts.

For other tips and ways to protect your financial future, contact us today for your no-cost consultation!

5 Tips to Prepare for a General Contractor’s License Audit

Tip 1: Know Which Type of License you are Seeking:

The dollar amount of the project you are bidding on will likely be the determining factor of which license type is right for your company.  See the chart at the bottom of the post for the license thresholds, financial requirements and whether an audit is required to be performed by an independent CPA.

Tip 2: Possess the Necessary Working Capital:

Even though you may want a certain license type (i.e. unlimited), you may not meet the eligibility criteria for one, so be sure to review all of the eligibility requirements before submitting your application.

Tip 3: Engage an Independent CPA:

Please know that not all CPAs can perform audits.  Make sure you are working with a firm who has prior experience performing audits of general contractors.

Tip 4: Assemble all Documents Necessary for an Independent Audit:

Typical documents requested as part of an audit or review engagement include: a) access to QuickBooks or other accounting system used by the contractor; b) bank statements; c) access to source documents (checks received or paid); d) organizational documents including articles of incorporation.

Tip 5: Submit Audited Balance Sheet along with Completed License Application to your State Board of General Contractors:

Ensure that all of the necessary documents are attached to the State application form and the proper reports prepared by the independent CPA are attached.  States will not process your application without an attached audited balance sheet (if necessary).  Failure to include the audited balance sheet will result in costly delays in processing of your application.

For a quick outline of the requirements and thresholds for a GC licensure audit, CLICK HERE.

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!

5 Tips For Preparing Your Annual HOA Budget

Preparing a budget for an HOA may seem daunting.  However there are 5 simple tips that can go a long way in making sure your HOA is budgeting correctly:

1.  Start by preparing a “business plan.” 

Set financial goals or objectives for the HOA to achieve.  Establishing short term and long term financial goals that are attainable and span from board-to-board, are essential to the Association when boards turnover.   This can be a simple list of goals and/or objectives for the upcoming year and future years ahead.  Use this list to plan for potential mid-year problems or anticipated major repairs.   This would be a good time to review the reserve study and anticipate those common areas that need to be replaced or repaired. 

2.  Always factor in uncollectible assessments.

Every association is going to have owners that just don’t pay their Association’s assessments.  Budgeting for uncollectible assessments is not only essential but critical to understanding the Association’s potential cash flows. Avoid the simple use of prior bad debt expense as the same amount for the current budget.  Put some ‘weight’ behind this line item in the budget.  A simple method would be to look at historical collection amounts over a five year period, as well as, factoring in any potential external impacts to homeowners.   Remember to include an evaluation of legal and collection costs when you develop an uncollectible amount.  These costs can increase significantly when collections become a significant issue.  

3.  Obtain updated contract costs on all major contracts; don’t just rely on annual renewals.

Landscaping, pool service and maintenance, and association management are typically the largest expenses to an association.  Review these contracts annually and make sure to understand the increases and possible changes.  Many of these contracts will have an automatic renewal clause.  Avoid the ‘autopilot’ approach and negotiate new rates and charges.  Remember, the Association’s income is fixed and a good approach would be to align the major expenses on a fixed basis.  Renegotiating with your major vendors doesn’t mean a full ‘request for proposal’ process.   If the Association is happy with the major vendors, then there is no need to go through the hassle of changing but locking in fees is a prudent approach for both parties.

4.  General recurring maintenance costs and utility costs are expense areas that seem to be ignored.

Utility costs are a given and increases annually should be expected, but simply relying on the prior year amounts for the current year budget can be misleading.  Research the anticipated annual increases and compare to historical trends within the Association.  General maintenance is unavoidable but these occurrences are not consistent from year-to-year.    Use the ‘business plan’ that was developed and budget for maintenance costs with a idea of the areas that need the most attention. 

5.  Review the reserve study and the Association’s current balances in reserve.

Then set the reserve contributions to ensure that you are meeting the needed reserve balances for future major repairs and replacements.   The more long term liabilities and obligations you have, the more you should be putting away.  For example, many condo associations have much larger obligations regarding upkeep, maintenance and replacement.   Failing to follow the reserve study or not budgeting for reserves at all can lead to significant financial problems.  Budgeting appropriately and consistently with the reserve study is critical to avoiding that dreaded need for a special assessment. 

To learn more and to speak with a member of the LBA Haynes Strand team. Click here for your no-cost consultation!

5 Key Internal Control Principles Manufacturing Companies Must Consider!

If large manufacturing companies want to stay competitive in today’s business environment they need to continually work on improving production efficiencies, product quality and cost reduction.

Apart from the competitive business environment, large companies need to comply with a load of rules and regulations.  The Department of Labor (DOL) administers and enforces more than 180 federal laws.  These include the Fair Labor Standards Act (FLSA), Occupational Safety and Health (OSH) Act, Federal Mine Safety and Health Act of 1977e Occupational Safety and Health Act and many more.

In addition, publicly listed companies have to comply with the Sarbanes-Oxley Act.   The intent was to drive improvements in companies’ internal controls.  To comply with the Sarbanes-Oxley Act many firms adopted a recognized control framework.

The most common control framework that companies chose is known as the COSO framework.  The COSO framework was issued in 1992 by the committee of sponsoring organizations of the Treadway Commission (COSO).  Their Internal Control – Integrated Framework was referred to as “COSO”, but on May 2013 COSO issued an updated Internal Control – Integrated Framework (the 2013 Framework) to incorporate the changes and technology advances that have taken place and effected the business world.

The 2013 Framework provides more guidance to large companies to effectively put in place a robust system of internal controls.  It adds 17 principles that are necessary for effective internal controls, but also introduces 81 focus points that are typically important to establish an effective system of internal controls for large companies.

Large manufacturing companies now have the opportunity to implement some of these “best practice” principles and focus points at the operations level to improve on their efficiencies and effectiveness of internal controls.

The following 2013 COSO principles and focus points are more relevant to large manufacturing companies:

1.    The organization selects and develops general control activities over technology to support the achievement of objectives. (COSO Principle 11)

With today’s advances in technology, management needs to consider which technology solutions fit their business models best.  It is important to understand the risks associated with the different technology solutions available. Assessing and documenting controls over technology would greatly assist manufacturing companies to make the best decisions regarding technology.

2.    The organization identifies and assesses changes that could significantly impact the system of internal control.  (COSO Principle 9)

Manufacturing companies are faced with more changes today than in the past that could affect the system of internal control.  These can be grouped into three categories:

  • Changes in the external environment, such as availability of raw materials, new laws and regulations.
  • Changes in the business model, such as better technology solutions and higher quality standards.
  • Changes in leadership.

Understanding, documenting and communicating these changes to management will assist the organization to better manage these changes and control the desired outcomes.

3.    The organization specifies objectives with sufficient clarity to enable the identification and assessment of risks relating to objectives. (COSO Principle 6)

For manufacturing companies to achieve their manufacturing goals, sufficient clarity and understanding of the risks associated with these is essential.  Once the risks are properly identified and ranked, management can implement actions to mitigate these risks.

Specific focus areas such as tolerance of risk and the required level of precision in performance measurements could greatly improve the effectiveness of risk mitigating actions.

4.    The organization obtains or generates and uses relevant, quality information to support the functioning of internal control. (COSO Principle 13)

Control systems need to provide accurate, relevant and timely information to enable management to have a more pro-active than a re-active approach towards internal changes in the business.

5.    The organization selects, develops, and performs ongoing and/or separate evaluations to ascertain whether the components of internal control are present and functioning. (COSO Principle 16)

As manufacturing processes and systems evolve and change over time, so should the internal controls and monitoring systems to stay current and relevant.   Regular evaluations and updating of internal controls are essential to ensure that internal controls are present and functioning.

Focusing on these key areas will enable large manufacturing companies to use their resources more effectively and help them to better define their operational goals and objectives to ultimately become more competitive and successful!

At LBA Haynes Strand we have a group of qualified and experienced professionals with internal controls and manufacturing experience to assist your manufacturing company to implement an effective and efficient internal controls framework. Click the button below for your no-cost consultation today!

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!

3 Tips For Successful Tax Planning

Tax planning can be the single most important thing you do for your financial stability when entering into a new year. The tax planning process is an intricate one that involves gathering information, organizing numbers and data, creating a comprehensive financial picture and charting the best course forward.

With tax season almost among us, take a look at the tips below. Use these tips as a guideline to help protect your financial interests and ensure a smooth, successful tax year.

Tip #1: Know The Basics

Before you begin your tax planning process, there are a few things to keep in mind. These may seem like no-brainers, but you’d be surprised at the number of people who sometimes overlook the obvious!

  • Your income – a key determinant of the tax rate you are facing
  • Your location – tax laws and guidelines differ from state to state
  • Your expenditures – how much are you spending and where?
  • Keeping a budget can help tremendously with this!
Tip #2: Work Closely With a CPA Firm

Maintaining a close relationship with your CPA is vital! Your CPA is there to help find approaches that work best for YOU. Some techniques are better suited for businesses, while others align better with educational institutions or nonprofits. Your accountant can help you identify specific financial areas that incur higher tax rates and form preventative strategies to avoid possible tax increases. With a professional accounting service, you lower the risk of making mistakes. Remember to communicate with your firm all year long, not just right before tax season.

Quarterly financial updates – Think about sending your CPA firm financial updates on a quarterly basis. When they evaluate your numbers regularly, your firm develops more accurate tax saving estimates.

Best practices – Inform your firm of all business decisions you’ve made throughout the year. If your CPA firm has all the correct information, they are able to provide you with the very best advice for the upcoming year.

Regulation changes – Tax laws change every year, sometimes several times within a year. Tax laws shouldn’t be a huge concern when filling out your tax forms, but they should be one of the first things you research before starting a new tax year. Your CPA can help keep you up-to-date with all regulation changes in order to better your financial plan.

Tip #3: Don’t Forget Retirement Plans

Everyone loves a tax decrease, but most folks overlook the fact that a retirement plan can be used as a tax-savings vehicle. Although your income is reduced when you contribute to your retirement plan, your taxes are reduced as well. Working with your CPA and wealth management advisor is a key factor in ensuring that you have the best plan in place. Don’t have a wealth management advisor? Don’t worry – your CPA can point you in the right direction.

Depending on your current standing with these factors, there are several tax planning strategies you and your CPA Firm might want to consider.

Standard and itemized deductions – You may want to consider itemizing your deductions if you pay a significantly high mortgage on an owned home.

Contribute funds to your retirement plan – The more money you make, the more taxes you pay. And the less money you make, the less taxes you pay. One of the best ways to lower your taxes is to decrease your income by contributing to your retirement plan. Your contribution reduces your income, which lowers your tax bill.

Want to learn more about securing tax-planning success? Contact us to start the conversation about your financial future with our firm – accountants who truly care about becoming a partner in your success.

3 Keys To Staying Relevant With Your Clients

Staying relevant with your clients is the key to success. This applies to not only retaining your clients, but to also getting referrals from your clients. So, how exactly do you do that? What does staying relevant or becoming more relevant mean?

You talk to your client, you master the industry the client is in, and you provide timely advice and tips that lead to productive results for your client. Ultimately you are building a relationship with your client. One that is built on mutual trust and knowledge share. In North Carolina, especially in the Charlotte and Triad regions, there are dozens of CPA firms that can handle a client’s tax or accounting needs, however client service is where LBA Haynes Strand stands out from the rest. We create strong mutually beneficial relationships with clients. We stay relevant with our clients, and we do that by focusing on three main client service aspects:

1. Industry Acumen

Staying up to date on a client’s industry, including threats and opportunities is key. This includes making your client aware of any changes or updates that they need to be aware of relating to their industry. We pride ourselves in having a diverse team that is able to handle client needs in a number of industries. Most specifically: Charter Schools, Construction, Manufacturing, HOA, Non-Profit, and Entrepreneurs. Our team attends regular seminars, conferences, and other events in all of these fields to stay up to date.

2. Client Collaboration

We cannot stress this enough… work with your client! Your client should feel comfortable to come to you regarding any problem or issue they have and before important decisions are made! Something we have found helpful with our clients is to hold regular planning sessions. These can be monthly, quarterly, semi-annually or just annually – whatever the client feels is necessary. When you sit at the table on the same team with your client, then you are much more likely to provide real value to your client.

3. Client Insight

Focus on the client! Focus on the client’s vision, short-term and long-term goals, and strategic initiatives to meet those goals. You must understand your client in order to provide great service! This can greatly help you, especially when it comes time to offer useful advice to the client. You cannot fully help your client if you don’t understand them.  We highly recommend to take this last step seriously and really get to know your client.

These three steps can greatly increase your relevance with your clients. Thus, creating an excellent client experience and one that will be mutually beneficial for years to come. We know because this is how we handle our clients. If you would like to discuss your tax or accounting needs with a member of the LBA Haynes Strand team, contact us for your no-cost consultation!

3 Design Tips For Your Exit Strategy

A successful and effective exit from a business usually takes more than a miracle. I do believe in miracles, however gaining the greatest value for your company doesn’t usually happen without a solid design and execution. As a business owner contemplating a future exit, you should be focused on a plan that includes the following 3 design tips:

1. Timing

Is the market right? Are other parties interested in acquiring your company? Do you have plans for after your exit? Do you have more passion or anxiety over the business?

Timing is everything if your objective is to maximize the value of your company. Don’t be a statistic, too many company owners run the company up the growth curve, and down the other side before relinquishing control and exiting the business. Companies frequently grow beyond the capabilities of the owner, so all these considerations will help you determine the right timing.

2. Value

Have you completed a valuation on the company? Can the value of the company be improved? Will the exit event provide the revenue, cash and stability you desire and need?

Value is the number one driver for most executives contemplating an exit. However, value is nearly impossible to change if you have one foot out the door. Value creation is difficult but will yield the greatest financial reward for each dollar invested. Reducing costs, improving processes, increasing margins, managing debt, hiring the right resources and growing the top line are all important factors in gaining the greatest value for your business. A good business advisor can help you navigate through the projects that offer the highest return on value.

3. Succession

Do your leaders have the skills, interest and passion to carry on and improve the business? Do you financially need the business to perform after your exit?

Succession is not an issue if you are emotionally and financially detached from the exit event. In this scenario, succession is the problem for the acquirer and the seller can take the money and run. However many small business owners can’t afford to detach financially and therefore must be concerned about the quality of the successors (family members or employees). Complicated exit scenarios tend to create succession challenges and as a result will have a negative impact on the value.

Exiting a business is not an event, it is a process. Albeit an emotional process, it requires a proper design to get the most out of the final exit event. Exiting your business is much easier when you understand the 3 design tips and  have a plan to answer the tough questions regarding. . . Timing, Value and Succession.  Then you can ” Exit by Design”,  and not exit by mistake or miracle.