Investors tend to follow and copy what other investors are doing. This “herd mentality bias” is influenced by emotion and instinct as opposed to independent analysis. Some examples include Ponzi schemes, cryptocurrency trading, and Black Friday purchases. How does one ensure they’re not being pulled into the herd? Analyze the investment by: Removing the noise. (Forget where you heard the recommendation from). Objectively analyzing the risks and rewards associated with the investment. Explaining the investment to yourself. Does it make sense? Does the investment sound too good to be true? (It ..read more

Fraud happens in small businesses just like in other places. Fraud is more prevalent in small businesses, compared to larger ones, because: Small business owners focus less on controls; they instead focus more on sales Many employees assume additional tasks which are not properly segregated The largest fraud factor is entrusting one employee with a large amount of responsibility. Time and time again, small business owners try to offload responsibility to others who take advantage of this opportunity. HOW TO MINIMIZE THE RISK OF FRAUD I recommend this two-tier approach, for owners and employ ..read more

The U.S. annual inflation rate jumped to 8.5% in March 2022, the largest increase since December 1981. This was caused by global supply chain bottlenecks, high consumer demand, and the war in Ukraine. Sectors impacted include: Energy prices surged 32% (including gasoline’s increase of 48%) Food prices increased 8.8% New vehicles jumped 12.5% When considering inflation’s influence on business valuations, there are several variables impacted. Here’s a quick review of the impact of inflation on different valuation approaches: Asset approach This approach is used when financial results are con ..read more

Quite often, small business owners do not see the value in getting a business valuation completed. Perhaps there is no urgency to complete one, or the owners felt one was not needed, or the valuation seems cost-prohibiting. Here are some reasons owners value their business: Tax (estate/gift) planning purposes Sell the business Attract new investors Divorce Buy out other owners Apply for a loan or line of credit Understand their business growth Different approaches are considered in business valuations. One approach or a combination of approaches may be used in the business valuation calcula ..read more

A successful and robust Anti-Fraud, Compliance, and Ethics Program has tremendous benefits to a company, including minimizing material theft, keeping policies and procedures up-to-date, and making minimal year-to-year program changes. Along the way, some companies' programs become less important as the attention to their programs falls which causes the benefits to the companies to decline. What are the reasons these programs fail? Lack of upper management support - without upper management support, lower management's annual compliance goals get minimized, and the necessary program updates are ..read more