How dealmakers at an investment banking firm are winning new business and preserving existing revenue

By Ben Harrison
October 1, 2020

We all know that if there are fewer opportunities in the market, there is greater competition. Every single capital markets firm globally needed to contend with this fact when the Covid-19 pandemic hit. I watched as thousands of deal professionals scrambled to win new business and preserve existing revenue. For Scott Salpeter, president of Miami-based investment banking firm Cassel Salpeter, it meant integrating technology and remote capabilities into his team’s day-to-day workflow. The result? A single source of truth everyone in his firm could rely on for accurate, real-time information to support decision-making.

“Data is more important than ever,” he said. “The pace of change has dramatically accelerated; industries are being transformed. What was true yesterday, might not be true today, and that can be a challenge when we’re advocating for our clients’ best interests.” For many investment bankers and M&A advisors trying to stay informed in an ever-changing economic and geo-political climate, having access to data isn’t enough. They require a full, 360-degree picture of the client they are serving , the factors affecting the industries in which they operate, a historical view of transactions in that market, and so much more.

These needs and challenges are how I got to know Salpeter, his team of bankers, and thousands of other people who serve as trusted advisors to business owners and executive teams just like them all over the world. Without technology that centralizes a firm’s propriety data alongside third-party data, transaction advisory and other deal professionals dedicate time towards tedious and administrative tasks that could be better spent face-to-face (even on Zoom) with their clients.

Specifically for the team at Cassel Salpeter, the implementation of an industry-specific CRM solution (like DealCloud) across its staff of 14 created a central place for all client, deal, pipeline and relationship data. This allowed the entire team to be better informed, more accountable, and more productive on behalf of its clients.

“When the pandemic hit and we were all forced to work from home, I felt confident that our team had access to the data and tools they needed to support our clients,” said Salpeter. “Other firms that had not made investments into internal tools and technologies have to be struggling with communications and processes across their firms.”

With platforms like DealCloud, a project weekly status report that used to take Scott’s team hours to generate, now takes less than 15 minutes. His team no longer relies on spreadsheets and email. Data is no longer siloed across multiple databases. Cassel Salpeter was even able to create notifications and automate workflows, ensuring nothing slipped through the cracks. Now, Cassel Salpeter has an advantage over the competition.

Bankers like Scott are leading the way for their firm by being squarely focused on making Cassel Salpeter better, more efficient, and ultimately, more essential to its clients no matter what the future holds.

If you would like to learn more about how DealCloud can help your firm become essential to your clients, visit

DealCloud, an Intapp company, provides a single-source deal, relationship, and firm management platform to enable over 900 clients to power their deal-making process. We offer fully configurable solutions purpose-built for the complex relationships and structures of private equity firms, investment banks, private/publicly traded companies, debt capital providers, and other investors.

Ben Harrison is co-founder and chief revenue officer for DealCloud, which he developed after realizing the needs of alternative asset managers were not being met by one-size-fits-all CRM platforms. Harrison has 15 years of experience in capital markets and holds an MBA from the University of North Carolina Kenan–Flagler Business School.

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Fort Lauderdale lawyer accused of raising $100M in 1 Global Capital fraud

By Ashley Portero
September 30th, 2020

A Fort Lauderdale attorney is facing fraud charges for allegedly raising $100 million from investors as the outside counsel for 1 Global Capital, the now-bankrupt company accused of defrauding thousands of investors.

Andrew Dale Ledbetter was charged by federal prosecutors with conspiracy to commit wire and securities fraud Sept. 29 in U.S. District Court for the Southern District of Florida. The U.S. Securities and Exchange Commission charged Ledbetter with fraud the same day.

Erica L. Perdomo, an attorney representing Ledbetter, declined to comment on the charges.

Hallandale Beach-based 1 Global Capital, a commercial lending business, was charged with civil fraud charges in 2018, shortly after it filed for Chapter 11 bankruptcy. The SEC claimed the firm fraudulently raised $322 million from more than 3,400 investors, many of whom were elderly, from 2014 to 2018.

Ledbetter served as outside counsel for the company until his dismissal in August 2018, according to court documents.

Prosecutors allege Ledbetter was personally involved in raising more than $100 million in investor funds that went to 1 Global, nearly a third of the total amount raised during the scheme. Ledbetter and company executives claimed investor money would be used to fund commercial loans in exchange for a share of the principal and interest payments as the loans were repaid, court documents said.

Ledbetter is accused of using false legal opinion letters with misleading information about 1 Global when pitching investors, court documents said. Although he told investors he served as outside counsel for 1 Global, Ledbetter reportedly received $3 million in commissions from the company. He did not disclose those commission payments to investors, court documents said.

If convicted, Ledbetter could face five years in prison.

Former 1 Global COO Steven Allen Schwartz and former CFO Alan Heide previously pleaded guilty to fraud charges tied to the case. Former CEO Carl Ruderman agreed to disgorge $32 million in ill-gotten gains, pay a $15 million civil penalty, turn over $750,000 in cash and give the SEC a 50% interest in his condominium. He was also barred from working in the securities industry.

Last year, a bankruptcy trustee recovered and distributed $112 million to thousands of individuals who lost money investing in 1 Global Capital. Trustee James S. Cassel said investors received an initial repayment of about 40 cents on the dollar.

Click here to read the PDF.

Strengthening your network could assure your company’s survival | Opinion

Social distancing has diminished in-person interactions, weakening our connections. With strong relationships essential to the fabric of middle-market success, maintaining and strengthening these bonds should be a priority.

Here’s what to consider:

Reach out and tune in: Networking in the age of COVID means regularly checking in with customers, clients, and partners and showing genuine concern for their wellbeing. Send texts to those you haven’t spoken to in awhile. For associates who you are closer to, use video conferencing. More personal than a phone call, text, or email, it can let you read body language and provide greater insight.

Fortify your links and be comprehensive. Connect with everyone who might benefit from your expertise or services, not just business clients. A targeted email blast reminding people you are available is an option. Consider volunteering your talents or services, which is another great way to meet new people and potential clients, expanding your relationships and network, and an excellent way to do good while demonstrating the value you bring to the table.

Virtual happy hours can be another great way to connect with the top brass at other companies, and with your own team and their networks as well. You can be the organizer or join with another group organizing them. These can be structured to ensure you are spending time with the right people. You can also invite prospects enabling the development of new relationships. And sometimes, having a guest speaker on a relevant topic can be an interesting and educational draw.

For your company, consider virtual team-building exercises. Not only can they boost morale, but they are a great way to pick up on cues from colleagues, helping identify those who may be struggling. Remember that your staff’s network is just as important as yours. Struggling employees may not be in the best mindset to meet new people or maintain old relationships. So, it’s important to check in and make sure they know you are there to support them.

If you can find creative ways to meet individually with key players in a socially distanced setting that you are comfortable with, find the time and safe place, and do it. But be careful not to press them into meeting if they don’t feel OK. If meeting in person is not an option, a one-on-one Zoom call or an email are also effective.

What to listen for and how: As you engage your network, understanding the group’s physical and emotional health is paramount.

Don’t just focus on the bottom line. Be sensitive to different needs. Some may have been working from home alone all this time and could use support from others. Others may be dealing with multi-generational households, or children and homeschooling, and are hoping for less team-building and more time addressing home issues. Strike the right balance.

For some, the challenges may be financial. For others, the impacts can come down to health: physical, psychological, or both.

What to do with what you learn: Follow-through is everything. If you get useful intel and don’t use it, you’ve wasted your efforts and may even have let down those anticipating your support.

Not all help is about business, and not all assistance means making a grand, sweeping effort. Remember, a small gesture at the right time can go a long way, so think outside the box when it comes to how you can help.

As for enduring the challenges of the continuing pandemic, the verdict isn’t in. Making it through seems more a marathon than a sprint.

Some of us are coping better than others. Running a successful middle-market business means knowing how people connected to it are getting by. That means creating opportunities to listen and acting on what we learn.

If your network is healthy, then your company has a much better chance to be as well.

James S. Cassel is co-founder and chairman of Cassel Salpeter & Co., LLC, an investment- banking firm with headquarters in Miami that works with middle-market companies. or via LinkedIn at

Click here to read the full article.

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What You Should Know About Company Mergers

By Skye Schooley

•     A company merger is when two companies combine to form a new company.

•     Companies merge to expand their market share, diversify products, reduce risk and competition, and increase profits.

•     Common types of company mergers include conglomerates, horizontal mergers, vertical mergers, market extensions and product extensions.

•     This article is for business owners who are considering merging their company with another business.

A company merger can happen for many reasons. Although very few business owners build their business in anticipation of one day merging with another company, the right business mergers can be very beneficial. Learn about the different types of mergers and their benefits.

What is a company merger?

A company merger occurs when two firms come together to form a new company with one combined stock. Although a merger is typically thought of as an equal split in which each side maintains 50% of the new company, that’s not always the case. In some mergers, one of the original entities gets a larger percentage of ownership of the new company. [Read related article: You Bought a Business … Now What? 5 Post-Acquisition Steps]

Key takeaway: A merger is when two companies come together to form one company with new stock.

Why do companies merge?

Mergers are a great way for two companies with unique experience and expertise to come together and form one business that is more profitable than the two entities were on their own.

There are several reasons why two companies might want to merge. Sometimes, it is out of convenience, and other times, it is out of necessity. Regardless of the specifics, the goal of a merger is to take advantage of opportunities in the marketplace that benefit both businesses.

“The companies may be looking to take advantage of financial synergies, opportunities for efficiencies, new market dynamics or a chance at product diversification, to name a few things,” James Cassel, chairman and co-founder of Cassel Salpeter & Co., told Business News Daily. “The companies may see opportunities by merging product lines or by cutting redundancies, like having two CFOs when one will suffice for both companies if they come together.”

Key takeaway: A merger can benefit companies by increasing profits, enhancing expertise, expanding market share, diversifying products and minimizing redundancy.

How does a company merger work?

A company merger occurs when two businesses with similar synergies decide that being one company together will yield more profits than being two separate entities. During a merger, the companies involved are likely to undergo quite a bit of restructuring in terms of corporate leadership and operations.

When a company merger happens, the two equal companies can convert their previous stocks into one new, combined company stock. First, they must decide what each company is worth, and then they split the ownership of the new company accordingly. [Read related article: How to Calculate Your Business Valuation]

“For example, it may be determined that company A is worth $100,000,000 and company B is worth $200,000,000, making the combined value of the new company worth $300,000,000,” said Terry Monroe, founder and president of American Business Brokers & Advisors. “Therefore, the stocks from each of the companies will be surrendered, and new stock will be issued in the name of the new company based on the valuation of $300,000,000. The stock owners from company A would get one share of stock in the new company, and stock owners from company B would get two shares of stock in the new company.”

Although the creation of a brand-new stock with the new entity is ideal in theory, it is not always what happens. In fact, oftentimes, when two companies merge, one company chooses to buy the other company’s common stock from its shareholders in exchange for its own stock.

Key takeaway: When entities merge, both companies can convert their current stock into one new stock and divide it among the new owners based on previous worth.

What is the difference between a merger and an acquisition?

Mergers and acquisitions are often confused as interchangeable terms, but there are a few differences. Although both involve combining two entities, an acquisition is when one company buys and controls the other, whereas a merger is when two companies come together to form a new entity.

“A lot of the time, no money is involved in a merger, whereas an acquisition is when one company pays to purchase another company, either with money or the issuing of stock or assumption of debt or a combination of all of these methods,” Monroe said. “With an acquisition, the acquiring company will remain in business, and the company that was acquired will no longer be in existence.”

Since an acquisition, or a takeover, involves one company consuming the other, the leadership in both companies often stays the same. Mergers, on the other hand, frequently involve the restructuring of corporate leadership, which can cause problems when both companies have headstrong leaders with different ideas on how to run the new organization.

For example, you will likely have to decide which CEO or president of the two merging companies will run the newly merged company. Although some merging companies attempt to have the CEOs of both companies share leadership through a co-CEO structure, this strategy rarely works out well, Monroe said. This is something business leaders should keep in mind when considering mergers versus acquisitions.

Key takeaway: A merger is when two companies combine to form one new company; an acquisition is when one company buys out and controls another company.

What are the different types of company mergers?

 There are five main types of company mergers: conglomerate, horizontal, vertical, market extension and product extension. The merger type is based primarily on the industry and the business relationship between the two merging companies.

Conglomerate merger

 A conglomerate merger is the combination of two companies from different industries and unrelated business activities. The benefits of a conglomerate merger include diversifying business operations, cross-selling products and minimizing risk exposure. A well-known example of a conglomerate merger was when The Walt Disney Company merged with the American Broadcasting Company (ABC).

Horizontal merger

 A horizontal merger is the combination of two companies from the same industry; these companies can include direct and indirect competitors. The benefits of a horizontal merger include greater buying power, more marketing opportunities, less competition and a larger audience reach. Monroe said this type of merger is common in the restaurant industry, where different brands of restaurants merge to reach a wider customer base and gain greater buying power from the same vendors.

“For example, in 2019, Papa Murphy’s, a company in the pizza business, merged with a company called MTY Food Group – which owns restaurants such as TCBY, Cold Stone Creamery and Planet Smoothie – which would allow the new company to have a centralized marketing and advertising department and franchised sales department,” Monroe said.

Vertical merger

A vertical merger is the combination of two companies that operate in different stages of the same supply chain, producing different goods or services for the same finished product (e.g., one company sells something to the other company). The benefits of a vertical merger include a more efficient supply chain, lower costs and increased product control. An example of this type of merger is when The Walt Disney Company merged with Pixar Animation Studios for its innovative animations and talented employees.

Market extension merger

A market extension merger, similar to a horizontal merger, is the combination of two companies from the same industry; however, in this merger, the two companies are from separate markets. The primary benefit of this merger is to expand and increase market share. Monroe said this type of merger is commonly seen with banks.

“With the government implementing more regulation and compliance from banks, it sometimes behooves smaller bankers to merge with other banks of similar size to reduce the cost of operations and regulatory compliance and increase their market share, since they all offer essentially the same product,” Monroe said.

Product extension merger

 A product extension merger, also known as a congeneric merger, is the combination of two companies that sell similar, but not necessarily competing, products. The benefits of a product extension merger are expanding customer reach and increasing profits. Monroe said this type of merger is very common in the software industry, where one company may offer a virus protection software and another company may offer financial protection software for  your personal financial data.

“The idea of these two companies merging would be a good idea, as both of their products would be applicable to the same customer,” Monroe said. “The product merger can continually be extended with add-on services and products once a customer has been acquired.”

Key takeaway: There are five main types of company mergers: conglomerate mergers, horizontal mergers, vertical mergers, market extension mergers and product extension mergers.

Click here to read the PDF.

Sadly, for some middle-market businesses, the next chapter will be bankruptcy

Many middle-market companies have tightened their belts, raised capital, and availed themselves of emergency government funding, but it may not be enough, and they might yet be moving toward an economic cliff. If they act fast, they may still have a few options left.

Troubled middle-market businesses are struggling to endure and adjust to the economic squeeze presented by the ongoing pandemic. Despite availing themselves of PPP funding, scaling back product lines and services, laying off or furloughing employees, while increasing efficiencies, retooling marketing strategies, and reinventing themselves, for many the light at the end of the tunnel continues to dim. Even with the possibility of more government funding, the on-again-off-again reopening process, accompanied by new COVID surges, has them headed for a crash.

As survival options dwindle, here’s what to ask:

Knowing time may be the enemy, the overarching question is: Can the business survive long enough to prosper again, and is the struggle worth the effort?

Finding the answer begins with realistically assessing your projected revenues and expenses for the next 12 months. With those numbers in mind, it’s time to ask the following questions:

Is there more government assistance available? And if so, will it be enough, and will you qualify?

Do you have enough capital and resources, or can you somehow obtain it to save your business?

Can you sufficiently further right-size your business, conserving cash to give you the needed time to survive?

Do you have any personal guarantees on loans or other obligations that will affect you if the business fails?

If your answers suggest you won’t secure the needed survival capital, and the risk ahead looks high, here’s what to consider next:

Small businesses can take advantage of the newly created SBRA, or Subchapter V of Chapter 11 of the Bankruptcy Code, which is less expensive and faster than a Chapter 11 bankruptcy. It offers one-step confirmation and allows a debtor to spread their debt over three to five years with administrative costs paid over the life of the plan. While a trustee is appointed to facilitate the development of a consensual plan of reorganization, the debtor retains control of assets and operations.

Also, consider a traditional Chapter 11 bankruptcy. It might give you time to reorganize to save or sell your business, or to liquidate in an orderly fashion.

But if you have to act fast to get the situation out of your hands as quickly and completely as possible, a Chapter 7 liquidation may be best. Here, a trustee takes control of your assets and liquidates, or sells them.

Another option is an Assignment for the Benefit of Creditors (ABC), a state, rather than a federal, alternative. It’s generally less expensive, faster, more discreet, and simpler compared with a traditional bankruptcy. Here, you get to not only choose the assignee to manage the process, but you also have a chance to play a role in that process. This helps ensure that the assignee is an expert in liquidating the assets, and also knows how to operate the business  for a time to get the best return by attaining the going-concern value when possible.

Your final option may simply be shutting your doors and closing the business. It’s important to note that if things are going south and you can’t save the business, you may have to sell in or out of bankruptcy. Selling in bankruptcy affords certain protections from creditors, allowing an acquirer to buy the business free and clear of all, or non-assumed, liabilities.

While none of these options is easy, in this economic climate some business owners must cut their losses and sell. By asking tough questions now and consulting experts at restructuring firms, law firms and investment banking firms, you can find your way to a new beginning, as opposed to getting mired in a reputationally hazardous calamity. Talk to professionals sooner rather than later. You may still have options.

This column was contributed to Business Monday by James S. Cassel, co-founder and chairman of Cassel Salpeter & Co., which is an investment-banking firm with headquarters in Miami that works with middle-market companies. He may be reached via email at or via LinkedIn at

Click here to read the full article.

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U.S. DIRECT LENDING WRAP: ‘Green Shoots’ Emerge for Shadow Banks

By Kelsey Butler
August 03, 2020


U.S. direct lending activity is starting to see some signs of life, though volume remains depressed as borrowers and their private equity backers tread cautiously.

* “Any which way you look at it, volumes are low,” said Suhail Shaikh, head of U.S. direct lending for Alcentra Group in an interview. “But we’re starting to see some green shoots, we’re seeing some more inbound activity, but by no means at the same pace as before Covid”

** A resurgence in activity could “evaporate very quickly depending on what happens in the broader economy,” according to Shaikh

* Private equity sponsors focused on middle-market businesses that typically tap direct lenders are exploring add-on transactions for their portfolio companies and buyouts in coronavirus-resistant industries, according to market participants

** The volume for PE deals is higher in July than it was in June, but still remains relatively muted, according to James Cassel, co-founder of middle-market investment bank Cassel Salpeter & Co.

** “When the water mark is so low, it doesn’t take much to float it higher,”Cassel said

* Spreads, which widened out considerably in the early stages of the pandemic, have eased slightly

** Pricing for most unitranches has settled back in the high L+500 to low L+600 range, down from around L+700 at the start of the pandemic, but above the L+500- 550 range pre-Covid, according to market participants

Click here to read the PDF.

Tweaking your middle market company to survive the crisis

Despite the bumpy rollout, the CARES Act PPP program provided forgivable loans to about 4.5 million businesses. There is concern that many middle market businesses have exhausted much of the available assistance, although Congress has extended the Paycheck Protection Program until Aug. 8. With the crisis continuing and no end in sight, here are four areas business owners should address as they look to ride out tough times ahead.


An obvious avenue for adjustment is a reevaluation of your company’s office space needs, both short and long term. How much real estate do you really need to operate in this new era? If your business is work-from-home friendly, maybe your best play is to shrink your footprint. In the short term, consider not renewing your lease and putting your furniture, fixtures and equipment (FFE) in storage, or approaching your landlord for rent relief. It’s best not to rush this decision. It could result in growing pains and inefficiencies later, but in the near term, until we can find a vaccine, this might make sense for your company. If your business has employees who cannot work from home and are scattered across a large area, consider splitting your office space into multiple, smaller locations.


With consumers spending less and leaving their homes infrequently, the next area worth evaluating is whether your business is rightsized from a staffing perspective. It’s a tough decision, but now is the time to act, especially with PPP money running out. If you must cut employees, do you reduce hours and retain more employees, or do you concentrate on your core staff and let   others go? The nature of your business should tell you which direction to take.

Remember, it’s not all doom and gloom. This pandemic has also presented some companies with opportunities, while others may need to add employees with new and flexible skill sets. There is a lot of newly available talent, hire now if you need them. This might be a great time to strengthen your team and acquire human capital not previously available.


If you want to retain and attract more customers, you need to make them feel safe. Have policies in place for the health and safety of your team, which translates into health and safety for your customers. Consider providing COVID-19 testing options for returning employees and have a policy in place for employees who test positive, including a return-to-work plan. The CDC has guidance that is available. There are even companies like FocusPoint International that provide pandemic screening and business continuity services. Aside from testing, medical screenings, or even quarantining a large workforce, they can also implement software that tracks the infected,   provides contact tracing and lets management know when it’s safe for employees to return. Consult with an attorney to ensure confidentiality and privacy is not violated. Many of these protocols can help to limit health concerns for your customers before they enter your place of business.


If your products/services are particularly suited to addressing needs raised by the pandemic, then focus on and expand those offerings. But for most companies, this may be the time to consider reducing or tweaking inventory/product mix to increase efficiencies and help cash flow. With consumers and businesses wary of spending, hone your marketing messaging to distinguish your offerings from competitors. Stay in front of customers and continually refine your message. The new normal is a moving target, it’s crucial that you show your clients and customers that you know this.

We seem to have moved past the period of generous government assistance to help keep businesses afloat. More assistance may be coming, but we do not know when or how much or to whom. More and more, company owners must look to themselves to endure through turbulent times. Focus on what you need to survive over the coming months, so that you can be a survivor in the years to come.

This column was contributed to Business Monday by James S. Cassel, co-founder and chairman of Cassel Salpeter & Co., which is an investment-banking firm with headquarters in Miami that works with middle-market companies. He may be reached via email at or via LinkedIn at

Click here to read the full article.

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The Pros and Cons of Business Partnerships

By Skye School
July 16, 2020


•     A business partnership is a shared business venture between two parties.

•     It can be an informal agreement, although you should always have a written contract.

•     Business partnerships are great for financing, expertise and division of labor, but be wary of disadvantages like partner liability and conflicts of interest.

•     This article is for entrepreneurs and future business owners who are considering entering a business partnership.

When starting a business, you may have the option to either go it alone or form a business partnership. Both options have advantages and disadvantages, and the best one for your business depends on your unique situation. We spoke with business owners and legal experts to map out what you should consider when evaluating a business partnership opportunity.

What is a business partnership?

A business partnership is formed when two or more parties come together to carry out a business venture, sharing both profits and losses. A business partnership can be formed by individuals and/or business entities (e.g., limited liability companies or corporations).

The terms of the partnership can take many shapes and forms. For example, a business partnership can occur when a pharmaceutical company takes on a development partner to develop a specific drug, said James Cassel, chairman and co-founder of Cassel Salpeter.

“A partnership can also consist of a musical artist partnering with a record company, or it can be a case where two people just decide to go into business together, or an attorney wants to partner with another attorney,” Cassel told

Although it is possible to have a business partnership without a formal agreement, it is always wise to have a written contract with detailed terms.

Key takeaway: A business partnership can be a shared business venture between two people or between two business entities.

Types of business partnerships

There are four types of business partnerships you can enter: a general partnership (GP), limited liability company (LLC) partnership, limited liability partnership (LLP), and limited partnership (LP). Each partnership type has varying levels of liability and control.

General partnership

A general partnership is formed between two or more parties who run a business venture together. GPs don’t require formal agreements or state registration, so they are easiest partnership to start. They offer tax flexibility; however, they don’t offer personal liability protection, so you are responsible for the actions of your partners actions, and your personal assets are at risk.

Limited liability company partnership

A limited liability company partnership (also known as a multimember LLC) consists of two or more owners (individuals or corporations) who are referred to as members. In an LLC partnership, a member can be held responsible for another member’s actions, but it does offer the added benefit of personal liability protection and tax flexibility.

Limited liability partnership

A limited liability partnership is a formal agreement between two or more individuals to run a business venture together. Owners of an LLP are protected from the actions of their partners, and they are not personally responsible if a lawsuit is filed against the business (excluding cases of personal negligence or malpractice). LLPs offer management and partnership flexibility, but they do not offer tax flexibility. In some states, only certain professions can form LLPs. This is something to investigate if you are operating in an unapproved profession in multiple states, as some may not recognize you as an LLP.

Limited partnership

A limited partnership consists of two or more partners, including at least one general partner and one limited partner. The general partner has control over business decisions and is personally responsible for the business. The limited partner (also known as a silent partner), though, does not make business decisions and is not personally liable. There is some tax flexibility with LPs.

Compare each partnership type to see which level of liability and control suits your needs. When evaluating partnership types, it is important to be mindful of the state rules and regulations that apply to your business type.

Key takeaway: You can enter a general partnership, limited liability company partnership, limited liability partnership or limited partnership, depending on state guidelines and the level of liability and control each partner wants.

How are business partnerships formed?

Matt Odgers, attorney at Odgers Law Group, said a partnership can be unintentionally formed based on the actions of the partners, unlike other business entities that require state fees and registration documents (such as articles of incorporation).

“While strongly recommended, a partnership does not require a written agreement, and it can be formed based on an oral agreement or based on the actions and relationship of the partners,” said Odgers.

It is always best to clearly communicate what your intentions are when working with someone else. If you decide you would like to officially partner with that person or organization, Odgers advised drafting a partnership agreement, applying for a tax ID number, and filing a statement of partnership with your state government.

Key takeaway: Partnerships can be created through formal written contracts or informal agreements.

Business partnership taxes

Partnerships are generally taxed as pass-through entities, meaning that each partner reports their share of the income and expenses on their personal tax returns. Because of this, partners who own more shares of a business are responsible for paying more in taxes.

“The partnership will file a Form 1065 with the IRS, and each owner receives a Schedule K,” said Odgers. “The Schedule K spells out that owner’s share of the income and expenses from the partnership. The owner then uses that information when filing their own taxes.”

Key takeaway: Partnership taxes are reported on each partner’s personal tax returns, according to their ownership shares in the company.

Pros of business partnerships

A business partnership can be a desirable option for many reasons. The core benefits pertain to funding, taxation, division of labor, and knowledge.

•     Access to capital. Perhaps the most obvious advantage to having a business partner is splitting the finances. Starting and running a business is an expensive venture, and when you share the financial responsibilities of a business with another individual or entity, you are at a greater advantage of getting your business off the ground. Partnering with one or more other business members (regardless of partnership type) can increase financial security and cash flow, and lower the stress of funding your operation.

•     Taxation. Another advantage to a partnership is taxation. Most business partnerships are taxed as pass-through entities. Because of this, you file and pay taxes on your share of business ownership. This can reduce the burden of paying taxes on the entire business yourself.

•     Division of labor. Just as partners can split the financial burden of a business, they can split the responsibility of operations as well. A business partner is someone you can share day-to-day business operations and major business decisions with (unless you operate under a limited partnership). Splitting up the responsibilities and duties of your business can help with efficiency and productivity, enabling you to accomplish more than you would alone. If you have a problem with your business, you have someone to consult with.

•     Knowledge and expertise. Every business owner brings unique experiences and skills to the table. When you operate your business with a partner, you can benefit from their knowledge and expertise. It is ideal to have a business partner that excels in areas where you are lacking. Additionally, if you are a first-time entrepreneur, it can be beneficial to partner with a seasoned business owner who can help guide the business.

Key takeaway: The benefits of business partnerships include additional funding and expertise, tax benefits, and division of labor.

Cons of business partnerships

Operating a business with someone else is not always easy, and sometimes it can end terribly if you are not properly prepared. There are a few challenges to be aware of, primarily regarding profit, liability, and conflicts of interest.

•     Informal arrangement. Partnerships allow for great flexibility, but this can be a problem as well. When setting up a partnership, it might be easier to just settle on a verbal agreement, but it is always best to sign a clear, written agreement for protection. Coming to terms about the percentage of ownership, liability, and responsibility can be difficult to agree on, which can cause setting up a partnership to take more time and money than you might have anticipated.

•     Lower percentage of the profit. In contrast to the benefit of having additional funding, a business partnership can also yield lower profit per person. Since you will be dividing the profit of the business based on share of ownership, you must be okay with not receiving the full income that the business brings in.

•     Partner liability. Depending on the type of business partnership you enter, you may be personally responsible for any actions brought against the company. You also may be liable for a mistake your partner makes. Liability is a big factor in partnership, so it is important that you trust your potential partner and enter a partnership that protects your best interests.

•     Conflict. When you are running a business with someone else, you are bound to have occasional differences in opinion. If you and your partner have different work ethics, or have a disagreement you can’t resolve, your business can suffer immensely. This is especially true in cases of partnerships with family members or close friends, where personal issues can cloud professional judgement.

Key takeaway: The disadvantages of business partnerships can include lower profit percentages, added partner liability and conflict.

“While easy to form, partnerships can lead to a lot of trouble down the road if there is a disagreement or if litigation arises,” said Odgers. “It is strongly recommended to work with an attorney to determine whether the partnership is your best option.”

Click here to read the PDF.

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The COVID Comeback: Companies Cope With Reopening Challenges

By Anne Field
July 7, 2020

Businesses across the country are opening up. That’s good news, of course. Or is it?

Fact is, for many companies, from retail stores to interior designers re-opening involves a great many challenges. And the situation has been made even more formidable as such states as Florida and Texas order the re-shuttering of some businesses, while others, like New York, slow down schedules or change the parameters of the re-opening phases. Here are some of the top challenges facing small companies as they attempt to make their COVID comebacks.


“The single biggest issue for small businesses is uncertainty,” says James Cassel, chairman of Miami-based investment banking firm Cassel Salpeter & Co. That’s especially true for enterprises serving customers from a physical location. Perhaps their patrons aren’t ready to spend a lot of time inside. But even if they are, there are logistical questions for staff, both now and down the road: Are camps and day-care centers opening? what about schools holding in-person classes in the fall? If they don’t, how to juggle childcare and work schedules? And of course, underlying it all: Will a new surge of cases force companies to close up again?

The result: Small businesses are struggling to plan in an unpredictable environment. “They’re trying to determine an optimal strategy that will enable their businesses to be profitable when there are so many variables out of their control,” says Johana Schwartzman, who heads Go Blossom Consulting, a business and marketing strategy consulting firm in Toronto.

Ideally, according to Schwartzman, businesses can develop at least a “plan b” to fall back on, if not a “plan c,” too–different options to follow depending on, say, whether they face a second COVID wave or employees need to stay home with children. She points to a company that typically teaches art to students at their physical location. In case the business has to close again, the owner is considering stocking up on art kits to sell to parents and holding classes via Zoom.

Perhaps the most pressing issue related to uncertainty is cash flow. According to Brian DeChesare, founder and CEO of finance blog Mergers & Inquisitions, about half of small businesses are concerned about how much cash they have on hand. “They might be able to afford to reopen, but they won’t be able to sustain operations for an extended period of time if profits are down significantly,” he says.

Safety Concerns

Companies need to take steps to ensure the safety of not only customers, but employees, as well. In March, Sumita Batra, CEO of Ziba Beauty, an Artesia, Cal.-based eyebrow threading salon, closed all 14 venues, selling supplies like gloves and hand sanitizers to keep the business alive. Because the service is high-touch, requiring close contact between client and employee, however, Batra’s employees, many of whom live with elderly parents, are wary of returning. “How can they keep social distancing? It’s impossible,” she says.

The upshot: In June, although she was allowed to open under California’s rules, Batra chose to remained closed through July. (Several counties also pushed back their opening dates to later in the month.) With customers clamoring to schedule appointments, Batra launched a social media campaign on Facebook and Instagram to explain her decision to stay closed. That included a video in which eyebrow threaders address customers, explaining their reluctance to return. According to Batra, customers have responded positively.

Once she opens up, like many business owners, Batra will face another safety-related problem: paying for PPE and other cleaning and sterilization measures. According to Batra, the equipment is both more difficult to find and more expensive than usual. To cut costs, she’s trying to renegotiate the terms of her leases with her landlords.

New and Old Business Models

Since March, many retailers, as well as wholesalers that sell to brick-and-mortar stores, have expanded their e-commerce sales to stay afloat. But that creates a conundrum: As stores open up, how much resources to put into traditional channels vs. new ones? “It calls for a re-prioritization of funding,” says Alexander Kehoe, who runs Caveni Digital Solutions, a digital marketing company in Philadelphia.

Kehoe points to a wholesaler that added a direct-to-consumer e-commerce capability about six weeks ago. Now that many of its regular retail customers are opening up, however, it’s unclear how to divvy up dollars, and directives. The firm is dealing by staying loose: Should those older clients experience normal levels of demand, then the company will most likely focus more on its original market. On the other hand, if that business is slow, the e-commerce side will require greater attention. “It means being ready to do both,” says Kehoe.

Re-Connecting with Customers

Just because a company has reopened, doesn’t mean it’s business as usual.

And that can affect relationships with new and existing customers.

Take Ryan Novak, the owner of Chocolate Pizza Company, a gourmet chocolate maker in Marcellus, NY. While the company’s manufacturing facilities stayed open during lockdown, Novak had to close his retail location, which he re-opened in June. But, according to Novak, an essential ingredient in his company’s success has been the ability for retail employees to chat with customers and build a rapport. Now, however, employees are separated from patrons by Plexiglass, face masks and social distancing, while customers tend to get in and out quickly rather than spending time to browse. “It’s hard to build a relationship,” says Novak.

To create more of a personal connection with customers, Novak recently asked his retail staff for patrons’ most frequently asked questions. Then he added wall art with interesting, eye-catching tidbits about the company to answer those queries, like the single largest order (31,000 “chocolate pizzas”), and pictures of far-flung places they’ve shipped to.

Pent-Up Demand

As they rev up, some companies are scrambling to meet a backlog of orders (admittedly, a good problem to have). Case in point: TAKA Interiors, a Lyndhurst, NJ, interior design firm. Under normal circumstances, according to co-owner Tamara Ramos, she and her partner provide in-home one-on-one services. But while clients were sheltering in place, they switched to virtual consultations, and projects that required entering client’s homes were put on hold.

As a result, when clients started allowing the partners into their homes about a month ago, there was a pent-up demand not only for projects placed on pause but also for more extensive renovations. “People who just wanted their living room changed before lockdown now also want a home office and a playroom,” says Ramos. That also means large-scale projects lasting three-to-four months versus the usual six weeks or so.

To meet the demand, Ramos and her partner decided to change their usual design approach. Instead of joining forces and working together on, say, two projects at one time, now each woman is operating solo, while still touching base with the other. “We’re dividing our forces,” says Ramos.

Handling the backlog of projects also requires a triage, of sorts. Clients who had to postpone work during the lockdown period go to the top of the list. “Anyone who signed a contract in March, we’re getting to them first,” says Ramos.

Click here to read the PDF.

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What to Look for in Remote Employees

By Julie Bawden-Davis
July 02, 2020


It takes a certain type of employee to successfully work from home for the long term. When you’re recruiting remote employees, consider for these necessary characteristics.

Working from home (WFH) has become a fixture in workforce policy and talent management. For those companies intending to make WFH permanent or semi-permanent, it may be helpful to modify recruiting and hiring practices for remote workers. This means developing new practices and perspectives to identify and attract people who are suited to work and succeed in this new reality.

While WFH employees need to have the proper hard skillsets, soft skills, particularly for the digital age, are equally as important. To be as productive as possible, remote employees need to be determined and have time management and organizational skills, as well as enough of a command of digital tools to keep on top of the work and collaborate.

“Work-from-home employees must also possess very strong communication skills,” says Andrew Hinkelman, founder of Priority-1 Group, a leadership coaching and consulting organization. During 25 years in the tech industry as a chief technology officer, Hinkelman built remote teams.

Internal motivation and drive are also critical to WFH success, believes Stewart Guss, founder of Stewart J. Guss, Injury Accident Lawyers.

“People in sales and recruiters tend to be the type of people you want in work- from-home positions. They’re usually independent,” he says.

“The ability to stay focused, despite distractions in the home environment, is also vital to WFH success,” adds James Cassel, co-founder and chairman of Miami-based Cassel Salpeter, an investment banking firm. “It’s one thing to deal with distractions from colleagues at the office, but quite another to be faced with the temptation to address domestic issues.”

The Differences in WFH Recruiting and Hiring

Certain traits and attributes will be of more importance than others when you’re recruiting and hiring remote employees. Consider probing for the following traits when interviewing potential WFH employees.

Self-direction. “The ability to take the initiative to set goals and complete work with limited supervision is essential,” says Tracey Wik, managing director of talent and organization effectiveness at GrowthPlay, a research-based sales talent consulting company.

“Look for work-from-home employees who demonstrate the intrinsic motivation to meet expectations without a lot of hand-holding,” she adds.

Comfort in using and learning new digital tools. Employees need to be adept at using digital tools for themselves and for collaboration purposes. Ultimately,

it’s on the company to ensure that their employees are sufficiently trained on the tools they’re expected to use in their day to day, but ensuring that the candidate will be comfortable with the expectation of learning and using these tools is critical.

Time management efficiency. “Look for employees who can maintain a steady, unhurried pace for task assignments and remain available or implement a backup system when unavailable to ensure others’ needs are managed,” says Wik.

Secure work environment. There are best practices around how to create a secure home office. This includes cybersecurity protocols for equipment and a space free of distractions. Look for employees who understand the gravity of cybersecurity and take it seriously.

Ability to effectively communicate. “Successfully interpreting and digesting information from a variety of sources and communicating effectively is an important attribute in a work-from-home employee,” says Terry Salo, senior HR consultant for outsourced human resources company strategic HR Inc. This is especially important as communication during WFH mainly occurs without tonal or facial cues. A keen understanding of how messages can be interpreted over digital channels will go a long way in ensuring context doesn’t get lost in email and on messenger platforms.

How to Spot Great Remote Employees

You can use various methods to determine if potential WFH employees possess the ideal skills for remote work.

“I determine work-from-home suitability by asking if the person has experience with independent work,” says Megan Marrs, founder of K9 of Mine, which provides dog care resources and information. “I ask if they’ve freelanced or completed independent projects in their spare time. I’ve also found that introverts tend to fare better with remote work than extroverts.”

“Have them complete a personality assessment test to check their soft skills,” he says.

It’s also helpful to ask potential WFH employees how they structure their days, adds Marrs.

“Those who have developed a routine to their workday will likely have the necessary mindset for creating work/life balance,” he explains.

Cassel suggests looking for self-starters with self-reliant character traits. You also want someone who has shown adaptability and persistence in their prior work experience, especially those who can change course if necessary.

Successfully interpreting and digesting information from a variety of sources and communicating effectively is an important attribute in a working-from-home employee.

 Terry Salo, senior HR consultant, strategic HR Inc.

One way to identify these traits is to ask the candidate about which project they’re most proud of. After they explain what it is, encourage them to discuss the dynamics of how it came to life, focusing especially on where communication and collaboration took place. The objective of this line of questioning is to create an opportunity for the candidate to explain their leadership role in the project, hopefully to focus on how their bias towards action helped bring the project through any roadblocks or hurdles.

Helping Hires New to Remote Work

You may find that your new hire is suited for WFH, but not accustomed to it. Make new employees feel comfortable quickly by providing clarity.

“Clarity is vital,” says Wik. “This includes clarity about the culture of the organization and how that will manifest virtually, and clarity about expectations.”

To ensure that all expectations are clear with new remote employees, opt for phone or video calls, suggests, Ed Mitzen, founder of healthcare marketing agency Fingerpaint. “Set frequent check-ins as employees get acclimated to their new roles.”

“Consider dedicating an office liaison to new employees. Such a person can help train, monitor, coach and groom new employees to be ready to meet company expectations,” says Cassel. “Additionally, company mentors can show new work-from-home employees the ins and outs of the business and its leaders’ expectations.”

Patience is also vital. “It can take several weeks or months to adjust to this new working style if employees are new to working from home,” says Wik.

Click here to read the PDF.