Archive for the ‘Business Valuation’ Category

It’s OK To ‘Think Small’

Friday, November 20th, 2015

Revenue Growth Isn’t Always The Solution

Revenue Growth Isn't Business Growth, Rea & Associates, Ohio CPA Firm

Your revenue is like the water level. When it’s high, it hides a lot; but when it’s low, problems begin to reveal themselves. Unfortunately, some business owners believe that the best way to fix their business is by adding revenue. What they don’t realize is that this tactic is simply masking the real problem.

Have you ever been white water rafting? When the water is high, you glide effortlessly through the river, expertly navigating the bends and slicing through the current – it’s exhilarating. Flash forward a few months later, after the water level has dropped, and it’s a completely different story. Where it was once smooth sailing, you are now confronted with a scattering of rocks, boulders, logs and branches. Your ability to progress through the course takes a hit.

Your revenue is like the water level in this example. When it’s high, it hides a lot; but when it’s low, problems begin to reveal themselves. Unfortunately, some business owners believe that the best way to fix their business is by adding revenue. What they don’t realize is that this tactic is simply masking the real problem.

Sometimes, More Is Less

If you want your business to be healthier, you can’t rely on revenue growth to solve your problems. In fact, you may find greater success if you start thinking small.

Businesses that are healthy tend to be able to generate healthy cash flow. This means that you need to pay attention to more than just your ability to generate revenue. For example, you could find great success if you were to tighten up your billing strategy. Oftentimes, business owners will only focus on their monthly revenue and forget to consider how long it actually takes for the money to roll in. Even though your company’s revenue looks great for the month of July, it could be September (or later) before you actually get paid. In the meantime, you are stuck playing the waiting game.

Instead of looking for more customers to cover the difference, start thinking small. Get rid of the extra baggage that’s holding you down. Revenue doesn’t mean a whole lot unless you have the cash to back it up. To that point, it may be time to stop doing business with clients who aren’t prompt when it’s time to pay their bills on time. Instead, be more selective when choosing who you will do business with.

What’s Holding You Back?

It can be a lot of work to identify what’s holding you back and sometimes you need to look at your business from a different perspective, some business owners find great success simply asking for help from an outsider. There is no one-size-fits all solution. The best way to take control of your business is to work with a trusted advisor.

A great place to start is by listening to our podcast, Unsuitable on Rea RadioEpisode 10: The Revenue Sin covers business health and what you can do to strengthen your cash flow. When you are done, click here for additional resources.

Do you have a business question you need help solving? Send it to and let us know what issues are challenging your business. We could feature your question on an upcoming episode of Unsuitable or in a blog post.

By Brad Martyn, Founder & CEO, FocusCFO

Looking for more ways to improve your business? Check out these articles:

Not All Growth Is Good Growth

5 Reasons Why Managing A Solid Cash Flow Is Just Good Business Sense

Drive Internal Cash Flow And Improve Profitability

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Stop The Family Drama With A Buy-Sell Agreement

Thursday, October 8th, 2015
Take control of your future with a buy-sell agreement - Unsuitable on Rea Radio

You don’t know what the future holds, but if you don’t take steps to prepare for the unknown you are leaving your business and your family vulnerable. Click here to listen to How To Ruin Thanksgiving Dinner on Unsuitable on Rea Radio, a new finance and business management podcast.

It seems like when the holiday season comes around everybody does their best to put their best foot forward and to portray the image of “the flawless family.” From the turkey dinner on Thanksgiving, to the Christmas cards featuring happy, loving families – we do all we can just to make sure everything is … perfect.

Listen to the podcast: How To Ruin Thanksgiving Dinner

The holiday season is also notorious for other less-than-perfect qualities, such as family fights, holiday shopping stress and, ultimately, increased depression and anxiety.

Now imagine you are battling the normal holiday stressors while trying to manage a family business. And what if your business is in crisis mode and your life, the future of your family members and the sustainability of your company hangs in the balance?

When you own a business with family or friends you already run the risk of business matters spilling over into your personal affairs. But when you haven’t invested the time and resources needed to plan ahead, you are leaving your business and your family vulnerable. Take control of the future of your business and the general well-being of your family all year long by knowing the true value of your business and investing in a proper buy-sell agreement.

Click here to read the full article.

By Tim McDaniel, CPA/ABV, ASA, CBA (Dublin office)

Business Valuations - Ohio CPA firmLearn more about the importance of securing a custom business valuation and buy-sell agreement. Listen to the How To Ruin Thanksgiving Dinner” podcast on Unsuitable on Rea Radio at or on iTunes or SoundCloud.

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Why would I want to listen to a podcast from an accounting firm?

Wednesday, October 7th, 2015
Unsuitable Podcast - Ohio CPA Firm

Mark Van Benschoten (left) talks with Doug Feller, a principal and financial advisor with Investment Partners, talks about wealth enhancement and investment tactics for an upcoming episode of Unsuitable on Rea Radio, a new financial and business advisory podcast from Rea & Associates. Click here to learn more about Unsuitable on Rea Radio.

I know what you’re thinking – listening to a podcast from an accounting firm is probably about as entertaining and insightful as watching paint dry. But Unsuitable on Rea Radio isn’t your typical accounting podcast, and here’s why.

Real, Simple Solutions

Who doesn’t like a good story? What about one that leaves you with greater insight into the financial wellness of your own company? And if you had a better idea of how other successful entrepreneurs manage their wealth, wouldn’t you try to follow their lead?

The professionals at Rea have seen a lot over the last several decades and they are willing to open the curtain just enough to provide you with the information to forge your own success. And on Unsuitable, they do just that.

An Effective Kick In The Pants

Unsuitable offers a little something for everybody and I am confident that this is a show that will not only help provide you with more clarity, but will motivate you to take the next step as a professional and as a business leader.

Look at what has already been discussed in the first four episodes:

And this is just the beginning. Look for episodes highlighting investment strategies, Affordable Care Act compliance and retirement preparedness – just to name a few.

Accountants Like To Laugh Too

This may come as a surprise to many since those in the accounting profession tend to be thought of as dry, stuffy, number-crunching fanatics, but that’s just not true – well, most of the time. The Rea team consists of some pretty humorous, outgoing folks and I think that the diverse sense of humor of our team shines through. Mark Van Benschoten, the host of the show, helps a lot, of course. He does an excellent job addressing each guest and makes them feel comfortable … then the show gets really good.

Just The Right Length

Our firm has 11 offices throughout Ohio, which means I do a lot of driving. When I’m on the road I like to listen to podcasts – and there are a lot of them out there! What I really like about Unsuitable, is that it’s long enough to be really informative and wraps up nicely before it reaches the point where I am wishing it would end. In fact, when it does end I find myself wanting to start the next one. Mark and his guests get right to the point of the show, provide examples and offer hard-hitting advice in a concise, enjoyable format – all while having a great time and avoiding stuffy accounting jargon.

Go to now and start listening or subscribe to Unsuitable on Rea Radio on iTunes or SoundCloud. I also want to encourage you to use #ReaRadio to join the conversation on Twitter and Facebook.

By Lee Beall, CPA (Dublin office)

Click here and start listening to Unsuitable on Rea Radio now!


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5 Financial Secrets Of Successful Business Owners

Tuesday, September 29th, 2015
Financial Secrets Of Successful Business Owners - Rea & Associates - Ohio CPA Firm

After following through with a 13-week cash flow for almost a year, you will have better insight into how to spend your profits to help your business generate additional cash and sales. Visit to learn more and listen to Rea’s podcast — Unsuitable on Rea Radio.

Many business owners find difficulty coming to terms with their financial obligations. They will dedicate long hours combing through their company’s expenses, invoices and payroll to arrive at an annual budget, only to let the report sit until it’s time to repeat the exercise again a year later. A 13-week rolling cash flow helps take the stress off business owners when it comes time to make important strategic decisions throughout the year. But in order to get your company back on the right track, you must be ready to change the way you look at your company’s finances. These five financial secrets of successful business owners will get you on the right track.

Listen To Unsuitable On Rea Radio – Why $1 Million Doesn’t Matter

1)     Know how much cash you have on hand.

We’re talking about tangible cash here; and to know how much you actually have on hand you will have to look beyond the ending balance on your business’s bank statement while not letting yourself get caught up in a sea of technical information, graphs and presentations. The three most important questions you should be asking every week are:

  • How much money do we have in the bank?
  • What is our accounts receivable balance?
  • Who do we owe and how much we owe them?

The other information and reports are still important, they just aren’t as critical when you have to make big decisions without a lot of time to ponder your company’s short- and long-term financial state.

2)     Understand your billing practices.

To get an accurate picture of your company’s cash flow, you will need to take a closer look at your current billing practices to find out if you are getting your bills out on a timely basis. Don’t be tempted to gloss over this step. It may surprise you to learn that a lot of decision-makers and business owners think they are on top of their billing activity, only to learn that they’re not. A 13-week cash flow budget will expose this weakness and will get you back on track.

3)     Delegate ownership of your cash flow. 

We are all busy and it’s easy to be enthusiastic about implementing a 13-week cash flow strategy — in theory. But when it’s time to actually put your strategy into action it’s easy to blame “lack of time” for why you put it off. The good news is that you can delegate the work to someone who has the time. You really can’t afford to ignore your cash flow. When you understand where your money is coming in from and where it’s going, you will begin to see positive results.

4)     Review your cash flow projection often.

While it’s great to write out an annual budget or a three-year-projection, most owners will push the document to the side … where it will begin to gather dust. Then, when the day comes when you need to know the financial state of your company for decision-making purposes, you are left with inaccurate, outdated information. When this happens, your effectiveness and accuracy as a leader is challenged. It doesn’t have to be though. When you review your cash flow regularly, you arm yourself with the tools need to make financially strategic decisions. For example, after following through with a 13-week cash flow for nearly a year, you will gain greater insight into how to spend your business profits to help generate the additional cash and sales needed to facilitate sustained growth.

5)     Put your accrual basis profit in its place.

While you may still need to have an accrual statement or generally accepted accounting principle statement to appease regulatory agencies, you would do well to remember that when it comes to the lifeblood of your business, cash flow is king. In all likelihood, businesses of all sizes should consider keeping two sets of records — an accrual and a cash basis statement — to maintain your company’s compliance among all stakeholders.

You can’t spend accrual basis profit. You can, however, spend cash basis profit. Which is why, at the end of the day, you’ll find that your banker, your lender, your shareholders, etc. … will take more interest in your cash flow strategy and your cash flow budget than your other reports.

Want to learn more? Click here to listen to Unsuitable on Rea Radio and find out “Why $1 Million Doesn’t Matter.”

By Dave Cain, CPA (Dublin office)

Visit for more episodes of Unsuitable on Rea Radio or click here to subscribe to the podcast on iTunes or click here to listen to the show on SoundCloud.

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Investing In Your Business’s Immortality

Monday, May 11th, 2015
Business Teamwork - Rea & Associates - Ohio CPA Firm

Ensuring that you have the right team in place – from the ground floor to upper management – is a solid, common sense strategy for business owners who are looking to add short-term and long-term value to their business. Not only are customers and clients more likely to equate your team’s passion with quality, which helps secure new business and develop long-term relationships, but the strength and self-sufficiency of your team is a major incentive to investors.

Go ahead. Take pride in all that you’ve accomplished. Relive the moment you decided to go into business and reflect on your trials and triumphs. And as you reminisce, identify everyone who helped you achieve your vision – because chances are you didn’t get where you are by yourself.

Make no mistake. In business, the strength of your team directly impacts your company’s success and overall val­ue. Therefore, it’s never been more im­portant to ensure that your exit from the company doesn’t lead to a “going out of business” sale.

Read: This Is An Intervention – Step Away From Your Business

Your Company’s Longevity

As a business owner, it’s your responsibility to continually evaluate your busi­ness. Part of the evaluation process is ensuring that the right people are in the right place to help guide and grow your company – even when you’re not around.

Whether they move on or retire, eventually every person on your leadership team will leave, including you. You must decide what kind of impact this will have on your company when it happens.

One of the best strategies you can em­brace is to become obsolete. That’s not to say that your work is not important, it just means that your team, your business, does not depend on you for its survival.

Every time you recruit an employee, you have an opportunity to reinforce your company’s mission. Do your due diligence to make sure the people you hire are on board with the company’s vision. They will continue to set the tone after you leave, which is why the qualities you consider when hiring a candidate should go beyond their education and experi­ence. Anyone you hire must have the passion to succeed, the capacity to learn and a personality that helps them easily overcome complicated situations. From entry-level to leadership positions, your ability to maintain a strong team ensures the longevity of your business.

Is Your Team Valuable?

Ensuring that you have the right team in place – from the ground floor to up­per management – is a solid, common sense strategy for business owners who are looking to add short- and long-term value to their business. Not only are customers and clients more likely to equate your team’s passion with quality, which helps secure new business and develop long-term relationships, but the strength and self-sufficiency of your team is a major incentive to investors.

Email Rea & Associates to learn more.

By Don McIntosh, CPA, CGFM, CFE (New Philadelphia office) and Tim McDaniel, CPA/ABV, ASA, CBA (Dublin office)


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This Is An Intervention – Step Away From Your Business

Tuesday, April 28th, 2015
Be The Leader You Want To Be - Rea & Associates - Ohio CPA Firm

Join organizations, attend events, and talk to other leaders about your business, your industry and your role in the world. It’s time to be the business leader you’ve always wanted to be.

As the driving force behind your company’s growth and success you have undoubtedly spent countless hours and dollars strategizing, networking and juggling a laundry list of managerial responsibilities. But your effort has paid off – today, you are praised for your work and are regarded as a leading entrepreneur within your industry. But maybe it feels like you have only begun to scratch the surface and that your business is long overdue for a growth spurt. While these are great challenges to have in the business world, if you are spending all your time in the office instead of hitting the pavement, it could seem like your ability to expand further is simply unattainable.

If only there were more hours in the day!

Read: Did You Know That Treating Your Business Like An Investment Can Lead To Wealth?

Throughout my career I have had the pleasure of working with many successful business owners. And while these men and women possess the skills, expertise and leadership traits essential for success in their respective industries, they have all learned that they are not immune to getting caught up in day-to-day managerial distractions. It can happen to anybody and before you know it you are caught up in a fruitless, energy-sapping, time-consuming headache that hurts your effectiveness as a business leader and prevents your company from achieving the growth and revenue you know it is capable of.

When that happens, it’s time to stop what you are doing, take a step back and reassess your organizational development strategy.

Step Away From Your Business – An Intervention – Created with Haiku Deck, presentation software that inspires

Work On Your Business, Not In It

“[The] executives who ignited the transformations from good to great did not first figure out where to drive the bus and then get people to take it there,” says Jim Collins in his book Good to Great: Why Some Companies Make the Leap … And Others Don’t. “No, they first got the right people on the bus (and the wrong people off the bus) and then figured out where to drive it.”

In other words, if you want to continue to grow a successful company, you can’t do it alone. While this advice may sound cliché, your ability to develop a strong organizational structure is directly responsible for your company’s long-term success. But it’s not easy and getting “the right people on the bus (and the wrong people off)” has been the single hardest objective for some of the most talented business owners. But once you are able to achieve this step, you will finally be able to maximize your time and talent by working on your business, instead of in your business.

How To Lead Your Business By Developing Your Organization

  1. First you must understand that organizational development is a never-ending process. To get started, develop a formal organizational chart and take time to identify “the right people” to effectively fill the top positions on your chart. To aid in the flexibility and evolution of your business’s organizational development, consider forming an advisory board to bring outside objectivity to the process.
  2. Next, step away from the daily grind of running your business. It’s time to be the business leader you’ve always wanted to be. Join organizations, attend events, and talk to other leaders about your business, your industry and your role in the world. Doing so will help you earn respect and influence throughout your community.
  3. Once you put some distance between yourself and the day-to-day grind of your company, you will be able to lead your company more objectively. This is an ideal time to observe your current organizational structure and brainstorm strategies to help you achieve your future success with your inner circle. Just make sure that those who make up your inner circle are not like you, will tell you the truth, will add value to you and your organization and are willing to have crucial conversations.
  4. Now that you have solidified your role as a business leader, it’s time to empower those in your organization to take ownership of the company and their place in it. This includes giving them the ability to make decisions while supporting and encouraging them and demonstrating your willingness to follow their lead.
  5. One of the most critical responsibilities of a business leader is planning for the future of your company. How will you transition your business once it is time to retire? What should you do now to ensure your company’s longevity? Do you know how much your business is actually worth? In order to protect your most important investment, your business, it is important to thoroughly understand the value of your business and develop a plan for its continued growth.

Starting your business is hard; growing your business is even harder. You will make mistakes. When you do get it wrong,act swiftly to make the necessary changes.

Maximize your time and talent. Email Rea & Associates today to learn more growth and development tips for your business. I won’t say that we have seen it all, but we have certainly seen a lot.

By Mike Taylor, CPA (Millersburg office)


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Is A Sale-Leaseback Transaction Right For Your Business?

Tuesday, March 3rd, 2015
Sales-Leaseback Transaction

Is it a better business strategy to enter into a sale-leaseback transaction on your current office building or other business property? Make sure you know the pros and cons before making any decisions – Rea & Associates – Ohio CPA Firm

Are you looking for a plan to increase your business’s cash flow? If you own business property, you may be able to benefit by entering into a sale-leaseback transaction. But while there several great benefits to this type of agreement, there are also some significant drawbacks. So, before you draw up the paperwork, schedule a time to meet with your financial advisor to find out if the benefit outweighs the risk.

Advantages Of A Sale-Leaseback Transaction

A sale-leaseback transaction occurs when you, the real estate owner and occupier, sell your property to a third party on the condition that they agree to lease the property to you. Entering into this type of arrangement has several benefits, including increasing your business’ cash flow while freeing your business up to allocate the capital to other areas of your business. Additional benefits include:

  • As the seller and eventual lessor, you essentially maintain control of the property, which prevents operational disruptions from occurring.
  • Assuming the current property is financed with debt, this long-term debt can be eliminated from the balance sheet under certain lease arrangements.
  • From a tax perspective, you gain an additional annual “write-off” for the portion of rent related to the land (as land is not depreciated).

Drawbacks Of A Sale-Leaseback Transaction

Perhaps the most significant disadvantage of entering into this type of agreement is that you stand to lose the flexibility that comes with owning the property outright since these transactions usually are for longer terms than a typical property lease (15 or more years). The typical sale-leaseback transaction takes the form of a “triple net lease,” which usually states that you, as the tenant, will be responsible for the net real estate taxes, net building insurance and net common area maintenance. Other disadvantages include:

  • The loss of the real estate’s appreciation value over the course of a lengthy lease term.
  • Significant income tax impact that comes in to play when a property’s sale price significantly exceeds the property’s “book value.” This typically occurs when you are selling a property that has been owned for a long period of time prior to the sale.
  • A decrease in your Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) as your depreciation expense on the property is replaced by the rent expense.

The financial benefits of sale-leasebacks must be balanced with your unique strategic and operating considerations. A financial advisor and business consultant can help identify whether this option is right for you and your business. Email Rea & Associates to learn more about sale-leaseback transactions and other strategic business decisions. By Ben Antonelli, CPA (Dublin office)  

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‘Ghost Assets’ Haunting Your Business? How Can A Small Business Owner Keep More Money In Their Pocket? How Will A Tax Credits and Incentives Plan Benefit Your Business?

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‘Ghost Assets’ Haunting Your Business?

Tuesday, October 7th, 2014

The IRS recently issued taxpayer-friendly guidance regarding the disposition of a component of real or personal property.

Under the Internal Revenue Code, taxpayers are required to capitalize certain amounts paid to acquire, produce or improve real or tangible personal property during the year and that is used for a trade, business or for the production of income. However, prior to the issuance of new regulations in 2013 taxpayers were unable to write-off the remaining cost of a component of a larger asset or building that was repaired or replaced (e.g. a roof). In fact, under the old rules, it was not uncommon for business owners to be required to depreciate “ghost assets” – assets that were removed or replaced by the taxpayer and are no longer in service.

The good news is that the IRS has changed its mind on these, so-called, “partial dispositions.”

So, What’s Changing?

Beginning Jan. 1, 2014, taxpayers were able to deduct the remaining cost of such components in the year they were replaced/repaired by making an election on their tax return.

Additionally, the IRS allowed taxpayers to apply the regulations to dispositions that had already happened in prior years as long as the ghost assets were still being depreciated.

What was unclear until recently was how a taxpayer could effectively make the election on a retroactive basis given that businesses were required to file their 2013 year tax returns before the IRS had issued definitive guidance.

The IRS’ Response

The IRS officially announced a specific revenue procedure that provides a limited opportunity for taxpayers to write-off assets that were disposed of during a prior year. The guidance outlines the procedures necessary for taxpayers to secure the write-off, as well as what documents they should include when filing their request. If you do plan to write off a ghost asset from a previous year, you must make plans do so now as this retroactive election opportunity is time sensitive. Taxpayers who miss this opportunity will be required to continue depreciating these ghost assets. For some, this means that you could be depreciating ghost assets for another 15-20 years.

Are you a business owner who is still paying the IRS for assets that you no longer have or that have been replaced? Do you want to learn more about the IRS’s new rules on ghost assets and how they can impact your business? Email Rea & Associates to find out if you can write off ghost assets that continue to haunt your business.

Author: Chris Axene, CPA (Dublin office)


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When Should You Start Thinking About Succession Planning?

Monday, February 10th, 2014

You’re busy serving customers. Managing employees. Overseeing the day-to-day operations of your business. Stepping down as the head of your company may not be on your radar, but sooner or later you’ll need to think about what will happen to your business once you’re out of the picture. We recommend that business owners start thinking about their business succession plan at least five years before planning to implement it.  (more…)

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What Are 6 Things You Can Do To Improve The Health Of Your Business in 2014?

Monday, December 30th, 2013

Are you out of breath from the impact the economy had on your business during the last several years? Is it time to develop some New Year’s resolutions that will make a difference in your business? Adopting a new diet, jumping on the treadmill or committing to run a half marathon are common items on the “personal” resolution menu. However, is it time to add energy and resources to your resolutions in order to improve the health of your business?  (more…)

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