Tim Kinane


Interesting Items

Monday, January 20th, 2020

14 Reasons Not To Share Ownership with Key Employees

By: Patrick Ungashick


Many business owners consider at some point sharing ownership of their business with one or more key employees. Sharing ownership can create powerful advantages—retaining employees for the long-term is usually a top motive. Sharing ownership appears to elevate top employees into a true partnership with you in the ongoing effort to grow the business.

However, sharing ownership is fraught with potential problems. In our experience, it backfires more often than it succeeds. If it backfires, the owner’s ability to successfully exit from the business one day may be jeopardized.

Listed below are fourteen reasons to avoid sharing ownership with top employees, whether you are contemplating selling or gifting to them a piece of your company:

Top employees sometimes leave. No matter how loyal and trusted they are, be realistic. It happens.

1.Top employees rarely switch industries. If they leave you, they will likely join or become the competition. Now you have somebody competing with you who owns a piece of your business.

2.To prevent this, you will need to have employees sign an agreement obligating them to sell their stock (or units, if an LLC) back to you should they leave. (This is commonly called a buy-sell agreement.) This arrangement helps avoid a competitor owning some of your company. But, you won’t like writing a check to a former employee to buy back your stock. That’s not fun.

3.Speaking of the buy-sell agreement, sharing ownership with top employees increases governance and legal costs, such as creating and/or updating this buy-sell agreement.

4.Sharing ownership complicates decision-making on critical issues, such as selling the entire company one day. You cannot allow minority owners to hold up a possible sale in the future. This buy-sell agreement therefore also needs to give the majority owner clear authority to sell the entire company, further complicating your exit planning.

5.Sharing ownership bestows rights. Even minority owners have certain rights, commonly including a right to review the company’s financial information and records. You may not be crazy about employees seeing that level of financial detail.

6.Sharing ownership with one or more employees creates a precedent. You intend your company to grow, and that growth in the future may lead to additional valuable employees coming into the picture, either hired from outside the company or promoted from within. Those future top employees may want ownership too, given that their peers already have it.

7.Once a top employee has ownership, it’s easy for the line to blur between ownership and employment. It can become harder to manage an employee who also is an owner. Firing that person, if ever necessary, becomes harder and more expensive.

8.With ownership, come perks. You likely enjoy some personal expenses paid by the company, such as your vehicle, cell phone, meals, etc. Employees who receive ownership often expect to participate in such perks. Either, you will have to include them, which increases costs, or you will have to temper their expectations, which increases your work and their disappointment.

9.With ownership comes responsibilities, such as personally guaranteeing company debt. Top employees who have ownership should not be exempted from sharing in the responsibilities and risks of ownership. It takes additional time and work to explain all of this to new owners, and to include them in a creditor’s underwriting procedures.

10.Occasionally, employees might do things that put themselves and their ownership in the company at risk, such as getting divorced, get sued, or find themselves in financial difficulties. Sharing ownership increases the possibility that your company gets dragged into one of these situations.

11.Sharing ownership complicates your tax and wealth planning. Various strategies that owners use to reduce taxes and build wealth get more complicated with more owners. For example, certain laws regarding retirement plans require owner-employees to be treated differently for anti-discrimination testing. Also, if you have an S-corporation and you wish to make a profit distribution, it must be in proportion to ownership.

12.Sharing ownership dilutes your equity position. That can be more expensive than using cash to incentivize, reward, and retain top employees.

13.Sharing ownership can put your exit goals at risk, particularly if you intend to sell the company. Employees with an ownership interest will receive their portion of the proceeds upon sale. Consequently, you may create a situation where these employees are now flight risks immediately after the sale, if they receive enough cash to contemplate leaving the company.

Because of these disadvantages, we try to accomplish business owners’ objectives without sharing actual ownership. Owners and key employees are often surprised to learn that alternative strategies exist which incent and retain top employees, without the risks of sharing actual ownership. One of our favorite tools to reward, retain, and incent employees involves using golden handcuffs plans in lieu of shared ownership.

There are a few situations where sharing ownership with top employees may make sense. The most common would be sharing some actual ownership now as one step within a comprehensive plan to eventually sell or transfer the entire business to the employees. Otherwise, in most cases, it is advisable to pursue a different course of action.

If you have a quick question coming out of this article or, if you want to discuss your situation in more detail, we can set up a confidential and complimentary phone consultation at your convenience contact Tim 772-221-4499

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Saturday, January 4th, 2020

An A-Team Is a Collection of Learning Curves

Periodically, I share a favorite book review from Readitfor.me. There is never enough time to read all the latest books – this tool is a great way to learn and to stay on top of the latest topics and new ideas.

Your Team is your greatest resource. Recognizing each member’s abilities and fostering their growth to full potential will grow your Team’s Strength.

This review of Build an A Team   by: Whitney Johnson outlines the “S Cures” of learning that you can use to strengthen your team to reach peak productivity


Build A Team


Build an A Team
by: Whitney Johnson

Book Review by ReadItFor.me

Disruptive innovation, at its simplest, explains how low-end industry insurgents take on—and eventually outcompete—high-end incumbents who seemingly should have known better Things take traction and the David beats the Goliath.

It is now generally accepted that disruptive innovation underpins the invention of new products and services. Less generally recognized, is that personal disruption in the workplace—the movement of people from one learning curve to the next, one challenge to another—can drive learning, engagement, and even innovation. Johnson claims we can build an A Team this way. Let’s explore how.

The S curve of learning

The S curve of learning represents three distinct phases:

1. The low end, involving a challenging and slow push for competence.
2. The up-swinging back of the curve, where competence is achieved, and progress is rapid.
3. The high end of the curve, where competence has evolved into mastery and can quickly devolve into boredom and disengagement.

An A-Team Is a Collection of Learning Curves 

Johnson challenges us to visualize our team as a collection of people at different points on their own personal S curves. New team members will be at the low end of their curve for approximately six months depending on the difficulty and aptitude. At the six-month mark, they should be hitting the tipping point and moving onto the steep back of their learning curve. During this second phase, they’ll reach peak productivity, which is where they should stay for three to four years. At around the four-year mark, they will have made the push into mastery. In the mastery phase, an employee performs every task with ease and confidence. But ease, and even confidence, can quickly deteriorate into boredom without the motivation of a new challenge. It is  time for them to jump to a new learning curve.

Accelerants of Learning And Growth 

Johnson gives us pointers to progress on how to get the right Team on the right Learning S-curves.

Johnson challenges us to visualize our team as a collection of people at different points on their own personal S curves. New team members will be at the low end of their curve for approximately six months depending on the difficulty and aptitude. At the six-month mark, they should be hitting the tipping point and moving onto the steep back of their learning curve. During this second phase, they’ll reach peak productivity, which is where they should stay for three to four years. At around the four-year mark, they will have made the push into mastery. In the mastery phase, an employee performs every task with ease and confidence. But ease, and even confidence, can quickly deteriorate into boredom without the motivation of a new challenge. It is  time for them to jump to a new learning curve.

Accelerants of Learning And Growth 

Johnson gives us pointers to progress on how to get the right Team on the right Learning S-curves.

1.Identify the Right Risks 
What needs aren’t being met on your team? Does it make sense to redistribute responsibilities? Create a new role? Would more high-quality candidates be available if you looked beyond the spec of the current job? As a manager your job is to mitigate the risk of disruption, not to plug gaps with human resource plugs.

2. Play to Individuals’ Distinctive Strengths 
What does each person do well that other people on the team do not, and what sorts of problems do those strengths equip them to solve? As a manager, your job is to pinpoint what people do uniquely well and pit these abilities against assignments that make their strengths relevant

3. Stepping Backward Is a Way to Move Forward 
Why would an employee be motivated to step back from success in a role while resting on their laurels at the top of the curve, enjoying privilege and entitlement? Because stepping back is your slingshot to moving further forward and contributing more. Pull back and accelerate further.

4. Give Failure Its Due 
At the low end of the curve, when you hire within the organization you must expect staff to flounder. This gives them support for learning, allowing them to quickly engage in the actual work. With employees in the sweet spot of the S curve it can be harder. You may want to shield them from failure, but when tasked with undemanding assignments their confidence begins to falter. Give them stretch goals to keep the edge.

5. Encourage Discovery-Driven Growth 
With discovery driven growth the initial plan is skeletal and is fleshed out as feedback rolls in. We can use this approach when managing people. As you learn about a person’s capabilities you can redeploy them to improve the match between strengths and unmet business needs. Job descriptions should be deliberately vague attracting talented prospects who can contribute now, while offering potential unexplored roles.

Hire People Who Can Grow on the Job 

Begin by reminding yourself that the goal is to approach human resources as raw materials rather than as finished products, the same way you would handle other resources. Johnson suggests we consider the following.

1. Identify the tasks you want a new hire to perform. Don’t accept that it has to stay as it currently is. Genuinely understand what you are looking for, then make the effort to find it.
2. Do a team check: consider how the new role will affect the team. How might a new hire enhance the capacities your team already has? Where are the gaps in good team compatibility?
3. Do a sanity check: identify your motivation for the new hire.  Having identified these, may require an adjustment to expectations. If we onboard someone who can do the functional job but can’t do the emotional job, we won’t be satisfied no matter what they do.
4. Write the right job specification. The target should be to attract talented people who are qualified to onboard at the low end of the job’s learning curve. They won’t be experts, but they will have what it takes to learn and grow into other roles. If we inflate the necessary qualifications to attract the crème-de-la crème we will get a candidate who will become disinterested within the first few months of employment.

Managing the Hungry New Hire 

New hires need a vision. Understanding why their job is important will aid them through early stage difficult days. Initially they may struggle and try your patience. You may even wonder why you hired them. But you can increase their odds of moving up the learning curve by laying out a vision from the outset. Just as your new employee needs to understand the company’s vision, you’ll want to understand theirs. Find out what they are trying to accomplish as a person and how this new role fits with their goals, as well as what they anticipate they will need from you to be successful.

As your employees share their goals with you, clarify expectation that progression by learning is important. Be explicit: I am here to help you help me get my job done. Here’s how. I will then reward you for your contributions. And here’s how I’ll do that. Get your new hire’s perspective on your operation. Being able to hear the contrary ideas of others allows us to move more quickly up the learning curve. Learn to solicit ideas and opinions from newcomers who aren’t yet blind through familiarity. Future performance and innovation may hinge on it.

Be a Chief Encouragement Officer. Feeling the agitation or disapproval of the boss can cause concern. Remember staff took this job and will stay in this job—or not—largely because of the leader. If you can make them feel safe and acknowledge their efforts, even when imperfect, you’re sitting on a gold mine.

Playing to Sweet Spot Strengths 

Sweet-spot employees are confident in their abilities, having moved past the daily struggle at the low end of the curve. Yet it is common for managers to be reluctant to provide these employees with stretch assignments. Maybe you don’t want to discourage or derail them. But experiencing a genuine risk of failure – working under pressure – is what motivates most of us to step up to the plate. Allow, and even generate, pressure. In the case of your sweet-spot employees, consider imposing constraints that fall into the following categories:

  • Time – A task that is less demanding becomes a major challenge if you impose a tight deadline. Here are some questions to ask your employees, and yourself. To hit annual targets in nine months instead of twelve, what would you do differently? If you were going to be away for three months, what would you do to make sure things could run without you? What are the most important priorities? Which things aren’t as important? What must you absolutely get done so that your manager can advocate for your jump to a new curve? 
  • Money – Trim back the expenditure on the team. Ask questions such as: If your business unit had to be profitable as a stand-alone entity, what would your business model be? If you only had half of the current marketing budget, what would you do differently? If you had to assemble an A-team with only 80% of your current budget, what would you do? 
  • Expertise – Exploit their deep understanding. Ask: If you were CEO for a day and ran the company based on your area of expertise, what would you change? What if everyone on your team were new? No experts, only novices. What would you do differently? 

Managing Masters 

Here’s the challenge: after months, maybe years of investment, our employee shoots up the learning curve. They have become our go-to person, willing and able to do whatever is asked. We’ve become accustomed to an outsized return on their effort. Why would we push them to try something new, when we’re still reaping the rewards of our investment? As growth peaks and flattens out, if change isn’t on the horizon, our high performer may become a low performer. This is seldom intentional, but it happens anyway, either because they feel stymied or because work has become too easy, and routine is boring.

Have Your Best Workers Share What They Know 

High-end-of-the-curve employees are sought after assets internally but even more so externally. So how can you manage (and keep) this human resource you’ve worked hard to develop in a way that will work for your organization, your team, and you? There are three important roles they can play:

Pacesetters: pushing low-enders to excel. Put your top performers to good use by showing low-enders what success looks like.

Trainers: conveying corporate memory. Have the top enders create their legacy in the creation of the Organisational Encyclopaedia – The business Book of Knowledge.

Mentors: the benefits of mentoring offer a fresh angle on the job for someone who may be a bit idle while they await the jump to a new curve, and it disperses the training responsibility through a wider pool of talent.

Keeping Masters Engaged

The goal is always to retain talent, but the more people achieve seniority, the more it becomes a challenge. Not everyone can go up. But it is also true that “up” isn’t the only way up: a lot of learning and growth can happen in lateral moves that may give employees the perfect skill set to forge ahead. If lateral moves carry some stigma, then backward moves are often seen as even more so. We tend to assume something’s wrong with someone who takes a step back. But sometimes taking a step back is exactly the right move. Like the slingshot, we pull back to get the momentum we need to catapult forward.

Shake Things Up 

Managing people as a series of S curves requires a disruptive mindset on your part. Here are some important questions Johnson says we should consider.
How can I shake up employees or teams who have become set in their ways? What goals might be accomplished by shifting people into different roles? How can I create a company culture that encourages and even insists on curve jumping? 

Where to Climb When You’re at the Top

For some employees, there may not be a next curve to jump to within the organization, especially those who are approaching retirement. Data tells us that more people are choosing to work past traditional retirement milestones. Some may have the work-life bandwidth remaining to tackle entirely new learning curves, others may not. Efforts to accommodate their needs, perhaps part-time or remote work can keep them contributing at great benefit to everyone involved. Many will be willing to discuss adjustments to compensation that will maintain their high value to the firm while allowing them more flexibility to pursue noncareer objectives. The key is to think creatively. Years of experience is a human resource not to be wasted.



Successful businesses strengthen their greatest resource by hiring and growing Strong Teams.Are you using the Team Strength DISC model? It is a great tool that helps you to easily identify and understand your own style, recognize and cognitively adapt to different styles. The Team Strength charting app makes it easy to develop a process to communicate more effectively with others. Creating effective communication at every level of your origination.

Tim Kinane

Call 772-210-4499 to set up a time to talk about tools and strategies that will lead to better results.

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Thursday, December 19th, 2019

What Do You Want Your Legacy to Be? White Paper

By: Patrick Ungashick

Man on phone


Legacy. This single word causes business owners more emotion when they are preparing for exit than any other single word. Few owners would define an exit as being “successful” if somehow their exit failed to uphold strongly-held values and beliefs. Legacy is hard to define. It means different things to different people. Yet it is immensely powerful. Many owners surprise themselves by how important legacy becomes a vital motive once they get close to exit. Legacy is so powerful that it can veto price. For example, many owners are willing to accept a lower purchase price for their company if it means making sure their employees, customers, and brand are treated better by that particular buyer.

It’s imperative to determine what is essential to you about legacy before you intend to exit when there is time to plan and implement steps that will achieve your success. (Read this article about why all business owners should start their exit planning five years prior to exit.) Waiting until shortly before exit to figure out what’s significant to you narrows your options and usually increases your stress. For example, many owners have some employees they want to thank once they exit, generally with significant bonus checks. Who to thank? How much to spend? Who gets what? These are some of the common questions that keep owners awake at night — owners who wait to address this until shortly before exit always stress with these decisions. Those questions are difficult to answer at any time, and even more challenging when you have dozens of other things pressing on you shortly before exit.

Figuring out your legacy wishes takes time and reflection. To help you get started, download this free white paper, The Three Laws of Legacy. This insightful article can help you identify what will be relevant to you about legacy—well before you reach exit.


If you have a quick question coming out of this article or, if you want to discuss your situation in more detail, we can set up a confidential and complimentary phone consultation at your convenience contact Tim 772-221-4499

Thursday, December 12th, 2019

The Five Conversations You Must Have to Prepare for Exit

By: Patrick Ungashick

Team Pix


Five conversations can put you on the path to a happy and successful exit. These conversations need to be open and honest, revealing your desire to exit the business eventually. They need to be handled intentionally and carefully, with preparation and practice, because there is a real danger you may do more harm than good. Ideally, the conversations need to happen well before you exit (we suggest about five years,) when you still have time to take the right advice coming out of these conversations and put it to use. Waiting until just before you exit to have these conversations negates the opportunity for positive action arising out of them, and risks alienating people who care about you and the business, and feel disrespected for not being included much earlier.

The five conversations are with the following relationships:


2.Your spouse or partner

3.Your business co-owners (if applicable)

4.Your business co-leaders

5.Your advisors

These five relationships are critical for your exit success. How you approach these relationships—through the conversations you have with them—will go a long way to determine if you exit happily or not. As long as you have not disclosed your exit aspirations with these key relationships, you cannot be entirely honest with them for fear of creating potential problems for you and your company. Your ability to lead the business and work effectively with these relationships will be compromised. You will find yourself making critical exit-related decisions that impact the business, partners, employees, customers, key suppliers or advisors, and your family, keeping them in the dark about your intentions, and where you are trying to lead things. Misalignment, tension, friction, and frustration are nearly certain to ensue.

The longer you wait to have these conversations, the greater potential your exit success will be undermined, or you may even cause harm to your relationships with your business partners, employees, customers, and family members. The business may suffer. Millions of dollars may be lost. Consider the following real examples we have encountered, all of which occurred because of business owners who never had a productive exit conversation with these relationships:

  • The two business partners who, after 14 years of working together in friendship, found themselves unable to be in the same room out of anger and hurt, because they could not learn how to effectively talk about their future exit.
  • The business owner’s wife, sitting in a conference room in our offices, crying out of fear. After thirty years of owning their business, nearly all their wealth was still tied up in the company, and her husband was unwilling or unable to tell her when they would end their financial dependency on the business.
  • The three siblings who co-owned a second-generation family business, who prematurely sold the firm because they never learned how to have the exit conversation with each other.
  • The two key employees who left the company they cared about as much as the owner, feeling unappreciated and disrespected because they suspected the owner would sell the business one day, but had never confided in them nor approached them about potentially buying it.
  • The business owner who did not feel comfortable sharing his future exit intentions with his accountant, and without that information, the accountant failed to recommend a corporate structure that would have reduced taxes at exit by more than five million dollars.
  • The business owner who sold his business when a surprise buyer showed up and wrote a large check, even though the owner never had this conversation with himself about his exit goals and values. Only to watch the buyer subsequently treat his former employees and customers poorly to the point that for the rest of the owner’s life, he felt like he had failed those people.

Conversations with the five relationships will not guarantee you a happy and successful exit. However, if you fail to have the conversations with these five relationships, your exit likely will be more stressful, riskier, and costlier than if you have the conversations. To plan these communications takes a modest amount of time. In return, you may create thousands to millions of dollars in increased net business value, years of continued good relationships, and uncountable benefits in reduced stress and avoided problems. On a dollar-for-hour basis, these conversations may be the most valuable time you spend during your entire career as a business owner.

To get started, review this helpful information about the 14 most common exit planning questions. Then, contact us to discuss your specific situation.


If you have a quick question coming out of this article or, if you want to discuss your situation in more detail, we can set up a confidential and complimentary phone consultation at your convenience contact Tim 772-221-4499

Friday, December 6th, 2019

You Wouldn’t Sell to Just One Customer at a Time, So Why Sell Your Company That Way?

By: Patrick Ungashick

Biz meeting

One of the most common mistakes owners make in their exit planning is negotiating with only one potential buyer for their business. Rarely, this works out fine, and the business sells for the desired price. However, more often than not, negotiating with only one potential buyer at a time undermines your exit success—sometimes without even knowing that you lost something.

Here are five reasons why you may come up short if you only talk to one potential buyer at a time:

1.You don’t know if you are talking to the buyer who will pay the highest price.

For most businesses, there are multiple potential buyers out there. Within the universe of potential buyers, some will be more motivated than others to acquire your company. Remember—the buyer’s motive makes the multiple. So, unless you happen to get lucky, the simple odds are that you are not talking to the most motivated potential buyer for your business. Making matters worse, you have no way to recognize if you are talking to the best buyer or not without other potential buyers in the conversation.

2. You also don’t know if you are talking to the buyer who is the best fit for your company.

When selling their business, most owners seek more than just the top price. If you are like most owners, when you go to exit, you will prefer to sell to a buyer that is a good fit for your organization, a buyer that will continue your culture, treat employees fairly, and serve customers well. Again, unless you happen to get lucky, the odds are that you are not talking to the best fitting buyer. And, here too, the only way to know is to include other potential buyers in the conversation.

3.Talking to just one buyer eliminates any competitive pressure in your favor.

If you are negotiating with only one potential buyer, that party knows it has no competition to acquire your company. It has no incentive to put forth its top price or most attractive terms. It has nobody bidding against it. Even if you believe that you want to sell your company to this one buyer, you don’t have a second buyer to create any pressure. Consequently, you have little leverage within the negotiations. Without other potential buyers in the picture, the one potential buyer is mostly free to set the price on its own, dictate the process and timetable, and secure an outcome favorable to itself. The whole situation validates the old saying, “In a potential negotiation between one party with all the money and another party without any, the party with the money will win.” Most potential buyers have a lot more money than you do, and if it’s just you and one buyer in the negotiation, likely they will win.

4.You have little to no protection during due diligence.

During the due diligence phase, some potential buyers look for opportunities and justifications to lower the final purchase price. (This is called “retrading” the deal.) You can attempt to negotiate with your potential buyer to keep the price up, but you have little leverage short of walking away from the negotiations, and your potential buyer will know this. It is easier said than done to walk away from a deal once you are this far along because you will have months invested in transactions, as well as tens of thousands of dollars in expenses and endless emotional capital. With just one potential buyer in the picture, you are at a disadvantage all through the process, but especially during due diligence.

5.Getting your deal done may take more time and present greater risks.

Without competition, your potential buyer feels little pressure to get the deal done. This leaves them in control over timing. The longer your sale takes, the higher the risks for you. For example, something could happen, which gives the potential buyer leverage to lower the price, such as your business misses a monthly sales forecast. Or, a customer or competitor could learn about your potential sale before you are ready. Time is the enemy of all deals. As time increases, the effort and cost you have invested in this possible deal increase, making it harder for you to walk away—a vulnerable position for you. Potential buyers know this, and use it to their advantage.

Your Exit Plan and Selling Your Company

With few exceptions, business owners seeking to sell their company at exit are better served by working with advisors who will run an organized process that confidentially brings multiple potential buyers into the picture. A competitive process creates positive price pressure, increases your options, and likely leads to exit success.

At NAVIX, we have helped hundreds of business owners plan for and achieve successful exits. To learn more about what goes into an exit plan, start here. Or contact us with your questions.

If you have a quick question coming out of this article or, if you want to discuss your situation in more detail, we can set up a confidential and complimentary phone consultation at your convenience contact Tim 772-221-4499

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Wednesday, November 27th, 2019

9 Ways to Maximize Value & Cash When Selling Your Company

Navix Webinar

December 3, 2019 2-3PM EDT


About 70% of business owners expect to exit by selling their company to an outside buyer. Many owners, however, have little to no M&A experience, and thus often don’t fully know what really drives getting top value (and cash!) at sale. This webinar will explain how. You should attend if:

  • You intend to sell your company one day when you exit
  • You wish to maximize value and cash at sale
  • You want to learn how to achieve exit success


If you have a quick question coming out of this article or, if you want to discuss your situation in more detail, we can set up a confidential and complimentary phone consultation at your convenience contact Tim 772-221-4499

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Friday, November 22nd, 2019

Why Reaching Financial Freedom at Exit is Absolutely Essential – And How to Get There

By: Patrick Ungashick


Let me share with you three quick and true stories of business owners, and how each failed to achieve and maintain financial freedom at exit. 

Story 1 – Joe 

When I first met Joe, he was sitting in his desk chair, a broken man. He had sold his trucking company a couple of years earlier, expecting to fully retireJoe had received some cash at closing, but a large portion of the deal included debt, financed by him. Shortly after selling, the economy had softened, and the new owner made some bad moves in the market. The company plummeted and defaulted on its payments to Joe. As a result, Joe had to take the business backHowever, by then, the company was a shell of its former selfand market conditions stunkTo keep it afloat, Joe had to put back into the company much of the cash he had received at closing. Joe was tired. Joe was dejected. Joe was broken. 

Story 2 – Neal 

Neal was one of several partners in a convenience store company with locations across the midwestern US. Neal and his partners sold for $75 million. Neal netted about $15 million, and at the ripe old age of 50, he then had to find something else to do. We advised him to allocate $10 million to invest a new company while setting aside $5 million for safe, conservative investments. The $5 million, if allocated prudently, could provide for his family for the rest of their lives. Neal agreed with this recommendation. That is, until a few months later, when he purchased a manufacturing business for $30 million, putting all $15 million of his money into the deal 

Neal believed he had the Midas touch when it came to running a company, and he was confident this next one was a future gold mine. The seller also believed the company had a bright future, which is why he only sold Neal 75% of the company, keeping 25% for himself and agreeing to stay involved. Within weeks of the sale, Neal and his new partner were squabbling. Within months they were openly fighting. Lawsuits followed. Revenues fell as customers fled. Profits evaporated as key employees bailed. Neal ended up losing everything.  

Story 3 – Dan 

Dan was contacted out of the blue by a strategic buyer to acquire his garden equipment manufacturing company. At only $1 million in adjusted EBITDA, Dan’s company was fairly modest in size, but the buyer offered to pay ten times earnings in all cash at closing. Dan could not refuse. After paying off company debt and taxes, Dan walked away with about $5 million.  

Entranced by selling for such a large multiple, Dan looked closely at his financial picture only after his exit. When he did, Dan realized that he could not conservatively invest the $5 million and maintain his family’s lifestyle for the rest of his life—he would run out of money. Dan’s three options were to: immediately find new work, cut his standard of living, or invest more aggressively. Dan chose the third option. He invested half of his funds into some raw land he intended to develop. His timing could not have been worse, for only a few months later, the real estate bubble burst. He also invested heavily in a local community bank, which eventually folded when a recession hit. Within a couple of years after selling this company, Dan owned some empty acres, some worthless bank stock, and a few hundred thousand dollars in cash.  

Reaching Financial Freedom 

All three of the business owners built fine companies. All three exited happily—or so they thought at the time that they exited. All three of them sold their companies for a compelling price. Also, unfortunately, all three of them failed to either achieve or maintain financial freedom.  

Financial freedom is not just some buzz phrase, either to business owners or to us. We define it to mean reaching the state where working to generate income is a choice, rather than an economic necessity. Many business owners do not wish to ever fully retire. Entrepreneurs often see themselves “working” for nearly all their lives. Despite that, practically all business owners aspire to reach a point where work is a choice and not a necessity. That is financial freedom. It is the number one goal at exit for the vast majority of owners.  

Unfortunately, many owners fail to reach financial freedom at exitwalking away with too little assets and income to meet the need. Other owners seem to have enough at exit only to make any one of several mistakes that set them back into a shortfall. Either way, if you find yourself coming up short, it will be too late to turn back the clock, and you will find yourself facing a list of undesirable choices. 

There is only one sure way to reach financial freedom—you must create a valuable company and have a sound exit plan. Both elements are required. Just producing a valuable company is not enough (see the previous stories for evidence.) Building a valuable company without a sound exit plan is like rolling the dice with many chips on the table. You might win, and you might not. Why take that risk? 

To help you reach financial freedom, you need a sound exit plan that addresses ALL of the following questions and issues: 

  • How valuable does your company need to be at exit? 
  • Are you on track to get there—and if not, what do you need to do about it? 
  • What makes one company more valuable at exit than another, and how can you maximize value in your company? 
  • How much money can you safely pull money out of your company between now and exit to reduce risk? 
  • What can you do to reduce taxes now and at your exit? 
  • How can you build and execute a post-exit financial plan that reduces risk and preserves financial freedom? 
  • What will you do in life after exit, and how can you make sure you don’t over-invest or risk too much? 

Any exit plan that fails to address each of these issues, thoroughly and carefully, leaves you at risk, and you have worked too hard and achieved too much to come up short. 

Our website is full of educational materials on this topic. To help you get started, consider the following free materials: 

Cheat Sheet: “What Does an Exit Plan Look Like” 

Free Ebook“The Exit Magic Number™” 

Free Webinar: “You Only Get One Shot” 

If you have a quick question coming out of this article or, if you want to discuss your situation in more detail, we can set up a confidential and complimentary phone consultation at your convenience contact Tim 772-221-4499


Wednesday, November 20th, 2019

Team Strength DISC


Team Strength DISC


Team Strength DISC is a simple, practical, powerful tool used to understand people. It focuses on individual patterns of external, observable behaviors and measures the intensity of characteristics using scales of directness and openness for each of the four styles:


Using the Team Strength DISC model, it is easy to identify and understand our own style, recognize and cognitively adapt to different styles. The Team Strength charting app makes it easy to develop a process to communicate more effectively with others.


Word Art Team Strength


Team Strength DISC a tool to:

  • Demystify behaviors
  • Improve communications
  • Develop strong teams
  • Build better relationships
  • Facilitate conflict resolution
  • Self-growth

Team Strength DISC provides tools to help you become a better you – to develop and use more of your natural strengths while recognizing, improving upon, and modifying your limitations. Then, because we can easily see and hear these behaviors, we can quickly and accurately “read” other people and use our knowledge to enhance communication and grow our relationships.
Historical and contemporary research reveal more than a dozen various models of our behavioral differences, but many share one common thread: the grouping of behavior into four basic categories:

Dominance, Influence, Steadiness, and Conscientious.

There is no “best” style. Each style has its unique strengths and opportunities for continuing improvement and growth.


Historical and contemporary research reveal more than a dozen various models of our behavioral differences, but many share one common thread: the grouping of behavior into four basic categories.

The Team Strength DISC styles are Dominance, Influence, Steadiness, and Conscientious. There is no “best” style. Each style has its unique strengths and opportunities for continuing improvement and growth.

The assessment examines external and easily observable behaviors and measures tendencies using scales of directness and openness that each style exhibits.


DISC directness

This is part one of the Team Strength DISC Profiles Series.

Knowledge builds better relationships and strong teams. Team Strength DISC profile is a cost-effective tool that gives powerful results that can be used for both personal and professional relationships. I have used Team Strength DISC profiles to help businesses and organizations develop strong teams and great leaders.

Tim Kinane

Call 772-210-4499 to set up a time to talk about tools and strategies that will lead to better results.

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Friday, November 15th, 2019

When Apple Lost $10 Billion…And What It Means for You

By: Patrick Ungashick




Back in 2011, when Apple announced the retirement of its founder and visionary leader Steve Jobs, the company’s value immediately fell by about $10 billion. (That’s billion with a B.) This dramatic loss of value occurred even though Jobs’ departure had been expected for some time, and his successor Tim Cook was highly respected leader already established within the company. Investors were simply too disturbed and uncertain about how the company would fare without Jobs as CEO.  

Since then, most of us know that Apple has not only survived, but it has thrived under Cook and other talented leadersThere is an important lesson for business owners with small to mid-market companies: when it is time for you to exit, it must be clear to everybody involved that your company can not only survive your departure but can actually thrive without you going forward. If the company’s leadership is uncertain without you, you find it very difficult to exit happily. Here’s why.

Owner Dependency 

We call this issue, “Owner Dependency.” Within many small to mid-sized businesses, the owner is the most valuable and vital employee, and the company is highly dependent on this owner’s involvement. If you lead an owner-dependent company, then your knowledge, relationships, and vision are what drives the business. Undoubtedly you have help—few CEO/owners build a business alone. But much of your company growth has been due to your personal presence and efforts.  

None of this is a problem, as long as you have no desire to go anywhere. But, one day, you will wish to exit. If, at that time, you remain an essential employee, you may face several serious challenges that can undermine or outright block your exit. Here are four examples: 

Lost Business Value 

Apple lost $10 billion when a flood of investors sold their stock upon learning Jobs was stepping down. In their minds at the time, the company was less valuable without him. 

The same may happen to you and your company when you exit. If you intend to sell your company one day, buyers may reduce their offer price (or take a pass altogether) if they have questions and uncertainty about the company’s future without you. You might not lose $10 billion, but if buyers reduce their offer price by even a few tenths of a multiple, that can add up to serious loss of value for you.  

If the value loss is severe enough, you might be in jeopardy of never reaching personal financial freedom at exit—which is most owner’s number one exit goal

Lost Legacy 

For most owners, achieving a happy exit is not just about the money. It’s also about making sure that you leave the company in good hands, and that the company is wellpositioned for success going forward. A company that may not run effectively without you faces an uncertain future once you exit. Most owners will not want to take that risk. 

Lost Control 

When you exit from your company, you will want to be in control of how you do this. For example, you will want to exit when you choose to, and not when somebody else dictates. You will also want to transition away from the company in the manner of your control. Some business owners want to make a quick transition, moving on to pursue other interests. Other business owners prefer to stay with the company for an extended transition, staying involved in some supporting role, such as serving on the board of directors. Whatever your preferences, if the company is unable to operate effectively without you, your ability to control your own exit will be restricted or forfeited. You can’t exit on your terms as long as your company needs you every day.  

Big Uncertainty About Life After Exit 

One of the biggest challenges owners face in life after exit is finding activities and interests that provide meaningful involvement once your role in the company has reduced or ended. If your company is highly dependent on you, typically, that means you rarely or never unplug from the company for any significant period of time, beyond perhaps a brief vacation here or there. Without taking an extended time to unplug, you cannot develop and test-drive your ideas for activities and interests after exit. And, without taking time to unplug, you cannot create an organization that learns how to function without you.  

It will not matter how much money you might have in the bank at exit, or how well the company is doing after you exit, if you wake up every day without something engaging and rewarding to do with your time and talent.  

Get Started Now 

Apple’s setback reveals that all business value is fragile. One of the world’s largest and most admired companies felt the negative impact of being potentially overly dependent on a single leader 

Building a leadership team that can lead and grows the company without you takes time, typically years of focused effort. An important part of any exit plan is developing competent and loyal successor leaders. The sooner you get started, the more likely you achieve a happy exit.  

To learn eight tactics to address owner dependency, read this articleAnd, contact us to discuss your situation and how we help owners like you achieve happy and successful exits. 


If you have a quick question coming out of this article or, if you want to discuss your situation in more detail, we can set up a confidential and complimentary phone consultation at your convenience contact Tim 772-221-4499

Thursday, November 7th, 2019

In Family-Owned Businesses, Equal is Not Fair and Fair is Not Equal

By: Patrick Ungashick

Family biz

Do you have at least one child working in your family business, and at least one child who is not working in your business? If you do, and if you want to treat all of your children fairly in your business exit and succession planning, prepare not to treat them equally. Because in exit planning for family businesses, fair is not equal and equal is not fair.  

To show why, here’s a true story involving a previous client.A Client Story 

Dad and Mom had started a construction company nearly forty years earlier. Along the way, Dad and Mom had raised two children: one Son and one Daughter. Son began working in the company right out of school, and eventually became the company’s President. As part of Dad and Mom’s exit planning, they wanted to pass their business down to the Son eventually 

Other than their company, Dad and Mom owned a modest home, a little cash, and a significant amount of raw land. Dad and Mom were worried that if they gave the business to the Son, which seemed fair to do, then they would not have any means to treat their Daughter equally, which seemed unfair to her. But while splitting up their assets 50/50 between the two children would treat them equally, it seemed unfair to the Son.  

At that point in our exit planning, we suggested that Dad and Mom have their the two most valuable assets appraised: the company and the land. Independent appraisers were brought in to value each asset. Purely coincidentally, the company and the land were both valued at almost exactly $5 million each. With this information in hand, we suggested to Dad and Mom that their plan should be to give the business to the Son, and the land to the Daughter. After all, this was nearly perfectly equal.  

Upon hearing our recommendation, Mom became upset to the point of tears. She said that she understood this seemed to be an equal solution, but it struck her as unfair—for both of her children. As she explained, the land was undeveloped, pristine forest, and grassland. Theused it for hunting and camping. Everyone in the family hoped to keep it for generations to come. Giving the land to the Daughter was not providing her with any wealth or income—actually, they were giving her aannual property tax bill. Compared to the company, the land was a financial burden. That was not fair to the Daughter. 

As for the Son, giving him the business seemed the right thing to do. However, Dad and Mom appreciated that even though the company was profitable and generated wealth, it was inherently risky, as construction is a volatile and uncertain industry. The business would require the son to personally guarantee his assets to collateralize debt, whereas the land was debt-free. The company could one day be diminished or worthless through no fault of the Son. In contrast, the land would always exist and likely have at least some value. Furthermore, they wanted the Son and his heirs to also enjoy the use of the land, without forever needing to ask anybody for permission.  

For these reasons, giving the Son the business, and the Daughter the land seemed entirely unfair. There seemed no way to treat the children fairly and equally. 

Family Business = Complicated 

This real-world example is unusually simple: two kids, with one involved in the business, and not participating in the business. Two main assets: the company and the land, both worth the same amount of money from a market value standpoint. Yetfor all this situation’s simplicity, it illustrates the remarkably tricky challenge of being fair to everybody when trying to design and implement an exit plan for familyowned businesses.  

Many real-world situations are more complex thawhat this client faced. For example, things can get even more complicated if any of the following are true: 

  • There are more than just two kids 
  • Multiple children work (or have worked) in the business, and thus have competing expectations and interests 
  • Some children need specialized medical care or have struggled with issues like substance abuse, financial mismanagement, or marital instability 
  • Dad and Mom have little to no significant assets outside of the company 
  • Dad or Mom in in poor health, and there may be a need to rush a process 
  • Not all of the family members get along with one another 

The Solution? Focus on Fair, Not Equal 

In situations where a family is trying to treat everybody fairly, rarely it is possible or advantageous to treat everybody equally. Typically, you have to be unequal to be fair. 

For example, children who have worked in a family business for years usually come to expect that they will one day receive a larger portion of that company than their siblings. That may not be equal, but to many families, this is the right and fair thing to do out of respect for the service and contribution those children working in the company have made to the company. Dividing a company into equal parts among children who have not worked equally in that company rarely produces a stable and happy outcome.  

People are different. No two people are identical, and thus no two people are equal in terms of their skills, desires, traits, wants, and needs. Trying to treat people who are not identical equally usually ends up being unfair because they are different people.  

Assets are different too. Different assets have inescapably different characteristics and qualities. As the mother from this true story pointed out, $5 million worth of raw land carries very different opportunities and disadvantages compared to $5 million worth of a closely-held business. Cash, marketable securities, commercial real estate, vacation properties—all these assets too are, unavoidably, “not equal,” even if the worth is the same in terms of market value. Again, approaching these assets as equals rarely creates outcomes that will be seen as fair.  

There are no one-sizedfitsall solution with family businesses and family members. But, understanding that equal is not fair, and fair is not equal, allows family members to consider solutions that are more likely to be seen as “fair” by everybody involved. 

To learn more, watch our free educational webinar or contact us with your questions.  


If you have a quick question coming out of this article or, if you want to discuss your situation in more detail, we can set up a confidential and complimentary phone consultation at your convenience contact Tim 772-221-4499