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Last Update: Sunday March 29, 2020

Key Idea: Lean on Your CPA

Host Hattie Bryant says that small business owners can depend upon a good CPA.

Think about it

How often do you meet with your CPA face-to-face?  Does your CPA give you advice or only do what you tell him to do?  Have you ever asked your CPA for help outside of your tax return?

Clip from: Sell To A Public Company

La Jolla and Dallas: Every day the press reports, especially The Wall Street Journal and Forbes, about how big business acquires small businesses in order to grow.

If you are running a good business and have market share in your industry segment, you should consider preparing for that call or knock on the door, "Can I buy your business?"   In most every episode of this show we explore how and why the founder of a business gets started and how they get over the hurdles. This week we look at how they received a very large check for the fruits of their labor.

Today, we spend time with Tracy Myers and Gary Cantor, the founders of Advertising Arts College, and Bob Orenstein, founder of International Wine Accessories (IWA). Both have completed all eight steps within the business cycle, and they define what it means to "Exit At the Top." You met Bob a couple of years ago when we did his story about starting IWA from the extra bedroom of his townhouse.

Both stories are important.

Gary and Tracy's story is for all of us who are not even thinking about selling, then there comes a knock on the door.  Bob's story is for the rest of us who know that we have created a substantial asset. Bob, however, knew that his "time" was coming. Bob was strategic and spent several years getting ready for the day, and then it took over four years to consummate a deal.

To say the least, every one of us should have an exit strategy.

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Lean on Your CPA

HATTIE (In the Studio): Did you notice that these two share many things in common? First, they both studied their financial statements. Their month-end closing was their score card. And they not only knew how to interpret their P&L, their profit and loss statement, and their balance sheet, they were always looking at key critical ratios.

Another common quality is their relationship with their CPA.  Each had a CPA who was a trusted adviser. Even though Bob is a CPA himself, they both valued that extra set of eyes to help keep accurate books. Do you study your financials? Do you follow certain key critical ratios? Is your CPA your most trusted adviser? If your answer isn't yes to all three, then consider making some changes. If you understand your business valuation, if you develop an equity and liquidity model, and if you are able to act on an exit strategy, you, too, may find uncommon wealth when you leverage both the tangible and the intangible assets of your business.

None of us live forever, and we should all be thinking about our transition, that period of your life when you share your wisdom with others within your industry, especially helping guide the next generation down the straight and narrow.

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