By: Jordan Nottrodt Company culture means more than just setting up a ping pong table in an open-concept office space. Company culture represents how your business works, and it can actually have a big impact on business outcomes. “I used to believe that culture was ‘soft,’ and had little bearing on our bottom line. What I believe today is that our culture has everything to do with our bottom line, now and into the future,” said Vern Dosch, CEO at National Information Solutions Cooperative ( NISC ). And he’s right. Company culture isn’t some nebulous idea invented by wellness industry entrepreneurs to sell books and seminars to CEOs. Aligning your core values with your business strategy helps define your brand, both internally and externally. It also helps attract top talent and enhance employee engagement in a way that yields tangible results in terms of productivity and profitability. What is company culture? Company culture refers to a company’s core values, which are reflected in the attitudes, behaviors, and practices of its employees and the organization as a whole. Think of company culture as the heart of your organization, both physically and metaphorically; it signifies the qualities that your company values, and it affects every part of your business. The way your organization operates, both formally and informally, is reflected in its company culture. It encompasses how employees feel, their work environment, the company’s mission, goals, and expectations, as well as the various leadership styles within your organization. A strong company culture fosters a positive work environment, which enhances employee satisfaction, mitigates time-consuming conflicts, and empowers team members to take pride in and ownership of their contributions to the organization as a whole. The importance of a positive workplace culture Work is a significant part of our lives; from the sheer quantity of hours spent at work to the impact a chosen profession can have on your identity, the job that you do is part of who you are. So it makes sense that finding a company that aligns with the ethics, values, and behaviors that matter most to you is vital to new hires, especially in a competitive job market. A positive workplace culture enhances the overall employee experience, and for many candidates, it’s a key factor in choosing an employment option. A Glassdoor survey of 2,000 adults revealed that 73% of respondents considered company culture to be more important than salary when it comes to job satisfaction. Boosts employee engagement Engaged employees are more productive, innovative, and committed to organizational goals. Employees who appreciate an organization’s values and have a strong sense of belonging are ultimately happier at work, which translates into more discretionary effort—staying late to perfect projects, volunteering for challenges, and proactively solving problems. This investment stems from feeling genuinely connected to the organization’s mission and seeing how their contributions matter. Drives retention and reduces turnover A strong, supportive culture reduces attrition, saving organizations significant recruitment and onboarding costs. But beyond cost savings, stable teams build institutional knowledge and deeper relationships that fuel better performance. When people feel supported in their growth and wellbeing, they naturally want to stay and contribute long-term. Fosters psychological safety When employees feel safe to speak up, own mistakes, and share ideas, teams innovate faster and solve problems more effectively. Psychological safety means people can express themselves without career consequences. This openness accelerates problem-solving because issues surface early, and team members freely share ideas, ask for help, and give honest feedback that drives better decisions. Enhances employer brand Companies known for positive culture attract top talent, giving them a competitive edge in talent acquisition. Strong employer brands act as talent magnets, drawing candidates already aligned with organizational values. This cultural fit leads to faster onboarding, better performance, and higher retention. Top performers choose organizations where they can do their best work while growing professionally. Builds resilience during change Positive cultures with strong values help teams navigate uncertainty, organizational shifts, or crises with greater alignment and cohesion. When change hits, employees have shared values and trusted relationships to anchor them. This foundation prevents panic and fragmentation, while strong cultures maintain performance standards even during turbulent times, creating a significant competitive advantage. Different types of company culture A well-defined company culture motivates employees to exhibit desired behaviors. Therefore, tailoring your culture to your company’s goals can help encourage traits and behaviors that benefit your business strategy. Clan culture Also known as a collaborative culture, clan culture focuses on teamwork and prioritizes relationships, communication, and participation. (In PI terms, this is known as a Cultivating culture .) Adhocracy culture Often found in successful startups, adhocracy culture is centered around innovation, risk-taking, and an entrepreneurial mindset. (At PI, this organizational culture is an Exploring culture.) Market culture A focus on the bottom line characterizes market culture. Profitability, meeting quotas, and reaching goals are what matter most. (PI refers to this culture as a Producing culture.) Hierarchy culture The most traditional type is a hierarchy culture, which has a clear chain of command, a specific way of doing things, and a focus on stability, reliability, and the status quo. (PI calls this a Stabilizing culture.) Freedom & responsibility culture (e.g., Netflix ) This culture operates on a simple principle: hire talented people, get out of their way, and hold them accountable for results. No micromanaging or endless processes—just the freedom to work how you work best. It’s designed for self-motivated people who don’t need hand-holding. Lattice / flat culture (e.g., W.L. Gore & Associates ) Instead of a corporate ladder, think of a spider web instead. This culture ditches traditional hierarchy for a flat, interconnected network where people take initiative, communicate directly across all levels, and rally around a shared purpose. Intrapreneurial innovation culture (e.g., 3M , Google’s 20% Rule ) Employees get to be entrepreneurs without leaving the company. This culture dedicates time and resources for people to pursue creative passion projects that align with the overall goals of the business. It’s innovation from the inside out. How to build a framework to improve company culture Many companies want to improve their culture, but aren’t sure where to begin. They need a framework to guide them – and steps for establishing that framework. 1. Define and codify values. Once you define your values, translate them into clear goals (e.g., diversity, wellbeing). Start by getting crystal clear on what you actually stand for—not just nice-sounding words on a poster, but the real behaviors and principles that drive your organization. Once you’ve nailed down your core values, translate them into specific, measurable goals that people can actually work toward, like concrete diversity targets or wellbeing metrics. This gives everyone a shared language and clear direction for what “living the values” actually looks like. 2. Reinforce via rituals and infrastructure Create regular touchpoints like innovation days, hackathons, recognition programs, or team rituals that reinforce what matters most to your organization. These aren’t just feel-good activities—they’re strategic investments that make your culture tangible and keep it front of mind. Values without action are just wishful thinking, so you need to build them into the fabric of how work gets done. 3. Enable autonomy with guardrails. Use Netflix’s ‘loosely coupled’ model or Gore’s peer leadership. Give people the freedom to operate within clear boundaries—think of it as providing the sandbox, not dictating every grain of sand. This means establishing non-negotiables (the guardrails) while letting teams figure out the “how” of getting things done. The goal is to create alignment without micromanagement, so people can move fast and make decisions without constantly asking for permission. 4. Foster psychological safety. People need to feel safe to speak up, take risks, and yes, even fail sometimes—that’s where real innovation and growth happen. Leaders set the tone by being open about their own mistakes, asking for feedback, and showing that it’s okay to not have all the answers. When psychological safety is real, you get honest conversations, creative problem-solving, and people who actually want to bring their best ideas forward. 5. Measure and adapt. Utilize regular employee experience surveys and pivot based on the feedback. Culture isn’t a “set it and forget it” kind of thing—it needs constant attention and course correction based on what’s actually happening on the ground. Run regular pulse surveys and focus groups to get honest feedback about what’s working and what isn’t, then actually do something with that data. The key is closing the feedback loop by communicating what you heard and what you’re changing as a result. 6. Sustain through leadership. DEI (diversity, equity, inclusion) wellbeing, and authenticity must be modeled and prioritized from the top. Culture change dies without consistent leadership commitment—people watch what leaders do, not just what they say. This means executives need to visibly prioritize things like diversity, employee wellbeing, and authentic communication in their own behavior and decision-making. When the C-suite walks the walk on culture initiatives, it sends a clear signal about what actually matters in the organization. Company culture examples (of highly engaged teams) There are two ways company culture becomes established: 1. A set of beliefs, expectations, priorities, and attitudes that materialize on their own within a group. 2. Vision, values, passions, and goals are deliberately designed, developed, and delivered from the top down . Actively cultivating culture is far more likely to result in a positive work environment. Here are three awesome company culture examples. Southwest Airlines Southwest Airlines believes that happier customers lead to greater customer satisfaction—and higher company earnings. They “hire for attitude and train for skill,” and employee retention is at the heart of everything they do. According to the Southwest Airlines Careers page , “Our Culture is woven into all aspects of our business and our Employees’ lives, from the way Employees treat each other to the way that our Company puts our Employees first. Three vital elements of our Culture are appreciation, recognition, and celebration.” Their nine core values are clearly stated and divided into three categories: How I Show Up, How We Treat Each Other, and How Southwest Succeeds. Salesforce Salesforce often lands on “best places to work” lists due to its strong sense of culture. Instead of rec room-like offices with free food and games, Salesforce focuses on family and service to provide a different employee experience. As stated on its careers page , Salesforce’s five core values guide the business and its relationship with stakeholders: “Our values-driven company—built on trust, customer success, innovation, equality, sustainability, and a responsibility for one another and giving back to our communities—has transformed cloud computing and is committed to making the world a better place. Twenty-two years after our co-founders, Marc Benioff and Parker Harris, handwrote the company’s goals on the back of an envelope, Salesforce’s people, culture, and values have remained strong.” HubSpot HubSpot is so committed to its culture that it created a 128-slide presentation deck of its Culture Code , which has been updated more than 25 times. In the company’s own words, “HubSpot culture is driven by a shared passion for our mission and metrics. It is a culture of amazing, growth-minded people whose values include using good judgment and solving for the customer. Employees who work at HubSpot have HEART: Humble, Empathetic, Adaptable, Remarkable, Transparent.” The following line from the Culture Code does a great job of summarizing the importance of intentionally shaping culture: “Whether you like it or not, you’re going to have a culture. Why not make it one you love?” Considering current trends and insights So, how is company culture evolving in 2025? These are the new trends we’re seeing. Psychological safety, owning mistakes, and transparency drive innovation. The most innovative teams in 2025 aren’t the ones that never mess up—they’re the ones that fail fast, learn faster, and aren’t afraid to talk about what went wrong. Leaders who openly admit their mistakes and create space for honest post-mortems are seeing breakthrough ideas emerge from their teams. This shift toward radical transparency is becoming a competitive advantage as organizations realize that psychological safety is the secret sauce behind sustained innovation. Authentic DEI embedded in culture builds talent loyalty. DEI initiatives that feel like checkbox exercises tend to fall flat, while organizations that weave diversity, equity, and inclusion into their actual decision-making processes are seeing incredible talent retention. The difference is authenticity—when DEI shows up in how you hire, promote, allocate resources, and solve problems, employees notice and stick around. Companies that treat DEI as a core business strategy rather than an HR program are building the kind of workplace loyalty that’s harder and harder to find. Remote/hybrid-first cultures reinforce culture via frequent in-person summits. The rising and sustained popularity of hybrid and remote work environments has presented a challenge for some organizations in building and maintaining company culture, particularly those that relied on the in-office foosball and free beer concept of culture. The organizations thriving in hybrid work aren’t trying to recreate the office experience remotely—they’re being intentional about when and why people come together in person. While day-to-day culture is shaped by clear values, transparent communication, and keeping everyone aligned on business strategy, the magic often happens during those periodic in-person summits. These aren’t just team-building retreats ; they’re strategic investments in connection that help remote and hybrid teams maintain a sense of belonging and shared purpose, which can be harder to cultivate through screens alone. The key is to ensure your culture is values-driven first, so that it can be translated anywhere. Then use in-person time to deepen those connections and reinforce what makes your organization special. How PI can help develop your company’s culture As a talent optimization platform , The Predictive Index understands the importance of people. Our proven talent optimization framework aligns business strategy with people strategy in a way that supports the success of both your company and its culture. Our science-backed suite of tools is designed to help you: Hire the right people for your needs . Inspire your people to work at their best . Assemble and lead high-performing teams . Boost engagement and build a world-class culture . With PI, you have the means to level up your current culture, optimize your talent, and achieve your business goals. Put the power of people data to work, and that data will work for you.

As much as the workplace has evolved over the last decade, the challenge of balancing AI and productivity alongside workforce dynamics remains as old as time. For as long as humanity has existed, there has been a spectrum of work ethic. At one end sit the boisterous and ambitious “go-getters,” while the disengaged and rarely responsive “quiet quitters” sit at the other. However, all too often, the critical mass who are positioned squarely in the middle are overlooked. Take Note of the ‘Quiet Workers’ These middle employees are what I like to call “quiet workers,” the dependable, heads-down, no-hysterics, drama-free employees. They may not be a company’s top performers or chasing the C-Suite , but they are also far from laggards. Because they are neither flashy nor problematic, it can be easy to overlook their contributions; however, the reality is that “quiet workers” are the backbone of every company. They are the people getting the lion’s share of the work done each day, and ultimately, that makes them the force moving business forward. Every organization needs those who show up each day ready to complete their role to the best of their ability. This dynamic is evolving even more rapidly with the emergence of artificial intelligence . The relationship between AI and productivity is already driving significant, measurable improvements. As those gains in efficiency continue to gain momentum, “quiet quitters” have fewer places to hide, and the most ambitious are unlocking new ways to get even further ahead, creating an even bigger gap for “quiet workers” to fill. This widening bell curve leaves even more work on the plate of the “quiet worker,” and as a result, leaders must take proactive action to tap into the full potential of this group. Give the Middle the Floor: AI and Productivity Gains Leaders must ensure that employees remain engaged and connected , both with one another and with the company. To do so, they must regularly recognize and reward employees’ successes. Employee recognition isn’t solely about retention or culture; at its core, it propels performance and productivity. In fact, all employees are at risk of being less engaged when they feel unnoticed by their leadership teams for so long that they fail to see the upside in applying themselves, slipping down the slope to a bare minimum mentality. While the current job market has softened significantly, “quiet quitters” can stretch out their job search while doing just enough to avoid getting fired, leaving a slow but damaging drag on productivity. Left unchecked, “quiet quitting” can run rampant across organizations, becoming a viral case of the “why-even-bothers.” In the age of AI, don’t just develop the very top and lowest performers — bring all employees along for the ride. Leaders also must invest in learning and development for their team. If we fast forward four years to the AI-driven workplace, AI won’t replace the majority of employees — just those who fail to evolve. To scale AI effectively and ensure their workforce is prepared for what’s ahead, leaders need to ensure they have a strong bench of employees who can: 1) envision use cases for AI, 2) build AI, and 3) operate AI. High performers will lead innovation, and “quiet workers” offer untapped potential for effectively utilizing AI tools and agents with proper training, as they are disciplined, dependable, and open to learning new ways to work smarter. By developing employees’ uniquely human abilities and helping them find ways to responsibly utilize AI, leaders can ensure that AI and productivity go hand in hand, enhancing processes and enabling more efficient work. “Quiet workers” can reclaim time for the organization by learning more and developing tools for individual use. The continuous growth of the “quiet worker” propels the growth of the organization as a whole. AI can help organizations produce higher-quality work in less time. With AI comes a shift from traditional success metrics — such as time spent working, attendance, and activity logs — to more meaningful measures like performance and productivity. While “quiet quitters” risk being replaced by automation, leaders who focus on AI and productivity can make bigger strides toward the future by empowering “quiet workers” to help lead the charge, rather than living in fear of it. This story first appeared in Inc. About the Author: Joe Galvin Joe Galvin is the Chief Research Officer for Vistage Worldwide. Vistage members receive the most credible, data-driven and actionable thought leadership on the strategic issues facing CEOs. Through collaboration with the Vistage community. 

By Trent Lee — The CEO’s Sage Here’s something I say often: Every business problem is a people problem. And most people problems? They’re structure problems in disguise. That’s why the fourth pillar of execution— Activities & Structure —isn’t just about charts and checklists. It’s about designing the machine that drives your strategy, day in and day out. Start with Vision—Then Structure Too many leadership teams try to organize their business around current roles, personalities, or politics. That’s backwards. Your organizational structure should follow your vision. First, get crystal clear on: What are we trying to accomplish? Where do we want to be 18–24 months from now? From there, you reverse-engineer the structure needed to support that growth. What roles, functions, and accountabilities must exist to make the vision real? Design that first—then staff it. It’s the business equivalent of choosing your offense before drafting your team. Running a West Coast passing offense? You better have linemen who can protect the quarterback. Structure ≠ Org Chart Let’s clear this up: your org chart is just a visual. What matters is the accountability structure behind it. This is why I often lean into the Accountability Chart popularized in EOS by Gino Wickman. When done well, it strips away fluff and focuses on: The 3–5 core things each seat is truly accountable for One boss per seat—no dotted-line nonsense Clear lines of ownership across the entire org This creates clarity, trust, and hyper-accountability—without micromanagement. And here’s a bonus: it allows individuals to wear multiple hats intentionally. If someone is both Sales Manager and Key Account Rep, they show up in both boxes. That’s fine—as long as responsibilities are defined and tracked in each role. Keep It Simple, Build It for Growth Complexity kills execution. Design your structure with simplicity and scalability in mind. A good rule of thumb: Build the structure for where you want to be 18 months from now—not just where you are today. This forces you to think ahead, eliminate redundancy, and avoid patchwork hiring decisions based on who’s available instead of what’s needed. Also, don’t let a new hire’s skills dictate the role. I see this too often—someone talented joins the team, and suddenly the role bends around them. That’s like changing your entire offense because a backup quarterback wants to run the option. Define the structure first. Then hire to fit it. Final Thought: Review It Quarterly Your accountability chart isn’t a “set it and forget it” tool. Review it at least quarterly. As the business grows, changes, or pivots, your structure needs to evolve alongside it. If it doesn't, you’ll eventually find yourself misaligned—and wondering why execution is stalling. The structure behind the strategy is where execution actually lives. Design it with clarity. Review it with intention. And don’t be afraid to adapt it as you grow. — Trent Lee helps growth-stage CEOs align people, structure, and strategy for real-world execution. Follow him on LinkedIn or visit www.compassleadershipadvisors.com for more insights.

By: Patrick Ungashick In Part 1 of this series , we examined how to handle the stream of inquires that you may receive about potentially selling your business. We also discussed how to conduct an introductory call with an inquirer if you decide to investigate a specific opportunity, including important mistakes to avoid and information you should gather. In Part 2 , we explored how to prepare your company’s initial financial statements to share with the potential buyer after signing an NDA, once reviewed by a specialist mergers & acquisitions (M&A) attorney. We also provided two educational resources created by our team at NAVIX to help you evaluate if you are ready to sell your company (Download our white paper “Top 10 Signs You are Not Ready to Sell Your Company” ), and to help determine if this potential buyer might be the right deal (See our webinar "Knock Knock!...How to Know if the Potential Buyer at Your Door is a Waste of Time or the Opportunity of a Lifetime" ) for you. In this final part of the series, we will explore the importance of putting together an advisory team if you intend to pursue a sale of the company. If you have reached this point this article series, that means you have been contacted by a potential buyer to acquire your business, and you have taken the first steps of speaking with that party and providing them with company financial statements properly prepared for outside review. To proceed further, it is time to convene an advisory team to guide you and your business through this process. Let’s explore who needs to be on your team, and the role that they will play. Accountant We will start with perhaps the most obvious advisor that you will need—an accountant. Most successful business owners have an existing relationship with an accountant or accounting firm for tax and perhaps audit services. Therefore, you probably do not need a new accounting relationship to assist you with the potential sale of your company. But you need to make sure that your accountants are informed about your situation and qualified to provide the required advice and services. Share your situation with your accountant at the earliest opportunity. Verify that your accountant has extensive experience assisting business owners with the tax, accounting, and transaction issues that come with the sale of a company of your general size and characteristics. There is a good chance that your existing account is fully qualified in this area. If not, often your accountant has a colleague that they can introduce into the situation. You will need your accountant to advise and assist you with some to all of the following issues associated with the sale of a company: Tax planning: evaluating the tax impact of a sale and recommending any potential tax-saving strategies and tactics Tax compliance: making sure that your company is current and compliant on all tax issues including: federal, state, sales, and payroll taxes Assistance preparing the company for due diligence and sale, including potentially providing an audit and/or a quality of earnings (QofE) review as well as working capital analysis Most business owners intuitively know they need to involve their accountant when considering a sale of the company. Just make sure you contact the accountant as soon as possible, and verify they are experienced in transactions of your company size and profile. Mergers and Acquisitions (M&A) Lawyer Unlike with an accountant, many business owners do not maintain a regular relationship with an M&A lawyer. Therefore, you may need to find and engage an M&A lawyer to join your advisory team. In Part 2 of this article series, we first encountered the need for an M&A lawyer, when reviewing and signing an NDA with your potential buyer. If pursuing the sale of a company, working with a M&A legal specialist is a must-do. A competent and proactive M&A lawyer will provide incalculable protection to you and your company throughout the negotiation and purchase process. Your potential buyer likely has expert legal advisors on its side, and you need them too. Your M&A lawyer will provide many important services during this process, including: Legal review and guidance for all relevant transaction documents and agreements such as letters of intent, purchase agreements, employment agreements, non-compete agreements, shared services agreements, etc. Negotiation of terms and conditions to reduce your risk and ensure your deal structure is consistent with market norms and standards Assistance with preparing the company for due diligence and sale, including reviewing company legal and operating documents, contracts and agreements such as leases, customer contracts, vendor agreements, joint venture agreements, etc. If you do not have an existing relationship with an M&A lawyer, ask your business attorney or your accountant to recommend several M&A lawyers to consider. The sooner this professional is on your team, the better. Investment Banker In most situations, engaging an investment banker to represent your company in the discussions and negotiations with a potential buyer is a wise move, even if you are only considering this one potential buyer. (See our webinar "Knock Knock!...How to Know if the Potential Buyer at Your Door is a Waste of Time or the Opportunity of a Lifetime" to learn how to cost-effectively engage an investment banker for a targeted process that involves just one or a very small number of potential buyers.) This is especially true if your company leadership/management team does not have extensive experience acquiring and/or purchasing companies. Again, your potential buyer almost certainly has a team of people who have negotiated the purchase and sale of many companies. It is important that you have the same experience and expertise on your side too. A common question we hear from business owners is “How do I select an investment banker?” Business owners should apply these four criteria to find and select an investment banking relationship: 1. Typical Deal Size – Select an investment banker that routinely works with companies of similar size and value to your business. A banker who usually works with $10 million companies may not be the best choice if your business is worth $100 million, and the reverse. To discern if the size is a good match, ask the investment banker to list five to ten recent transactions that he or she directly represented, including company size, industry, and other relevant data. If the banker is part of a larger team or firm, be sure the list includes transactions that your investment banker directly worked on, and not a list of deals done by other people from that firm. 2. Industry Experience – In many cases, it makes sense to select an investment banker who has relevant experience in your industry or sector. This applies if your industry is highly specialized, technical, or presents a niche market. A banker with experience in your industry needs less ramp-up time, possesses a deeper understanding of industry factors influencing company value, knows relevant industry trends, and may have relationships with potential buyers. However, in some situations it can be disadvantageous to work with an investment banker who specializes in your industry. That investment banker may have ongoing relationships with the more prolific buyers in your industry—relationships the banker may not want to push hard to get you the highest sale price. Also, being too much of a specialist may insulate the banker, leaving them unaware of potential buyers outside the traditional players. 3. Compensation Alignment – In recent years, investment bankers have evolved into a greater variety of compensation methods and practices. For example, some investment bankers charge a fee payable upon the successful sale (thus commonly called a “success fee”) that is expressed as a percentage of the total company value at sale. Another approach is to charge a flat fee or tier of flat fees, with or without an incentive on top of the flat fee tied to achieving a higher sale price. To further complicate matters, retainer fees can greatly vary in amount from one banker to the next, and some bankers credit their retainer against the success fee, while others do not. This diversity requires you to sift through a wider range of compensation methods, but you gain the opportunity to select a banker whose compensation structure aligns with your situation and preferences. 4. Your Other Advisors Support Your Choice – Selling a company is a team sport. An investment banker usually plays the lead role in negotiating with the potential buyer but will need help from your other advisors along the way. Ask your other advisors for their input on which investment banker you intend to use, not just to protect your interests but also to make sure that you create a team of advisors who work together effectively. Exit Planner (that’s Us) The last professional to add to your team is your exit planner. At NAVIX we specialize in exit planning, and we have extensive experience assisting business owners pursue and successfully exit by way of company sale. Our sole focus is to help our business owner clients plan for and achieve successful exits. Engaging us creates three potential advantages: save you time, reduce your risk, and help you net more money at the end of the process. 1. Save You Time – Reading this three-part series of articles probably has highlighted for you that selling a company is a significant time demand. The time burden is greater if you and your leadership/management team have limited experience in these transactions, and if you were put into this potential sale situation on short notice. Furthermore, when selling a company, it is imperative that you and your team avoid getting distracted or bogged down with the sale. While in discussions with the potential buyer that party is closely watching the company’s financial results. If the company misses its revenue or profit targets during the sale process, which most commonly occurs when the leadership team does not have enough time to lead and grow the company while simultaneously assisting with the sale of the company, that can cost you a lot of money or even kill the deal. When selling a company, insufficient time equals lost money and increased risk. Engaging NAVIX saves you time, because our experience means we know what needs done ahead of time, and how to get it done as quickly as possible. 2. Reduce Risk – All of the professionals on your advisory team—your accountant, M&A attorney, investment banker, and exit planner—help reduce the risks that inherently come selling your company. Those risks are not just legal and transactional. Common risks include the potential that: o Employees, customers, competitors, or vendors prematurely learn your company is for sale o You fall short of reaching the amount you wanted to net from the sale o You and your business partners find yourselves divided about the sale opportunity (if applicable) o Your potential buyer turns out to be unqualified, dishonest, or predatory o You close on the deal but the buyer later trashes the company culture and/or reputation o You receive less than 100% cash at closing, but never see the rest of the funds o You sell too soon when you should have just waited At NAVIX we understand these risks. We help clients implement an exit plan that identifies potential concerns and implements tactics that take risk off the table and out of the deal. 3. Net More Money – The final way NAVIX adds value to business owners seeking to exit successfully and sell their company is to potentially increase net value from the transaction. Not all companies sell for the same price or multiple—we understand the factors that drive business value at sale. Perhaps you have heard that companies in your industry are selling for some multiple range, such as “between 6x to 10x earnings” for example. That is helpful to know, but which company gets a 6x at sale and which gets an 10x? We help companies maximize the multiple through our proprietary analysis tool called the Transferable Value Score, contact us to see how it works. The Transferable Value Score analyzes 80 factors not directly related to revenues or profits, that drive company value today and at your exit. Raising your company’s Transferable Value Score can help you sell your company for a premium multiple and favorable terms. Working with NAVIX is like hiring a part-time, temporary team-member who’s only job is to help you exit successfully: maximize your company value, exit on your own terms and timetable, and build a sustained business legacy. Conclusion and Next Steps Through these articles you have learned what it takes to explore and pursue the potential sale of your company. You understand the important steps and have a clear plan for creating an advisory team who are going to help you fulfill our exit goals. At this point, we’d be glad to speak with you to learn more about your specific situation and see if we can help you like we have assisted hundreds of other business owners. Contact us to schedule a complimentary and confidential phone or video call.

By: Andrew Barks Even the most high-performing teams go into slumps – often at inconvenient times. The September slump spares few, creeping in as summer closes and employee engagement wanes. From starting pitchers to the stock market, everyone seems to suffer as school gets back in session and shorter days set in. But the most resilient organizations don’t just weather these seasonal changes; they flip them to their advantage. By understanding the underlying causes of performance dips and proactively preparing for them, businesses can not just minimize negative impacts, but capitalize on what’s known as the September surge. This surge represents a unique opportunity for businesses to invigorate their teams and operations by strategically harnessing available talent and renewed energy. For HR teams, it’s key to understand the factors behind the slump, so you can better predict – and positively respond to – how it might manifest at your organization. Understanding the September Slump September can be a real challenge for can HR teams and business leaders aiming to sustain engagement and production. Several factors can contribute to this seasonal shift, including: Vacation hangover: Returning from summer vacations can leave employees feeling less engaged and focused, struggling to re-acclimate to demanding work schedules. Seasonal Affective Disorder (SAD): The onset of shorter days and less sunlight can trigger symptoms of SAD in some individuals, leading to decreased energy and mood. Shifting work-life balance: The return to school for children often means a significant shift in family routines, increasing stress and diverting focus for many employees. Energy depletion: The cumulative effect of summer activities, combined with the anticipation of a demanding Q4, can lead to a general sense of fatigue and lower energy levels. recruit millennials on social media Failing to address these factors can lead to tangible negative outcomes for businesses: More sick days and mental health-related absences: A dip in well-being often translates to more time away from work. Higher turnover rates: Employees may seek new opportunities if their current environment doesn’t support their well-being or career aspirations during challenging periods. Decreased productivity: Q4 planning and execution can suffer significantly when the workforce isn’t operating at full capacity. More workplace conflicts and less collaboration: Stress and disengagement can strain interpersonal relationships within teams. Reduced participation in company initiatives and meetings: Apathy can lead to a lack of enthusiasm for organizational goals. Capitalizing on the September surge so employees can thrive While the slump presents challenges, it also sets the stage for the so-called September surge. This is a period characterized by a renewed sense of purpose. In many cases it means more hiring – a fresh influx of talent and potential for growth. This can translate to: A refreshed talent pool: Many professionals consider career changes in the fall, making it a prime time for recruitment. Other people whose children are back in school may have more availability and inclination to explore new roles. Renewed focus and planning: The end of summer often brings a desire for structure and forward momentum. Employees and job seekers might be eager to set new goals and contribute meaningfully as the year progresses. More contract- or project-based Workers: The freelance market often sees an uptick in talent availability as summer engagements wind down, offering flexibility for short-term projects or specialized needs. How employers can adopt a proactive and supportive approach Prioritize employee well-being and flexibility. Acknowledge the seasonal shifts and offer support. Consider flexible work arrangements, mental health resources, and programs that promote work-life balance. Initiatives like “wellness Wednesdays” or focused mindfulness sessions can help employees navigate stress and re-engage. Start strategic recruitment drives. Launch targeted recruitment campaigns in September. Highlight your company culture, professional development opportunities, and commitment to employee well-being. Focus on roles that can invigorate existing teams, or fill critical gaps for Q4 and beyond. Invest in professional development. Autumn can be an ideal time for training and upskilling. Employees are often receptive to learning new skills as they settle into new routines. Offer workshops, online courses, or mentorship programs to boost morale and capabilities. Leverage project-based talent. For specific projects or seasonal needs, consider bringing in contract or freelance professionals. This can provide a valuable injection of production without the long-term commitment, allowing your core team to focus on strategic initiatives. Communicate and set clear expectations: Transparent communication about upcoming goals and challenges can help employees feel more prepared and less overwhelmed. Break down larger objectives into manageable steps to maintain momentum and reduce stress. By understanding the ebb and flow of seasonal impacts on the workforce, businesses can turn what might traditionally be a period of decline into an opportunity for growth and revitalization. The September surge is a powerful antidote to the slump, offering a chance to recruit top talent, invigorate existing teams, and set the stage for a strong finish to the year. But the most resilient organizations minimize the damage by recognizing the reasons behind performance dips, preparing for them, and helping employees offset their effects before most companies’ end-of-year crunch times.

We analyzed 47 leadership development programs serving CEOs and executive teams, evaluating them against measurable criteria for business impact and long-term outcomes. When you’re responsible for leading a company or developing executive talent, you need programs that deliver measurable results rather than theoretical concepts. We examined programs based on their ability to drive actual business outcomes, provide accountability structures and enable long-term leadership transformation. Our analysis shows that the most effective leadership development programs combine expert facilitation and peer learning with structured accountability systems. Below are the top 8 programs that consistently produce results for leaders and organizations. Ranking Criteria We evaluated leadership development programs using 5 critical factors that determine real-world effectiveness: Business Impact Measurement (30%): Programs must demonstrate quantifiable improvements in business performance, revenue growth and decision-making quality through member outcomes and third-party validation. Peer Learning Quality (20%): The caliber and relevance of fellow participants directly impact learning quality. Programs with carefully vetted, revenue-matched peers provide more valuable insights and networking. Expert Facilitation (20%): Professional guidance from experienced practitioners with real P&L responsibility creates better outcomes than peer-led or academic-only approaches. Accountability Systems (15%): Effective programs include structured goal-setting, progress tracking and follow-through mechanisms that ensure participants implement what they learn rather than just consume information. Sustained Engagement Model (15%): Long-term development requires ongoing interaction rather than one-time events. Programs that offer continuous support and foster relationship-building produce lasting transformation. Top Leadership Development Programs for 2025 Top Leadership Development Programs – Descriptions & Reviews 1. Vistage Vistage provides monthly peer advisory groups for CEOs of $5M+ companies, combining professional executive coaching (Chair) facilitation with structured accountability systems. Members work through real business challenges using proven frameworks while building sustained relationships with non-competing peers. For those seeking to expand leadership development to their C-level teams and beyond, Vistage offers tailored programs for every level of leadership in an organization: the Key Executive Program for the CEO’s direct reports, the Advancing Leader Program for experienced managers and team leads, and the Emerging Leader Program for high potentials and rising stars. • Business Impact Measurement: Vistage members have a history of growing 2.2x faster than non-members and sustaining their businesses 4x longer than average companies. Member companies report consistent improvements in revenue growth, decision velocity and operational efficiency. • Accountability Systems: Monthly progress reviews with both peer groups and individual Chair coaching create multiple layers of accountability. Members set specific business goals and track measurable outcomes. • Peer Learning Quality: Groups include 12-16 CEOs from non-competing companies generating $5M+ in revenue, ensuring relevant operational complexity and strategic insight exchange. • Expert Facilitation: Accomplished Chairs with 15+ years of P&L responsibility guide sessions using proven issue-processing methodologies developed over 65 years. Summary of Online Reviews Sustained Engagement Model: Monthly full-day meetings, combined with individual coaching sessions, foster ongoing relationships that deepen over time, rather than ending after Vistage members report “doubled the annual revenue to $22 million” and “business has grown significantly — up 30%.” Members consistently cite strategic guidance: “they recommended acquisition as my best option… within 3 months, I acquired a company” with measurable accountability driving results. 2. Stanford Executive Program Stanford’s Executive Program provides intensive leadership education through case studies and strategic frameworks, complemented by networking with global executives. The program focuses on building critical thinking capabilities for senior leaders. Business Impact Measurement: Participants report improved strategic thinking and expanded professional networks, though quantifiable business outcomes vary significantly across participants. Accountability Systems: Limited to program duration with some alumni networking opportunities, but lacks ongoing accountability structures for implementation. Peer Learning Quality: Attracts high-caliber international executives and entrepreneurs, creating valuable networking opportunities with diverse global perspectives. Expert Facilitation: World-class Stanford faculty with strong academic credentials and consulting experience to guide curriculum delivery. Sustained Engagement Model: Intensive residential format with GSB Alumni Status after program completion, but limited ongoing structured support. Summary of Online Reviews Stanford Executive Program participants call it “the best program in the world” and report “SEP gave me brilliant knowledge to transform our organization, while establishing a worldwide network of connections.” Participants describe how “it widened the realm of what’s possible” for career transformation. 3. Harvard Business School Executive Education Harvard’s Executive Education programs utilize a case-study methodology and draw on world-renowned faculty to develop strategic leadership capabilities. Programs range from short courses to extended leadership development tracks. Business Impact Measurement: Strong brand recognition and networking value, with participants reporting enhanced strategic perspective and career advancement opportunities. Accountability Systems: Program-specific assignments and peer feedback during sessions, but minimal post-program accountability structures. Peer Learning Quality: Attracts senior executives from Fortune 500 companies and international organizations, creating high-value peer connections. Expert Facilitation: Harvard faculty bring academic excellence and consulting experience, although they may have limited hands-on operational leadership experience. Sustained Engagement Model: Intensive program format with alumni access but relies primarily on individual initiative for ongoing development. Summary of Online Reviews Harvard Business School participants report “the program was instrumental in helping me secure my new position as CEO” and describe the experience as “completely life changing. It’s changed how I look at the world.” Participants note building confidence at “this incredible institution.” 4. Center for Creative Leadership The Center for Creative Leadership specializes in behavioral leadership development, combining assessments and feedback with experiential learning. Programs focus on self-awareness and interpersonal effectiveness. Business Impact Measurement: Strong focus on leadership behavior change with documented improvements in 360-degree feedback scores and team effectiveness measures. Accountability Systems: Includes action planning and some follow-up coaching, with structured feedback processes throughout program participation. Peer Learning Quality: Mixed participant backgrounds from various industries and company sizes, providing diverse perspectives but varying relevance. Expert Facilitation: Specialized leadership development facilitators with behavioral psychology backgrounds and practical coaching experience. Sustained Engagement Model: Multi-month programs with coaching support and some ongoing development resources for continued growth. Summary of Online Reviews Center for Creative Leadership participants describe “nothing short of transformative” experiences that provide “insights into how my personality traits drove my behaviors and the impact those had on other people.” Members value the “dynamic environment” for leadership exploration and strategic development. 5. Dale Carnegie Leadership Training Dale Carnegie offers practical leadership skills training through workshops focused on communication and interpersonal effectiveness, building team leadership. Programs emphasize confidence-building and relationship management. Business Impact Measurement: Participants report improved communication skills and team relationships, with some documentation of productivity improvements. Accountability Systems: Workshop assignments and peer practice sessions provide accountability during program participation with limited post-training follow-up. Peer Learning Quality: Open enrollment attracts leaders from various backgrounds and company sizes, creating networking opportunities with mixed strategic relevance. Expert Facilitation: Trained facilitators utilize a proven curriculum that emphasizes practical skill development and confidence-building. Sustained Engagement Model: Multi-session workshop format with some ongoing reinforcement materials and practice opportunities. Summary of Online Reviews Dale Carnegie participants report “my self-confidence is sky high” and immediate career advancement: “halfway through this course, I was promoted to Director, and now I manage 100+ people.” Graduates gain hiring advantages with “full-time position” offers over internships. 6. Franklin Covey Leadership Franklin Covey offers leadership development based on Stephen Covey’s principles, emphasizing personal effectiveness, trust-building, and organizational culture transformation. Business Impact Measurement: Organizations report improvements in employee engagement and culture metrics, with some productivity gains documented. Accountability Systems: Includes planning tools and some follow-up support, though implementation depends heavily on organizational commitment. Peer Learning Quality: Corporate-sponsored participants from client organizations, creating internal networking but limited external peer learning.  Expert Facilitation: Certified facilitators trained in Franklin Covey methodology with a focus on principle-based leadership development. Sustained Engagement Model: Multi-day workshops with organizational implementation support and ongoing resource access. Summary of Online Reviews Franklin Covey participants describe profound impact: “This session has changed me inside out,” and professional improvements, including “I have grown in the organisation, improved my organising skills.” Participants note “Franklin Covey programs have been an eye opener” for cross-functional communication enhancement. 7. Korn Ferry Leadership Development Korn Ferry combines leadership assessment with development programs, leveraging their executive search expertise to create leadership profiles and development plans. Business Impact Measurement: An assessment-driven approach provides a measurable baseline and progress tracking, with some correlation to improvements in leadership effectiveness. Accountability Systems: Assessment follow-up and coaching support provide some accountability, though it varies by program design and organizational commitment. Peer Learning Quality: Program participants are typically from client organizations, creating valuable internal networking with limited external peer exposure. Expert Facilitation: Korn Ferry consultants bring executive search perspective and assessment expertise to leadership development programs. Sustained Engagement Model: Assessment-based approach with coaching support, though ongoing engagement depends on organizational program design. Summary of Online Reviews Korn Ferry participants call it “simply the most important development experience in my long professional life” and report “life-changing experience” that “completely shifted my thinking about myself as a leader.” Members value getting “what I really needed” through assessment-driven insights. 8. Gallup Leadership Development Programs Gallup offers strengths-based leadership development programs that utilize assessment tools to pinpoint individual strengths within teams and organizations. Their programs combine the CliftonStrengths assessment with workshops and coaching designed to enhance leadership effectiveness and employee engagement. Business Impact Measurement: Organizations using Gallup programs report measurable improvements in employee engagement metrics, though business impact varies significantly based on implementation quality and organizational follow-through. Accountability Systems: Assessment-based approach with structured follow-up sessions and coaching support, though long-term accountability depends heavily on organizational commitment and internal champions. Peer Learning Quality: Programs primarily focus on internal team development within client organizations, offering limited opportunities for external peer learning or cross-industry insights. Expert Facilitation: Gallup-certified facilitators deliver a standardized curriculum based on CliftonStrengths methodology, with training in assessment interpretation and organizational development principles. Sustained Engagement Model: Programs range from one-time assessments to multi-month engagements with coaching support, though ongoing development typically requires additional organizational investment and program renewals. Summary of Online Reviews Gallup program participants comment that “it’s the best investment someone could make” and that the “time invested in the sessions was always worth it.” One member noted that the experience “really allowed me as a manager to use my team in a more sophisticated way.” Specialized Leadership Development Categories Best Leadership Programs for Executive Teams These are the best programs for CEOs in executive development programs who want to offer leadership development training to their teams. Rank Program #1 Vistage Leadership Development Programs #2 Harvard Advanced Management Program #3 Wharton Advanced Management Program #4 Stanford Executive Leadership Development Best Leadership Programs for Local Networking These programs are ideal for individuals seeking local networking opportunities and referral groups that prioritize connections with local business owners. Rank Program #1 Business Network International (BNI) #2 Local Chamber of Commerce CEO Forums #3 YPO Regional Chapters #4 Vistage Small Business Program Best Leadership Programs for Emerging Leaders These programs are ideal for CEOs and small business owners at the beginning stages of their leadership journey. Rank Program #1 Vistage Small Business Program #2 Center for Creative Leadership: Emerging Leaders #3 Franklin Covey Emerging Leaders #4 Dale Carnegie Emerging Leader Institute Why CEOs Choose Vistage for Leadership Development If you’re evaluating leadership development programs for yourself or your executive team, you need more than classroom learning. You need practical support that drives business results through real-world application. For Your Development You get monthly sessions with CEOs facing similar challenges, guided by a Chair who’s walked in your shoes. Instead of theoretical frameworks, you work through actual decisions affecting your business using proven methodologies. For Your Executive Team Your leadership team members gain access to specialized programs designed around the operational challenges they face daily. They learn from peers managing similar responsibilities while developing skills that directly impact their business performance. Measurable ROI Unlike programs that end after a few weeks, Vistage creates sustained accountability that ensures implementation. Members consistently report faster decision-making, improved strategic clarity and stronger business performance. Local Impact with Global Resources You work with leaders in your market who understand your business environment while accessing insights from 45,000 members across 40 countries when specialized expertise is needed. The investment in leadership development pays dividends when it’s structured for real-world application rather than academic theory. Vistage provides the accountability, peer insight and expert guidance that transforms how you lead and how your business performs.

By Trent Lee — The CEO’s Sage One of the most common traps I see in growing businesses is this: They measure everything… except what actually moves the business forward. Leadership teams often show me dashboards packed with KPIs—revenue, margins, pipeline, utilization—and assume they’re in control of execution. So I ask:“Which of these metrics helps you course-correct before a result shows up in your P&L?” Crickets. This is where the third pillar of execution comes in: Balanced Metrics . Lagging vs. Leading: Know the Difference Most companies are over-reliant on lagging indicators—metrics that tell you what’s already happened. Revenue, profit, EBITDA… important? Absolutely. But they’re the outcome, not the input. To manage execution in real-time, you need leading indicators—those signals that tell you if your strategy is working before the financials come in. Want to improve revenue? Then track:  • Number of sales conversations held • Proposal-to-close ratios • Follow-up velocity • Referral rates • Net Promoter Score • Employee engagement These are the gears that turn the revenue engine—not just the readout at the end of the month. What a Balanced Scorecard Looks Like A strong, execution-focused scorecard includes metrics across five categories: 1. Financial – Revenue growth, margins, cash flow 2. Customer – Retention, satisfaction (NPS), complaints 3. Internal Process – Efficiency, cycle times, error rates 4. People & Culture – Turnover, engagement, training completion 5. Sales Activity (Leading Indicators) – Daily/weekly outbound touches First-time meetings booked Conversion rates at each sales stage Sales cycle length CRM hygiene & pipeline velocity Sales activities are often overlooked but are essential execution indicators. They reflect effort, focus, and momentum—all critical levers in B2B and service-based businesses. The Problem with Misaligned Metrics Many leadership teams say they want innovation, agility, or customer intimacy—but then measure only financial efficiency. That’s like saying you want to lose weight, then only tracking how much you spend on groceries. If your metrics don’t align with your strategy, your teams will chase the wrong goals with perfect precision. Final Thought: Don’t Measure for Measurement’s Sake Metrics should drive conversations, decisions, and accountability—not fill dashboards to make us feel productive. Here’s a rule of thumb I share with CEOs: Just because you can track a number doesn’t mean you should. Ask yourself: “Would I do anything differently if I had this data?” If the answer is no? Don’t track it. Balanced, intentional metrics turn confusion into clarity—and strategy into execution. — Trent Lee helps CEOs and leadership teams scale execution by aligning strategy, leadership, and performance systems. Connect on LinkedIn or visit www.compassleadershipadvisors.com to learn more.

A Strong Business but a Modest Multiple When Sean McAuliffe sold his company, he had a lot going for him. His distribution business was generating nearly $19 million in revenue. Margins were healthy. Growth was solid. And yet, when it came time to sell, his company was valued at around four times EBITDA, a relatively modest value for a $19 million company. The reason? Sean didn’t fully control his supply chain—and buyers noticed. Dependency Makes Buyers Nervous Sean’s model was simple. He bought car key fobs from suppliers in Asia and sold them to locksmiths across the U.S. It was a classic distribution play: source cheap, sell smart, and manage relationships. Sean executed well. He even created his own brand, Keyless to Go, and FCC-registered his products—moves that set him apart from competitors. But despite these efforts, Sean was still reliant on third-party suppliers. He didn’t own the factories. He didn’t control manufacturing. His business was exposed to the decisions of vendors half a world away. In today’s environment—where tariffs and geopolitical tensions can change the cost and availability of overseas goods almost overnight—relying on foreign suppliers feels riskier to acquirers than ever. This kind of dependency is exactly what The Value Builder System™ measures through the Switzerland Structure—one of the eight key drivers of company value. The Switzerland Structure assesses whether your business is overly dependent on any one customer, employee, or supplier. Buyers pay a premium for companies that aren’t beholden to any single relationship. Why Monopoly Control Drives Value  Contrast that with businesses that own their brand, control their production, or have proprietary products. Companies with a defendable moat—what we call Monopoly Control—are 40% more likely to have received a written offer to acquire their business, according to analysis of more than 80,000 business owners who have completed their Value Builder Score report. When you control your product and customer experience, you influence your valuation upward—giving buyers fewer reasons to discount your business. The Takeaway for Owners Sean still built a great business. His execution created life-changing wealth. But if he had owned the supply chain or had exclusive manufacturing rights, he likely would have commanded a higher multiple. The takeaway for business owners: Building a valuable company isn’t just about revenue and profit. It’s about creating a business that can thrive without being dependent on any one customer, employee, or supplier.

By: Patrick Ungashick This is Part 2 of a three-part article series. In Part 1 of this series, we examined how to handle the stream of inquires that you may receive about potentially selling your business. We also discussed how to conduct an introductory call with a inquirer if you decide to investigate that opportunity, including important mistakes to avoid and information you should gather. Finally, we left off with asking the potential buyer to send a non-disclosure agreement (NDA) if you wish to continue the discussion with that party. From this point, let’s look at the next steps. Step 1: Engage a mergers and acquisitions (M&A) lawyer to review the NDA on your behalf. Too many business owners skip this step because NDAs appear short and harmless. Do not make that mistake. A small legal bill can protect you and your company against big potential problems later. Use a lawyer who is an M&A specialist. M&A is a highly specialized legal field. Just as you would not ask a general practitioner medical doctor to do heart surgery, do not ask a general-purpose attorney to do M&A work. Your M&A lawyer will review the NDA and, if necessary, recommend edits. NDAs are usually not contentious, so if this potential buyer becomes difficult to work with on the terms of the NDA, then you might have just learned that it’s time to conclude discussions with this party. Step 2: Getting your M&A lawyer to approve the NDA is usually simple compared to this step. Before you submit the signed NDA, you must be ready to provide the potential buyer with the information they are going to ask for. In most cases, your potential buyer will immediately ask for financial reports starting with your company’s previous three to five years’ income statements and balance sheets, and additionally the company’s current financial results year-to-date. Do not sign and submit the NDA until you have these reports available and up-to-date, and specifically formatted to share with a potential third-party buyer. Many owners will not have these reports already formatted in the necessary manner, so let’s examine that issue. Step 2a: Review the financial reports to remove any overly sensitive information that may be visible, such as the names of specific customers, distributors, vendors, lenders, or employees. Rename or redact any protected information. Step 2b: Make sure that the income statement shows the company’s adjusted EBITDA. If you are 100% certain that the company financial report accurately shows the adjusted EBITDA, then you can proceed to Step 3 below. If your company has not historically tracked adjusted EBITDA (and many companies don’t), or if you are not fully certain about what constitutes adjusted EBITDA and how to calculate it, keep reading. In many situations, potential buyers will typically first look to a company’s adjusted EBITDA to determine their interest in acquiring that company and at what price. EBITDA stands for Earnings Before Interest, Taxes, Depreciation and Amortization. Contrary to popular perception, EBITDA does not calculate a company’s profitability. However, buyers put such importance on EBITDA because it shows the company’s current earnings power. Many owners do not regularly calculate EBITDA while operating their company, instead focusing on revenue and profits. Yet for most buyers, EBITDA is the first and most important step in determining what they will pay for a company. If that’s EBITDA, then what is adjusted (also described as “normalized”) EBITDA? Like many business owners, you might not always make decisions that maximize your company’s EBITDA. Often you have other priorities, most commonly minimizing taxes. Many tactics that reduce taxable income also artificially reduce EBITDA. Common examples include: Above-market compensation: If your salary exceeds the amount that you could reasonably pay somebody else to perform your job, your extra above-market compensation reduces the company’s earnings, hence lowering EBITDA. Company-paid expenses: EBITDA is also lowered by ownership-related perks such as vehicles, expense accounts, travel reimbursement, and large retirement plans contributions. Inflated lease: If you own an office building and lease it to your company at a higher rental rate than might be available from another landlord, the extra rent lowers the company’s taxable earnings and also reduces EBITDA. Additional payroll costs: Putting family members on payroll with generous salaries is a common tactic for many privately held companies, but also lowers the company’s EBITDA. A company’s EBITDA is not always understated. Other business decisions can cause EBITDA to be overstated. For example, if you are paying yourself a below-market salary, perhaps to free up cash to reinvest into the company or because you take the lion’s share of your income in the form of profit distributions, then the company’s initial EBITDA may be higher than it otherwise would be if you were paying yourself market-rate wages. Many issues can impact EBITDA positively or negatively, including accounting methods, employee benefits programs, and product development costs. The bottom line is that many privately held companies either do not track their EBITDA, or their initially reported EBITDA has not been adjusted to reflect business decisions that may understate or overstate the figure from the perspective of an outside third-party buyer. Calculating your company’s adjusted EBITDA involves carefully reviewing these issues and preparing a true picture of company earnings. Items that artificially understate EBITDA are “added-back” into the figure, and items that overstate EBITDA (“negative add-backs”) are subtracted. The math is not difficult, but it is essential that you or somebody working with you has deal experience and knows the normal and customary adjustments to take. Buyers typically want to see the prior three to five years’ financial statements, so it is imperative to have adjusted the EBITDA where necessary over that entire period. Otherwise any of the following problems can occur: If your EBITDA is artificially understated, as is common, offers from buyers may be lower than otherwise possible. For example, if a buyer offers to pay seven times the earnings for your company, then every $1.00 that your EBITDA is understated will cost you as much as $7.00 off your sale price. If your EBITDA is overstated, this will likely come out during negotiation or the due diligence process, throwing a rather large wrench into your plans to sell the company for a certain price. For example, a buyer paying seven times the earnings may reduce its offer price by $7.00 for every $1.00 that EBITDA is discovered to be overstated. Whether under or overstated, if you and the potential buyer cannot agree on what the accurate adjusted EBITDA is, it will be hard to reach agreement on the company value and other important figures, undermining your chance to sell the business. If your company does not have financial statements ready for a buyer to review—and this is common—then you must temporarily pause the discussion with this inquirer until the company reports have been properly reviewed and recast. Explain to the potential buyer “You contacted me, and my company financial records are not yet ready for a buyer. We both know that this common when a company is not being marketed for sale, which mine is not. My team and I will get our reports ready and then I will get back to you.” Be prepared for your potential buyer to press you to keep talking and even meet with them, because they want to keep you close and extract more information from you. In most cases it will be best to resist having any more conversations until your documents are ready. If the potential buyer is legitimate and their interest in your company is genuine, usually they will wait a few weeks while you get the company’s financial records in order. To calculate and track the company’s adjusted EBITDA, you need people on your team who are familiar with the exercise and understand how potential buyers view these issues. If your company has a chief financial officer (internally or outsourced) that has guided companies of your size through acquisitions, then he or she can likely do this work. If nobody on your current team has this experience, then in Part 3 of this article series we will discuss advisors who can help with these calculations before you sell. Step 3: Start doing your homework. If you chose to go forward with this potential buyer, the next step will be a bigger one than many business owners fully appreciate. Up to this point likely you have had a brief conversation or two with the potential buyer, and you have not shared a lot of details about your company and your personal situation and goals. (Hopefully you have not.) However, once you sign the NDA and submit the company’s financial data, your conversations with this potential buyer will rapidly expand and dig into greater detail about your company and you. What started as a harmless little inquiry can quickly become a time burden and confidentiality risk. The potential buyer often will bring more people from its team into the conversations and will pivot into asking for more information and documents. They will also want to meet and may ask to visit your facilities—a scary proposition if employees or customers learn what you are considering. The entire time, you will be sharing detailed information with a company that either is a competitor or might be one in the future if they don’t acquire your company but later buy another. Your potential buyer likely has acquired many companies and possesses a team of experienced staff and expert advisors. In contrast, if you are like most owners then your company may be one of the few and perhaps the only company that you ever sell. You cannot take the risk of going forward without doing your homework to be prepared. You must learn what it takes to sell a company, evaluate if you are truly ready, and assemble your own team to guide you through the process. NAVIX has three free resources designed to help business owners in your situation prepare for your next steps: Download our free white paper “Top 10 Signs You are Not Ready to Sell Your Company”. Just like any important decision, the question of selling your company should not be made hastily. Every business owner and every company are unique, yet there are some universal signs that business owners can use to help determine if they are ready to begin the sale process. Overlooking any one of these signs can lead to a significant amount of lost value or derail the sale altogether. Because most business owners exit only once, it is important to learn what is involved in getting ready to sell—otherwise you risk discovering half-way through that you missed something critical. This white paper explores each of the ten signs and offers resources to help owners address each issue. At the conclusion, the white paper identifies further steps to help you prepare for the sale of your company. Watch our free on-demand webinar “Knock Knock!...How to Know if the Potential Buyer at Your Door is a Waste of Time or the Opportunity of a Lifetime.” This educational webinar explores how to recognize if a potential buyer is serious, how to evaluate the situation quickly, effectively and in the safest way (especially if the inquiry comes from a competitor), and how to sell your company without the cost and risks of a full sale process. Contact us to schedule a complimentary and confidential phone or video call to discuss your situation . Since 2009 we have helped about 500 business owners prepare for exit, and we are glad to learn about your situation and offer any assistance that we can.