Ep. #1 [THEME FOUR]   Many owners (me included back when I was running the family business) often lumped anyone who works on numbers together in one big group and many times view that group as a cost center in the business.    Have you ever heard yourself – or another business owner – say my “finance team” or “accounting people” are handling it? You may have also said or heard a statement like: “We just need to get paid, pay our vendors, and get our monthly results in so we can see how much cash we have so we can keep growing.”    This shouldn’t surprise to most because many business owners did not have a tour of duty in Private Equity or work at a Big Four Accounting Firm prior to starting their business. Why should we expect any owner to understand how all the financial and accounting functions work, exactly what good looks like, and how all those functions roll up into a comprehensive financial forecast. This forecast should answer the only questions that matter: can we afford our growth, desired distributions, and taxes on the way towards the targeted equity valuation and timing?   In order to view – and run – your company like a financial asset, it takes a team with a strategic financial leader (the CFO) to produce valuable information you feel comfortable making decisions and take action based on.    On today’s show Arkona co-founders, Ryan Tansom and Pat Hobby, explain all the roles in the financial department and how each function is crucial in getting closer to your ultimate goal, taking it one month at a time.   They break down the roles of bookkeeper, accountant (which he explains can be viewed as a totally separate department), controller and, of course, CFO. You will get very detailed insight on the role of each position and how the CFO plays into the equation   After explaining each individual role, Pat puts all the pieces together and describes how the finance department can be the driving force for all the business owner's decisions and how the business owner can feel confident moving toward their long-term goal without worrying about whether they have the money to grow or not.   // WATCH THE INTERVIEW ON YOUTUBE: Intentional Growth™ Podcast   What You Will Learn How the CFO provides the current – and future – financial impact of the business owner’s goals and ideas and their impact on cash flow and the future value of a business. How the CFO is the missing link to finally take away the mental stress from the owner who mentally keeps track of the future financial impact of operational decisions in the business The difference between finance and accounting and why they are two very distinguishable departments. How to separate the roles of each internal finance team member (bookkeeper, CPA, controller, accountant, CFO). How to not GROW yourself out of business. What exactly a controller does in the finance department. Why the monthly financial statements matter even when your annual financial statements look “good.” The difference between the roles of a CFO versus a Controller The process of budgeting and how it’s a business planning exercise (like strategic planning). The relationship between the CFO and bankers and the CPA How pivotal a basic understanding of financial literacy can be for your business. The role a CFO plays in leading an acquisition strategy The role a CFO plays in the exit   // USE YOUR FINANCIALS TO CLARIFY A PATH TOWARDS A MORE VALUABLE BUSINESS: Intentional Growth Financial Assessment     Interview Quotes:  08:07  - “Once a business owner shifts their mindset and understands the value of useful, timely, and accurate financials and what can be done with it. Then they look at the cost (and it’s a cost) of those functions as additive to the value of the business as opposed to a necessary evil.” - Pat 11:30  - “Finance is more analytical. Taking that comes out of, not only the financial statements but, other data within the company to analyze what’s going on.” - Pat 14:10  - “Without accurate and timely recording of transactions, you’ve got nothing.” - Pat 32:00  - “It is incredibly valuable information. How are we doing? Are the strategies we put in place last year working?” - Pat 38:52  - “Don’t take last year’s [budget], add 5%, and divide by 12 for every line. Don’t do that. That’s not budgeting.” - Pat 49:39  - “When you get to understanding the financials… Being able to read them, understand them, and use the information to make decisions, that’s what business owners want to do.” - Pat 59:25  - “You can increase your return on your investment by mixing in some debt with your cash investment.” - Pat   Links and Resources:  Arkona Fractional CFO Services The 5 Intentional Growth™ Principles (5 Videos to Help Clarify Your Vision) Intentional Growth™ Financial Assessment Fractional CFO Services   You can also reach out to me via email at rtansom@arkona.io, or on my LinkedIn.

Ep. #4 [THEME THREE]   In this last episode of the series, “Demystifying Business Valuations,” we have Chris Yates, the owner of Rhodium Weekend, a community of online entrepreneurs, on the show to share the story of how he sold his business, Centurica. Chris received two offers from different buyers that were wildly different. In this episode, we hammer home the concept of intrinsic financial value vs. strategic transaction value by unpacking the differences in Chris’s offers.    In the first half of this episode, Chris goes in-depth with the first offer he got from a strategic buyer–an Amazon aggregator–that wanted to do an “acquihire” (essentially wanting to purchase the company for the people and processes). Chris describes how the purpose of the deal drove the deal structure and terms and how it eventually blew the deal up.   In the second half, Chris walks us through how he doubled down and focused on the intrinsic financial value of the company by getting a bank to pre-approve an SBA loan (ultimately determining the intrinsic financial value of the company based on the risk of the cash flow).    Getting clear on the intrinsic financial valuation helped Chris during the second negotiation for a few reasons. First, he knew what his valuation was regardless of the specific buyer. Second, Chris was able to clearly negotiate the terms and deal structure efficiently because he knew what the company’s intrinsic value was worth. In addition, there are limitations to “creative” deal structures when an SBA is used.    Being approached by a buyer can cause a rush of emotions for you as the business owner. However, in this series, we have consistently discussed how getting clarity on the intrinsic financial value is crucial so you can weigh all your options against what you know the company is worth.   //WATCH THE INTERVIEW ON YOUTUBE: Intentional Growth™ Podcast   What You Will Learn How to structure an LOI so a buyer can’t steal your clients, processes, and systems.  Why Chris decided to exit even though he was getting fed opportunity from old and existing clients. What was driving the acquihire buyer to want Centurica so badly. How Chris got into the mind of the acquihire buyer to really understand why they wanted his company. Why understanding what he wanted and why helped Chris negotiate with a buyer that initially had an unappealing offer. How Chris realized that ALL of the decision makers need to be sitting at the deal table. The uncertainties Chris had in the first deal and why he wished he had set the terms instead of reacting to each offer (and pulled away at the beginning knowing it wouldn't work). Chris’s thought process after the first deal fell apart and how it benefited him for the next deal. Why the buyer taking out an SBA loan was so attractive to Chris in his second negotiation. How Chris handled the aggregator–who was also a competitor–wanting to get inside his client list and agreements. Chris’s takeaways for other business owners that will be going through an exit in the near future.   // USE YOUR FINANCIALS TO CLARIFY A PATH TOWARDS A MORE VALUABLE BUSINESS: Intentional Growth Financial Assessment   Bio: Chris Yates is an entrepreneur who acquires and manages portfolios of websites. He is the founder of Rhodium Weekend—an event for investing in online businesses, and he runs several online businesses including Centurica and Vision Group Management.   Chris started his online entrepreneurial journey in 2009 while running a digital marketing agency. He felt client work wasn’t scalable, and he had an urge to build his own assets. He also got a call from a former partner/mentor who wanted to partner with Chris on buying online businesses. They bought 10 or 12 websites that year, and Chris thought it was so much fun that he sold his marketing agency and started acquiring web businesses full time.   Interview Quotes: 09:28  - “What due diligence is, in short, is we look at the financials to make sure that the numbers and make sure they match what the seller or the representative claimed. And we also look at the sales and marketing channels to look for KPIs, trends, things like that, to look for risk in those.” - Chris Yates 19:39  - “What I did was, I wanted to figure out, ‘What is the model was for the aggregators?’” - Chris Yates 28:13  - “There were these things happening behind the scenes, with investors and board members, that made us think that not everyone was clued in. And that was a big red flag.” - Chris Yates 32:47  - “It’s more about, what is the cash flow we’re pulling from this business, and what’s a reasonable multiple on that? And that’s the valuation we had in our mind.” - Chris Yates 43:10  - “We started to really think about who that buyer would potentially be.” - Chris Yates 53:51  - “We took our initial LOI. We started with half of what we were willing to except to give ourselves some breathing room.” - Chris Yates 59:24  - “Credit to my buyer. He was awesome. We had regular weekly meetings to keep communication going. That was key. We were communicating through this whole process.” - Chris Yates   Links and Resources: Rhodium Weekend   Arkona Website The 5 Intentional Growth™ Principles (5 Videos to Help Clarify Your Vision) Intentional Growth™ Financial Assessment Fractional CFO Services   You can also reach out to me via email at rtansom@arkona.io, or on my LinkedIn.

Ep. #3 [THEME THREE]   So far in this series, we’ve been demystifying business valuations by focusing on how a company is valued–as it stands today based on the risk of its cash flow–so you can view and run your company like a financial asset. By focusing on growing the intrinsic financial value–and how the net proceeds correlate to your timeline and ability to hit your financial targets–you will have choices in the future.   With that context in mind, we’re now going to dive into what you can do to maximize your valuation and net proceeds if you want to sell your company to a third party (e.g., strategic buyer or private equity firm). Today’s show focuses on the strategic transaction value which is driven by the reasons buyers buy a company or as we call it “the purpose of the deal…”   What happens if the current company financials are not the primary reason behind the buyer’s purpose of the deal?    Every entrepreneur and business owner can tell one heck of a story–about the history and future potential of the company. And when it comes to a strategic buyer, we’ve barely ever met an owner who doesn’t know why a strategic buyer would buy their company and what they should do with it. Too often, during the sale to a third party, this story is left to “finance people” to show the numbers and explain the story.    On today’s show we have Ted Schlueter and Eric Coonrod who have partnered up to solve this issue. They help companies maximize value to a third party buyer through “Branding for Buyout.” Ted helps companies market themselves by increasing the perceived value to a buyer through strategic branding with the target buyers in mind. Eric is an investment banker who focuses on the transactional value and deal structure side of a deal.   We discuss how the story of a company can increase the purchase price of a business (branding), why past marketing data is a huge metric that buyers will look at when acquiring a company, and how successful (pilot) market penetration campaigns can open up opportunities to a buyer and increase desirability and the multiple of your business. Overall, this episode really clarifies how marketing and deal structures fit hand in hand and put more money in your pocket.   //WATCH THE INTERVIEW ON YOUTUBE: Intentional Growth™ Podcast   What You Will Learn What buyers look for in an acquisition and why they actually buy a company. Ways Ted and Eric figure out the “purpose of the deal” and why the buyer wants to buy the company and how to leverage that reason to increase the sale price. Why the role of marketing is so important when getting ready for a buyout. Ways to increase the intrinsic value using M&A trends and past marketing data. How “Branding for Buyout” combines a marketer’s and investment banker’s skillset. The process of positioning a company to maximize purchase price by targeting buyers with your marketing. How to fuse the numbers and perception of a company to grow the intrinsic and transactional value. How the “Branding for Buyout” process helps with negotiations at the deal table as it relates to the deal structure (not just the purchase price). How your brand’s story can increase the multiple if it’s told right. Why the intrinsic value of your company needs to hit your financial targets before you go to market and why that can–and should–be your “Plan B” if you don’t get what you want from the third party offers.   // USE YOUR FINANCIALS TO CLARIFY A PATH TOWARDS A MORE VALUABLE BUSINESS: https://arkona.io/intentional-growth-financial-assessment   Bio: Ted drives growth initiatives for The Grist’s B2B and B2C Clients as well as spearheading internal business development efforts. Before The Grist, Ted spent over 20 years driving integrated marketing initiatives for his own award-winning agency, Crunch Brands and subsequently Breakaway Marketing.  Eric has over 19 years of experience originating and executing transactions in the Health & Wellness, Food & Beverage, Consumer, and Healthcare Services industries. Before founding Integral, he was a Senior Vice President at Cascadia Capital. There he founded the firm’s Health & Wellness practice and was responsible for initiating coverage for Healthcare Services transactions within the firm’s Healthcare Group. He has also been a part of numerous corporate finance and capital market transactions, including mergers and acquisitions, follow-on equity offerings, initial public offerings, leveraged buyouts, and equity private placements. Eric graduated from Washington University in St. Louis with a B.S. in Business Administration and is registered with FINRA holding the Series 79 and 63 licenses.   Interview Quotes: 12:06  - “Marketing and branding has always existed to sell more product, service, or technology to a customer. That’s its whole sole goal should be that: to increase sales and to help companies grow. But after branding myself out of a job with Repetitively over ten years, I realized, like an epiphany, that there’s actually a new target audience, who are the potential buyers of a business.” - Ted 12:45  - “The thing I realized with a new audience is that you have to run a bimodal track. You have to run track one as you always have (sell more product or service or technology to increase sales) but there is another work track where we now intersect with Eric, which is, if you know who the potential buyers could be, you can actually position the brand and aggregate, not only so it’s appealing to customers but it’s also appealing to buyers and what they want to buy.” - Ted 20:18  - “The way to win in B2B tech, by the way, is to humanizing the story and getting away from all of the technical stuff.” - Ted 23:32  - “And by the way, with digital marketing, you can basically get into the ecosystem and brain of a buyer and put your content in front of them, if nothing else, just for awareness.” - Ted 26:18  - “You do a lot of prep in advance so you make the sell process easier because–you’ve done it yourself, Ryan–selling your company is unbelievably difficult. It’s unbelievably time consuming.” - Eric 27:28  - “It’s the things that are the soft things that are the most important. That’s what increases value.” - Eric 40:43  - “When you ask the question, ‘Why buyers buy?’ nine times out of ten, or maybe -99 times out of 100, the answer is potential. They are buying potential.” - Ted 53:50  - “The brands themselves have a story that’s waiting to be told. It’s just being told really poorly.” - Ted 54:40  - “Not only do you have to sell to the customers but the buyers are looking for something very specific. If you have a brand that can do both, then there’s more of a chance of getting to that negotiation table.” - Ted   Links and Resources: Intentional Growth #276: Branding for Buyout with Ted Schlueter Thegrist.com (Ted Schlueter) Brandingforbuyout.com (Ted Schlueter) Integralcapitaladvisors.com (Eric Coonrod) Eric’s phone number: (310) 995-8579   Arkona Website The 5 Intentional Growth™ Principles (5 Videos to Help Clarify Your Vision) Intentional Growth™ Financial Assessment Fractional CFO Services   You can also reach out to me via email at rtansom@arkona.io, or on my LinkedIn.  

 Ep. #2 [THEME THREE]   If you focus on growing the intrinsic financial value of your company (the value based on the risk of the cash flow), you can engineer the future valuation you want as long as you have enough time and capital–all while focusing on the right strategies that de-risk the company’s cash flow (therefore increasing the multiple) while increasing your normalized EBITDA. A lot of business owners don’t understand how intrinsic financial value works, but we haven’t done a deep dive on it yet. Until now.   Dave Diehl is back on the show. He is the CEO of Prairie Capital, a nationwide investment banking firm that specializes in helping business owners transition via ESOPs, management buyouts, and third party buyers.    In this interview, Dave talks about the different types of risk within a company–from the financial buyer's view–and how an entrepreneur can lower that risk and, therefore, increase the valuation. He is the perfect guest for this topic because Prairie does 425+ ESOP valuation updates each year and works on countless transactions that are valued and structured based on the intrinsic valuation of the company.    This episode is quite literally a treasure trail to help see your company's valuation through the eyes of a financial investor and understand how to increase the equity value over the course of a couple of years.   //WATCH THE INTERVIEW ON YOUTUBE: Intentional Growth™ Podcast   What You Will Learn How a financial buyer perceives risk in a company. Dave’s thoughts on the discounted cash flow (DCF) approach vs. the market approach to a valuation. How a financial buyer views past cash flows compared to future projections and the weight they place on each when determining the value of a company. The value of being able to tell the story of the business using the financials, answering questions, and how it all contributes to the trust a buyer has in a seller and their perception of risk. Why focusing time on management and a future successor is something every entrepreneur needs to focus on. Why the intrinsic financial value can only yield a certain valuation and how the deal structure and payoff proves that point. What the capital stack approach to a valuation is and why it matters. The market approach vs. a discounted cash flow model vs. a capital stack. Why external events (like a pandemic) can affect your purchase price (even if you have done everything right). What re-trading a deal is and how it can be dependent on the external economic climate. Why a growing company–all things being equal–can be worth more than a company that has maintained the same EBITDA.   // USE YOUR FINANCIALS TO CLARIFY A PATH TOWARDS A MORE VALUABLE BUSINESS: Intentional Growth Financial Assessment   Bio: David Diehl joined Prairie Capital Advisors in 1999 and is a shareholder in the firm. He is also a member of Prairie’s Board of Directors. Dave provides closely-held businesses with a complete understanding of the best available options for their ownership transition needs. He expertly executes mergers and acquisitions (M&A), management buyouts (MBOs), employee stock ownership plans (ESOPs), estate planning and other corporate finance transactions. Dave serves as a trusted advisor to a diverse range of clients nationwide delivering highly strategic consultation.   With extensive end-to-end management experience and a focus on his clients’ success, Dave helps ensure an exceptional ownership transition experience. Dave is also a CFA Charter holder and is on the board of directors of a company that manufactures plastic parts. In addition, he is a frequent speaker in forums around the country on topics including ownership transition, valuation, capital management and the sale of businesses. Dave is also a past chair of the Advisory Committee on Valuation with The ESOP Association.   Interview Quotes: 07:54  - “The biggest thing for us is having satisfied clients and in doing so, we want them to be fully educated.” - David Diehl 10:42  - “What’s important to understand is to really get to the value of things and understanding how that value is derived… Valuation is incredibly important. You really can’t plan without it.” - David Diehl 15:29  - “The past is a helpful means to help you understand what the company can do and perform in the future. When you buy equity, you’re buying the future. You’re buying the future cash flow stream, you’re not getting the past.” - David Diehl 17:00  - “Inherent in that cost of capital is the risk.” - David Diehl 18:00  - “Valuation is all about risk and the assessment of risk in those cash flow streams.” - David Diehl 23:26  - “At the end of the day, valuation is really an academic exercise but there is a lot of art and science that gets combined in it. Because, in order to get a truly accurate valuation, you really need to understand business, you need to understand what’s going on in the outside world from a valuation perspective, and you need to apply risk appropriately relative to what you’re perceiving in the marketplace.” - David Diehl 31:10  - “So whether you reduce the debt or whether you grow the business (or the value of the house) you’re magnifying your returns. That’s what private investors tend to do and that’s how they get their return for the risk they are taking.” - David Diehl 39:49  - “If you look at things from a pricing standpoint in the market, the banks are being very aggressive and pursuing things still.” - David Diehl 46:17  - “Cash flow is everything.” - David Diehl 51:45 - “If  you don’t control that narrative, the buyer will.” - David Diehl   Links and Resources: Prairie Capital Advisors   Arkona Website The 5 Intentional Growth™ Principles (5 Videos to Help Clarify Your Vision) Intentional Growth™ Financial Assessment Fractional CFO Services   You can also reach out to me via email at rtansom@arkona.io, or on my LinkedIn.

Ep. #1 [THEME THREE]   There are so many terms, philosophies, and methods regarding business valuations that many owners tend to ignore, or they delay addressing their company’s valuation until they want to sell, which is often too late.    In the previous theme, we covered how you can measure and monitor the value of a business–by integrating it into your company’s financials–while you own it. In order to do this, we need to understand how a company is valued and the key concepts and levers that influence that value.    Arkona co-founders Ryan Tansom and Pat Hobby are back to kick off the next theme:  Demystifying Business Valuations. They explain the difference between intrinsic financial value and strategic transaction value and how they relate to normalized EBITDA, multiples, enterprise value, equity value, and finally how much money is going into your pocket after a sale (net proceeds). During this episode, Ryan and Pat unpack how companies are valued so you can begin to see–and run–your business like a financial asset.   //WATCH THE INTERVIEW ON YOUTUBE: Intentional Growth™ Podcast   What You Will Learn Why knowing the value of your company today is crucial to view–and run–your company as a financial asset. That intrinsic financial value +/- the purpose of the deal = strategic transaction value. Why the intrinsic value of a business is based on its cash flows. Why planning into the future using the intrinsic value of the company increases the options you will have when you actually want to sell. How to get a premium over the intrinsic financial value of a company. How the purpose of the deal and the buyer impact the transaction value. The difference between enterprise value, equity value, and net proceeds. How normalized (or adjusted) EBITDA works, how to calculate it, and why it matters. Why knowing the value of your company in real time helps you make decisions and in line with your long-term goals. The THREE numbers you should focus on in order to increase your net proceeds in the future when and if you decide to sell.   // USE YOUR FINANCIALS TO CLARIFY A PATH TOWARDS A MORE VALUABLE BUSINESS: Intentional Growth Financial Assessment   Bio: Pat Hobby started his career as an auditor at EY and over the years held various finance positions before launching his own outsourced CFO services company. As one of his clients continued to grow and needed more assistance, he joined the company full-time for more than 20 years. He helped the company grow significantly, do acquisitions and eventually sell it to the employees via an ESOP. Two-and-a-half years later, he led the sale of the company to a PE firm—with tremendous benefit to the employees. Since then, Pat co-founded Arkona with Ryan Tansom to help owners grow the value of their company with an end in mind.   Interview Quotes: 09:35  - “Cash flow. Sustainable, predictable, and transferable cash flow.” - Pat Hobby, on what creates real value 10:27  - “The more sustainable, predictable, and transferable cash flow there is, the more it’s worth.” - Pat Hobby 12:47  - “There are things that. Affect the risk of that cash flow. When you start to realize those things you can address them and say, ‘How do I derisk my company?’” - Pat Hobby 22:40  - “In running the business, you want to get a true picture of the cash flow. How much is this business really generating as a business, excluding some of these one-time items.” - Pat Hobby 25:47  - “I want to be careful too. There are some adjustments to EBITA that can go the other way; they can subtract from reported EBITA to get to normalized EBITA.” - Pat Hobby 37:24  - “You want to watch that value go up and be on a path that will get you to a point where you have choices that you can do with your ownership, what you want with it.” - Pat Hobby 38:58  - “In order to measure progress, you need to know what the value is.” - Pat Hobby 51:35  - “Most people think their company is worth more than it is.” - Pat Hobby 58:41 - “When you start thinking about your business as an asset, and your goal is to grow the value of that asset, having good clean financials that are accurate, timely, and useful, is essential.” - Pat Hobby   Links and Resources: Arkona Website The 5 Intentional Growth™ Principles (5 Videos to Help Clarify Your Vision) Intentional Growth™ Financial Assessment Fractional CFO Services   You can also reach out to me via email at rtansom@arkona.io, or on my LinkedIn.

QUARTERLY ECONOMIC AND M&A MARKET UPDATE   There’s a lot going on in the world today that could make a business owner feel anxious and question what to do next with their company. Should you sell your business? Acquire other companies? Reinvest? Play the long game and grow intrinsic value? What about the labor market, geopolitics, and supply chains, and their impact on my growth potential and future value of the business? ANSWERS AND DISCUSSIONS TO ALL THE QUESTIONS ABOVE START IN THIS FIRST EPISODE OF OUR QUARTERLY ECONOMIC AND M&A MARKET UPDATE SERIES They are going to be segmented into three sections. Below are each of the three organizations, the topics, and we listed the starting point for each segment - along with the main highlights - so you can jump to one section if you’d like.    View Section: ITR Economics, Brian Beaulieu // 05:20 GF Data, Bob Wegbreit // 41:45  ButcherJoseph, Jeff Buettner // 1:19:30 First, you will get insights into the current macroeconomic environment, market trends and things to keep an eye on in the future; second, you will hear updates on the data behind recent private transactions, valuations, and deal volume and structures; and lastly, you will hear stories from people who are doing deals in the M&A market. This episode will be a bit longer because we had each organization give a bit about themselves, their company’s background, as well as where they get their information.  WHY ARE WE DOING THIS? We want to bring to you resources - typically only accessed by people at the heart of private M&A deals and the capital markets - so you can make better decisions, grow the value of your company, and get where you want to go faster.    Middle- and lower-market privately held business owners (we’re defining that as around $2M to $250M in revenue) need more information–on the economy, capital markets, and the M&A market–that is timely, relevant, and useful to them. So many resources are spent gathering and publishing information that is geared toward the public markets, and we believe that privately held marketplaces need - and deserve - more attention.    //WATCH THE INTERVIEW ON YOUTUBE: Intentional Growth™ Podcast   What You Will Learn   ITR Economics, Brian Beaulieu // 05:20 The first segment (05:20) is from ITR economics where Brian Beaulieu goes over an analysis of current market trends and what to expect in the future as a business owner with consumer trends, increases in interest rates, and the predicted 2030 depression. Since 1948, ITR Economics has provided business leaders with economic information, insight, analysis, and strategy. ITR Economics is the oldest privately held, continuously operating economic research and consulting firm in the US. How ITR Economics uses rate of change in their forecasts The cause of business cycles and why people fear them because there’s no context  Why the bond market foreshadows high interests rates ITRs insight to the 2030 depression and how to shift your mindset towards it The consumer and leading indicator trends   GF Data, Bob Wegbreit // 41:45  In the second segment (41:45), Bob from GF Data, a data aggregator on private-equity sponsored M&A transactions with enterprise values of $10-250 million, talks about M&A data and trends as well as how much debt and how much equity is being placed in M&A deals. He gets this data from over 350 PE firms that have provided information on their acquisitions with over 4000 transactions reported. Why - and how -  GF Data tracks financial offers from private equity firms Why 2021 was such a busy year for deals How private equity is reacting to raising interest rates Deal structure updates: insights on the mix of debt and equity from recent deals Why logistics and labor is causing private equity to start to hesitate on doing deals   ButcherJoseph, Jeff Buettner // 1:19:30 Lastly, Jeff Buettner from ButcherJoseph (1:19:30), an M&A advisory firm, to business owners of middle market companies, discusses what buyers are doing today and how they are valuing their investments. He talks about why a buyer may hesitate on a deal and what business owners can do now to position themselves to a potential offer. ButcherJoseph delivers a full spectrum of options, including sell-side advisory, valuation advisory, ESOP advisory, debt & capital advisory, and fairness opinions.  The current climate of activity and valuations What’s going on in the M&A market right now - are people buying? How people are thinking about changes in corporate tax rates The spread between the financial value and strategic value in buyer activity Why strategic buyers are making acquisitions part of their growth strategy   // USE YOUR FINANCIALS TO CLARIFY A PATH TOWARDS A MORE VALUABLE BUSINESS: Intentional Growth Financial Assessment   Bio: Brian Beaulieu has served as CEO and Chief Economist of ITR Economics™ since 1987, where he researches the use of business cycle analysis and economic forecasting as tools for improving profitability. Brian has shared his highly valued research results via presentations, workshops, and seminars in numerous countries to hundreds of thousands of business owners and executives for the last 38 years. Prior to joining ITR Economics, Brian served as an economist for the US Department of Labor, where he worked on the health-care component of the Consumer Price Index. Brian has coauthored, with Alan Beaulieu, the books Prosperity in the Age of Decline, Make Your Move, and, for children, But I Want It!   Bob Wegbreit is the Executive Director of GF Data. He has held a variety of senior-level positions in operating, sales, and marketing in the printing and advertising industries. He has been a featured speaker on the state of the middle market at several industry events. He has held elected and appointed regional non-profit board positions and is currently the vice chair of the Montgomery County Redevelopment Authority Board. Bob has a B.S. from Boston University.   With over 20 years of valuation and financial opinion services experience, Jeff Buettner has provided valuation and financial advisory services for ESOP and non-ESOP companies in a multitude of industries. As a trusted financial advisor, Jeff has provided business and security interest valuations to stakeholders for a variety of purposes, including ESOP transactions and annual valuations, fairness opinions, solvency opinions, mergers and acquisitions, corporate planning, and financial recapitalization and restructuring. Jeff served as a member of the Board of Directors of the National Center of Employee Ownership (NCEO), and is a member of The ESOP Association where he serves on the Valuation Advisory Committee. In addition to his professional memberships, Jeff has been a frequent presenter at local, regional, and national conferences. Prior to joining ButcherJoseph, Jeff spent nearly ten years with Stout Risius Ross, Inc., where he most recently served as a Managing Director in the ESOP Advisory Services practice within the Valuation & Financial Opinions Group providing ESOP valuation and financial opinion services in a multitude of industries. Jeff started his career at PricewaterhouseCoopers before later joining a national valuation advisory services firm, where he performed and supervised numerous valuation and corporate financial advisory engagements. Jeff earned a Bachelor of Business Administration degree in finance from the University of Kentucky and a Master of Business Administration from the University of Pittsburgh.   Interview Quotes: 07:48  - “We are totally independent. I don’t get paid any more or less–nobody on my team does–whether we are seeing a recession coming or a nice cyclical rising trend coming. We get paid for giving you the reality as we see it, as far out as we can see it.” - Brian Beaulieu 10:53  - “Always hire people who are smarter than yourself.” - Brian Beaulieu 13:29  - “Rate of change (we used to call it ‘pressure curves’ back in the old days) is simply looking at the latest aggregation of data–it could be one month, it could be three months, it could be twelve months–and comparing it to the same aggregation one year earlier.” - Brian Beaulieu 13:55  - “Trends don’t change direction on a dime.” - Brian Beaulieu 18:17  - “If they have money in their pockets, if they have a job, they can be depressed, pessimistic, say anything they want, but they’re going shopping because that’s what we do.” - Brian Beaulieu 27:40 - “I think it’s best to think about the 2030s with the realization that a lot of the trends that we have embarked upon are not sustainable.” - Brian Beaulieu 28:23 - “But as we continue to pile on debt, why would the world just continue to assume that are able or even willing to pay off this mountain on debt, that we can afford to do it?” - Brian Beaulieu 33:49 - “Don’t manage a business by headlines. Don’t manage a business by the first paragraph of the news story because that’s not where the news is.” - Brian Beaulieu 44:00  - “No one in the advisory world wants to say, ‘Your baby is not so hot.’ But they do want to say, ‘This is what market is.’” - Bob Wegbreit 50:51  - “We capture a lot of debt information: the amount of debt, senior debt, the subdebt piece that’s in there, the pricing of the debt… Because that really affects what the private equity groups are able to pay–not what they’re willing to pay, but what they’re able to pay.” - Bob Wegbreit 53:09  - “Buyers and rational and sellers are emotional.” - Bob Wegbreit 59:59  - “People had pretty much felt like the interest rate thing was going away but once you commit to getting the thing done, you want to get it done.” - Bob Wegbreit 1:26:29 - “I think there’s obviously less volatility in the private market because there are so many other variables that impact the public markets that really have nothing to do with the underlying fundamentals of the business.” - Jeff Buettner 1:27:16 - “When I think of fundamentals, I think of the revenue and the earnings profiles of these businesses. Cash flow! What’s transpiring with cash flow?” - Jeff Buettner 1:30:31 - “I think we’ll probably start to see that spread compress a little because there is, inherently, this dynamic where we are today in the macroeconomic environment and the inflation and the uncertainties around a potential recession on the horizon. There is, perhaps, a little bit more cautiousness built into those financial buyers than they may have exhibited before.” - Jeff Buettner 1:33:51 - “Here, today, even if things start to change and we start to move toward a more recessionary environment, I think there’s still going to be a lot of activity. We’re still seeing a very robust deal market. There’s still buyers that need to put that capital to work. They want to put that capital to work.” - Jeff Buettner 1:39:57 - “An ESOP, as an entity, is a tax-exempt entity.” - Jeff Buettner   Links and Resources: ITR Economics Bob Wegbreit email: bw@gfdata.com GFData ButcherJoseph&Co   Arkona Website The 5 Intentional Growth™ Principles (5 Videos to Help Clarify Your Vision) Intentional Growth™ Financial Assessment Fractional CFO Services   You can also reach out to me via email at rtansom@arkona.io, or on my LinkedIn.

Ep. #3 [THEME TWO]   We have two business owners, Rob Dube and Cindy Banchy, on the show to wrap up our second theme, “Are You Creating a Lifestyle Business or a Valuable Asset.” They share how they shifted their mindset to think about their company like an asset, what their future goals are, and how their lives - and businesses - have changed since they adapted this new mindset.    Rob and Cindy discuss the three areas they focused on to help them run their company like and as an asset: trust your people, understand your financials (using the three financial statements), and follow your vision. Both of them dive deep into those three areas and pretty much give away the start-to-finish foundational points that will allow you to turn your business into a valuable asset, create future options, and how to successfully sit in the “owner’s box” instead of the management team.   //WATCH THE INTERVIEW ON YOUTUBE: Intentional Growth™ Podcast   What You Will Learn What it took for Cindy and Rob to shift their mindset to view their company like a financial asset and not just a job. Why Rob believes financials truly tell the story of the health of a business. How each business owner views their company and their relationship with the business and management team. Ownership roles vs. management roles and how that relates to normalized EBITDA. How each business owner separated their ego from their business to better run their business like an asset. How Rob and Cindy built the trust around their people so they can step away for weeks at a time. How Rob and Cindy manage their rhythm between their managers without stepping on each others’ toes. The intrinsic benefits of understanding the financials. How combining the three financial statements has allowed Cindy and Rob to understand how much they can pay themselves and give out for raises. Why culture can add asset value to the right buyer and also allow your business to better run as an asset.   // USE YOUR FINANCIALS TO CLARIFY A PATH TOWARDS A MORE VALUABLE BUSINESS: Intentional Growth Financial Assessment   Bio: Cindy Banchy: Cindy is the President and Regional Master for Vanguard Cleaning Systems of Minnesota, a commercial cleaning master franchise located in Minneapolis. Prior to Vanguard, Cindy was with IBM from 1989 through 2005. Cindy loves spending time taking adventure travels to new countries, competing in long-distance triathlons, taking epic long-distance hikes, spending time with family and friends, and exploring new cities, countries, food, and crazy adventures.   Rob Dube: From Blow Pops to Forbes Best Small Companies, Rob started his first business in high school selling Blow Pops out of his locker. In 1991, he founded imageOne with his best friend, Joel Pearlman.  ImageOne has been recognized as one of the Top 25 Small Businesses in America on the list of Forbes Small Giants, an Inc. Magazine Best Places to Work, the number one Top Workplace in Michigan, a National Best and Brightest Company to Work For, one of the Inc. 5000 Top Fastest-Growing Private Companies in America, a Positive Workplace by the University of Michigan’s Stephen M. Ross School of Business, and Crain’s Detroit Cool Places to Work. Rob is the Visionary/CEO of The 10 Disciplines for Managing and Maximizing Your Energy, a video-based journey that teaches people ten fast, simple, powerful, and fully customizable disciplines to manage and maximize their energy and live an optimal life. He is the author of the best-selling book, donothing,™ The most rewarding leadership challenge you will ever take, and the host of the Leading with Genuine Care retreat and podcast. Rob challenges business leaders and entrepreneurs to look inward with mindfulness and meditation by sharing his own mindful leadership journey.   Interview Quotes: 04:41  - “I finally said, ‘Enough Corporate America. I’m done.’ If my family can run a business, I think I can run a business too.” - Cindy Banchy 10:53  - “I have gotten–through Arkona, thank you very much–quite educated on, not only the terminology but how to look at it from, not only a growth, but a derisking of all the aspects you can do within a business in order to make it more valuable to someone outside.” - Cindy Banchy 11:28  - “What can I do to increase the value of the business, not just by revenue but by derisking it?” - Cindy Banchy 12:24  - “As your asset grows you have to start realizing separate from you, you have this entity that you have to take care of, more than when you’re just trying to get every contract and every widget out the door.” - Cindy Banchy 14:11  - “If I’m going to look at this business as something beyond ‘providing me with a job,’ I have to make a change.” - Rob Dube 16:23  - “Management is EBITA, and ownership is normalized EBITA.” - Cindy Banchy 20:16  - “What I’ve noticed with entrepreneurs (most of the time) is that ego is at the forefront of their business. Their identity is wrapped up in it.” - Rob Dube 20:34  - “They’re needed. They’re respected. They’re looked up to. It can feel almost like an addiction, sometimes.” - Rob Dube 23:04  - “It’s about people, and how you trust them, and how you treat them. And you treat them with genuine care, everyday, every time. The recruiting is key (obviously) but once you have the right people in the right seats (as Cindy said), you don’t lose sleep over anything because you know they have it covered.” - Rob Dube 23:53  - “Drawing a box around their responsibilities and letting them get there any way they can, is smart leadership.” - Cindy Banchy 24:29  - “Often times leaders don’t really understand the power of their words.” - Rob Dube 36:24  - “When people at the company understand [the numbers] the way you do, they just make better decisions, because they have the information they need to make better decisions.” - Rob Dube 40:58  - “If you can’t see where you’re going, how do you know you’re going to get there?” - Cindy Banchy   Links and Resources: Rob Dube: Donothingbook.com   Cindy Banchy: Email: cbanchy@bgcsmn.com   Arkona Website The 5 Intentional Growth™ Principles (5 Videos to Help Clarify Your Vision) Intentional Growth™ Financial Assessment Fractional CFO Services   You can also reach out to me via email at rtansom@arkona.io, or on my LinkedIn.

The podcast discusses the dilemma of reinvesting profits or taking cash out. They explore challenges faced by business owners, such as balancing current cash flow with long-term value creation. They also discuss investment opportunities, the psychology of risk perception, and the impact of lifestyle choices on business value.

EP. #1 [THEME TWO]   Today, we kick off a new theme: are you running a lifestyle business or are you growing a valuable asset? In this episode, Arkona co-founders Ryan Tansom and Pat Hobby break down what it takes to view your business as a financial asset - regardless of when you want to sell - so you can focus on growing the value of the company. By running your business as a financial asset, you can focus your time, money, and energy on areas that will increase the company’s valuation by creating sustainable, predictable, and transferable cash flow. The more valuable your company is, the more choices you will have down the road and it will allow you to create wealth, enjoy work, and make an impact.  Ryan and Pat dive deep into some key concepts that will help you walk away with a clear understanding of the metrics that you need to focus on - and what they mean - in order to see what your company is worth today and how you can project out the value of the company years into the future. It all starts by clearly understanding the difference between your ownership role versus your management role and three financial targets. // WATCH THE INTERVIEW ON YOUTUBE: Intentional Growth™ Podcast   What You Will Learn The difference between a lifestyle business and long-term value creation. The three financial targets that will help you view your business as a financial asset. The number one thing holding people back from long-term value creation. The difference between ownership and management roles, why they matter, and how it impacts your decision-making. How to clearly see the interaction and tradeoffs between funding growth, distribution, and taxes. What EBITDA and Normalized EBITDA is, why it matters, and how it is used to value a business. How the three financial statements are used to project out the value of a company. Why you need to use - and integrate - all three financial statements and why business owners typically don’t. How to integrate enterprise value, equity value, and net proceeds into the three financial statements so you can project out the value of your business year into the future. The importance of creating a financial “path” to creating long-term value.   // USE YOUR FINANCIALS TO CLARIFY A PATH TOWARDS A MORE VALUABLE BUSINESS: Intentional Growth Financial Assessment   Bio: Pat started at EY before creating his own outsourced CFO services company. There, he advised over 15 companies. He ended up joining one of those clients as they continued to grow, which led to a working relationship that lasted over 20 years. He then led the sale of the company to a PE firm. Utilizing firsthand experiences and lessons he has learned over the years, Pat helped co-found Arkona to help change how owners grow and exit their businesses.   Interview Quotes: 07:06  - “They’re like, ‘I’ve got a business now!’ But they’ve got that mindset where they’ve never viewed the business as an asset. It’s–in my opinion–the number one thing holding people back, is them viewing their business as a lifestyle business, as a job, as opposed to, probably, their largest asset. They don’t think of it that way, and when they do, they look at it through a completely different lens.” - Pat Hobby 09:00  - “People who start a business and own a business and run it, deserve to be rewarded for their hard work and the risks that they took, and the sleepless nights and worries about making payroll and worries about making rent. So I’m not saying don’t reward yourself. But if you shift your mindset away from, ‘Okay, I have a job and I get paid for doing that job but when I’m an owner, I want to view the business as an asset.” - Pat Hobby 09:33  - “.The goal of owning most assets–not any assets, most assets or, at least, investments–is for them to grow.” - Pat Hobby 13:48  - “Ownership is just owning some stock or LLC interest, in a company.” - Pat Hobby 16:14  - “That’s your job, go do your job. You get paid a paycheck for doing a job. You don’t get a paycheck for being an owner.” - Pat Hobby 33:13  - “Anytime that somebody buys a business, the first reason they’re looking at, in order to buy a business is because of its projected cash flow in the future.” - Pat Hobby 34:21  - “The intrinsic value is the value of the business, based on its cash flow as they exist today, without any other reason that someone would want to own it.” - Pat Hobby 40:32  - “But when you go from enterprise value to equity value, in deals of almost any size, the seller almost always keeps their cash and has to pay off their debt, their funded debt.” - Pat Hobby 48:35  - “When you think about your business as an asset, how much money would you put in your pocket today, if you sold it?” - Pat Hobby 65:25 - “Growth is risky and can be expensive.” - Pat Hobby 70:45 - “The whole point of this is to give yourself choices, understanding of where your situation is, where you’re going, so down the road you’ve got choices.” - Pat Hobby 72:14 - “Employees want to work for companies that are growing in value. They may not articulate it that way, but it’s just more job security, more opportunity, more people to employ.” - Pat Hobby   Links and Resources: Arkona Website The 5 Intentional Growth™ Principles (5 Videos to Help Clarify Your Vision) Intentional Growth™ Financial Assessment Fractional CFO Services   You can also reach out to me via email at rtansom@arkona.io, or on my LinkedIn.

EP. #4 [THEME ONE]   This is a very special episode to cap off our first series “What Do You Want From Your Business and Why.” We have a panel of four business owners–along with Dr. Stacy Feiner–who are willing to share their personal journeys about getting clear on what they wanted from their businesses and how it impacted their decision-making, stakeholders, and personal happiness.    The group shares their stories about what led them to feel lost and confused and how they overcame it by learning more about themselves and their stakeholder ecosystem. They explain what drove them to seek outside help (coaching with Dr. Stacy Feiner) instead of trying to solve the problem themselves and the enormous progress they have achieved since.   // WATCH THE INTERVIEW ON YOUTUBE: Intentional Growth™ Podcast   What You Will Learn The personal struggles these entrepreneurs were going through that led them to seek outside help. How coaching can eliminate personal and mental blind spots.  What it’s like after having clarity on what you want and why, and how that impacts your business, stakeholders, and decision-making. Why and how relationships with the people around you (both business and personal) can improve and grow as a result of coaching. The impact of not having tools and resources to help you communicate what you want with your stakeholders. How conflict with others and internal anxiety can be reduced–or eliminated–if you do the hard work to look inside and get clarity on what you want and why. What it was like for these business owners to look back on their struggles they had prior to finding clarity through coaching. The importance of momentum while working with a coach. How these business owners aligned what they wanted with the “stakeholder ecosystem.” The group’s comments toward people who are skeptical of coaching.   // USE YOUR FINANCIALS TO CLARIFY A PATH TOWARDS A MORE VALUABLE BUSINESS: https://arkona.io/intentional-growth-financial-assessment   Bio: Dr. Stacy Feiner is a professional coach for top performers who are ready to solve emotionally-charged problems in their professional lives in order to focus on growth. Conner Krizancic is a founder of Good Wolf Marketing and was a Division 1 college football player that has now shifted to business, brand building, and marketing strategy. Rachel Wallis-Andreasson has been at Wallis Companies since 1993. She first served ont he acquisition team, spent a year at territory manager, and finally moved up to the corporate headquarters. Brandon Johnson is the president and chief vision officer at Liquid Freight. Levi Hagen is co-owner with Brandon at Liquid Freight   Interview Quotes: 12:47  - “None of us do it alone.” - Stacy Feiner 14:56  - “I was feeling exhausted and drained and I knew that–in order to get past that point–I had to level myself up.” - Brandon Johnson 19:30  - “It’s a lot of hard work and sometimes you don’t want to dothe work because it’s emotional.” - Stacy Feiner 29:24  - “Taking away some of the questions and some of the doubt that you have in your mind, releases the stress that you don’t even know you’re working on behind the scenes.” - Brandon Johnson 37:21  - “I felt like, philosophically, we were moving from a business that was owned by a family to a family who was running a business and it was a psychological shift.” - Rachel Wallis-Andreasson 44:13  - “He appreciated me and when I feel appreciated, I want to give so much more.” - Stacey Feiner 55:46  - “We all think we’re being efficient and you don’t realize how inefficient you are when you’ve got all that baggage that you’re trying to carry around.” - Ryan Tansom 59:19  - “Not every business owner and stake holder is ready to hear what Stacey has to say.” - Rachel Wallis-Andreasson 59:55  - “I didn’t like hearing it but I guess I agree. There’s an impulsive streak, an impulsiveness.” - Levi 70:10 - “I think that’s the point of this conversation is that all this sounds simple, but it’s not. It’s extremely hard.” - Ryan Tansom   Links and Resources: Dr. Stacy Feiner Stacyfeiner.com Stacy Feiner, LinkedIn   Conner Krizancic - in LA Conner Krizancic, LinkedIn Goodwolfmarketing.com   Rachel Wallis-Andreasson - in St. Louis Rachel Wallis-Andreasoon, LinkedIn   Brandon Johnson (co-owner with Levi) - in Madison Brandon Johnson, LinkedIn Email: bjohnson@liquidfreight.com   Levi Hagen (co-owner with Brandon) - in Madison Email: levihagen@gmail.com   Arkona Website The 5 Intentional Growth™ Principles (5 Videos to Help Clarify Your Vision) Intentional Growth™ Financial Assessment Fractional CFO Services   You can also reach out to me via email at rtansom@arkona.io, or on my LinkedIn.