An Exit Interview with Jim Ramstad

Jim Ramstad is no stranger when it comes to business. From starting businesses to selling businesses and every step in between, Jim has done it all. After all his time and experience, Jim has decided it’s time for a new path in life – retirement!

Jim has been an important part of our work here at Eide Bailly, and we know his advice and knowledge will be missed. We sat down with Jim to ask him to share some of his thoughts and advice with you, fellow business owners and entrepreneurs.

How long have you worked in the business world?

Altogether, I’ve spent 49 years in the business world, involved in various aspects of business.

How/what made you want to get involved in business?

Growing up and in high school, I never even thought of getting involved in business. In fact, I wanted to be a teacher and a coach. As I grew up, I watched as my dad’s family did very well for themselves in business. As I watched their successes and trials, I became more and more intrigued, and decided it was the right path for me.

If you weren’t in business, what would you be doing?

As mentioned before, I thought about being a teacher and a coach when I was younger. Now looking at it, I think it would be fun to be in politics. Twenty some years ago, I took a personality test that determined the top two areas that would make sense for me career wise. My top two were politician and ambassador, and accountant wasn’t even on the list. I feel like ambassador made sense, and I’ve gotten to do some of that in being an ambassador for other businesses.

How long have you been at Eide Bailly?

I’ve been working at Eide Bailly for 12 years, and I was a client here before I started working here. I’ve always had a connection with the Firm, which has led me to some of the career positions I’ve been in.

What positions have you held prior to being at Eide Bailly and at Eide Bailly?

Prior to being at Eide Bailly, I held many different positions. I’ve been an accountant, controller, CFO, COO and CEO. I’ve also done business development and government relations for a company in which I got to propose a piece of legislation that actually got approved into law in the energy bill.

Here at Eide Bailly, I’ve always worked in business advisory. In 2005, I started working with entrepreneurs to help get their businesses to take off. Throughout this role, I’ve been blessed and fortunate to take my personal experiences in business and apply it to other clients and help them learn from it.

What was your favorite position and why?

I don’t think I could really pick a favorite – I’ve enjoyed them all! I’ve really enjoyed the last twelve years here at Eide Bailly. I’ve enjoyed getting to apply my past experiences while also learning new things from our clients. Although there have been challenges, I’ve found it very rewarding.

What changes did you see take place in the business/accounting world during your tenure?

The biggest and most obvious change I’ve seen is in technology. From everything being completely manual to now being nearly all online and in the cloud, it’s been a total change. When I was 26, I worked with for a trucking company that completed everything manually. I gradually helped introduce them to technology, which was a process. Now, they use technology for everything.

What advice would you offer small to mid – sized businesses just getting started?

Get an advisor. It’s important to find people who are truly and genuinely interested in you and your success, not just in selling you something or getting a fee for the job. Find these people and rely on them – don’t try to do it all on your own.

What will you miss most about Eide Bailly?

The people, hands down. I am also sad that I won’t be around to watch the Possibilities Center grow into a bigger, Firm-wide practice, but I will be paying attention and willing to help if the need arises.

What are your plans after retiring?

I’m going to stay busy. I’m going to use my facilitation skills to start some groups in the FM area, such as mastermind groups and a bible study type group. I always want to continue to be a mentor and resource for Eide Bailly professionals who may need my help. The rest of my time will be spent with family, being a grandpa and a great grandpa.

While Jim isn’t leaving us for a few more weeks, please join us in wishing him well and thanking him for all his hard work and dedication.

Exit Planning: Increasing Value

As a reminder, this blog series is based on The Seven Step Exit Planning Process created by the Business Enterprise Institute (BEI).

Today we continue our journey through the exit planning process. Our last blog discussed the importance and method of finding out the value of your business, and today we will build off that concept with step three: increasing the value of your business.

After completing your business valuation, you may have found your business is not worth as much as you hoped. Because of this, selling your business will not generate enough money for you to live comfortably the way you were hoping. Another problem you could be facing is a lack of interested buyers, which could be due to the fact your business doesn’t pose much value to them.

So, how do you solve these problems? The answer lies within value drivers, which do exactly what the name suggests – they drive up value!

It would be a mistake to assume every business, no matter the type, could increase its value by utilizing every value driver possible. After all, each business has characteristics that make it unique. However, there are seven value drivers, according to the BEI, that are common to all industries and can be tailored to match each unique business.

Management Team – One of the most important aspects of any business is its employees. When you think of a management team, you should be thinking of those employees responsible for decision making, monitoring and setting objectives and motivating employees.

So how can this team be a value driver? It’s likely the team members have a variety of talents and skills that have helped the business become what it is today, and have a proven track record of success. Potential buyers are looking for a management team with staying power; in other words, they want these talented individuals to stick with the company to help ensure success. It is also common to assume if a management team can stay in place, the company then has the ability to keep and maintain customer relationships, which keeps the company’s reputation intact. The stronger the management team, the higher the offer from the buyer is likely to be.

Operating Systems – In addition to a great management team, buyers are also interested in what systems and policies are in place to continuously generate revenue from an already established, yet still growing customer base. These systems include, but are not limited to, procedures used to generate revenue and maintain expenses, customer relationship management programs (CRM) and means of distribution. Having these systems properly established and documented show the buyer the business can continue to be profitable after sale. Think from the buyer’s perspective; as a buyer, you want to be sure the business will grow and continue forward with new ownership and that it will not fall apart when the previous owner exits.

Customer Base – We’ve touched on the customer base in the previous points, but this value driver deserves its own emphasis. Buyers are looking for a business that has an established customer base that won’t be going anywhere soon. According to the BEI, it is a great practice to have a diverse customer base in which no single client accounts for more than 10% of total sales. This adds protection if a customer(s) is lost. When buyers are willing to shell out large amounts of money, they want to make sure they are getting what they’re paying for.

Facility Appearance – Although not a huge factor for most businesses, it is still important to keep in mind some buyers are very, shall we say, picky? Some buyers have a tendency to be more reserved with their spending if the physical appearance of the business or its equipment isn’t very appealing to the eye. A clean and organized office promotes the idea that the business is also well organized. Superficial improvements, both interior and exterior, can improve the marketability of your business.

Growth Strategy – It is important to have a realistic growth strategy in place. By realistic, we mean a growth strategy that fits your business, not an elaborate plan that is not attainable. Keep your growth strategy ambitious, but also attainable. This strategy can show potential buyers specific reasons why cash flow and the business will continue to grow after it has been purchased. The growth strategy should be based on factors such as market plans, industry dynamics and demand based on demographics, to name a few. The growth strategy helps the buyer understand your business, and where it will go in the future.

Financial Controls – Financial goals are not only an important part of how a business is managed; they also help to safeguard a company’s assets and support any claims of the company’s profitability. A buyer will not spend a large amount of money on a company without first knowing what the company’s cash flow has looked like; they need to have confidence in the company. Giving buyers confidence can lead to a much higher valued sale.

Cash Flow – To piggy back off the last driver, not only do we want financial controls in place, but we want to make sure the cash flow is All of the value drivers in some shape or form contribute to a stable and predictable cash flow, so it is important to focus on all of the value drivers to operate their business more efficiently. Buyers look for companies with a solid cash flow they can increase after purchasing, and are willing to pay top dollar for these companies.

What a buyer decides to pay for your business is dependent on many factors. However, to increase that number and get top dollar for your company, it will be beneficial to follow these seven value drivers down the road of exit planning success. Following these seven value drivers can lead to a competitive advantage over other businesses that will give your business the upper hand when it comes time for buyers to decide which business they would like to purchase.


Exit Planning: Business Valuation

As a reminder, these seven steps are based off of BEI’s Seven Step Exit Planning Process

Welcome back to our series on exit planning. In our last blog, we talked about the goals and objectives needed to create a successful exit plan. One of those goals was knowing how much money would be needed from the sale of the business to maintain your current lifestyle. That brings us to the topic of this blog: business valuation.

We get it, you’re probably wondering why you need to do this now or how this applies to you. Even if you are not planning to leave the business for quite some time, or think you know what your business is worth, business valuation is an important and crucial step to ensure you have a solid exit plan in place.

Okay, let’s get down to the nitty gritty. For most business owners, their business is their most valuable asset. Sure, you might have real estate, property or stocks, but the main source of income is the business. When you sell the business, you need to know if the cash flow from the sale will be enough to sustain your lifestyle desires. So, how does this business valuation thing work?

First, it is important to note there are two types of valuations that can be done, based on how far away you are from your exit date.

  1. Thorough Valuation – If you are ready to leave the business now, it is important to have this type of valuation completed. This will establish whether your company can be sold today at its appraised value. Often times, business owners think their business is worth more or less than it actually is. This valuation ensures a correct estimate is in place.
  2. Calculation of Value – This type of valuation is usually completed annually for those who plan to leave the business, but not for quite some time. This gives more of an approximation of the value, rather than a definitive answer. It helps to determine if the business is on track.

By now, you should be able to determine which type of valuation best suits your needs. However, you’re probably still wondering why you should be doing this. After all, it is your business and you know more about it than anyone else.

Here are some of the top reasons why you should have a business valuation.

  • Determine Worth – When business owners are ready to sell, they want to receive the full and fair value from their ownership interest. But how do they know exactly what this price should be? Often times, following casual estimates and rules of thumb does not take into account location, reputation, technology and other important factors that impact the business’ worth. A business valuation, on the other hand, does consider everything. Think: would a buyer purchase a business without knowing how much to pay for it? Probably not, and you as a business owner also need to know how much it is worth in order to determine an asking price.
  • Accuracy – After determining what your business is worth, you then have a comparison factor. Once you know how much the business is worth, you can then compare that with your lifestyle desires after the sale, and accurately predict if the business sale will be enough to sustain the lifestyle, or if changes will need to be made to get to this level (our next blog focuses on the idea of increasing value).
  • All Factors Considered – Along with including factors such as technology, reputation, etc., the valuation takes into account many different scenarios and options to ensure everyone involved will get the best bang for their buck. This takes into consideration the idea that the value of the business is actually relative and not fixed, meaning it can vary based on many factors. A valuation will take into account the different buying scenarios, such as selling to a third party or selling to an insider. With the value fluctuating, having a valuation done periodically will help keep the value up to date so you have the best idea of just how much you will get from the sale.
  • Motivation – Finding out what your business is worth through a valuation can be a great form of motivation for all parties involved, but especially management and employees. Once insiders know where the business is standing and what potential it has for growth, they can often be motivated to work harder to reach these goals. A common way for this motivation to occur is through incentive programs, especially those that link the size of the incentives to the growth in the value of the business.
  • What is Fair – If you are selling a business, do you really believe interested buyers will just take your word for it and accept whatever price you say? Probably not. A business valuation can help determine the fair market value of your business, which can then help you develop a fair asking price that doesn’t offend anyone in the process.

So there you have it. A business valuation is absolutely necessary, no matter what stage of the business you are in. It is recommended to start early in case the value needs to be raised, but no matter when you decide to act, the business valuation should never be ignored.


Exit Planning: An Introduction

Chances are, as a business owner, you have heard of exit planning. But have you ever sat down and considered it in all its glory? Exit planning is a crucial step to any business, no matter what stage. In fact, the earlier you consider it, the more time you have to create an effective exit strategy that will ensure your business stays successful even after you are no longer in the driver’s seat.

Did you know that exit planning and succession planning often get confused? While the two sound similar and have some common themes, they are actually different.

  • Succession Planning – Focuses on identifying successors within a business and preparing them to replace the existing business leaders; Focuses on transfer of leadership from one generation to the next
  • Exit Planning – Analyzes all of the factors that impact a business owner, including current and future planning; Identifies strategies and steps that are most likely to allow the business owner to reach their goals

In this next series of blogs, we will be discussing a framework for exit planning and what you, as a business owner, need to know to keep your business running smoothly after you exit.

The steps we’ll be discussing are based on BEI’s Seven Step Exit Planning Process. They include:

  • Identifying Owner’s Objectives & Goals. This step will focus on identifying primary planning objectives, such as desired business departure date, who you want to leave the business to and more.
  • Quantifying Business and Personal Financial Resources. In this step, we will talk about valuation and cash flow. This will include asking yourself how much you know about the worth of your business, and how much it is expected to bring in future cash flows.
  • Business Value Enhancement. In order to make the business more appealing to your ownership interest, you must know how to increase value.
  • Ownership Transfer to Third Parties. To make sure that a smart transfer is made to a third party, this step will ensure you know how to sell to a third party in a way that will maximize your cash while minimizing your tax liability.
  • Ownership Transfer to Insiders. If you are considering transferring the business to someone on the inside, such as family, this step will be of high importance to you. This step can also help you decide whether an inside or third party transfer is right for you.
  • Continuity Planning. This step will help you ensure you have all the necessary precautions taken to be sure your business continues on if you don’t.
  • Personal Wealth and Estate Planning. It is imperative to have a plan in place to provide for you and your family post-business sale. This step will help make sure you are on the right track for financial security.

Prepare to join us over the course of these next seven blogs to learn a framework on successful exit planning and how it can benefit you and your business now, as well as in the future.


No Man’s Land: A National Treasure

In our previous blog in the No Man’s Land series, we talked about the decision to grow your business. Although a hard decision to make, there is often great reward in making this decision.

So, after thinking it through, you may have decided that growth is indeed the right path for your business to follow. You are ready to step out into this new adventure and see where your company is headed. So, what can you expect for your business with this new growth plan?

Doug Tatum, author of No Man’s Land gives some examples of what the “growth business” industry looks like:

Growth companies have an average revenue growth of at least 20% over a four year period

  • Of the 20 million companies in America, there are roughly 350,000 growth companies.
  • Most growth companies are small to mid-sized, and only 5% employ over 100 people after their growth spurt.
  • Growth companies exist in all sectors of the economy.
  • Growth companies are not all young; up to half have been in business for at least 15 years.
  • Growth companies are all over the country.
  • Growth companies are innovative. In fact, one estimation showed that these companies are responsible for two-thirds of the economy’s innovations.

Another important aspect of growth companies is that they provide and create jobs. Why are these companies hiring so many people? Well, they’re in the process of renewing and growing their business, and these efforts require all hands on deck. As these companies grow, they also need to grow their employee base to scale to keep up with the changes going on in the business.

Now, we come to the closing of our No Man’s Land blog series. We hope you have gained knowledge on how to navigate through No Man’s Land. We leave you with two closing pointers to keep in mind when you find yourself on the journey through No Man’s Land.

  • Think strategically when making decisions about the business. Also, be sure to consider factors in both the long and short term.


  • Always be conscious of the four Ms and the rules and implications that come with each.
    • Market alignment – make sure business is still meeting the needs of the market while keeping up with the entrepreneur’s visions
    • Management expertise – hire at the top, and have management that truly knows the ins and outs of the business
    • Model that is scalable – make sure the value proposition is still attainable at a higher level
    • Money – make sure money is managed and invested strategically, and is ultimately reducing the risk of the company

“Growth companies are America’s National Treasure” – Doug Tatum

No Man’s Land: Beyond Growth

If you’ve been following our No Man’s Land blog series up to this point, you’ve learned what causes you to enter No Man’s Land, the troubles you will face there and how to propel your company forward and out of this phase. By this time, you’ve thought through the four Ms (market, management, model & money) and believe you can lead your company through No Man’s Land while maintaining enough momentum to carry on, even when times get tough.

However, there is one question that needs to be answered: should your company grow? Along with that question come other things to consider:

  • Are the benefits of working through No Man’s Land always worth the large costs?
  • What does the future look like after No Man’s Land?

Some entrepreneurs are determined to grow, no matter what obstacles and costs they may stumble across. Others may want to stay at the size they have established, while innovating and working on improving their current assets. There are also those who are ready to look at their endgame and sell the business.

So, should your company get big? Well, there really is no correct answer. The journey through No Man’s Land and the climb out of it reflects not only the financial wellbeing of the business and its ability to apply the four Ms, but it also looks into the determination and ambition of the entrepreneur. Leading a company after it passes through No Man’s Land requires taking a step back, and looking at the company from an investor’s perspective. Is the business making money and providing return on investment, or is the business not going to survive the journey it went through? To be successful, the entrepreneur must decide whether running the business in a way that keeps investors happy is also consistent with their own values and dreams.

The decision of whether or not to grow your company can be terribly difficult when you don’t know what exactly will happen in the future. It is hard to decide if growth is really what is best for the business. Each path, growing or not growing, carries risks and benefits that are often hard to weigh.

Finding answers to these types of questions will help you determine a course of action that will be satisfying in the long run.

There are many reasons why entrepreneurs make these decisions, and they don’t all focus on financials, market share or the product, to name a few. In the end, the decision of whether to grow big or not becomes a personal case. You need to sit back and focus on the task of making this tough decision and ask yourself a couple questions:

  • Why did you get into business in the first place?
  • Is the business still delivering what it was set out to provide?
  • What do you hope to gain from the business?






No Man’s Land: Momentum

In our previous blog posts, we have touched on market misalignment, outgrowing your management, and outgrowing your money, to name a few. Going through all these trials may have resulted in your business losing something you didn’t realize was missing: momentum.

In the beginning, rapid growth companies possess an incredible momentum. However, going through No Man’s Land causes this momentum to disappear, leaving the business at a standstill. To get out of No Man’s Land, the company must find ways to generate momentum again. Keep in mind the other navigational rules we have discussed in prior blogs, as implementing these rules will give a sense that your company is heading in the right direction and regaining momentum.

It’s important to remember that momentum is not the product of following these rules only. To survive No Man’s Land, leaders must manage the company’s culture and decision making process to assure the feeling of forward motion exists at all times, even when survival seems impossible.

While wading through the challenges that come from this rapid growth, it is important not to neglect the company’s morale and emotional wellbeing. Money, experienced managers, and a good business model are critical if a company wants to transition through No Man’s Land; however, these assets alone are not enough.

Entrepreneurs must be sure to maintain a sense of forward momentum, even when the outlook for the company doesn’t look bright. Although momentum isn’t measureable or tangible, the feeling of moving forward brings about actual change. Because of this, the presence or absence of momentum makes all the difference for a company in the stages of transition.

So what exactly is this momentum thing we’ve been talking about? The dictionary defines it as “the force of motion”, while in physics it is described as “the mass of a body multiplied by its speed.” According to Doug Tatum, author of No Man’s Land, “Momentum in business can be viewed as institutional self-esteem.” When entrepreneurs speak about momentum, they are referring to positive energy grounded in the optimistic expectation that a company’s future will become brighter than it currently is. For a company to experience this momentum, they must have a good business model, competent management, sufficient finances and alignment with customers. Without these traits, it will never make its momentum profitable.

So, how do you go about cultivating this momentum? Unfortunately, there is no single rule or set of rules. Rather, the manner in which momentum is cultivated is influenced by qualities of an individual’s leadership style. There are some general guidelines leaders of emerging growth companies in No Man’s Land can follow to create momentum:

  1. Optimism – it is very difficult for a leader to get a company off the ground, much less through No Man’s Land, if the leader is not optimistic. No Man’s Land pushes the entrepreneurs’ emotions to the limits. Entrepreneurs must have an attitude to do whatever it takes without losing determination or hopefulness. They also need to have a can-do attitude that employees can depend on and mirror. It is important to have someone positive to look to when times get tough.
  2. Clarity in Decision Making – How are decisions being made and who is even making them? Are company values being withheld in these decisions? Are goals and ambitions being reached? As discussed in the market misalignment blog, the company needs to have a clear, defined and successful pattern for decision making that also defines the company’s culture. Do your employees have confidence in the way decisions are being made? Without this confidence in the decision making process, you will not be able to generate momentum.
  3. Give the Company a Boost – If your company is deteriorating, don’t wait around for someone to come and declare it dead. Instead, put the heartbeat back into the business using the following three methods:
  • Change up the circle of decision makers and make sure it can be managed.
  • Implement something radical and fun, even unpredictable. This can help inject some life into the company.
  • Make new promises to customers (not too many that you stop fulfilling them) from time to time and have staff members create, develop and implement new processes required to meet the customer’s needs.

So there you have it, a general discussion on what momentum is, why your business needs it, and how to get it back if it’s gone missing. Getting through No Man’s Land is a huge commitment, and having the guidelines to get through it will make the journey a little easier.