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    Important Industry News & Helpful Tips

Technology Impact on Business Valuation

Just as with so many industries, technology is transforming the accounting industry. Gilmore Jasion Mahler CPA Jeff Denning works with many different business owners to determine the value of their businesses. He says there’s no question technology and artificial intelligence, or AI, are changing things. The real question, he says, is whether or not those changes are a good thing when it comes to trying to figure out what your business is worth.

Jeff Denning has over three decades experience as a CPA. His expertise is business valuation and forensic accounting.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting and provides comprehensive services including assurance, business advisory, tax, risk advisory, healthcare management and outsourced accounting. The Firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.  

The 8 Steps of Business Succession Planning

Jeff Denning Business Valuation Gilmore Jasion MahlerIt’s one of those issues that you may feel you don’t have time for because you’re too busy actually running your business. But it’s an important question you need to ask yourself. What are your plans for the business once you’re out of the picture? It’s surprising how few business owners actually know the answer. Statistics show that almost half of family businesses have absolutely no succession plan.

Gilmore Jasion Mahler and Croghan Colonial Bank recently teamed up to present a business succession planning workshop for area business owners. They offered some valuable takeaways including 8 steps to ensure a successful transition to new leadership.

First and foremost, be realistic about how long it will take to sell your business. Croghan’s Paul Wannemacher says the average time to sell a business once it’s listed for sale on the market is 6-11 months. He says one should also factor in 2-3 months to close once an agreement is reached.

“Make sure you’re ready when that prospective buyer does come along,” says Wannemacher. “Create a descriptive listing of the business as well as an overview. Just like when selling your house, you need to think about “curb appeal”. You may need to resurface the parking lot, freshen the landscape or painting to make it look more attractive to a potential buyer.”

Once you’ve tended to that first impression of your business and informed your key management, here are the 8 steps to succession planning:

  1. Get a handle on the marketplace. What’s the climate in your industry, the local economy and the national and international economies? Are there potential buyers out there?  Maybe your family members, managers within the company, maybe competitors?
  2. Pull together a team of advisors. This team should include your CPA, lawyer, wealth advisor and commercial banker.
  3. Get your business ready for transition
  • Review metrics
  • Make sure your records are accurate and up to date

It’s smart to anticipate some challenges along the way as you get your business ready for transition. Some of those challenges could include:

  • Normalizing your income statement
  • Cash flow/debt service history and capacity
  • The condition of your balance sheet
  • Collateral

Who is in the pool of potential buyers?

  1. Get a valuation

Gilmore Jasion Mahler CPA Jeff Denning is an expert in business valuation. He says the first question you need to ask yourself before getting a business valuation is: what are you offering to sell?

“Are you selling all of the transferable assets of your business or a fractional interest or equity share? What about your client and customer relationships? Your contracts? What about your workforce? We’re in the midst of a critical workforce shortage,” says Denning. “Many businesses are interested in acquiring other businesses right now to acquire their workers.”

Another challenge can be landing on an asking price for your business. Denning offers these questions to ask yourself:

  • Do you have a CFO or controller to assist in this process?
  • Do you have an outside CPA with valuation experience?
  • Do you need a business broker to help assess market potential or handle the entire sale process?
  • Do you need a real estate appraiser?
  • Grade your business against other comparable businesses
  • Is the business transferable? Owner-operated? How much risk of retaining customers?
  • Put yourself in the buyer’s shoes- your advisors should help with this perspective
  1. Create a personal financial plan: What amount of sale proceeds do you need to be satisfied? Look at your living expenses, vacations and spending you anticipate, family and charity goals. Don’t discount the emotional toll of finally leaving a business you’ve nurtured and built over the years.
  2. Prepare your family for the transition: The sooner you can let family members in the business know your plans the better. You may consider family wealth transfers through trusts or partnerships.
  3. Work with prospective buyers: Some things to keep in mind as you consider bids: how will loyal managers and employees be treated? Will the new owners continue with the company, improve it, or close it down?

“The buyer may want you to stay for a period of time after the sale. Just be very clear what that continuing role might be and how long will it last,” adds Croghan Bank’s Chris Kelly.Succession Planning Chris Kelly Paul Wannemacher Croghan

  1. Structure and close the sale

“Once you’ve identified a buyer, be aware that the final stretch can be as difficult as all the other steps that led you to this… and maybe more frustrating,” says Croghan’s Paul Wannemacher. “Will the business organization change? Will there be a reorganization? Are non-compete agreements needed?”

And, what type of financing is available?

  • Seller financing (you take on all the risk)
  • Conventional bank financing
  • SBA 7(a)
  • Collateral enhancement
  • Equity investors
  • ESOP

From assessing the marketplace to closing the sale, these eight steps are meant to be a guideline as you contemplate the future of the business you’ve worked so hard to build. While it may seem daunting, many financial experts agree that perhaps the worst thing you can do in regard to succession planning is to do nothing. If you and your financial team can come up with a strategy, you can rest assured that your exit will leave your business and your employees well positioned for future success.

Jeffrey S. Denning, CPA ABV, CFF is a partner with Gilmore Jasion Mahler, LTD. He has over 30 years of accounting experience, with a focus on providing services as an accredited business appraiser, forensic accountant, litigation consultant, and expert witness.

Chris Kelly is a Vice President and Commercial Loan Officer at Croghan Colonial Bank. He has over 20 years of experience in commercial banking, providing small to medium sized privately held businesses, nonprofits and professional firms with financial solutions.

Paul Wannemacher, CPA, PFS, CFP is a Vice President and Trust Officer at Croghan Trust & Investment Management. He has over 25 years of experience in trust administration, portfolio management, tax & financial planning and business consulting.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting and provides comprehensive services including assurance, business advisory, tax, risk advisory, healthcare management and outsourced accounting. The Firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities

Get to Know One of Our Newest Team Members

Jason Shepherd Gilmore Jasion MahlerWe are pleased to welcome a new member to the GJM family. Enjoy this Q&A with our new risk consulting senior associate Jason Shepherd.

  1. Describe your role at GJM – I am joining Matt Hoverman’s GJM team as a senior associate to help grow our risk consulting practice for the firm. I intend on leveraging my perspective from the internal audit experience I possess to build relationships with our current and future clients. Additionally, I will be handling work ranging from SOX/ITGC’s, Data Privacy & Cyber, and other areas the team pursues in the risk consulting practice.
  2. When did you start employment/will you start at GJM? Monday, August 5, 2019.
  3. Why did you choose the accounting industry? Originally took accounting in high school because a favorite teacher of mine was the teaching the class. Ended up really doing well in it and knew I wanted to pursue a business career in college, so I continued the path of accounting at BGSU.
  4. What do you like best about accounting? The wide range of opportunities in different specializations. I originally had no intentions of being in the IT industry of accounting, but the amount of exposure and great working experiences I have been blessed to be apart of in such a short time has really been exciting.
  5. Are you from the Toledo area originally? If not, where are you from? I grew up in Clyde, OH and spent about 5 years or so in the Bowling Green area. Most of my family is from Bowling Green, Monclova, and Maumee.
  6. What do you like about living in Northwest Ohio? Being back near friends and family is the biggest win for me and my wife. I lived the city life being in Cleveland and metro Detroit for the past few years and there is nothing better than being able to take the back roads home and enjoying the openness.
  7. Anything you’d like to share about your past professional experience? I graduated the Master of Accountancy program at BGSU in 2017 and then started my career within the IT Internal Audit department of Sherwin Williams in downtown Cleveland. I was blessed to be exposed to many great opportunities within that network. At the time my girlfriend was with a big four accounting firm in Detroit, with a home we were renovating together, so I worked at finding a new opportunity in Michigan to relocate and propose. In the Spring of 2018, I accepted a similar role as IT Compliance Analyst within Masco Cabinetry in Ann Arbor, MI. I have spent the past year and a half revising their ITGC framework and Key Report testing, among other things. Fast forward to today, my wife and I got married this past May and are currently in the process of selling our home in Michigan and settling down in this area!
  8. Do you have any pets, hobbies, anything to share about family? My wife and I have two dogs and a cat, all of which are rescues. Hobbies include recreational sports, training with friends, binge watching Friends on repeat before they cancel on Netflix, video games, traveling, and just enjoying the married life!
  9. How do you like to spend your free time? I love to spend a lot of time with my dogs, Thor & Loki. When I’m not with them I love to do anything sports/fitness related. Also, I’m a big moviegoer!
  10. Favorite song or music? Anything 90s is a go to.
  11. Favorite book or movie? I’m a huge comic book/superhero geek, so I have to go with Man of Steel as one of my favorites. Another go to in the comedy genre has to be The Big Lebowski.
  12. Are you involved in any community organizations, do any volunteer work? Currently no, due to relocation. However, I intend on getting involved more with Habitat for Humanity and other volunteer work with our church this coming Fall.
  13. What is something people may be surprised to find out about you? Last May I competed in an MMA caged bout here in Maumee to cross it off my bucket list of things to achieve in life.
  14. Anything else you’d like to add? I’m looking forward to beginning my journey with the firm. I have always known GJM to have a great culture and a very team-oriented environment. It’s a very exciting time here with a lot of growth happening. I feel blessed to be part of such a great organization! 

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting and provides comprehensive services including assurance, business advisory, tax, risk advisory, healthcare management and outsourced accounting. The firm's professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.

Business & Succession Planning

You've worked hard to build your business, but there is a critical piece you can't ignore. What happens once you retire? Thinking you have an idea of how it will go isn't the same as coming up with an official strategic plan for the future. Experts say most business owners know how important it is to have a succession plan, but few actually have one in place. Gilmore Jasion Mahler partner Deanna Hall says she is having this important discussion right now with many of her clients.

 

Deanna Hall is a tax partner with Gilmore Jasion Mahler who advises many businesses on tax strategy and other critical business decisions. Her area of specialty is manufacturing & distribution.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting and provides comprehensive services including assurance, business advisory, tax, risk advisory, healthcare management and outsourced accounting. The Firm's professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.

Tim Schloz Joins GJM Team

Tim Schloz Gilmore Jasion MahlerGilmore Jasion Mahler recently welcomed a new member to the team. Well, he’s not exactly new as you’ll see when you read this Q&A with GJM’s Tim Schloz.

What is your title? Risk Advisory Manager

Describe your role at GJM: My role consists of helping clients in the areas of information technology (IT), enterprise resource planning (ERP) system implementations, business process and IT process designs, and internal controls over financial reporting.

When did you start at GJM? March 25th was my first day back at GJM!

Anything you’d like to share about your past professional experience? I worked nearly four years at a large public accounting firm serving clients in the IT audit and business process control testing space. I spent a lot of my time serving publicly traded companies helping them understand and optimize their IT and business process risk profile through numerous audits, and post and pre-implementation assessments. In college I had three internships with GJM in the tax department.

Why did you choose the accounting industry? Accounting is the language of business. I learned and found it very important early on that in order for a business to be successful, one must understand the ins and outs of accounting. After taking a few classes in high school and college I found accounting to be a great fit along with information systems. The two majors really complemented each other as we are truly experiencing an innovative time in the accounting world! 

Why did you specifically decide that GJM was a good fit for you? After completing my first internship with GJM, I really got a great sense of the culture, fun, and family atmosphere. I knew one way or another I would make my way back to GJM. With a growing risk advisory practice and a great team, I knew GJM was now the perfect fit for me.

Are you from the Toledo area originally? If not, where are you from? Born and raised in the Toledo area.

What do you like about living in Northwest Ohio? Northwest Ohio is really a unique place. Its big enough to suit all your needs and wants, but then small enough to get to know the community. There has been a revitalization in the area the past few years which is really exciting to watch and take part in. I also have several family members in the area and really find the area appealing and a great place to call home.

Where did you go to school? University of Toledo

Would you like to share any info on family, pets, etc.? I have two cats, Behr and Boston! They are brothers and really have two different, unique personalities.

How do you like to spend your free time? I enjoy the outdoors, whether its running, biking, playing golf, basketball, volleyball and occasionally swimming.

Are you involved in any community organizations, do any volunteer work? Is there a particular cause you feel strongly about? If so, why? I have recently been active with the United Way, Salvation Army, and Junior Achievement. I am looking to join a nonprofit board in the near future.

Favorite song or music? I am all over the place with music, but I enjoy a mix of current pop, country and techno.

Favorite book or movie? “How to Win Friends and Influence People” - Dale Carnegie

What is something people may be surprised to find out about you? Born and raised in Toledo, but a passionate Chicago Cubs fan. Go Cubs go!