Thought Leadership

Provisors Webinar: Preparing Your Business for the “New Normal”

By Thought Leadership

Nicole Kamm

Partner, Fisher & Phillips, LLP
ProVisors, Woodland Hills 2

Matt Taylor

Partner, CorpStrat
ProVisors, Woodland Hills 3

It’s back to business for most states, and as we move closer to lifting stay-at-home orders, businesses are preparing to get back to work. This 60-minute presentation, presented by Nicole Kamm, with employment law firm Fisher Phillips, and Matt Taylor, with CorpStrat, will address key considerations for employers and those who work with and advise employers as they bring employees back to work.

Why your mind is the best tool for being an inspired, high performing leader

By Thought Leadership

Charlotte Smith

Life Design for Lawyers & Leaders
ProVisors, San Francisco 5

Many lawyers and other professionals with the ability to work from home have settled or have started to settle into a new routine – juggling work with childcare, homeschooling, and other familial responsibilities.

There’s plenty of advice on the internet and social media saying we should be grateful for what is available in this time of uncertainty and scarcity – especially with respect to our jobs and careers.

As a lawyer Executive Coach who specializes in life and career design I’ve seen first hand how gratitude can serve as a helpful coping mechanism. But I also want you to know that it’s OK to not want to settle for this new reality – to still want to be successful and want the same dreams you had pre-pandemic.

Some of the most successful businesses and ideas were born in difficult times. Microsoft, Netflix, and Airbnb to name a few.[1]

Now you might be thinking, that’s wonderful Charlotte. Good for those companies, but I’m just trying to get through each day without losing my mind. Fair. But here’s why I bring up these successes. Life and career design, plus mindset work can help you get through each day with less overwhelm. It can take you from feeling stuck, to a space where you feel more clearheaded. Where you can accept the current reality, but continue working toward your definition of success.

In lawyer coach ‘speak,’ life design and mindset awareness can move you from fear, to coping, to inspired leadership (More on inspired leadership later).

Why does this matter for lawyers? Because you’re always switched on for your clients. You practice law like athletes practice their sports. Athletes physically train to get better. They also get coached on mindset so they can perform better. Lawyers practice their ‘sport’ but don’t get coached on mindset, which means they can’t perform optimally. That’s why mindset awareness is a total game changer for lawyers. Let’s explore further.

Types of Mindsets
To be a top performer, you need to know the types of energy you experience – the ones that zap you and leave you drained and the ones that invigorate you and propel you forward.

In my life design coaching for lawyers programme, we start with the Energy Leadership Index (ELI), a Forbes Top 10 Assessment tool that shows the lenses through which you view life, particularly when you’re stressed.

The ELI Assessment measures your propensity towards two types of energy: anabolic and catabolic. Anabolic is the energy that’s constructive, motivating, and growth-oriented. Catabolic energy, on the other hand, is draining, resisting, and fueled by stress.

The ELI Assessment categorizes these two types of energy into seven levels, the lowest two levels characterized by catabolic energy and the other five by increasing levels of anabolic energy. An energy spectrum, if you will. Rather than delve into the details of those seven levels, this article will discuss the three core mindsets that straddle the various levels: fear, coping & inspired leadership.

The end goal is to get you aware of the different mindsets you experience so you can learn to shift to that which will best serve you and those around you.

Fear Mindset

Imagine wearing a pair of completely opaque lenses – the type that blocks out any light and essentially blinds you. That is what the fear mindset looks like. It’s catabolic energy. It makes us feel trapped by our circumstances and leads us to catastrophize.

Maybe your law practice has slowed down over the past few weeks. Maybe clients haven’t been paying on time given the current economic situation. And maybe (likely) you’re worried that we’re on the cusp of another Great Recession.

Sound familiar?

You’re not alone. Lawyers have a heightened fear mindset because they’re trained to think through worst-case scenarios. This training makes lawyers excellent at issue spotting and problem solving for their clients, but it can negatively impact their personal lives, causing them to experience intense stress responses.

Consumption habits make matters worse. The news is depressing, and social media has become a ‘who is quarantining better’ competition. Many of us binge watch Netflix to get away from it all. We eat more junk food and drink more wine. We consume whatever makes us feel good in the moment to escape what’s happening in the world around us.

The problem is that poor consumption habits exacerbate the fear mindset. We all need self care, but if we’re not careful, a night of Netflix and wine becomes two, three, four nights. In other words, if we’re not mindful, our consumption habits can put our fear mindsets into overdrive and cause us to feel even more stuck.

When we feel this way, we cannot perform at our highest level. We cannot show up for ourselves and our clients in the manner we’d like to. We become like the injured athlete who wallows in misery instead of thinking through how they can get back in the game and help their team.

So how do you get unstuck? You learn to shift your fear mindset into a coping mindset.

Coping Mindset

The coping mindset is the critical shift from catabolic to anabolic energy. Think of it as the process in which the opaque lenses start to get clearer. It’s where we move from feeling like all the bad things are happening to us and ‘life isn’t fair’ to ‘we’re all just trying to do our best in this difficult time.’

The coping mindset allows us to acknowledge the difficulty of a situation but accept it for what it is. When we cope, we can move from stress responses and overwhelm to a place where we see things more objectively. We can go from reaction to proactive action.

Let’s see how this works by going back to the earlier examples of a law practice slowing down and clients not paying on time.

Shifting from a fear to coping mindset allows us to accept the fact that we cannot control the economic slowdown and its ramifications. We can then accept that our practice will be slower in the short-term and that certain clients might not be able to pay on schedule. Once we accept these facts and let go of fear, we can start thinking objectively and problem solve more creatively.

For instance, if your practice area has slowed down, rather than panic, you may:

  • Ask your clients what problems they’ve encountered a result of COVID-19
  • Start thinking through ways in which you can help solve those problems
  • Think about whether you can pivot your practice and learn a new area of law?
  • Design a new payment plan to accommodate clients who are having problems paying on time due to the current situation

To make this critical shift from fear to coping, you must first recognize when you’re in a fear mindset and choose to start moving towards a coping mindset. Doing so isn’t easy at first but gets easier with practice. Getting intentional with your self care also helps.

Moving to a coping mindset is an exercise in self-discovery. Experiment and find ways to cope that work best for you – e.g., nature walks (my favorite), exercise, a healthy diet, meditation, and mindful consumption. Once you find what suits you, you’ll find that you’re better equipped to shift from fear to coping.

Picture the injured athlete again. Imagine they’ve taken the time to get upset and fear for the future of their career. Now imagine they’ve started to cope – they’ve found that meditation works best for them, allowing them to focus on rehab and getting back in the game one forward motion at a time. That’s what we’re going for with a coping mechanism: acceptance and the start of forward motion.

Inspired Leadership Mindset

Inspired leadership refers to the clarity of mind that comes when we’ve had time to feel and acknowledge fear, accept the situation for what it is, and take steps forward in an inspired way. It is anabolic energy. There’s a lovely poem, ‘If,’ by Rudyard Kipling[2] that perfectly encapsulates inspired leadership.

A few of my favorite lines:

As Kipling’s poem artfully expresses, inspired leadership is the space where we perceive the world neutrally – as neither good nor bad, where we feel motivated and empowered to succeed. To put this in perspective, let’s revisit the examples of a law practice slowing down and clients not paying on time.

Let’s say you’re not making much headway with a new practice focus you’re trying out. When you’re in an inspired leadership mindset, you can confidently and calmly work collaboratively with your clients to figure out how you can best serve them. You can retool your practice without getting defeated. Now let’s say you’ve implemented a new payment plan for those clients who haven’t been able to pay on time and the new plan isn’t working for whatever reason. Rather than get frustrated and spiral into a fear mindset, you’re can rework and move forward with a plan B.

As these hypothetical examples show, inspired leadership is a “can do” mindset. It allows you to lead (motivate) yourself and others in a positive manner. It allows you to continue working toward your definition of success regardless of the situation around you. And it certainly will help you be resilient and persevere in what is one of the most challenging years we’ve ever experienced.

Let’s picture the injured athlete one last time. Imagine they’ve gone through rehab. Maybe their injury has healed, and they can get back to competing. But maybe the injury has caused permanent damage and will either delay or prevent them from playing their sport again. If they’ve cultivated an inspired leadership mindset, they can accept that new reality and redefine what success will look like. Perhaps it’s a year of rest and volunteering with youth sports while they continue to heal. Perhaps it’s figuring out a way to stay in the game yet off the court, as a coach or announcer.’

The key is forward movement. An inspired leadership mindset will propel the athlete forward, no matter what the circumstances. And it will do the same for lawyers who learn to harness that mindset.

Mindset Work Takes Practice

Now that we’ve explored the three mindsets, I want to reiterate that the goal is mindset awareness. It’s not about being perfect. It’s not about having an inspired leadership mindset at all times.

It’s about getting more aware of how you respond to different situations and practising shifting your mindset to that which will best serve you and those around you.

Plan Don’t Panic! How Your Business Can Survive and Thrive Post-Covid-19

By Thought Leadership

Richard Golubow

Winthrop Golubow Hollander, LLP
ProVisors, Irvine Spectrum

Years ago, a very wise and successful client told me that as people age, they don’t like ambiguity. Those words resonated with me then, and even more so now. We crave certainty and guidance right now as we try to overcome the fear and uncertainty about COVID-19. Business owners, managers and operators want to know what to do. These people recognize that when running a business, they’re not just responsible for themselves and their family. They also feel deeply responsible for their employees, vendors and customers.

COVID-19 is having a negative impact on almost the entire business environment. Nationwide, businesses are closed, others are suffering disruptions including reduced hours of operation from government restrictions, while still others are confronted with supplier or customer delays. Regardless of the business sector, we’re all wondering when shelter-in-place orders will be lifted so that we can all get back to work, as if COVID-19 never happened.

Many people have placed a great deal of hope and optimism on the more than $2 trillion-dollar federal stimulus package, supplemented by state, local, and private efforts, that have been announced. While the response to COVID-19 begins to take shape, the looming question is “will this be enough?” The old adage of plan for the worst and hope for the best is how every business must proceed in this volatile and unprecedented environment. Businesses must immediately enter crisis management mode as the certainty of more economic slowdown is 100%.

Now is a critical time for businesses to engage experienced financial restructuring advisors to assist with the following: update financial projections to evaluate cash flow in worst, likely and best-case scenarios, with an emphasis on hoarding cash; create alternative business plans based upon the updated financial projections; assess cash availability from current streams of revenue, existing loans, and lines of credit; assess unencumbered assets that could be used as collateral to borrow additional funds; review insurance contracts to identify claims for business interruption coverage; analyze current contracts with a focus on force majeure clauses, notification requirements and default provisions; summarize employee wage/benefit requirements and available assistance programs; and implement cost reduction plans to achieve or maintain positive cash flow.

A review of existing contracts and loan agreements by insolvency counsel experienced in bankruptcy and bankruptcy alternatives is critical, with a particular focus on financial covenant compliance and cash-flow-related default provisions. Lenders and other counterparties to agreements will expect management to have engaged competent legal and financial advisors to help navigate the complex landscape of non-bankruptcy restructuring alternatives that include forbearance agreements, waivers of certain financial and nonfinancial covenants, and other amendments to existing agreements. The goal for management is to implement strategies that maintain value moving forward, and to do so without the need to seek formal bankruptcy court intervention.

While most businesses will suffer, and many will fail, your business can survive. The key to survival is to plan, not panic!

ProVisors Webinar: Leading Before, During, And After The Crisis

By Thought Leadership
ProVisors - Daniel Linskey

Daniel Linskey
ProVisors Milton
Managing Director, Kroll

ProVisors Webinar – May 8, 2020

Dan Linskey provides lessons on leading before, during, and, after a crisis. Daniel shares how he and others effectively led team members to prepare and respond to unthinkable challenges. The presentation provides information for everyone’s “File Cabinet of Leadership”.

Read More

Employment Lawsuits Are Expected to Rise Dramatically due to COVID-19

By Thought Leadership

Barry Cohn

Really Great Employee Benefits/JorgensenHR
ProVisors, Westlake 5

Employers have a lot on their minds right now, but they should pay close attention to ensure their actions don’t trigger trouble down the road.
I have attended 3 employment law firm webinars in the past week about COVID-19 and labor law concerns. All three firms stated that plaintiff law firms are busier than ever with employees who want to sue over layoffs, terminations, furloughs, reduction in hours and reduction in pay.

  1. Wage & Hour Claims

    With the sudden and unplanned switch to work-from-home arrangements, companies may not have had time to adequately spell out policies and expectations for employees
    As a result of employees working remotely, standard operating procedures and controls relating to meal and rest breaks have been disrupted. A lack of adequate recordkeeping and oversight increases the risk of wage and hour claims, including overtime pay. In addition, the use of personal computers for business purposes triggers questions and claims relating to companies’ reimbursement policies with respect to cell phone use, internet charges, among many others.

  2. Employee Safety and Claims

    Companies have been required to balance urgent business needs with employee health and safety during the crisis. There will likely be class action suits relating to exposure to the virus in the workplace. In addition, the stress of the pandemic and resulting health needs will increase the likelihood of individual as well as class claims. There is also the possibility of work comp issues for employees that are injured in their own homes during remote work hours.

  3. ERISA Claims

    The stock markets have taken a wild ride in the past few weeks. 401(k) plans have taken a major hit across the board, and some people will be wondering if their advisors should have been doing more to protect them against any loss. Any down market prompts greater scrutiny of past fiduciary decisions.

  4. HIPAA and Employee Medical Privacy Claims

    One of your team members notifies you that they’ve tested positive for COVID-19.

    • What do you do?
    • Do you share this information publicly with the rest of the team so they’re aware of their own exposure?
    • How you handle employees’ medical information will undoubtedly come under scrutiny in the coming months.

    Companies have a legal obligation under HIPAA to protect Protected Health Information (PHI) and Non-Public Private Information (NPPI). Employee privacy claims are likely to follow as the way companies handle sensitive information concerning employees’ health and medical diagnosis is questioned.

  5. Disparate Impact Layoffs Claims

    For many companies, layoffs and downsizing will be unavoidable in the coming months. What can be avoided though, is claims of discrimination, if such layoffs are carefully and prudently planned.

    As companies address the need for layoffs the disparate impact of decisions on who is retained and who is terminated will face scrutiny, opening the door to possible claims of age discrimination and the possibility of clams around race, national origin, sex and retaliation.

    Tips for Employers

    • Create remote work policies including timekeeping and meal and rest break rules
    • Keep track of who is working remotely and regulate their access levels
    • Keep logs of remote access activity
    • IT should configure all devices before allowing them access to the network
    • Have each employee sign a Confidentiality Agreement
    • Create a BYOD (Bring Your Own Device) Agreement
    • Have a Media Sanitization Policy that indicates how employees should dispose of PHI and NPPI
    • Train staff on how to recognize social engineering attacks
    • Ensure that your VPN and other remote systems are secure
    • Enhance system monitoring

Source: & TotalHIPAA Compliance

The War for Human Talent Rages On (In Spite of AI)

By Thought Leadership

Michael Ashley

Ink Wordsmiths, LLC
ProVisors, Irvine South

Beware, we are told. Automation is coming, pant the breathless pundits warning of A.I.-induced job loss. Ratcheting up the fear meter, presidential candidate Andrew Yang recently sounded the alarm for unprecedented employment gutting — not just among blue-collar professions, but white-collar jobs, too. Meanwhile, renowned studies paint a gloomy picture, one in which rapid A. advances kneecap our middle-class dreams, sapping the hopes of young people who are left to wonder: Will there be a job for me when I graduate?

And yet, the on-the-ground reality doesn’t fit these sour prognostications.
If anything, it offers good news for workers. According to Gallup, (would-be) employees possess more than a little leverage in the present job contest. “The data are clear: U.S. businesses are in a full-fledged talent war and employees have the edge — the demand for jobs exceeds the supply of workers, and employees are confident about their chances.”

In spite of media augurs seemingly bent on catalyzing another recession with nonstop talk of downturn indicators, the economy is okay. Actually, we’re living through history’s longest-running bull market. “This means employers must be smart about attracting and retaining the right people,” says leadership, culture, and compensation consultant Laura Conover. “They must also avoid the pay equity quagmire if they want to win the talent war without facing legal challenges.”

To Conover’s point, pay equity concerns are no laughing matter. This is especially true for businesses in California facing stricter employment rules than other states. In 2015, it passed the California Fair Pay Act which “prohibits an employer from paying its employees less than employees of the opposite sex, or of another race, or of another ethnicity for substantially similar work.”

The Walt Disney Company knows how seriously courts take this issue. In 2019 several women filed a suit for discriminating against female personnel by paying them less than their male peers. Though the company has vowed to fight the accusation with its own counsel battalion, the judiciary’s message is unmistakable: Remunerative exploitation will not be tolerated.

“Still, while very few organizations would object to the need for such workplace protections in the 21st century, not enough are making compliance the priority it should be,” says Conover. No stranger to compensation disputes, Conover’s decade-spanning career has included litigation support. She has testified about economic losses in high-stakes employment matters for companies such as IBM and United Airlines. The United States Equal Employment Opportunity Commission also appointed her as a consultant on a compensation matter involving a middle market manufacturing company.

As a trusted advisor helping more than 300 organizations with compensation structures, she is used to contextualizing the complexities businesses face surrounding this issue. “Here’s how this works in real life,” she says. “Imagine I’m a hiring manager for a big bank wishing to attract top talent. It so happens we already employ a female branch manager. She’s been with us for a decade and earns $85,000 base salary a year. I also happen to be considering a white male who looks great on paper for the same role at a different branch. Because the economy is so sound and because this candidate could go to work elsewhere, I must offer an appealing salary — but one that still complies with the law.”

On its face, such a hypothetical challenge might seem simple. If it weren’t for a phenomenon called ‘ghosting,’ according to Conover. You see, our hiring manager has been burned before. Many times. And not just from white male applicants. Time and again, he found the ideal candidate. The person’s CV checked all the boxes. The interview went well. He/she seemed to be into working for his bank.

Read More

7 Keys to Enhancing Resilience

By Thought Leadership

Sherry Dutra

Dutra Associates, LLC
ProVisors, Merrimack Valley

Professional burnout is more common amongst lawyers than many would typically think, even in the best of times. In the midst of the coronavirus pandemic, lawyers are dealing with a wide range of challenges as they balance helping their clients with managing business operations and the economic impact on their firms. Never has resilience been more critical to overall well-being. There is no question that you will encounter situations in the coming days and weeks where the outcome isn’t quite what you expected or you’ll experience what you might view as a “failure”. To weather the inevitable challenges you’ll face, resilience will be a muscle you’ll want to enhance. Resilience will allow you to ride the roller coaster of this volatile and uncertain time and equip you, now and long after this crisis is over, to effectively make the impact you desire without burning out in the process.
What is Resilience?
The definition of resilience is, in part, “the ability to recover readily from adversity or the like; buoyancy”. The word buoyancy brought a childhood memory to mind. I grew up near the ocean and used to play for hours in Cape Cod Bay. I can remember tossing around a beach ball with my friends while we splashed in the water. No matter what any of us did to push that ball under the water, it always popped right back up to the surface – ready for the next game. Resilience is very much like that beach ball. No matter what you face, if your resilience is strong, you can stand back up, learn from your experience, reset your course, and be ready for what’s next.
7 Keys to Enhancing Resilience
Here are some practical keys that you can incorporate into your life that will support you in enhancing your resilience. These keys will not only positively impact your professional life but also your personal life. So what are you waiting for? Let’s explore.

  1. Stay aligned with your purpose: I believe that we all have a purpose and that discovering yours will keep you on track no matter what circumstances arise. What are you uniquely equipped to offer to the world?What brings you the most joy and passion? The answers to these questions will give you some clues to your purpose. With a defined purpose, that you are aligned with, you naturally attract people, resources, ideas, and opportunities that support you.
  2. Practice gratitude: Take a few moments each day, throughout the day, to appreciate and express gratitude for the people and things in your life. Stopping to notice what you are grateful for on a regular basis develops a habit of looking for good things and releases dopamine that supports a positive outlook.
  3. Set clear goals: Research has shown that the brain loves a good goal. It will work tirelessly to give you what you focus on. The most successful and resilient people set specific, measurable and time-based goals and consistently take action with the certainty that they will achieve them.
  4. Be present while working on those goals: A 2010 Harvard study found that people spend 47% of their waking time thinking about things other than what they are working on. When you are focused on the past or focused on the future, you are taking your energy away from what’s going on right in front of you. Mindfulness, or being focused on the moment, has been shown to modify brain processes that support resilience. And, experiencing and enjoying the moment is part of the journey.
  5. Act “as if”: Your brain doesn’t know the difference between a robust vision and reality. Don’t believe that? Then, take a moment and imagine that you have a beautiful, fragrant, juicy lemon in your hand. Cut off a slice of that lemon. Breathe in that lemony scent. Now, bring it to your mouth and take a great big bite. Salivating yet? You didn’t really just take a bite out of a lemon, did you? Yet, in creating that vision, your body reacted “as if” you had. So, start to take action in accordance with who you want to be. Act “as if” you already are being, doing and having whatever it is you want to create in your practice. Your attitude will be shifted to a more optimistic place and your resilience will build.
  6. Build a supportive team: Going it alone typically doesn’t work. Without the support of others, we tend to get stuck in doing things the way we’ve always done them. Create a community of supportive people from different backgrounds and professions who can help to keep your mind open to fresh perspectives and new ideas. Having others to lean on creates resilience-building social support.
  7. Look for the gift: What is the opportunity in the situation you’re facing? What might the situation be trying to show you? By focusing on the opportunity rather than the challenge, you open the door to solution-finding rather than problem-solving. You choose how you want to “show up” in the situation and your positive focus enhances your resilience.

There is no one formula for enhancing resilience. Find what works for you and practice it on a regular basis. Over time, you are likely to find that how you respond to the inevitable ups and downs is very much in your own hands.

B2C and B2B Marketing are Converging: Will You Adapt?

By Thought Leadership

Kim Salzer

Chief Outsiders
ProVisors, Westside

While countless marketers have opined on the differences between B2C and B2B marketing, the line between the two has recently been blurred. This shift is happening, in part, because more brands serve both consumers and businesses, as when a B2C luxury bed sheet startup lands a contract with a national hotel chain. Even the companies situated squarely on one end of the B2C⁠–B2B spectrum are destined to lose out if they fail to learn from the other side.

The companies willing to innovate—by testing and adopting new methods pioneered by B2C, B2B, and even direct-to-consumer (D2C) brands—have a huge opportunity to stand out in 2020 and beyond.

We’re All Marketing to Millennials

What’s the key reason to stop parsing out B2C and B2B strategies? Today, most businesses are marketing to millennials. Thanks to Generation Y’s size—at 83.1 million, they’re the single largest consumer group—they’ve long been the obvious target for B2C marketers.

More recently, however, millennials have started moving up professionally into management positions. In 2016, millennials became the largest segment of the US workforce, and some researchers say they will make up 75 percent of the workforce by 2025. As baby boomers retire, they are stepping into decision-making roles with spending power, and B2B companies need to adjust their marketing plans accordingly.

Here are four key strategies to help B2B and B2C companies alike navigate this new reality:

Forget the Perceived Personal⁠–Professional Divide

A key tenet of B2B marketing used to be that it should be more logic-driven and focused on ROI at the earliest stages of the customer journey. B2C marketing, for its part, was supposed to appeal more to emotions upfront.

New B2B buyers, however, don’t distinguish between the personal and the professional like those in decades past. According to a Deloitte study, millennials are “transforming the status quo by seeking purpose in the organizations they serve without sacrificing the flexibility to be who they are at work.” Today’s leaders and managers build corporate culture explicitly around personal passion and social purpose.

With personal and professional identity more aligned than ever, B2Bs can borrow from B2C marketing—building brand awareness around mission and social responsibility to draw prospects in, then focusing on ROI at research and consideration phases.


Read More

Jeffrey Swett: What small business owners need to consider when they think about retirement

By Thought Leadership

Jeffrey Swett

ProVisors, Boston 4

Having been in the wealth management business for 27 years with a focus on retirement planning, there’s one tendency that’s clear. Those who have a successful retirement (successful being defined as happy and fulfilled) tend to be prepared with regard to how they will spend their time prior to selling their business.

I have found that selling business owners understand that they need to enhance the attractiveness of their business for potential buyers — recurring revenue, minimization of owner-provided value, and a diversified income stream are all fairly obvious characteristics of a desirable business.

Typically what is less obvious to selling business owners are the lifestyle and emotional adjustments that come with stepping away. Sometimes those can be just as challenging as starting and developing the business many years ago.

Here are some simple steps that could be helpful in transitioning into a successful retirement:

Have a written financial plan

Cash flow, taxes, charitable giving, inflation, estate planning and insurance should be reviewed. Additionally, be sure to consider all stages of your financial life.

Define what you want

It’s important to spend adequate time on this because according to the Nov. 2018 UBS Investor Watch survey report, 41 percent of business owners preparing to sell have no idea what they want to do with their time.

What do you want from your exit? Define your personal goals to help shape the life you want to eventually pursue. Hobbies, travel, community service, charitable inclinations, teaching, relationships and other business ventures should all be considered.

Engage your family

Only 25 percent of former business owners engaged their children about family wealth. Owners tend to involve their family only after the deal has closed. Instead, communicate your desires and expectations early- this creates a clearer picture, gives family members a chance to contribute, and allows them to feel included. Developing a family governance structure, formal or informal, can help align common values and your overall family mission.

Be aware of some common traps:

Overconfidence: Business owners typically do not lack self-confidence. This makes sense as many have overcome significant obstacles during their careers. Overconfidence, however, can cause entrepreneurs to believe they have all the answers when it comes to their investments and this can lead to excessive risk-taking.

Overoptimism: Many business owners are optimistic by nature, and this optimism cements their faith during difficult economic times. This optimism can be dangerous, however, if it proves to be excessive when evaluating investments.

Control Illusion: Owners are used to exercising control as a success factor in their business environment. As investors, however, control over the markets is not realistic. It may make sense to work with an experienced advisor to avoid making mistakes that can lead to long-term negative effects.

These action steps all take time, and should not be rushed.

In order to help ensure thoroughness and proper execution, it’s critical, I believe, to begin these discussions, and relationships with advisors, far in advance of the consummation of a sale.

Jeffrey Swett is a Financial Advisor with UBS Financial Services Inc. a subsidiary of UBS AG. Member FINRA/SIPC in One Post Office Square, Boston, MA.

Your Paycheck Protection Program (PPP) Loan Was Approved & Funded – What Happens Next?

By Thought Leadership

Jeremy Waitzman

Sugar Felsenthal Grais & Helsinger LLP
ProVisors, Chicago 1

What are the PPP Loan Forgiveness Rules You Should Know?

By now you have probably heard about the Paycheck Protection Program (“PPP,” or the “Program”) incorporated into the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), which took effect on March 27, 2020. PPP is one of the most important components of the CARES Act for small businesses—making $349 billion worth of low-interest, forgivable loans available to small businesses in immediate need of financial assistance in the midst of the COVID-19 crisis.

The initial funding approved for the PPP was exhausted as of April 16, 2020. Despite the immediate exhaustion of the Program’s funding, the SBA and Treasury have indicated that 1.6 million small businesses successfully secured funds under the Program.

While there is hope that Congress will further fund and expand the Program to accommodate additional small business applicants, those businesses lucky enough to receive funds during this initial round must now focus their attention on maximizing loan forgiveness. After all, unlike traditional loans, having a PPP loan forgiven will not count toward a recipient’s taxable income, and it will result in the loan effectively becoming a grant.

The PPP Loan Forgiveness Rules: Key Actions to Ensure Your Loan is Forgiven

To obtain the maximum amount of PPP loan forgiveness, there are a number of considerations to keep in mind, as well as steps to take to ensure that, when the time comes, your business is ahead of the curve.

Know When Your Clock Started Ticking on Your Covered Period

Under the PPP, the forgiveness/measurement period is calculated as the eight-week period beginning on the date PPP loan funds are actually disbursed (the “Covered Period”).

Create a PPP Loan File

It is essential for businesses to document every dollar spent with the proceeds of a PPP loan and have supporting documentation ready to provide to its lender at the end of the Covered Period.

While we do not yet know what exact form (or forms) will be required at the time loan forgiveness is sought, for planning purposes, be sure to maintain all correspondence, evidence, receipts and supporting documentation related to your PPP loan funds.

In addition to the above, it is anticipated that the following items will be required when seeking forgiveness:

  • Certification from the business borrower that all documentation provided in support of its forgiveness request is true and correct, and that amounts for which forgiveness is sought were actually used to retain employees and make eligible interest, rent, and utility payments.
  • For payroll costs, Form 941 and state quarterly tax reporting forms or equivalent payroll processor records that most appropriately correspond to the covered period, with evidence of retirement and health insurance contributions.
  • Evidence of business rent, mortgage interest payments, or utility payments (to the extent loan proceeds were used for non-payroll related items).
  • If self-employed, 2019 Form 1040 Schedule C.

Track (and Know) Your Average Employee Count for the Covered Period

PPP loans are eligible for forgiveness if an organization’s average monthly full time employees during the Covered Period is the same or higher than one of the approved comparison period dates.


Friendly Bob’s, a parts manufacturer for an essential business, had 85 full time employees per month from February 15, 2019 to June 30, 2019. From January 1, 2020 to February 29, 2020, Friendly Bob’s had 80 full time employees.

Friendly Bob’s received a PPP loan originating on April 15, 2020. For the 8-week Covered Period starting on April 15, Friendly Bob’s had an average of 70 full time employees. Friendly Bob’s does not rehire any additional employees during the Covered Period.

Resulting Loan Forgiveness Percentage:

Based on the above facts, Friendly Bob’s must choose the lower of 85 or 80 as its baseline full time employee count.  Since 80 is lower, this is Friendly Bob’s baseline full time employee count, against which its loan forgiveness percentage will be calculated.

Since Friendly Bob’s average employee count during its Covered Period, was 70 employees, the maximum percentage of Friendly Bob’s loan forgiveness is:

70 Covered Period employees ÷ 80 baseline employees = 87.5%

Tweaking the Facts to See a Different Outcome:

If Friendly Bob’s were to rehire 10 full time employees before June 30, 20201—in addition to the 70 currently existing employees— then assuming the original decrease in full time employees happened before April 25, 2020, then 100% of the PPP loan amount would be forgiven since the resulting full time employee count during the Covered Period would be equal to the baseline employee count of 80 full time employees.

Compensation Levels

Keep in mind: to remain eligible for loan forgiveness, at least 75% of the PPP loan proceeds must be used to cover payroll costs during the Covered Period.

Qualified Non-Payroll Costs

The remaining 25% of PPP loan proceeds can be used for non-payroll costs, such as:

  • Mortgage interest (on loans originating before February 15, 2020)
  • Rent (for lease agreements in force before February 15, 2020)
  • Utilities (for services that began before February 15, 2020)

Be sure to keep a detailed log of these payments during the Covered Period as well as all related documentation, including payment remittances, statements, or invoices.

Consider Keeping PPP Funds in a Separate Bank Account

Consult with your bank to determine its specific requirements for where to keep PPP loan proceeds. Some companies may want to set up a separate checking account that receives and disburses the PPP loan proceeds. Even if your PPP loan has already been funded, you may nevertheless still be able to set up/transfer the funds to a new account.

Using a separate account will help streamline audit tracking, eliminate commingling and provide additional transparency during your loan forgiveness review with the bank and/or the SBA.

Spending the Funds

As mentioned above, the evaluation period for loan forgiveness is the eight-week period after the PPP funds have disbursed. As such, you should be sure to spend the money on authorized expenses during your Covered Period.

To the extent you have maintained employees and payroll during the Covered Period, this should not be problematic. It may be the case, however, that your normal payroll periods will result in payments falling outside the Covered Period. Based purely on timing considerations, you may want to arrange for a special payroll with your payroll provider that will fall within the Covered Period.

Similarly, to the extent profit share or similar contributions are typically made at the end of the year, you may want to check with your benefits provider to see whether there are ways to make estimated in-year contributions and have those payments reflected as compensation for forgiveness measurement purposes. It is unclear as of the date of this article whether it will be just as effective to “accrue” these items as opposed to actually paying them, but actually paying the funds will make it unambiguous.

Applying for Loan Forgiveness

After the Covered Period runs, you will need to submit a formal forgiveness request to the lender servicing your loan. While guidance related to PPP loan forgiveness is still forthcoming (at least in part), a forgiveness request will certainly need to include all documents supporting how funds were spent and the number of full time employees and their compensation levels. Lenders will then have 60 days to actually process the forgiveness request. Since no payments are due under PPP loans for six months, the review should be completed in plenty of time.

Nevertheless—be prepared. You should contact your lender as soon as possible after PPP funds are disbursed to determine what documentation and forms it will be seeking when processing your loan forgiveness request, as well as the bank’s currently anticipated process related to loan forgiveness.

As was the case in establishing the eligible loan amount for PPP loans, there will likely be differing opinions and guidance regarding the required documentation and processes, especially in the near-term. It is certainly in your best interest to over-document and track everything in as much detail as possible so you are ready to comply with whatever requirements may be thrown at you in the future.