Archive for category: General

Tim Ferriss is most known for his bestselling The Four Hour Work Week, but most recently has been compiling books that have been enabled by his top-rated podcast. The newest one is Tribe of Mentors, which has the subtitle of “Short Life Advice from the Best in the World.” At almost 600 pages, the book is not meant to be read straight through, but in 4-5 page increments as you peruse the answers to a set of questions Tim posed to one hundred different high achievers.

The Questions

Not every person answers every question listed below, and some bend and re-frame the question to go down a more interesting path, but to give you a frame of reference, here they are:

• What is the book (or books) you’ve given most as a gift, and why? Or what are one to three books that have greatly influenced your life?
• What purchase of $100 or less has most positively impacted your life in the last six months (or in recent memory)? 
• How has a failure, or apparent failure, set you up for later success? Do you have a “favorite failure” of yours?
• If you could have a gigantic billboard anywhere with anything on it — metaphorically speaking, getting a message out to millions or billions — what would it say and why? It could be a few words or a paragraph. 
• What is one of the best or most worthwhile investments you’ve ever made? (Could be an investment of money, time, energy, etc.)
• What is an unusual habit or an absurd thing that you love?
• In the last five years, what new belief, behavior, or habit has most improved your life?
• What advice would you give to a smart, driven college student about to enter the “real world”? What advice should they ignore?
• What are bad recommendations you hear in your profession or area of expertise?
• In the last five years, what have you become better at saying ‘no’ to?
• When you feel overwhelmed or unfocused, or have lost your focus temporarily, what do you do? (If helpful: What questions do you ask yourself?)

The Answers

We obviously can’t go through all the many answers that were given in the book, but here are a few.

On Advice to Recent Grads

Developer of “smart contracts” and the precursor to Bitcoin, Bit Gold, Nick Szabo offers the following: “The less you need positive feedback on your ideas, the more original design regions you can explore, and the more creative and, in the long term, useful to society you will be.” Unlike the “plastics!” advice of previous generations, this challenges those coming up in society to be willing to take more risks.

Ben Silbermann, CEO and co-founder of Pinterest, adds: “I feel like a lot of people in Silicon Valley serialize their lives. They think, ‘First I’ll do college. Then I’ll do a startup. Then I’ll make money. Then I’ll do X.’ There’s some truth in that approach, but most of the most important stuff has to be parallel-processed, like your relationships and your health, because you can’t make up the time by doing more of it later. You can’t neglect your wife for four years and then say, ‘Okay, now it’s my wife years.’

Relationships don’t work that way, and neither does your health or your fitness…Figuring out a system, so that the stuff you need to do all the time happens, even while you might be placing disproportionate focus on one thing, is pretty important. Otherwise, you’ll be setting yourself up to be lonely and unhealthy in your future.”

On New Beliefs

Arianna Huffington became more intentional with her time: “Before, I separated time into work time and non-work time, and I always wanted to maximize work time. Now I realize that you can’t separate the two — time spent taking breaks, taking a walk, unplugging, meditating — that’s all work time, too, in the sense that time spent unplugging and recharging makes me better, more effective, and happier in my work and in my life.” 

Saying No

Josh Waitzkin, a chess prodigy whose life was the basis for the film Searching for Bobby Fischer, has an extreme take on saying “no” more often: “I say no to just about everything public. I say no to more than 99 percent of professional opportunities that people approach me with.” This is echoed by tech founder Muneeb Ali later in the book: “External meetings should be initiated by me…and not initiated by others.” Now, not all of us are as busy as these people might be, but surely we could audit how and where we are spending our time to be of greater personal benefit to ourselves and those we love.

Regaining Focus when Overwhelmed

Maria Sharapova shared a quote of Hal Boyle’s to help her when she’s feeling lost or unfocused: “What makes a river so restful to people is that it doesn’t have any doubt – it is sure to get where it is going, and it doesn’t want to go anywhere else.”  

Of course there are literally hundreds more answers in the book, and if you’d like to listen to some of them free, you can check some of them out in the short audio series Tim released just for the book. 

In the meantime, it might be a fun exercise to do these questions yourself and share them with your friends and colleagues.  You’ll learn plenty about yourself and them in doing so.

Some time ago we wrote about adjustments you could make proactively in your business as COVID-19 started to make larger waves in the global economy. As the crisis grows and lingers, dynamics necessarily change for both buyers and sellers in the marketplace. What we continue to tell our clients here at Apex is: don’t panic. Those who can keep their heads when everyone is losing theirs will prosper when conditions improve. With that spirit of calm, let’s consider some things.

Short Term (the next 90 days)

We have deals in the pipeline and some of them will collapse due to a change for either buyer or seller that was unforeseen prior to these past few weeks. This has nothing specifically to do with the business but more to do with the general business climate. For example, a buyer may get cold feet about buying now or watched income which was going to be cashed out of stocks to finance the sale crater in value. They may see waiting as the best option.

That said, many deals will close, regardless. We saw some of this in 2008 during the financial crisis as well.

While the media may make it seem that fire is raining down from heaven, the reality is that business does go on in many sectors. And not just in the US but worldwide, including the supply chain for all businesses marked as “essential”. Indeed, some businesses are seeing their most profitable months in some years even as they move towards acquisition. Some of those sellers might delay a sale just to continue to ride some of those record profits a couple more months.

Medium Term (the next 6 to 18 months)

Should some kind of lockdown become national in the United States as it has in much smaller countries in Europe, there could be a hit to valuations of businesses, as those are based on earnings including the most recent financial statements.

On the other side, borrowing will be historically easy, as the Treasury and SBA make unprecedented guarantees and funds available. Rates are at historic lows. Some banks may put some additional provisions in the paperwork in relation to COVID-19 and its impact on certain types of businesses. But banks want businesses to move forward, not to freeze up, so they will likely be encouraging rather than discouraging.

Long Term (the next 24-48 months)

As with any shock to the economy of any country, there will be some necessary recovery time. But the realities of life go on.

The Baby Boomers continue to retire, and in record numbers, and many own businesses that have to be sold. Many people will begin to see their jobs through new lenses in a period of remote work. And the idea of buying a business, with its levels of control and opportunities for growth, may become even more appealing.

This isn’t to say that we don’t see some challenges ahead, but we tend to take the long view, because this isn’t the first economic shock we’ve experienced as advisors. Life does go on, despite great uncertainties, and indeed, this time, as any time in life and in business, is only as good as what you choose to do with it.

We look at facts and history and combine them with what we hear from our buyers and sellers and that leads us back to what we started this article with: not panicking.

Do you have questions about buying or selling a business right now?
We’re happy to talk through some of the challenges (and opportunities) with you!

It wasn’t that long ago that we were discussing the effects of an election year upon the business climate, and early in 2020 it seems that the dominant story is a flu-like disease that the world seems uncertain about in general. While it’s true that in many parts of the world consumers are still spending, shops are still open, and people are still going to work, at the same time stock markets have been swinging wildly, supply chains have been disrupted, and numbers of people have been quarantined.  What does this mean for business?

What has happened so far?

A number of airlines have made the decision to stop flying to certain places that are showing high levels of infection. At first this was just China, but now those concerns are spreading to Europe with northern Italy showing the greatest level of infections.

Major conferences have been cancelled. At the time of this article it looks as if SXSW in Austin will continue on as scheduled, though Twitter and Facebook have pulled out of the event. Facebook has cancelled its own F8 conference, opting for local gatherings and streamed content in its place. Shopify and Adobe are two other software firms that have cancelled their annual development conferences.

On the travel and leisure side, for the first time in many years, the final two days of Carnival in Venice were cancelled as the city was rapidly shut down by the regional and local governments. Giorgio Armani’s latest fashion show was streamed as the models walked in their outfits in empty rooms.

Like an Earthquake?

At this moment, the question seems to be whether this disease causes a fundamental change in global lifestyle and business norms or whether, like an earthquake, it is something that will pass. Indeed, after the ground stops moving in an earthquake the first things that need to be attended to are those who are hurt and wounded, but almost at the same time, the clearing and rebuilding begins, and that actually causes a rise in economic activity.  

It is clear that the media loves the sort of uncertainty that Corona Virus provides for them. Endless drama, speculation, and doomsday predictions. Much of the reaction in business can be traced directly to their reporting on these events.

Be Proactive

Business owners can’t really do much about how the media decides to conduct their business. They need to focus on the best way to navigate their businesses through this time of uncertainty, and there are some best practices that savvy entrepreneurs can adopt during the months ahead:

• Educate your customers about the virus and how it affects them specifically in their interactions with you. If your business is customer-facing, consider having hand sanitizer available and send emails/social media updates informing them about how to minimize their risk of infection.
• Talk with your vendors and bankers. Don’t wait until the Federal Reserve makes moves to start making moves of your own.  Consider expanding your credit line or restructuring some of your debt. Be more proactive on your receivables. Consider asking for better terms on your payables. Again, this is more about preparing for possibilities than panicking.
• Take a look at where you can save. Even if you may have already gone through this exercise at the end of last year, take another look. Perhaps you can buy some more materials at a better discount, or pay annual rates for SaaS instead of monthly. Better to save money now when it isn’t on most people’s minds.

There have been global disease scares and realities in the past and there will be more in the future. Know that we here at Apex are here to help you through the uncertainty, whether you are buying or selling. And yes, we will have hand sanitizer for you when you stop in at our offices!

One of the biggest mistakes that any employer can make is thinking that his/her employees think similarly. “Well, that’s what I would want!” is a terrible criteria by which to decide whether you should give your employees stock. While stock options seem like a reasonable way to boost the desirability of your workplace, you need to consider several factors when making a decision.

Is anyone asking?

This deals with the point made above: don’t assume that your employees think the exact same way as you do. Just because you would be interested in possible ownership doesn’t mean they would be. A fair number of employees are not interested in the ups and downs of owning a business. They are quite happy to have competitive pay and a positive work environment in which they add value to their own lives and to those of your clients.

Find out what benefits your employees are interested in. If “profit sharing/ownership” keeps coming up from various members of the staff, then yes, it might be something to take a hard look at.

Is it viable given your corporate structure and profits?

Remember that there will often be a loss of privacy with the introduction of an Employee Stock Ownership Plan (ESOP). There are often disclosure requirements that require you to disclose more than you currently have to disclose (which is usually nothing) about your books, long term capital spending, debts, and taxes.

Also unknown to most is the cost of creating and maintaining an ESOP, which can easily hit five figures for even the most modest companies. This is apart from the paperwork compliance that is necessary whenever you are talking about securities. On the other side of the argument, there are some ESOP expenses that are tax-deductible, within limits, for the business, and they represent tax-deferred savings for employees.

Is there another way for employees to feel ownership and ties to performance other than equity?

Just as there are many ways to build a business or create a product or service, there are many ways for staff to feel included, rewarded, or valued. You could have an incentive trip for top performers. This is something everyone can look forward to and aspire towards.

You can also give awards at annual meetings which recognize staff for things other than outstanding production. Sometimes people are great arbitrators in the office or bastions of kindness that help grease the wheels of those daily interactions. Recognizing them does a lot of what stock can do: show them you value them.

If you wanted, you could come up with a basic agreement (consult your attorney) that can be revised each year about some kind of profit-sharing. This can be an initial test which bridges what people say (we want an ESOP) and what they do (not actually step up and perform when goals are introduced) and helps you decide whether to introduce stock options.

We have dealt with ESOPs. Give us a call today to learn more.

Many people, for better or worse, avoid going to the doctor. No news is good news or if they feel fine all must be fine. But often there will at least be some kind of warning sign to nudge you to seek help. It may not be serious or life threatening, but it’s enough to get your attention.

This happens in business as well. In this article we will talk about a few of these that should make you pay attention.

Missing Revenue Targets

All businesses have bills to pay and if you don’t hit your revenue targets you may be in a more and more compromised financial position. You may start to rely on credit card debt or some of the higher priced alternative financing options out there. This can lead to a challenging situation if managed from a position of stress without foresight. Instead of limiting your liability to your corporate obligations, you may be putting your personal assets at risk as well.
Why are you missing your projections and what can you do to fix the situation?

Health Problems

Sometimes we have health problems because of genetic dispositions or because of choices we have made outside of the business. But on many occasions we’ve heard stories about health problems directly related to a business. The stress you are dealing with has to go somewhere, and sometimes it’s inflicted on your body, with devastating results.
If your business is causing you health problems, what are you going to change?

Loss of Passion

Many of us get into a particular business not just because we are good at it, but because we happen to enjoy it and find meaning in it. But sometimes, for various reasons, we lose our mojo. Very often it’s because of burnout.
If you’ve lost your passion for your business, can you keep it going?

Loss of Mission

While it’s true that businesses pivot to deliver something slightly (or greatly) different from where they may have first started, sometimes in the excitement to build and extend, a mission can get lost or muddled. These effects are felt throughout the business: from customers who aren’t sure exactly what you do, to staff who are confused about the change in direction, to you, who repeat what you think the mission of the company is but which has no basis in the reality of what your company is doing day to day.
If your company isn’t mission-focused, how will you correct that?

Key Staff are Leaving

If you don’t see the writing on the wall, sometimes your staff will. And when it’s key staff that leave, it’s the hardest to take, as they are the hardest to replace. They leave with institutional knowledge that is hard to pass on, and worse, they are probably leaving for preventable reasons.
If you’re losing key staff, are you willing to take a hard look at who the problem may be? (Is it you?)

If any of these are an issue for you, that’s cause for concern. If you have more than one, you’re in a crisis and need some help. If you want to rebuild and keep going, it’s possible, but it’s going to take a lot of work. But it may also be a good turnaround opportunity for one of our opportunistic buyers and can offer you a light at the end of the tunnel instead of just a longer tunnel. Give us a call to see if we can help.