Missed Opportunities

Posted on July 1, 2025 by John F. Dini

Your business is doing pretty well. You’re adding to your personal savings every month and are more focused on tax strategies than making payroll. But how do you know if you’re leaving opportunities on the table?

Some indicators are obvious. Others, less so.

One of the easiest to spot is stagnation. Businesses are like living organisms—they either grow or they shrink. Flat or declining sales are a warning sign. Stagnation limits opportunities for your top employees and makes it easier for competitors to lure away your customers with newer, more innovative solutions.

How does your growth rate compare to your industry or market? If others are growing and you’re not, standing still is really falling behind.

Customer Feedback

What are your customers saying? Your salespeople are often the first to hear feedback from the field. If you’re hearing things like, “Everyone complains about our new auto attendant,” the right response isn’t “Everyone is doing it—they’ll get used to it.” Instead, track call volumes and see if it’s driving customers away.

When was the last time you ran a Net Promoter Score (NPS) survey? The NPS question is simple but telling: “Would you recommend our product or service to another business?” On a ten-point scale, anything below a seven indicates a lack of enthusiasm. Sevens and eights are neutral at best. Only nines and tens are true fans—and every business should aim for a strong percentage of those.

Are you paying attention to buying trends from your top 20% of customers? The Pareto principle holds true in most businesses—that 20% often accounts for the majority of your revenue. Is their total spend declining? Have some of your best customers stopped buying altogether? Has anyone asked why?

Technology: Internal and External

A while back, we wrote about the cost of new technology relative to the value of the people using it. Are you taking advantage of the latest tools? How are you using AI? ChatGPT, Claude, DeepSeek, and Perplexity (along with a growing list of others) can do more than draft emails. They’re a gateway to broader AI solutions. Try asking them about emerging innovations in your industry. How are companies streamlining office work? What AI tools exist for logistics, material handling, workflows, or scheduling?

Are you making the most of trade shows and conferences? Do you attend to look for new ideas, or just to catch up with old friends? Are you attending your customers’ industry events—not to sell, but to see what new products and systems they’re adopting? Understanding their innovations helps you stay relevant as a supplier or partner.

What does your innovation pipeline look like? Are you consistently working on improving your products, customer experience, and internal operations?

Human Resources

How challenging is it to hire new talent? Are people leaving for better opportunities? Are you seeing fewer responses to job postings? Do new hire salary demands creating tension with your existing pay structure? Finding good people is hard—but it’s even harder if you aren’t competitive in the talent marketplace.

You may not have immediate answers to all these questions—but asking them is the first step. They’ll help you identify gaps, spark new ideas, and strengthen your business for the future.

Remember, you don’t have to solve all of this alone. The right advisor helps you ask the right questions, find the right answers, and act on them. Fresh perspective and outside expertise often reveal opportunities you didn’t know you were missing.

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Goals and Resolutions

Posted on May 30, 2025 by John F. Dini

There is a difference between goals and resolutions.

Businesses set goals. These can be budgetary, operational, recruiting, sales or profit oriented. Individuals make resolutions.

Business Goals

Goals are focused on a particular outcome, and so should be specific. It’s worth the time to get into the details. If you intend to increase the company’s cash flow, how will that be done? If it’s by boosting sales, what has to change to make that happen? You could add a new product line or enter additional territory. It may require hiring and training new salespeople.

You can also increase the cash flow by reducing your Cost of Goods. Is there a purchasing analysis software that would identify ideal order quantities? Should there be new competitive bidding between vendors? Perhaps the company has grown to the point where it needs to recruit full-time purchasing personnel.

Cash flow can also be improved by production efficiency to reduce expenses, early payment incentives for customers, or by financing receivables.

Goals and ResolutionsOnce the specifics are determined, the rest of the SMART equation comes into play. How will you Measure success? Who is Accountable for making it happen (and does their compensation reflect success?) What Resources should be allocated? Any effort requires personnel or investment, and frequently both.

Finally, what is the Time Frame? Is it the whole budget cycle? What interim measurements are needed to track progress? Are there contingency plans if the goal falls behind schedule?

Personal Resolutions

Individuals make resolutions. They are promises (even if only to yourself) to commit to a new behavior. By definition, they are often tied to a broader aspiration.

If that aspiration is an exit strategy, your resolution may begin with the time frame. “I will leave Acme Widgets on December 31, 2029.” It’s still worthwhile to think through the SMART process, but the focus would be on your individual behavior.

Specific. By 12/31/29 I will be prepared for an active second act dividing my time between clearly identified community service, our grandchildren, and traveling both domestically and overseas.

Measurable. To support my lifestyle, I will transfer my company to new owners for a price of not less than $6,000,000, which will be added to the $2,000,000 in savings I accumulate in the next five years.

Accountable. The only person responsible for this is me. I will review these resolutions every month, on the last day of the month, to consider whether I have moved forward on my goal.

Resourced. Maximizing the value of my business and leaving without regret requires that I have no day-to-day operational duties. I will create a delegation plan defining who will assume each aspect of my job(s).

Time Frame. Well, that’s where we started. Now you can sketch out the interim measurements.

Goals and Resolutions

In any business managed by the owner, both goals and resolutions are necessary to move forward. No business is likely to succeed in its goals if the owner’s objectives are in conflict with them. No owner can expect to succeed in his resolutions if the business goals don’t match.

Remember, sooner or later every owner exits his or her business. It typically goes much better if there is a plan. An exit plan is merely a strategy with an end date. Having that date defined helps a lot of other things fall into place.

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What is “Holistic” Planning?

Posted on March 28, 2025 by John F. Dini

Financial planners use the term “holistic planning” frequently. It’s meant to indicate that they consider the client’s short- and long-term life goals and the future they visualize. According to Fidelity Investments Holistic Wealth Planning is continuous and considers two dozen aspects of client wealth objectives.

The Valuation Reality Gap

Only one of those aspects is ownership of a business. This raises the question “If a typical business owner has 50% of their net worth in a business, is it really just 1/24 of their planning?”

Of course not. I’m exaggerating for effect, but there is an uncomfortable truth about financial planning for business owners.

When we ask financial planners about their assumptions regarding business value, the great majority (almost all) reply that they use a value provided to them by the client. Unfortunately, most business advisors estimate that the average owner’s impression of their company’s value is at least 35% too high.

An owner is planning on a $3,000,000 nest egg in retirement. He estimates that $1,500,000 will come from the net proceeds (after paying capital gains tax) of selling his business for $2,000,000.

But 90% of businesses that size are sold on an asset basis. That could bump the tax rate from under 25% to something closer to 40%. If he has overvalued by the “average” of 35%, a $1,300,000 sale would net $780,000.

Impact on Retirement Goals

Now his nest egg is $720,000 short of goal. Retiring on $2.3 million isn’t exactly poverty, but it would require substantial changes to the anticipated goals.

holistic planningThat is why financial planning for business owners can’t be holistic if it doesn’t include the value of their business. That value should be confirmed by a third party.

Exit planning is the critical final component of a business owner’s wealth strategy. A business requires different tax strategies, risk management and timing assumptions from simply calculating around a pension. Even an appraised value can range widely between different transition strategies.

Holistic Planning in Exit Considerations

How is estate planning affected by the disposal of the business? Does it employ one or more children? Just as importantly, does it not employ one or more children? How can the business value in the estate be balanced between fair and equal? In the most extreme case, will the business be passed down as part of the estate? In that case its value may not be included as part of the owner’s wealth at all.

Will the business be sold to a third party, or as part of a management buyout or ESOP? The proceeds may be realized all at once, or over a long period of time. Is there value for any real estate involved? (A new owner may or may not wish to purchase the real property.)

Holistic planning for a business owner is far more complex than for an employed individual. It’s almost like having a second client in the room. If the planning doesn’t consider the myriad of complexities surrounding monetization of an illiquid asset (the company), it may not be considering the biggest single factor in the client’s financial future.

 

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Battling Assets

Posted on February 1, 2025 by John F. Dini

Occasionally, we run into what I call “Battling Assets.” That is when an owner is drawing a comfortable income from the business, but it is arranged in a way that denigrates the business value, the value of the asset, or both.

Here are three true case studies for examples.

Under-optimized Real Estate

Two partners operated a beautiful campground. The acreage was along a river, and despite rapid suburbanization in the area, the bluff on the opposite bank prevented any visual encroachment. Like many such facilities, it had been a destination for the same families year after year.

The owners were ageing, and sought a buyer who would continue the tradition for their “family” of campers. In our interview they were emphatic about not selling to a developer who would cut up the land into lots for expensive homes.

I assessed the business, and found that their Seller’s Discretionary Earnings (SDE) was roughly $100,000 plus a modest salary for the partner who ran day-to-day operations. I told them that a presumed owner-operator seeking a lifestyle business and possessing substantial cash might pay as much as $1,000,000 in a deed-restricted sale.

They were enraged and accused me vehemently of being some type of grifter. They had already talked with an interested buyer who said he would pay them $4,000,000 for the property.

I asked about the identity of buyer. They said it was a developer who wanted to chop it up into lots for high-end homes. They only wanted a “fair” price for the land from someone who wouldn’t use it in that way.

I’m in Love with My Car

A contractor with an excavating-based business hated to see his workers idle. To make certain they were fully occupied at all times, he maintained duplicate inventory of his heavy equipment.

battling assetsHe would use his flatbed trailers to deliver a backhoe loader, bulldozer, rock saw and dump truck to the next scheduled job a few days in advance. The laborers would be picked up from a completed site (even if it was midday) and delivered to their new workplace promptly. A few days later he sent flatbeds to transfer the equipment from the finished job.

With two sets of equipment, the chances of any one being out of service were pretty high. To be safe, he kept a third set as spares. He was also proud of his substantial knowledge about used equipment values, and usually had a one or two “deals” that he had just purchased and a few others listed for sale.

His business had been good to him. He had a beach house, a ranch, and was essentially debt free. He rewarded his management well, and was perfectly happy with a nominal salary from the business. We estimated that his cash flow would justify a sale price of about $2,000,000.

He was shocked. “I have more than that just in equipment!”

The truth was, he could sell most of the equipment, sell the business to his managers for a note, include just one set of working tools, and still be better off financially.

The Battling Assets

This owner had a large building fronting on a busy highway. He had paid it off years before, and took the substantial rental payments as his principle income.

He occupied the premises with his business, a wholesale distributor of construction supplies. His wife took a salary for her administrative work, and the company paid health insurance for the two of them. Otherwise the business was at break-even.

At first, I found it difficult to understand why he even bothered with the business. In his eyes, it had little purpose other than as a triple-net renter for his building, although he worked more than 40 hours a week running it. It paid the rent plus all the expenses of maintenance and taxes.

When we looked at “normal” rents as a percentage of revenue for his industry, his costs were double the average. When we compared rents for the area, what he paid for his building  was about one-third less than the market rate.

We ran the numbers. I could show him how much more profitable the business would be if it paid thousands of dollars a month less in rent. I also showed that without his business there, the building could be charging thousands of dollars a month more to a tenant who wanted the highway visibility.

The practical results would be almost a doubling of his current income, as well as making the distribution business saleable.

Sometimes business owners become focused on a comfortable lifestyle at the expense of maximizing their investments. Pointing out battling assets can be both eye-opening and (usually) much appreciated.

Posted in Building Value, Exit Planning, Exit Strategies, Management | Tagged , , , , , , , , , , , | 1 Comment

One Response to Battling Assets

  1. Valerie Koenig says:
    February 3, 2025 at 4:37 pm

    Good insights, love the examples.

    Reply

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Purpose – Life After the Sale Part 3

Posted on December 27, 2024 by John F. Dini

The third component of life after the sale is Purpose – “Having as one’s intention or objective.”

Many exit planning advisors discuss the three legs of the exit planning stool – business readiness, financial readiness, and personal readiness. In our previous two articles, we focused on two of the “big three” components of a successful life after the sale, activity and identity. The third is purpose.

So many advisors point to the 75% of former owners who “profoundly regret” their transition, and say it’s because they didn’t make enough money. To quote Mr. Bernstein in the great film Citizen Kane, “Well, it’s no trick to make a lot of money…if all you want is to make a lot of money.”

I’ve interviewed hundreds of business founders. When asked why they started their companies, by far the most common answers are about providing for their families and having control of their future. Only a very small percentage say “I wanted to make a lot of money.”

Decades of Purpose

So what kept them working long hours and pushing the envelope after they had reached primary, secondary, and even tertiary financial goals? Sure, non-owners may chalk it up to greed, but Maslov’s hierarchy of needs drifts away from material rewards after the first two levels. Belonging, Self-Esteem and Self-Actualization may all have a financial component, but money isn’t the driver.

For most owners, the driving motivation is this thing they’ve built. The company has a life of its own, but it’s a life they bestowed. They talk about the business’s growing pains and maturity. Owners are acutely aware of the multiplier effect the success of the company has on employees and their families. In a few cases, that multiplier extends to entire towns.

That’s the purpose. To nurture and expand. In so many cases every process in the business was the founder’s creation. He or she picked out the furniture and designed the first logo. This aggregation of people breathes and succeeds on what the owner built.

That’s why so many owners still put in 50 or more hours a week, long after there is any real need for their presence. This thing they created is their purpose.

Life After the Sale

Unsurprisingly, so many owners find that 36 holes of golf each week, or 54, or 72, still isn’t enough to feel fulfilled. You can get incrementally better, but it doesn’t really affect anyone but you. Building a beautiful table or catching a trophy fish brings pride and some sense of accomplishment. Still, it never matches the feeling of creating something that impacts dozens, scores, or hundreds of other human beings.

life after the saleThat’s why we focus on purpose as the third leg of the personal vision. In the vast majority of cases, it involves impacting other people. Any owner spent a career learning how to teach and lead. Keeping those skills fresh and growing is a substantial part of the road to satisfaction.

Purpose in your life after the sale may involve church or a community service organization. It could be serving on a Board of Directors or consulting for other business owners. It might be writing or speaking. Purpose doesn’t require a 50-hour week, but it does require some level of commitment, and the ability to affect the lives of others.

Posted in Exit Options, Exit Planning, Exit Strategies, Life After | Tagged , , , , , , , , , , , , | 3 Comments

3 Responses to Purpose – Life After the Sale Part 3

  1. Jim Marshall says:
    December 27, 2024 at 2:57 pm

    This column is right on. I found many of those for whom I served as a consultant were the happiest after the sale if they had a hobby / purpose. For one it was building and flying personal aircraft, for others caring for a disabled spouse or other family member, or serving as spokesperson (officially or non officially) for an organization for which they had/have a passion were the happiest with having left their business.. And the route to that success started with plannning for no longer being “boss”. or known ownly by their connection to their business. As parrt of their exit strategy they passed on responsibilities to others and used that freed up time to start / continue their non business passion.
    One of my former clients started his association with me in 2006 with a goal of retiring in three years. He slowly passed clients and responsibilities and eventually sale of his company to his partner. He still (in 1924) performs those activities he likes with the clients he likes, when he likes. But travels, coordinates groups of friends E.g. into book clubs ,spends time with family and maintains his “mini farm,” acrerage” .He has no “need to do this” or “be there” at a specific time” etc. In his mind he is retired…and I think on the basis of my observation duiring our continued friendship .. his “third year” will be marked by his funeral. Not everyone can do what he has, but if desired, can do a variation.

    Reply
  2. Suzann Woodward says:
    December 27, 2024 at 3:48 pm

    Thanks John, this is very meaningful.
    I have sold my business and am in the process of transitioning to new owners now. I will work through 2025 and then just be available for consulting and questions on clients. So far all is going smoothly, hope that continues!

    Reply
  3. Stephen Oliver says:
    April 20, 2026 at 2:01 pm

    What is one’s purpose? The second most important question after deciding who to believe in for everlasting life.

    The first question impacts the second. One is not ready to exit until both are truly understood and committed to.

    I tackle both of these questions as part of my business and ministry with clients, family and friends. Hope others would join me in the ASK OLY way. 🕊️

    Reply

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