Expert Panel Discusses Maximizing Value from Your Business

On the morning of June 11, the Harvard Club was abuzz with business owners mingling as they waited for the NY REPORT panel discussion “Maximizing Value From Your Business” to begin. The three guest panelists for the event, sponsored by The Hartford, were Jon Bloostein of Heartland Brewery, Inc.; Patricia Carabello of CMC Interactive, LLC.; and Gregg Fisher of Gerstein Fisher. They drew from their unique perspectives to give the audience tips on the many different ways owners can maximize their financial growth. Below we share three takeaways from the program:

1. Be smart about diversifying.

On the issue of how much cash a business owner should be taking out of his or her business, Patricia Carabello believes diversifying one’s investments is key. “I think it’s very important to take out even a small percentage of cash every year and invest it in some other vehicles,” she said. “When you get to the point of retirement, you’re going to need this money. While your business may still be your largest asset, you don’t want it to be your only asset.”

Gregg Fisher, who founded the investment firm in 1992, reminded attendees of the reasons why it is important to invest outside the business. “My family owned a small men’s clothing business for years back in the ‘60s, ‘70s and ‘80s, and I watched my father put all of his money into the pants that were hanging on the walls,” says Fisher. “He did pretty well with that year after year; but ultimately, things he didn’t expect, like high inflation, higher rents, changing business environment caused his business to go sour right before his retirement. There wasn’t enough there for him to retire comfortably.” Owners may need to work backward by determining how many dollars they will need and at what age they will want to retire and investing accordingly.

2. Plan for your exit years before you consider selling.

For Heartland Brewery founder Jon Bloostein, the idea of planning now for a future exit was something he took to heart before he even opened his first location. “I looked at [ways to exit the business with money] before I even came up with the concept of building Heartland Brewery,” said Bloostein. “I looked at things that were highgross- margin products, where I could make some good money, build [the business] up and sell it, go public or be acquired by a public company.” In essence, he asked himself, “How much money can I make from this business?” before he even had a business. Editor’s note: for more information, on planning your exit, click here

3. ESOP creates camaraderie

Another topic the panel discussed was employee incentives, and Bloostein talked about the success he found by implementing an employee stock option plan (ESOP) at his company. The ESOP helped him hold on to quality employees in an industry not known for high retention rates. “We’re on the same side,” he said about the culture that the ESOP brought to his company. “I’m incentivized to build the equity for the entire company and all the employees who own stock in the company, since I own the same stock.” The ESOP also allowed Bloostein to “put more money into his pocket” by essentially selling his shares of Heartland Brewery to the ESOP. For more information on ESOP, click here.