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Business operations are subject to a number of internal and external risks, as are ownership interests in businesses. How organizations and their owners address these risks can have a significant impact on the value of businesses and interests therein. An enterprise risk management (ERM) process involves identifying risks relative to an organization’s objectives, assessing them for likelihood and impact, developing a response strategy and monitoring progress. A well-defined ERM process framework can protect and create value for organizations and their owners. Smart Business spoke with John T. Alfonsi, managing director at Cendrowski Corporate Advisors LLC, about how ERM precesses can…
The duty of leadership to effectively reward is essential to the survival and prosperity of any organization. Issues between the leader and his or her people regarding incentive compensation can undermine the entire motivation process. We really are in the “timely rewards” business as company leaders. Here are four principles for successfully rewarding your people for a job well-done: Deploy your people to maximize the use of their unique gifts and talents When we have people working in areas where their individual gifts and talents don’t match the position well, employee satisfaction and employee performance suffer. Why? Because expressions of…
Thursday, 27 February 2014 14:39

How to transition your small business to an ESOP

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Having a sound exit strategy in place with respect to departing shareholders is imperative for any company. This is especially true for small businesses in which the departing shareholder is a key cog in the company’s management and day-to-day operations. A departing shareholder also faces the issue of finding a market to be adequately compensated for his shares. “Companies and individuals are faced with the daunting task of finding a market for the shares being sold, the fear of a targeted acquisition in which the purchaser would drastically alter the landscape of the company, and the various costs and time…
It’s a new year and a fresh start. While it could be construed as cliché to make resolutions, sometimes they are exactly what I need to refocus and recharge. By working with multiple organizations over my career, there have been recurring themes that have stayed with me. People want to work toward something together and belong to an organization that they believe in and trust. They want simple, clear directions as well as focus, and everyone always wants to see tangible results. With those thoughts in mind, here is how I approach my new year: Plan — for the day,…
The goal of any incident response is to minimize the impact of a negative event on an organization’s objectives. This involves responding to an incident as quickly and efficiently as possible, making good decisions to limit further damage and repair any damage that has been done. In order to accomplish this, an organization should have a corporate response plan (CRP) in place that is ready to go at a moment’s notice. A CRP typically includes an oversight committee that will design the CRP and oversee the work of the corporate response teams. Smart Business spoke with James Martin, managing director…
Expert witnesses are frequently used in the courtroom by attorneys. While many qualified experts exist, the “right” expert can greatly assist counsel and the litigation with his or her testimony. An expert witness can offer testimony about a scientific, technical or professional issue in a court case. Finding the right expert is often a difficult task, but attorneys generally look for several attributes when selecting expert witnesses. Smart Business spoke with John T. Alfonsi, managing director, Cendrowski Corporate Advisors LLC, about the qualities attorneys look for in an expert witness.What are the key attributes an expert witness should possess? Attorneys…
When trying to learn about an individual, many companies turn to online background checks. However, this could be a mistake as much of the available information may not be fully verified, which is why many businesses turn to a licensed investigator to help provide a more complete and accurate picture. Smart Business spoke with Theresa Mack, CPA, CFF, CAMS, CFCI, PI, a senior manager at Cendrowski Corporate Advisors LLC, about working with a licensed investigator to help your business uncover the information you need.Why hire a licensed investigator? Most online or database-driven background checks are actually ‘record checks.’ In other…
Challenging times present opportunities for organizations to perform detailed assessments of their operations. Performing operational assessments can help organizations identify, mitigate and take advantage of the risks that they face. These assessments focus on process design and execution risks. “When properly performed, operational assessments identify areas where process design and execution risks are not aligned with an organization’s risk tolerance,” says James P. Martin, a managing director at Cendrowski Corporate Advisors LLC. Smart Business spoke with Martin to learn more about operational assessments.How can operational assessments help? Organizations must achieve a diverse set of strategic objectives. This is accomplished by…
Michael Romano thought about his company, his employees and his customers and couldn’t escape the idea that something needed to change. Unfortunately for Romano, it wasn’t clear what that change would look like. “In my mind, I knew what the issue was, but I struggled with what to do about it,” Romano says. “I was focused more on short-term solutions because that’s generally what people try to do.” Associated Material Handling Industries Inc. was launched in 1960 to provide customers with material handling equipment and services that would improve their warehouse operations. It became a successful business and steadily grew…
On Aug. 13 the Public Company Accounting Oversight Board (PCAOB) exposed proposed changes to the standard auditor’s report that have the potential to impact the relationship between auditors and their clients. “Practitioners, issuer entities and attorneys dealing with accountants’ liability matters should all understand the implications of the proposed changes,” says Barry Jay Epstein, Ph.D., CPA, CFF, a principal at Cendrowski Corporate Advisors LLC. Smart Business spoke with Epstein about the changes and their impact.What are the main proposed changes to the auditor’s report? The proposal most likely to generate controversy is that which requires identification of what the auditors…
With increased regulatory demands and constant threats of fraud and misconduct, businesses have to watch their backs, especially when it comes to finances. In many cases, having a traditional accountant is not enough. Instead, you may need someone who has not only accounting skills, but investigative and analytical skills as well. In other words, you need a forensic accountant. “Forensic accounting enables business owners to get control over possible financial fraud and mismanagement and, more importantly, to deter it before it occurs,” says James P. Martin, CMA, CIA, CFE, managing director at Cendrowski Corporate Advisors LLC. He says forensic accountants…
Executives often wonder why they need to have machinery and equipment appraised, but these appraisals are important components of business today. “Typically, appraisals are performed because of buy/sell agreements, mergers and acquisitions, business valuations, partnership dissolutions, insurance, bankruptcy, property taxes, financing and Small Business Administration lending. Other reasons would be divorce, estate planning or other estate issues, retirement planning, cost-segregation analysis and litigation support,” says Theresa Shimansky, a manager at Cendrowski Corporate Advisors LLC. Smart Business spoke with Shimansky about how machinery and equipment appraisals are typically handled. What is the useful life of an appraisal? Generally, an appraisal is…
Business operations are subject to a number of internal and external risks, as are ownership interests in businesses. How organizations and their owners address these risks can have a significant impact on the value of businesses and interests therein.“An enterprise risk management process involves identifying risks relative to an organization’s objectives, assessing them for likelihood and impact, developing a response strategy and monitoring progress,” says John T. Alfonsi, managing director at Cendrowski Corporate Advisors.A well-defined enterprise management process (ERM) framework can protect and create value for organizations and their owners, he says.Smart Business spoke with Alfonsi about ERM to better…
A company’s mission can be a very powerful tool for building employee engagement and fostering a winning culture. But that can’t be accomplished simply with a mission statement posted on a wall.“It’s not so much about creating a statement. A company mission lives and breathes, whether it’s documented or not,” says Greg Stobbe, SPHR, J.D., Chief HR Officer at Benefitdecisions, Inc. “The mission is what drives the culture, which is what drives the organization.”Smart Business spoke with Stobbe about the importance of having a mission and the impact it can have throughout your organization.What is a company mission?There’s a unique…
One of the primary functions of management is to understand what is actually going on in an organization, as opposed to what is supposed to be happening. However, for monitoring to be truly effective, there must first be good communication, a culture that promotes ethical behavior and a solid understanding of the particular organization’s risk factors.“Organizational monitoring is not just about protecting a company from fraud,” says James P. Martin, CMA, CIA, CFE, managing director at Cendrowski Corporate Advisors LLC. “Monitoring systems can help ensure quality, that customer needs are being met and that the company is doing everything else…
Since infiltrating the business world, the use of social media has increased at an incredible rate. Last year, Netflix CEO Reed Hastings caused considerable commotion in the financial community when he announced via Facebook that Netflix had exceeded 1 billion viewing hours in a month for the first time. There was heavy debate as to whether it was appropriate for a high-level executive to divulge material information regarding a public entity’s success through social media.Fast forward one year and the SEC just released a statement in April allowing companies to make announcements through social media outlets provided investors have the…
In a world where electronic data transfer is becoming the accepted norm, the definitions of such terms as “books of original entry” and “data set” are constantly changing. Check ledgers are being replaced by backup files and seven-column pads by accounting software. Some remote accounting and data storage systems, often referred to as cloud accounting, are virtual in nature.Smart Business spoke with Todd Jolicoeur, tax senior at Cendrowski Corporate Advisors LLC, to learn more about how technology has affected age-old accounting tools.What are books of original entry?When it comes to accounting that still utilizes column paper and a 10-key calculator,…
It wasn’t your typical corporate relocation when Cartridge World Inc. moved its North American headquarters from California to Illinois in 2011.For starters, most of the employees who had worked at the Emeryville, Calif., headquarters were not making the trip to the new offices in Spring Grove, Ill.“Institutional knowledge disappeared if it wasn’t retained in the system,” says William D. Swanson, CFO of the global ink and toner printer cartridge retailer and CEO of North American operations.“Even then, it might be in the system, but it’s not in the minds, hearts and thoughts of the people coming on board. So that…
Shelly Sun was quite confident that BrightStar Care would emerge from the 2008 recession intact and ready to grow. The challenge was convincing employees and franchisees that the health care staffing solutions provider could achieve such a daunting goal.“Access to financing to start franchisees had dried up and was completely unavailable,” says Sun, the company’s co-founder and CEO. “That meant our ability to grow and add new franchisees to fund improvements in our system had declined.”As a CPA, Sun decided to put her experience in the financial realm to use and tackle the financing issues. She asked her franchisees and…
Many companies undertake an acquisition using only a financial due diligence process. However, for a greater chance of detecting potential misrepresentations, companies need to incorporate forensic investigative tools into their standard due diligence process.“Forensic techniques will help point out and isolate areas of potential fraud as well as any irregular or suspicious activity,” says Michael Maloziec, an accountant at Cendrowski Corporate Advisors LLC.Forensic analysis during the due diligence process can uncover accounting improprieties that could overinflate the value of a target company. Performing these two services together will give increased assurance that projected performance is achievable, Maloziec says.“Adding in forensic…
Stacy R. Janiak was not thinking about becoming managing partner of the Chicago office at Deloitte & Touche LLP when she joined the accounting firm in 1992. The graduate of DePaul University just wanted to do her job and make a good impression on the people who had hired her. But it was an impression left on her by a mentor who she had just come to know who shaped both her future and that of the firm in the years ahead. “Within a month of my joining the firm, a woman who I held in high regard who was…
There had been much talk surrounding the fiscal cliff, or the triggering of automatic federal spending cuts if Congress did not act by the end of 2012.“It was everywhere — you couldn’t escape a newscast or report without hearing about it as 2012 came to a close,” says Todd Jolicoeur, tax senior at Cendrowski Corporate Advisors LLC.However, the crisis was averted when the U.S. Congress approved the American Taxpayer Relief Act (ATRA), which paved the way for President Obama to sign the bill into law a day later. While not much has changed because of the bill, it did lay…
Cost segregation studies are an effective component of any cash management strategy for a business that owns buildings or other depreciable real property for business use. The strategy involves the deferral of income tax liabilities to later years through the identification of property having a shorter cost recovery period for federal income taxes, which even the IRS acknowledges as an appropriate deferral method.Smart Business spoke with Walter McGrail, senior manager at Cendrowski Corporate Advisors LLC about using cost segregation.Why are cost segregation studies effective?The benefit is the ‘present value savings’ attributable to the deferral of federal and state income taxes.…
While the results of the presidential election have been determined, the tax landscape is less than settled. Absent any legislative changes, taxpayers are looking at significant modifications in federal taxation beginning in 2013.“Taxpayers need to be aware of the changes and know how they will impact them. Year-end tax planning becomes critical,” says John T. Alfonsi, managing director at Cendrowski Corporate Advisors.Smart Business spoke with Alfonsi about what business owners and individuals should know about the anticipated changes.What are some of the changes individuals will be experiencing in 2013?Plenty of changes will occur by virtue of the expiration of the…
A significant part of the risk management process for any business enterprise is the proper classification of its work force for federal employment tax purposes as either employees or independent contractors.“The risks from misclassification are a potentially significant underpayment of employer Social Security, Medicare and unemployment taxes, as well as the interest and penalty from failure to pay such employer taxes and for failure to withhold income taxes,” says Walter McGrail, senior manager, Cendrowski Corporate Advisors LLC.Employers, he says, are responsible for withholding taxes for employees, but they are not responsible for such taxes on independent contractors.Smart Business spoke with…
On July 30, 2012, the National Labor Relations Board (“NLRB”) reached a decision ruling that Banner Health Systems non-union employer’s system of advising its employees to refrain from discussing ongoing internal investigation matters with fellow co-workers violated Section (a)(1) of the National Labor Relations Act. Prior to the Banner Health System decision, businesses had a certain level of discretion in implementing confidentiality requests. However, the freedom to make such requests may no longer be exclusively in the hands of management and may even no longer be permitted without special justification. Companies should take notice.Courts and administrative agencies are cracking down…
The requirement for appropriate enterprise risk management (ERM) techniques continues to grow. The recently passed Dodd-Frank Wall Street Reform and Consumer Protection Act calls for a risk committee to be established by all public, nonbank financial companies, as well as larger public bank holding companies.Supervised by the board of governors of the Federal Reserve, the risk committee will be held responsible for enterprisewide risk management oversight and practices. Additionally, ERM is a central focus for many organizations outside of the financial sector looking to mitigate risks in today’s volatile economic climate.“All organizations face uncertainty; the challenge for management is to…
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