CPA Accounting Firm - Cleveland, Ohio | Barnes Wendling CPAs

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Web Name: CPA Accounting Firm - Cleveland, Ohio | Barnes Wendling CPAs

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description:A Cleveland accounting, tax and advisory firm that helps businesses, nonprofits and individuals build and maintain their net worth. Contact us today!
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75 YEARS OF SERVICE

A CLEVELAND ACCOUNTING FIRM DESIGNED TO BUILD AND MAINTAIN YOUR NET WORTH

At Barnes Wendling CPAs, our team of certified public accountants are driven by our client service objective of building and maintaining your net worth.

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INVESTMENT PLANNING FOR 2021

Key investment planning insights for new and experienced investors

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Building and maintaining your net worth

About Barnes Wendling CPAs

Barnes Wendling CPAs is a Cleveland accounting, tax and advisory firm serving privately-held businesses and not-for-profit organizations since 1946. Regardless of your accounting, tax, or advisory service needs, our approach is driven by our client service objective of building and maintaining your net worth.

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Our Approach

Our BRISE Model

Our approach to services begins and ends with our BRISE Model. We go beyond looking at what you have done and where you are now. We look ahead to where you want to be and how to get there.

Business DevelopmentRetirement PlanningInvestment PlanningSuccession PlanningEstate Planning

A Unique Approach

Business Development

We offer a comprehensive process to identify strengths and weaknesses of your business to improve its performance, value, and profitability.

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A Unique Approach

Retirement Planning

Our advisors will work with you to create an all-encompassing retirement plan to ensure your future financial well-being, giving you peace of mind to pursue your current goals.

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A Unique Approach

Investment Planning

We understand the importance of your long-term goals and offer an unbiased investment plan strategy designed to manage your wealth, grow your net worth, and plan for the future.

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A Unique Approach

Succession Planning

Our advisors will listen to your goals and work closely with you to establish, implement, and execute a plan to ensure the successful transition of your business.

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A Unique Approach

Estate
Planning

We will work with you and your legal counsel to develop an estate plan that considers all aspects of your financial situation to preserve and protect your legacy for the future.

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Featured Client Testimonials

Barnes Wendling has provided us guidance and recommendations that have strategically helped strengthen our business and position ourselves for growth. We needed to hire a new VP of Finance and Controller this past year, and they were instrumental in helping us find the best candidates for our company.

Sara Blankenship - President, Kaufman Container

Featured Client Testimonials

We value the trust, accuracy of information, and reliability of Barnes Wendling and Mike Essenmacher personally. Mike has been instrumental as a trusted advisor on accounting, tax, and personnel issues. His advice is always accurate, and he is very reliable. His associates are also very talented.

Dominic Ozanne - President and CEO, Ozanne Construction Company, Inc.

Featured Client Testimonials

We value Barnes Wendlings expertise with all things accounting so we can operate our business using our strengths and allowing them to be our experts. They have also brought me a few business sale opportunities to allow me to grow my assets.

John Gaydosh - President and Metallurgical Engineer, Ohio Metallurgical Service, Inc.

Featured Client Testimonials

Barnes Wendling (especially Lena) did a great job with our financials. Everything. It is extremely refreshing and comforting to know that all of our numbers are not only correct, but they are in the right place(s). Your diligence and reporting truly does make me (personally) feel better.

Thomas Adomaitis - Controller, Bialosky Cleveland

Featured Client Testimonials

I can wholeheartedly tell you that I have yet to work with an audit or tax team that have been more helpful, easy to work with, and committed than the team at Barnes Wendling- I have been through three different firms in the last few years.

Michelle Saylor, Former Controller

Featured Client Testimonials

Floyd Trouten at Barnes Wendling CPAs is an “expert’s expert” when it comes to M A accounting. Not only does he understand the evolving details of the Tax Code but he also sees the fine points of their application for owners, managers, investors, and financiers.

Mark A. Filippell, Western Reserve Partners

Featured Client Testimonials

The service is amazing at Barnes Wendling CPAs. The benefit is worth more than the cost. Sometimes it’s true that you get what you pay for.

Mark Boucher - Former Owner, Castle Heating 2021 Cleveland CPA Accounting Firm | Barnes Wendling CPAs

Podcast Transcript: Exit Planning Creating Value Before The Exit

Brian OConnell:
Hello, this is Brian OConnell with Better Business with Barnes. Thank you for joining us for our most recent podcast here. This ones entitled Exit Planning. In our episode today, we will be focusing on the exit planning and building value beyond the exit.

Brian OConnell:
Joining us today is Mike Pappas, director of our Audit and Assurance Services Department. Mike also became a certified exit planning advisor in 2018. Mike, thank you for joining us.

Brian OConnell:
Lets start with the basics. Just what is exit planning?

Mike Pappas:
Exit planning is not to be construed or confused with succession planning. It is much more about preparing a business for the eventuality that may occur when someone decides to exit. So its really all about building a great business and making sure that the business is performing at optimal performance so that when you choose to exit or succeed it, its in the best possible position.

Brian OConnell:
How far in advance should a business owner start planning for their exit?

Mike Pappas:
Its never too early to start and its never too late to start. Unfortunately, some people think maybe a couple of years before theyre ready to exit or sell their business or succeed it to the next generation that thats a good time for them to start thinking about it. Not to say that you cant do it then, but if you really want to get the business performing at optimal performance, its going to be pretty difficult to do that in a two year period of time. So I typically tell people, ideally, 10 year window is perfect. Can you do it in less? Yes, but it means you got to have everybody moving in the same direction at the same level of speed to accomplish the end game.

Brian OConnell:
Now you say everybody moving in the same direction. Who should be involved with this type of discussion?

Mike Pappas:
It is typically the key leadership team in the organization because its going to involve every facet of the organization itself, the business enterprise. And the more that you have everybody on board working with improvement, the better result.

Brian OConnell:
Who should know about this? If Im a small manufacturing entity and word gets out, Oh, Brians planning to leave the business, and all of a sudden you have people panicking and whos going to take over. Whats some advice there?

Mike Pappas:
Its not about saying, Hey, were going to embark upon an exit planning process. I think it could make some people very uncomfortable by thinking about that someones thinking about selling the business. Its really about building a great business. So the way I kind of characterize it dealing with clients, its taking your business, its measuring how its performing today and getting it to best-in-class.

Mike Pappas:
I like to use the comparison when people were back in school, not too many people raised their hand and said, You know, Im okay with being mediocre. Everybody wants to be best-in-class. Everybody wants to get the A grade or excellence or whatever. So relative to the business, its the same thing. Its about measuring what your current performance is and determining how do we get the best-in-class in everything that we do. If youre operating at best-in-class, it creates the highest level of profitability, and it also creates the greatest value.

Mike Pappas:
So its about taking the business where its at today, measuring where its at today, how it performs on the scale of an under-performer, an average performer, and then best-in-class performer and determining what we need to do to get the best-in-class. And theres ways to do that.

Brian OConnell:
Now, as a guy who graduated in the part of the class that made the top half possible, you had referenced succession planning. Whats the difference between the exit planning and the succession planning?

Mike Pappas:
Succession planning goes a lot easier once you have a great business. Its much easier if you have a business that is performing at optimal performance; its much easier to succeed it. When we talk about succeeding it, theres many different avenues that people evaluate. Some people think about, Im just going to build it to sell it. Some people say, I want to succeed it to a next generation. I want my kids to have the same opportunity that I did to create a great livelihood and create some personal wealth. Some say, Hey listen, I want my employees to be a big part of that. I want them to be a part of the succession plan. I want them to be part of the ownership team. Or we can potentially sell it to management.

Mike Pappas:
So theres many different ways to succeed the business, but that really comes down to the owners desire and wishes. Some businesses are easier to sell than others, so it all really all depends. But the overreaching item in the whole process is build a great business. You build a great business its easier to succeed it whichever avenue you choose to do.

Brian OConnell:
Now as far as the exit plan, you said its never too early. Some companies may want to consider building their exit plan at 10 years before they plan to exit it. Is there certain benchmarks along the timeline, like at the 10-year mark you should do this, at the five-year mark this should be in order, at the three-year mark you should have these ducks in a row?

Mike Pappas:
It boils down to whats referred to as a business attractiveness assessment. That process involves getting a leadership team together and through a series of anywhere from 120 to 150 questions, doing a business diagnostic on every aspect of the business, and then grading them on a scale of one to six, one being the least performer and six being the optimal performer. By going through this methodical process, a report is developed, which then is discussed with management leadership team to determine, Okay, these are the areas of our business that are performing well. These are the areas of our business that are not performing well. How do we improve those? Once again, the end game is to get the best-in-class at everything that we do, and then also doing some benchmarking of the business itself.

Mike Pappas:
Were fortunate enough to have a business valuation group, and because of that ability, we have a lot of business data available that we can compare our current business and how theyre performing to some industry benchmarks and determining from an operational performance, where they fall on the spectrum of below market performers, average performers or best-in-class performers. I think its an easy way and its a methodical way to address the areas of greatest need in the business. And then you begin the process of improving those one at a time with the leadership team involved to help accomplish that.

Brian OConnell:
So Barnes could kind of be driving the ship with input from key management personnel, key Barnes personnel.

Mike Pappas:
Yeah. Its not like were driving it as much as were facilitating. Typically, they know the areas they need to work on. Where we found that people need the greatest amount of help in is staying accountable and focused, and our job is to do that. So if we can help people be accountable and focused on that, then theyre accomplishing something because like most of our business owners, theyre dealing with the fire of the day issue, whatever that may be and its hard to stay laser focused. We like to refer to it also as relentless execution. Not many people can focus on executing their plan to achieve a desired result. Our role is wanting to help facilitate and help be accountable.

Brian OConnell:
We had mentioned in the opening comment that youre a certified exit planning advisor. Whats involved with this credential, and why did you decide to get it?

Mike Pappas:
I decided to get it because of the need for our clients. I mean, our privately held businesses have that ultimate desire to do something with their business, and we want to help them create the greatest amount of value with that business. We want it to perform optimally. Meaning we want them to be the highest level of performance in either against themselves or within their industry group. By doing that, youre creating more value and more flexibility for ultimate succession.

Mike Pappas:
The certified exit planning advisor credential the process for doing that is you have to go through a four day MBA style intensive class. The culmination of which is in a three hour examination that is taken, and then of course you have to have a passing score. A passing score is not merely 51% either; 70% has to be the passing score in order to receive the credential.

Brian OConnell:
What did you get on the test?

Mike Pappas:
They dont disclose it. They just tell you if you pass or not. The good news was I passed and I didnt have to take it again. It was kind of interesting. Its been a long time since I had taken an exam, so theres a little anxiety when youre going through the process.

Brian OConnell:
Is there a re-accreditation process, or once you have it, you have it?

Mike Pappas:
Once you have it, its about maintaining a certain level of education to maintain it. Its pretty much at a three-year window. Similar to maintaining a certified public accounting license permit; its a three-year window of continuous education and training. Its a good process.

Brian OConnell:
Now, is there a threshold as far as revenue where a company should say, Okay, I should really jump into this. Is a bigger business more difficult or easier because the systems are usually better? What advice would you give to business owners about getting their ducks in a row to start this?

Mike Pappas:
I think the biggest thing is a willingness of management and ownership to embrace an assessment. Some people are much more inclined and open-minded to do that, others I get it. Some people have pride of authorship and Id rather do it myself, and thats okay. I mean, thats your choice. But I think those that embrace it open-mindedly with a leadership team that is open and willing to commit to the process, will achieve the desired result.

Mike Pappas:
Its kind of like a little story right now. Im working with a client that has been wrestling with growing their business. Theyve been pretty stagnant. You either grow or you die. You have to choose which direction you want to go. Weve been talking about growth and they havent been able to effectively institute a growth strategy. They finally decided to embark upon this process and engage us to be a part of that process. Weve been doing it now for less than a year. I constantly check with them. We meet quarterly. I ask them, I say, Is this accomplishing your objective, after every session. Are we on target? The response is, Absolutely. We love the accountability. Were moving forward. We probably made more strategic investments in the past eight months than weve done in the past 10 years.

Mike Pappas:
But its a process. This is only year one. Theyre not quite where they want to be with it, but its all laying the foundation to achieve the ultimate growth and profitable growth that they want to achieve.

Brian OConnell:
So youre providing the tough love to kind of help them navigate whats ahead of them?

Mike Pappas:
Yeah, theres some give and take in the process, but youre trying to bring those issues to the forefront and get everybody to agree that we need to work on it together. If you dont have leadership team agree to work on it, guaranteed nothing will happen. Itll be sabotaged. People will dis the process, and thats the worst thing that you can have happen.

Brian OConnell:
You had mentioned grow or die. So I guess in theory, part of an exit plan may be an actual organized wind down.

Mike Pappas:
Its possible. Its possible. You dont like to see that too often, but there are cases where that could happen. You could have an industry that is obsolete or becoming obsolete, as weve seen certainly with the technology industry, and some industries have had more pain than others, so its possible. But you really kind of have to take your head out of the sand and be open-minded with how you want to approach this. Its fun. Its fun working with clients that are open-minded to do it.

Brian OConnell:
So before we wrap up today, any key points you want to give our listeners?

Mike Pappas:
I think the biggest thing is when going through this process, the owner also has to do a personal assessment themselves, and do whats referred to as an owner exit readiness to decide which direction they want to go, because they need to align their personal business and financial goals. All have to be in line, and if theyre not in line, then this could be a little bit problematic. Thats a separate discussion. But if owners are willing to embrace on this, they first have to do an assessment themselves because they need to know what direction they ultimately want to go.

Brian OConnell:
Well you heard it here, business owners, do your self-assessment, and then reach out to Mike.

Brian OConnell:
Thats going to wrap up our podcast for today. Thank you, Mike, for joining us and discussing your insights. We could talk about this for hours.

Brian OConnell:
This episode will be hosted on our website for future listening. Stay tuned for more topics in future podcasts. For more information on this topic, please visit barneswendling.com/insights. Again, we try to keep these around a 15 minute mark. Theres plenty out there for you to listen to and reach out to us with any questions, concerns, input, feedback. Were always here for you.

Im Brian OConnell. Thank you for listening.

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