“You need these guys…to increase cash flow, provide valuable guidance, contacts, and credibility.

Companies committed to going through significant business change (restart, turnaround, transition, generational ownership transfer), anticipating a major liquidity event, need guidance.

Why Add Outsiders to Your Board of Directors or Advisors?

• Outside directors often increase cash flow and business growth.  According to a Forbes/Lodestone Global survey; 97% of companies reported increased revenues and EBITDA, since adding a board with outside directors.
• Outside directors can be a low-risk, low-cost resource.  They bring a new set of skills and ideas to produce benefits, while you maintain control.
• Outside directors provide an external source of accountability.
• Outside directors are on your side.  These advisors answer only to you.
• Outside directors add credibility.  When it comes time for a liquidity seeking event, outside directors send the message that you are an organization with leadership and guidance.
• Outside directors bring an independent perspective, develop strategic thinking and planning, utilize their experience and objectivity, provide their contacts Rolodex, find capital to finance the company, and guide transaction activity.  Many of these benefits are absent in companies, so the outside influence should be used to your benefit.  Remember, the key is for the CEO and management team to listen to the advice given and factor these inputs into their thinking, then make decisions.

By: Randy Garn
Entrepreneur Leadership Network

An in-depth conversation with Jess Toolson, founder and CEO of Mixhers, about how being a parent has shaped her skillsets.

Motherhood arms women with several important skills that serve them well as CEOs, such as quick, efficient prioritization and the ability to nurture employees toward better performance, says Jess Toolson, founder and CEO of the Mixhers supplements company.  A mother’s inherent three-dimensional interpretation of situations comes in handy too:  “Problems come, sometimes quickly and urgently, and I need to provide solutions that are not only well thought out, but timely, because sometimes non-decisions are more damaging than incorrect ones,” Toolson says.

I wanted to have a chat with her, in part to find out how budding entrepreneurs can successfully step into a CEO position.  But early in the course of the conversation, she offered something that surprised me, and which changed the nature of the discussion.

“I feel like motherhood, above everything else I’ve done in my life, prepared me for being a CEO,” she said.

I found this fascinating, so we dug more into the concept, and what resulted took my breath away – key things that motherhood taught her about being a CEO.

1. Quick Problem Solving and a Three-Dimensional Perspective
Being a CEO requires a knack for quick-witted problem solving.  Most of the time, you must think through problems at a high level, looking at them three-dimensionally in order to arrive at a solution that you and your company can work towards and stand behind.

It is that key executive’s deciding vote which carries the most weight in determining company trajectory, and Jess said she was surprised how comfortable she felt when pushed into such situations, then detailed how being a mother prepared her to think through decisions calmly and from multiple perspectives.

“The power to problem solve is a life skill that’s just as important in motherhood as it is in the life of a CEO,” she explained.  “As a mother, I would try to look at challenges three-dimensionally: How can I see all sides of the issue?  What different approaches could I utilize?  What are the possible outcomes?  As a CEO, I try to take the same approach.  Problems come, sometimes quickly and urgently, and I need to provide solutions that are not only well thought out, but timely, because sometimes non-decisions are more damaging than incorrect ones.  Once I feel I have sufficiently thought out an issue, I try to act with a combination of confidence and flexibility.”

2. Prioritizing Quickly and Efficiently
The sky is not always falling.  Not every fire must be put out immediately, and there are (almost) no mistakes that cannot be reversed or fixed.  However, there is a mode that must be employed when dealing with the day-to-day demands of running a company.  Jess quickly realized that prioritizing would be an enormous part of her job description.  Luckily, as she explained, she felt prepared pretty much from the start.

“Being a parent taught me how to prioritize.  There are always one million things that need to be done, but there’s inevitably something that needs to be done first,” she said.  “At Mixhers, I’ve been able to look at what needs to be handled today, what can wait for tomorrow, and what’s a problem for next week.  This allows my team to chew off bits and pieces of a task, rather than take on the entire thing all at once.  Prioritizing intelligently has helped productivity, increased morale, and simplified our processes.  It’s also allowed us to celebrate wins and push through losses.”

3. Nurturing Employees Lead to Better Performance
A dramatic shift has taken place in the way employees are viewed, particularly over the last few years.  Rather than just warm bodies in seats from 9:00 to 5:00, employees are more often now regarded as individuals, whose performance is the sum of a number of different parts and circumstances – all of which an employer should understand and support.

Jess already felt a natural inclination to treat people like this, motivated in part by her experience as a mother.

“Good mothers have the ability to see their kids for who they can become with proper nurturing,” she observed.  “They also understand, on a circumstantial level, what’s driving behavior.  They always want their kids to know that even if they’re experiencing something hard, and even if there’s discipline or timeouts involved, they are there to be a child’s champion.  That’s what I’ve tried to implement at Mixhers.  I want my team to feel that I believe in them.  They need to know I can look past growing pains and well-intentioned mistakes, because potential is only realized when we work through those things together.

“I think I may take more time than the typical CEO in getting to know employees – their personal lives, their challenges, triumphs and skillsets.  Though this takes time, the payoff is immense.  Potential is reached more often, productivity increases and risks typically turn into rewards.”

Author: Brendan Nussbaum
Transaction Support Analyst
Benchmark International

In the world of small to mid-market mergers and acquisitions, a number that is very important is a company’s adjusted EBITDA.  The adjusted EBITDA is meant to find a company’s true normalized earnings by taking away any outside influences or ownership influences on the company’s bottom line.  Some companies do not have to make many adjustments in order to find adjusted EBITDA, while some companies may need many adjustments to arrive at adjusted EBITDA.

EBITDA
The EBITDA of a company can be found relatively simply by taking the net income and adding back interest payments, income taxes, depreciation, and amortization.  The reason for these being included in the bottom line varies.  Interest expense is added back as this is an expense that could be reduced or eliminated depending on how ownership has financed the growth of the company.  Income taxes are added back as they are deductible from a company’s tax returns.  Depreciation and amortization are both added back as they are both non-cash expenses that a company incurs.  A company does not pay any physical cash for its depreciation and amortization expenses, meaning that they do not affect the company’s bottom line.  These expenses are all then added back to the company’s net income to compute EBITDA.

Forbes Business Council
Council Post – June 16, 2022

Explosive growth is exciting for any business, and watching your brand become a success feels rewarding.  While you and your team should definitely celebrate that win, you should also be prepared for the side effects of explosive growth.  Your team may need to expand to keep up with demand, as well as increase production and marketing efforts.

These are all decisions that can be made strategically in advance in the event of unexpected growth to help your team more seamlessly adjust to the changes.  To help you do this, a panel of Forbes Business Council expert shared their recommendations for scaling operations to handle an influx of new customers.

1. Hire For Where You Want To Be
I received some of the best advice from a mastermind member: Don’t hire for where you are; hire for where you want to be.  I have always manifested the growth of my businesses and always use that advice.  Having the right staff that fits your culture and lives by your core values will step up when needed to serve all your customers.

By: jimmue

I wish I could tell you that Half-Retirement was as simple as flipping a switch…poof, you are Half-Retired.  However, Half-Retirement is more of a journey than a decision.  We observe many business owners begin down the path towards Half-Retirement and have seen that there are definitely some “phases” along this path.

Here are the phases towards Half-Retirement we have seen.

Phase 1:  Half-Retired in name only
Business owner says something like, “Wow, that sounds great.  I’m going to do that.”  They come into work the next day and tell their staff they are Half-Retired, but nothing really changes.  The owner still comes to work, still has stress, and the business is still dependent upon them.  This isn’t Half-Retired; it’s Half-Delusional.
If the business owner does not get out of this phase, they run the risk that precious years will go by and they may lose the opportunity to enjoy Half-Retirement because they did not get to work on the process.

Author: Ari Marin, SVP, Family Wealth Strategist

August 2022 – The Inflation Reduction Act, “the Act,” amounts to the largest investment encountering climate change in U.S. history and allows Medicare to negotiate drug prices.  The Act also increases IRS funding and changes some tax policy and tax credits.

Select Key Updates of New Legislation

Consumer Incentives:  The Act provides some incentives for households and businesses in the form of tax breaks and rebates.

• For new cars, a $7,500 tax credit for purchase of “clean” vehicles through 2032.  However, limits apply, and available tax credits depend on where the cars are assembled, what they cost and the buyer’s modified adjusted gross income.
• For used cars, the lesser of 30% of the sales price or $4,000 tax credit for some used electric vehicles.  The availability of this credit also depends on the buyer’s income, the sales price of the vehicle and other sales qualifications (the car must be at least 2 years old, it must be the first sale of the used vehicle, and buyers can only receive the credit once every three years).
• 30% tax credit for solar panels through 2032.  The credit would fall to 26% in 2033 and 22% in 2034.
• Rebates for the purchase of new electric appliances.  Funds will be allocated to the states and each state will determine use of those funds.  Income limitations and caps may apply on availability of rebates for individual consumers.
• Rebates may also be available for non-appliance upgrades such as ventilation, insulation, air sealing, electric load service upgrades and wiring.

• Corporate alternative minimum tax that imposes a 15% minimum tax on “adjusted financial statement income” for corporations with profits more than $1 billion.
• A 1% excise tax on the fair market value of any stock repurchased by “covered corporations” as defined, upon repurchase of stock from their shareholders.
• Extension of Limitation on Excess Business Losses on pass-through businesses for two more years.  The law which disallows pass-through owners from using business losses attributable to trades or business exceeding amounts ($250,000 single $500,000 married filing jointly adjusted for inflation) will be extended by 2 years until 2029.