• GJM Blog

    Important Industry News & Helpful Tips

Business Valuation: What to Look for in an Expert

You know you need a business valuation, but who should do it and how in depth should it be? Gilmore Jasion Mahler Partner Jeff Denning specializes in business valuation and says be aware that the IRS or a court of law will have some requirements when it comes to the valuation, and who does the work. He offers some ideas on how to go about choosing the right person for the job.

Who does a valuation for your business is one of several important questions as you begin to research the process. For more information, see GJM's video blogs How Do You Figure Out the Value of Your Business, Business Valuation: Lengthy Report or Not, and What is the Business Valuation Process. Learn more about Jeff’s expertise in business valuation and forensic accounting, and don’t forget to sign up for GJM’s free quarterly newsletter The Expert with a focus on business valuation and litigation support. Just click here for quick and easy sign up.

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 services 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

What the New NAFTA Means for Small Business

New NAFTA small business USMCAOn September 30, 2018, the United States-Mexico-Canada Agreement (USMCA) was established after 13 months of negotiations. While the agreement is not currently ratified, the USMCA intends to replace the North American Free Trade Agreement (NAFTA), which has been in place since 1994. Ratification is expected to take place in early 2019.

The USMCA brings several changes to the economic relationship between the three North American countries. These include greater market access, inter-governmental cooperation mechanisms, and higher duty-free limits.

Everyone will feel these changes, not just major government agencies. Three provisions in the USMCA will particularly impact small businesses:

  1. The establishment of the Committee on Small and Medium Enterprise (SME) Issues
  2. The increase of the de minimis threshold
  3. Changes to the automobile industry

The Committee on SME Issues

Chapter 25 of the USMCA will establish a Committee on SME Issues. This committee will assemble within one year of ratification and will be comprised of government officials from the U.S., Canada, and Mexico.

The committee will assist SMEs in their transition to the USMCA, identifying strategies to boost their economic success and increase cooperation between markets. The committee will host an annual SME Dialogue, inviting experts, academics, employers, non-governmental organizations (NGOs), and other stakeholders to engage in conversation on SME issues.

Small business owners may benefit from the representation this committee will provide. However, this committee will only be comprised of government officials. Not implementing the committee effectively may cause the voices of small business owners to drown within a messy bureaucratic system.

The Increase of the De Minimis Threshold

The de minimis threshold refers to the quantity of product you can purchase online and import duty-free. The USMCA raises the de minimis threshold to $800 USD for United States products, $150 CAD for Canadian products, and $100 USD for Mexican products.

This increase can lead to significant benefits for small businesses, which often do not have the resources to pay customs duties and fees. This will increase sales volume, providing greater profits for small business owners.

The 75% Tariff-Free Threshold for Automobile Manufacturers

Under the USMCA, 75% of an automobile must be manufactured within North America to be exempt from tariffs. This is a significant increase from the 62.5% requirement under NAFTA.

This provides an incentive for automakers to decrease operations overseas. The new threshold holds the potential to provide more income for small, local auto parts manufacturers and to increase jobs for North American workers.

If you're interested in staying up on issues impacting the manufacturing world, consider signing up for Gilmore Jasion Mahler's free quarterly e-newsletter The Manufacturer. It addresses a broad range of financial topics impacting the world of manufacturing. Just click here for quick and easy sign up.

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 services 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.  

Active Shooter Panel Discussion for Manufacturers

How you react in an emergency could make a life or death difference.

Manufacturers from across Northwest Ohio are coming together to hear from police and mental health experts what to do if there’s an active shooter situation at their plant or facility. There was a time when the mentality “it will never happen here” may have been the norm. In these days of mass shootings in the headlines, oftentimes at businesses, many agree that mindset doesn’t seem appropriate anymore.

Public accounting firm Gilmore Jasion Mahler is offering panel discussions in Maumee and Findlay to address the issue and arm manufacturers with the information they need to keep their workplaces safe. The events are part of the firm’s Manufacturing & Distribution Financial Executive Roundtable series. Attendees will hear from law enforcement officials, mental health experts and a risk management expert on everything from what to do in an active shooter scenario, to the red flags of potential violent behavior.

The panel discussions are Thursday, February 21 from 11:30 am - 1 pm at Findlay Country Club, 1500 Country Club Drive, Findlay, and from 3 - 5 pm the same day at The Pinnacle, 1772 Indian Wood Circle, Maumee.

Findlay panel members:

  • Sgt. Mark Price, Hancock County Sheriff’s Office
  • Travis Thompson, Director of Risk Management, Hylant
  • Ellyn Schmiesing, Executive Director, FOCUS

Maumee panel members:

  • Brett Warner, Dir. Of Community Affairs, Lucas County Sheriff’s Office
  • Mike Navarre, Chief of Police, City of Oregon and former Toledo Police Chief
  • Travis Thompson, Director of Risk Management, Hylant
  • Wendy Shaheen, VP of Clinical Services, A Renewed Mind

The events are free for financial executives from area manufacturing & distribution businesses. The Findlay roundtable includes lunch. The Maumee event includes an optional social hour from 5-6 pm. Manufacturing financial executives can RSVP via email for either roundtable event at info@gjmltd.com. They are welcome to also register their safety director or plant manager for this panel discussion. Please specify which event when submitting your RSVP.

Gilmore Jasion Mahler (GJM) established the Manufacturing & Distribution Financial Executive Roundtable series after learning that area manufacturers needed a way to come together to share their challenges and successes. Previous roundtable topics have included the technology disruption, company culture, employee engagement, the workforce shortage, and the state of Ohio manufacturing.

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

A Manufacturer’s Guide to Finding Alternatives to Tariff Materials

alternatives to tariffsMany manufacturers are finding that their production costs have risen along with recent tariffs on their product components. By identifying potential alternatives to materials that are subject to tariffs, companies can significantly consolidate their production expenditures and achieve greater return on investment over the years. For those in the manufacturing industry dealing with tariffs and their impacts, we provide this guide to finding alternative materials.

 

Identifying Materials Outside of China

China has become a leading trade partner to the United States in recent years as a result of China's large, highly productive workforce and its access to cheaper raw materials. But due to the tariffs in place on China within the United States, American companies are now finding it more expensive to import metals and metal components from Chinese sources. Trade tensions have only heightened since the recent arrest, at the request of the U.S., of a high profile Chinese business executive. Some manufacturing businesses are now looking to other countries for access to the same quality of material at lower pricing.

Thailand has become one of the leading options for many companies, as the country is known for its stable business environment and access to vast amounts of natural resources. In 2018, the country has also taken steps to significantly improve its technical capacity by pushing investments in innovation and inviting foreign companies to build their facilities within the country.

Other Asian countries like Japan and South Korea are also ramping up their production of steel and other metals to fill the gap in the market left by the drop in Chinese metal imports to the United States. In order to compete with the global marketplace for products, countries are also offering discount pricing specifically to overseas buyers. For example, Japanese and South Korean export prices for steel are 35% lower than their domestic prices for the same product. Growing companies across the United States and around the world can now benefit from this push to compete with the Chinese metal marketplace.

Another country that has benefited significantly from the trade war between the U.S. and China is Brazil. Brazil is exempt from the steel tariffs and is set to become a leading supplier of steel to manufacturers throughout the United States.

 

Lowering Production Costs with Cheaper Processes

Beyond sourcing materials from different countries and setting up new and complex supply chains for their metal materials, some manufacturers are now turning to new ways to produce the metals they need. We have refined the process for making metals such as iron and steel and can now produce these metals in large amounts. But, from mining the metal ores to smelting and tampering alloys, these processes can be extremely energy intensive and require significant resources beyond those available to the growing American manufacturer.

Studies show that the process has been honed to its maximum potential and any low hanging fruit in terms of process improvements has already been picked. Now, new processes are being tested as a means to consolidate the expenditure of metal production. Rather than using a blast furnace to heat the iron ore and remove oxygen, some manufacturers are dissolving the iron ore in a molten electrolyte and passing a current through it. The process has been shown to yield significant cost savings. The challenge within this process is finding a widely-available, non-consumable anode alternative to iridium and platinum. Chromium-based alloys have been shown in studies to offer the ideal anode material.

Not only might this form of steelmaking help U.S. manufacturers become less reliant on foreign sources for material, but it may significantly reduce greenhouse gas emissions within the metal production process. And with a new technique for producing metal such as steel, some analysts predict that prices will decrease substantially throughout the marketplace.

 

Flexibility is the Key to Future Success for Manufacturers

One of the leading challenges for manufacturing companies looking to navigate this new complex economic landscape and forge ahead with new strategies is the lack of clarity from a political perspective. Perhaps the key take-home message for manufacturing leaders hoping to protect their infrastructure to retain profitability is that a flexible supply chain is the best defense. Working with key stakeholders across the globe and establishing partnerships in growing economies can help your organization thrive regardless of the political environment.

We hope you have developed several ideas based on the guidance provided in this post. It is the third in a series of recent GJM blog posts about tariffs, including how to communicate with your customers about tariff-related price increases and what to expect when new tariffs are imposed.

Our team is here to work with you in devising new strategies for your business in the years ahead. Learn more about the Gilmore Jasion Mahler manufacturing & distribution team of specialists.

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 CPA Sharpshooter

This week begins my favorite of all our many firm activities, the GJM Pistol Team and our entry in the Winter Pistol League.

Ever since I was 12 and got my first air rifle (similar to the Daisy Red Ryder pictured here) and my Dad started teaching me the basics of marksmanship, I have loved target shooting. Back then, it was usually shooting tin cans off the backyard fence. One time I used a beer bottle instead, but this makes a terrible mess and is not recommended. Eventually I learned a little bit about real target shooting, got a couple of pistols, and now I’m the Equipment Manager and general Sherpa for the firm’s own pistol team.

We’ve been doing this for a while now – this will be the eighth year we’ve fielded a team, and interest and participation in it continue to grow. Team Audit has won the Grand Interdepartmental Championship four times out of the previous seven seasons (including last year), though co-captain Hannah Nowak hails from the Tax group, and has won the individual championship three of the four years she’s participated. Last year 28 different shooters joined us at least once, and by the end of the season we had to turn people away for lack of available roster spots.

This got me to thinking, why I and so many accountants enjoy target shooting, and why some of us are pretty good at it. In shooting and in accounting there is a mindset of being able to break a problem down into its components. For a seemingly simple process (point and squeeze!), target shooting has a lot of little details to it. “Go and shoot bullseyes” is a bit overbroad as coaching goes, but helping a new shooter see that there are separate components of a good shot – sight picture, grip, breath, trigger control, consistency, and finally physical conditioning – is a lot like helping a client understand why operations cash flow isn’t what it could be. The golfers at the firm probably feel the same way about breaking down the parts of their swing – but if you’ve ever seen me golf, all I can say is, sorry you had to see that, and I do better with the shooting at saltines than I do swinging at the little white ball. 

One of the concepts we like to emphasize in client discussions is continuous improvement – there is a gap between where you are and where you want to be, and it’s usually not possible to bridge that gap in a single stride. So what do we do? Instead of stressing because of the distance to travel, we break the process into more manageable pieces, tackle them in succession, and strive to be making continuous improvements that will get us there eventually. I’m nowhere near where I’d like to be as a shooter, but in the past year I’ve worked on my grip – mainly just how hard to squeeze the pistol, and doing it consistently shot after shot. My breathing and trigger control are finally reasonably good, and I’m looking forward to seeing how this season goes now that I’ve (hopefully) improved my grip consistency as well. Continuous improvement!

We all excel in different ways and I appreciate the fact that the firm supports our participation in a sport that’s a little outside the norm for an accounting firm. If we’re honest I probably enjoy the coaching these days more than the shooting itself, harking back to when my Dad taught me the basics of marksmanship when I was 12. So if your son or daughter starts plinking tin cans or crafts a homemade slingshot, just know that it’s harder to shoot out your eye than the movies would have you believe, and that you may have a future accountant on your hands!

Gilmore Jasion Mahler’s Ken Sagesse contributed this blog. Ken is a partner in the Assurance Department who joined Gilmore Jasion Mahler in 2006. A member of the firm’s Construction and Real Estate Specialist Team, Ken’s area of expertise is affordable housing, though he works with many clients across the construction industry. He is a member of the National Leased Housing Association.

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.