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All Hands 2021 Award Winners

2021 Award Winners

Congratulations to these Associates for their recent award at the FocusCFO All Hands meeting.

Client for Life Award

Gold Level

Don Cain

CFO, Central Ohio

Tom Flynn

Area President, Central Ohio

Dan Bloom

CFO, Central Ohio

Client for Life Award

Silver Level

Pat Lang

CFO, Central Ohio

Jeff Lacy

Area President, Central Ohio

Jim McKinney

CFO, Central Ohio

Client for Life Award

Bronze Level

Ric Butler

CFO, Central Ohio

Don Cain

CFO, Central Ohio

Darren Cherry

Area President, Central Ohio

Jim Collins

Area President, Southwest Ohio

Scott Davis

CFO, Southwest Ohio

Mike Derringer

Area President, Central Ohio

Jon Doerer

CFO, Michigan

Jeff Farrington

Area President, Michigan

Tom Flynn

Area President, Central Ohio

Peter Geise

CFO, Central Ohio

Greg Gens

Area President, Northern Ohio

Jim Gilbride

Area President, Northern Ohio

Jeff Lacy

Area President, Central Ohio

Pat Lang

CFO, Central Ohio

Jim McKinney

CFO, Central Ohio

Bob Palmerton

CFO, Michigan

Todd Peter

CFO, Northern Ohio

Kyle Rhodebeck

CFO, Central Ohio

Jeff Semple

Area President, Northern Ohio

Skip Vermilya

CFO, Northern Ohio

Mark Vernallis

Area President, Pennsylvania

Todd Whetstone

CFO, Northern Ohio

Lynette Zody

CFO, Central Ohio

CFO Hall of Fame

Gold Level

CURRENT MEMBERS

David Bourke

Director, CFO Services

Bruce Collen

CFO, Central Ohio

Pat Lang

CFO, Central Ohio

Lynnette Zody

CFO, Central Ohio

CFO Hall of Fame

Silver Level

NEW MEMBERS

Sherif Matar

CFO, Central Ohio

CURRENT MEMBERS

Dan Bloom

CFO, Central Ohio

Don Cain

CFO, Central Ohio

Jim McKinney

CFO, Central Ohio

Jim Zins

CFO, Central Ohio

Joe Dougherty

CFO, Central Ohio

CFO Hall of Fame

Bronze Level

NEW MEMBERS

Ed Chong

CFO, Central Ohio

Bob Palmerton

CFO, Michigan

CURRENT MEMBERS

Wendy Brugmann

CFO, Northern Ohio

Will Cooper

CFO, Central Ohio

Dean Cole

CFO, Central Ohio

Kathleen Ferry

CFO, Northern Ohio

David Gouttiere

CFO, Northern Ohio

David Green

CFO, Central Ohio

Todd Peter

CFO, Northern Ohio

Jim Rowlands

CFO, Northern Ohio

Bob Stecki

CFO, Central Ohio

Skip Vermilya

CFO, Northern Ohio

Scott Lee

CFO, Central Ohio

Walter Himmelman

CFO, Northern Ohio

Scott Davis

CFO, Southwest Ohio

Richard Murch

CFO, Central Ohio

Ric Butler

CFO, Central Ohio

Area President Awards

Rookie of the Year

Michael Stier

Area President, Carolinas

Area President Awards

Rising Star

Lesli Matukaitis

Area President, Michigan 

Mitch Willis

Area President, Pennsylvania

Area President Hall of Fame

Gold Level

NEW MEMBERS

Forest Bookman

Area President, Northern Ohio

CURRENT MEMBERS

Mike Derringer

Area President,
Central Ohio

Tom Flynn

Area President,
Central Ohio

Jeff Lacy

Area President,
Central Ohio

Jeff Semple

Area President,
Northern Ohio

Jim Gilbride

Area President, Central Ohio

Area President Hall of Fame

Silver Level

NEW MEMBERS

Jim Collins

Area President, Southwest Ohio

Bob McAdams

Area President, Central Ohio

CURRENT MEMBERS

Darren Cherry

Area President,
Central Ohio

Fred Dannhauser

Area President,
Northern Ohio

Peter Geise

Area President,
Northern Ohio

Bob Miller

Area President,
Central Ohio

Area President Hall of Fame

Bronze Level

NEW MEMBERS

Mark Vernallis

Area President, Pennsylvania

David Tramontana

Area President, Pennsylvania

CURRENT MEMBERS

Jeff Farrington

Area President,
Michigan

Bob Miller

Area President,
Central Ohio

Greg Gens

Area President,
Northern Ohio

2020 Continuous Learning Award

Exit Planning Institute – CEPA

NEW MEMBERS

Kim Cooper

CFO, Carolinas

Mark Clower

Area President, Southwest Ohio

Michael Stier

Area President, Carolinas

Randy Feger

CFO, Pennsylvania

Mike Derringer

Area President, Central Ohio

Greg Gens

Area President, Northern Ohio

David Green

CFO, Central Ohio

Lesli Matukaitis

Area President, Michigan

Jeff Farrington

Area President, Michigan

Tom Bartos

Area President, Pennsylvania

Forest Bookman

Area President, Northern Ohio

Bob Palmerton

CFO, Michigan

Mark Rust

CFO, Pennsylvania

Peter Geise

Area President, Northern Ohio

Rex Bevis

CFO, Southwest Ohio

Lynette Zody

CFO, Central Ohio

VETERANS

David Bourke

Director,
CFO Services

Darren Cherry

Area President,
Central Ohio

Mark Clower

Area President,
Southwest Ohio

Kathleen Ferry

Area President,
Northern Ohio

Tom Flynn

Area President,
Central Ohio

Jim Gilbride

Area President,
Northern Ohio

Brad Martyn

Visionary and Founder
FocusCFO

Jeff Semple

Area President,
Northern Ohio

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How to Avoid Sellers Remorse

How to Avoid Sellers’ Remorse

By Tom Flynn, CEPA, CPA

Almost two years ago, I became a Certified Exit Planning Advisor “CEPA” because in my role as an Area President for Focus CFO, I am constantly talking to baby boomers who own businesses that are thinking of selling but have no idea of how to start the process and what options are available to them. I have found that most business owners are so engrossed in their business that they don’t think about selling until six months before they want to exit. 

A survey was conducted by the Exit Planning Institute partnering with Grant Thorton, PNC, and the Ohio Employee Ownership Center at Kent State University. This “State of Owner Readiness “survey found that 75% of owners who sold their businesses had “sellers’ remorse” because they felt they were underpaid for their business and were not prepared for the emotional impact of selling their business. Seller’s remorse can be rectified by beginning to plan for a transaction 3-5 years before an owner actually wants to exit. 

 

Life After Exit

An exit plan not only deals with selling the business, but equally focuses on the personal financial plan and the personal life after the transaction. The plan addresses the issues of being financially secure after the sale and having a life plan to ensure personal happiness after the sale. 

One of the most significant lessons I learned in my training was that the most neglected part of selling is planning “Life after Exit”. Because entrepreneurs spend their life managing the highs and lows of everyday business, there is an emotional void in their life after they sell their business. 

Exit by the Numbers

A typical exit plan will determine an “Attractiveness Score” and a “Readiness Score”. These scores reveal the areas of improvement needed for a successful transition. The attractiveness score, as it indicates, shows what is needed to make the business attractive to a buyer. The readiness score addresses the questions:

1) Is the business at its ultimate value?
2) Is the owner actually ready to sell?
3) Does the owner have an adequate financial plan?

What are the Options?

The goal is to address the improvements needed resulting from the attractiveness and readiness scores to build the company to its ultimate value over 3-5 years. An added benefit to growing a business to its ultimate value is normally an increase in profits and cash flow during the process because of the improvements. When a company has reached its ultimate value, the owner has various options including:

1) Sell the company
2) Retain the company and continue to manage it until the owner is ready to sell
3) Retain the company, let the management team operate the business, and reap the financial benefits of a successful company.

Transition Tales

I am currently working with two clients during their transition. We started planning a transition 5 years ago for the first client. The owner and I analyzed the company and determined the actions that needed to be accomplished to get the company to its ultimate value. Once we determined the company was ready and attractive, we reviewed the various exit options. The owner decided that an ESOP was the best exit strategy for him. He chose an ESOP because it provided him the best dollar value and it addressed his desire to stay involved in the company for another 3-5 years.

The second client is not as far along as the first client. We have determined the actions needed to be accomplished in the next three years to get the company to its ultimate value and are moving to that end. We are also reviewing the potential exit options.

According to the “State of Owners Readiness” survey mentioned above, 34% of respondents have no exit plan and an additional 49% have thought about selling their business but have not documented how they would accomplish it.

What I have learned from the exit planning training and from working with my clients is that it takes 3-5 years planning to have a successful transition. In addition, an owner must not only grow the business to its ultimate value, he or she must plan for their own financial security and have a plan for “Life after Exit”.

Tom Flynn is an Area President with FocusCFO based in Columbus. 

Founded in 2001, FocusCFO is the leading onsite fractional CFO services provider in the Midwest and Southeast. FocusCFO works closely with small to medium sized businesses helping business owners gain control over three key financial and operational areas: increasing cash flow, reducing business risk, and creating a platform for scalable growth. This allows business owners to then realize full financial control and increased value in their businesses. For more information, visit us at focuscfo.com or follow us on LinkedIn. 

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All Hands 2020 Award Winners

2020 Award Winners

Congratulations to these Associates for their recent award at the FocusCFO All Hands meeting.

Client for Life Award

Gold Level

David Bourke

Leadership and Support Team
Director, CFO Services

Tom Flynn

Central and Eastern Ohio
Area President

Client for Life Award

Silver Level

Don Cain

Central and Eastern Ohio
CFO

Pat Lang

Central and Eastern Ohio
CFO

Tom Flynn

Central and Eastern Ohio
Area President

Jim Zins

Central and Eastern Ohio
CFO

Jeff Lacy

Central and Eastern Ohio
CFO

Lynnette Zody

Central and Eastern Ohio
CFO

Client for Life Award

Bronze Level

Dan Bloom

Central and Eastern Ohio
CFO

Forest Bookman

Northern Ohio
Area President

Darren Cherry

Central and Eastern Ohio
Area President

Mike Derringer

Central and Eastern Ohio
Area President

Kathleen Ferry

Northern Ohio
CFO

Tom Flynn

Central and Eastern Ohio
Area President

David Green

Central and Eastern Ohio
CFO

Jeff Lacy

Central and Eastern Ohio
Area President

Pat Lang

Central and Eastern Ohio
CFO

Jim McKinney

Central and Eastern Ohio
CFO

Lyle Rhodebeck

Central and Eastern Ohio
CFO

Jim Rowlands

Northern Ohio
CFO

Jeff Semple

Northern Ohio
Area President

Bob Stecki

Central and Eastern Ohio
CFO

Jim Zins

Central and Eastern Ohio
CFO

CFO Hall of Fame

Gold Level

CURRENT MEMBERS

Lynnette Zody

Central and Eastern Ohio
CFO

Bruce Collen

Central and Eastern Ohio
CFO

NEW MEMBERS

Pat Lang

Central and Eastern Ohio
CFO

David Bourke

Leadership and Support Team
Director, CFO Services

CFO Hall of Fame

Silver Level

CURRENT MEMBERS

Jim Zins

Central and Eastern Ohio
CFO

Dan Bloom

Central and Eastern Ohio
CFO

NEW MEMBERS

Jim McKinney

Central and Eastern Ohio
CFO

Don Cain

Central and Eastern Ohio
CFO

CFO Hall of Fame

Bronze Level

CURRENT MEMBERS

Wendy Brugmann

Northern Ohio
CFO

Joe Dougherty

Central and Eastern Ohio
CFO

Skip Vermilya

Northern Ohio
CFO

Sherif Matar

Central and Eastern Ohio
CFO

Jim Rowlands

Northern Ohio
CFO

Kathleen Ferry

Northern Ohio
CFO

NEW MEMBERS

David Gouttiere

Northern Ohio
CFO

Will Cooper

Central and Eastern Ohio
CFO

Dean Cole

Central and Eastern Ohio
CFO

Todd Peter

Northern Ohio
CFO

David Green

Central and Eastern Ohio
CFO

Bob Stecki

Central and Eastern Ohio
CFO

Area President Awards

Rookie of the Year

David Tramontana

Southwest Ohio
Area President

Area President Awards

Rising Star

Darren Cherry

Central and Eastern Ohio
Area President

Bob Miller

Central and Eastern Ohio
Area President

Area President Hall of Fame

Gold Level

CURRENT MEMBERS

Tom Flynn

Central and Eastern Ohio
Area President

Mike Derringer

Central and Eastern Ohio
Area President

Jeff Lacy

Central and Eastern Ohio
CFO

NEW MEMBERS

Jeff Semple

Northern Ohio
Area President

Area President Hall of Fame

Silver Level

CURRENT MEMBERS

Jim Gilbride

Northern Ohio
Area President

NEW MEMBERS

Forest Bookman

Northern Ohio
Area President


Fred Dannhauser

Northern Ohio
CFO


Peter Geise

Northern Ohio
CFO

Area President Hall of Fame

Bronze Level

CURRENT MEMBERS

NEW MEMBERS

Bob Miller

Central and Eastern Ohio
Area President

Darren Cherry

Central and Eastern Ohio
Area President

Jim Collins

Southwest Ohio
Area President

Greg Gens

Northern Ohio
Area President

2020 Continuous Learning Award Exit Planning Institute – CEPA

VETERANS

Kathleen Ferry

Northern Ohio
Area President

Tom Flynn

Central and Eastern Ohio
Area President

Darren Cherry

Central and Eastern Ohio
Area President

NEW MEMBERS

David Bourke

Leadership and Support Team
Director, CFO Services

Jim Gilbride

Northern Ohio
Area President

Jeff Semple

Northern Ohio
Area President

Brad Martyn

Leadership and Support Team
Visionary and Founder

Mark Clower

Southwest Ohio
Area President

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Business Exit Strategy – Maximizing Value

Business Exit Strategy – Maximizing Value

By Tom Flynn CEPA, CPA

Every business owner will, at a point in time, exit their business in some way. Most, however, don’t think about how they will exit until they are almost ready. I have found that most business owners are so engrossed in running their business that they don’t think about selling until six months before they want to exit. Unfortunately, this is a poor strategy. Effective exit planning takes time.

A survey was conducted by the Exit Planning Institute, in partnership with Grant Thorton, PNC, and the Ohio Employee Ownership Center at Kent State University. This “State of Owner Readiness Survey” found that 75% of owners who sold their businesses had “seller’s remorse” because they felt as though 1) they did not receive a fair monetary value and 2) were not prepared for the emotional impact of selling their business. Seller’s remorse can be rectified by beginning to plan for the exit transition three to five years before an owner wants to exit.

The typical exit plan will determine an “Attractiveness Score” and a “Readiness Score”. These scores reveal the areas of improvement needed for a successful transition. The attractiveness score indicates what is needed to make the business attractive to a buyer. The readiness score addresses the questions:

  1.   Is the business at its ultimate value?

  2.   Is the owner ready to sell?

  3.   Does the owner have an adequate financial plan?

The goal is to utilize information from the attractiveness and readiness scores to determine what actions need to be taken to build the company to its maximum value over three to five years, no matter what type of exit the owner will choose. An added benefit of this process is normally an increase in profits and cash flow during the growth period because of the actions taken.

This focus of this article in on building the business value. How, specifically, to do this varies from business to business based on many factors, but the end goal is the same – to create an entity that will provide maximum value to the new owner or owners, and therefore create the maximum exit return for the current owner.

First, of course, creating maximum value involves increasing revenue and the bottom line. Achieving these goals may involve increasing sales and marketing efforts utilizing techniques that provide the maximum ROI. Other initiatives may involve expanding into new markets or diversifying the company’s product or service offerings. Any of these actions or other growth initiatives will require capital, so before beginning any growth efforts, it must be determined where this capital will come from.

These are a few options:

  1. Current assets – Is there cash on hand or are there other liquid assets available? How much is available? What are the risks vs. returns of using these assets?

  2. Cash flow – Is cash flow being maximized by the effective management of accounts receivable, payables, and inventory? More cash on hand can be used to fund growth.

  3. Capital raising – Is there a potential to raise debt or equity financing? This is a complicated issue – exit implications of capital raising must be carefully considered. It can have a serious impact on the market attractiveness of the business if not managed correctly.

Second, growth much be managed. Increasing revenue will require an increased ability to fulfill orders, additional customer service, and other potential expenses.

Third, the company needs to have a sustainable competitive advantage, and that advantage should be strengthened as much as possible.

Fourth, making the business attractive to the market will require a stable and experienced staff who will be likely to stay after a change in management.

Finally, the business’s reliance on the owner must be considered. If the expertise or customer relationships of the owner are keys to the business, there must be a plan in place to transition these to another key manager or to the new owner.

The value growth initiatives we have discussed are not all inclusive and must be part of a comprehensive plan, the formation of which requires the skills of an experienced professional. This plan, again, must be created and initiated at least three to five years before the expected time of exit.

Tom Flynn is a FocusCFO Area President based in Columbus, OH.

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Exit Options for Business Owners

Exit Options for Business Owners

By Tom Flynn, CEPA, CPA

As a small business owner, your goal from the beginning was to build value, but at some point you will exit the business. If you have executed an exit strategy plan over three to five years, as discussed in my previous articles, and created maximum value, you have options.

  • Continue to grow your business and pay yourself a healthy income.

  • Hire someone to run the business for you while you benefit from the profits.

  • Transition the business to your family or other management.

  • Sell the business.

Let’s discuss the sale options in more specific terms.

**Note that tax implications must always be considered when choosing an option.

You may choose to put your business on the market to sell if for a fair market value.

Here are some things to consider when determining if this is the right option for you:

  • Will you be able to get the price you need in the time frame you have in mind?
  • How difficult will it be to find a buyer?
  • How much do market factors impact your business, and what is projected to happen in your industry and the market in your desired sale time frame?
  • What are your goals for the terms of the sale? Is this realistic? 

Your business may be in a position to be acquired by another company that has a similar product or service, or a similar customer base. That company may want to acquire you for a variety of reasons your company assets, access to your customers, intellectual property, or to remove you as a competitor.  

Here are some things to consider: 
 

  • What companies are potential acquirers (if there are any)?
  • What is your value to an acquirer compared to your value to a buyer in the open market? Itcould be more or less, based on the why the other company wishes to acquire you. In some cases, the value may be much greater if the company is acquiring you for strategic reasons.
  • Will you be required to stay with the company for a transition period? This is often the case. Doyou want to do this? What are the risks to you if the acquisition/merger does not go well? You should make sure that the terms of acquisition include adequate protections for you.

    You may set up an Employee Stock Ownership Plan (ESOP) that allows your employees to purchase the company over time. This can often be a favorable option for business owners who want to significantly improve the tax impact of the sale of their business.

    Here are some things to consider:

    • How should you structure your ESOP in order to create the most favorable tax outcome for you, as well as a positive outcome for your business and employees?
    • Do you have long-term valuable employees? If you do not, and have a high turnover of employees, an ESOP will not work well.
    • What are the future prospects for your company? Your company needs to have a realistically viable future based on your current financial position (which should be low debt, good cash flow) and favorable long-term market conditions.You may choose to sell the business to a person(s) who is already involved in the business. It may be an employee, customer, friend, or family member. Often, in a friendly sale like this, the business owner finances the sale over a period of time. A friendly sale can also just mean that you are passing the business to your heirs, but often still taking an income from it during your retirement.

       

      Here are some things to consider:
       

    • Is the buyer(s) qualified (and motivated) to manage the business successfully?
    • Consider the impact on your relationship with the buyer if the business has issues or fails in the future. Are you willing to take that risk?
    • Will you be able to sell with terms that will allow to achieve your financial goals? (i.e. are you going to be too nice to the buyer and put yourself at a disadvantage?)You may simply choose to let someone else manage the business and start taking as much cash out of the business as possible until you are ready to retire, and then sell it at a lesser value or just let it die. Here are some things to consider:
    • Will you be able to get enough, and save enough cash to retiremcomfortably?
    • Are you willing to sacrifice the value of the business by taking cash out rather than growing the business?
    • How does this impact your employees, now or in the future?You may choose to simply liquidate the business by selling it in pieces when you’re ready to exit. Here are some things to consider:
    • Are you so valuable to the business that it is unlikely to be viable without you? Typically,dissolving the business is only the best option if this is true. If the business won’t be successful without you, who will buy it?
    • What are the assets of your business worth? Is it enough?You may also, as previously mentioned, continue to run the business forever once you have achieved maximum value. Regardless of which option you choose, you must plan for it over time, and your plan should begin with the end goal in mind.
       
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