Almost everyone wants to be successful. While the definition of success will vary depending on who you ask, many consider it the ultimate goal in their personal and professional lives. Much has been written about how entrepreneurs and executives should “hope for the best and prepare for the worst”…But what happens once you or your business experiences initial success or substantial growth? What do you do now?

We here at Talley & Company believe that success is something that is continually created, not acquired. It is created by aspiring individuals who have no limits in terms of how they approach and execute creativity, intelligence, ingenuity, talent, persistence and determination. We’ve worked with countless inspirational athletes and entrepreneurs over the years and picked up some pointers along the way.  Here are a few that we’d like to share with you as you chase down your own personal version of success. 

Keep a positive attitude. Many entrepreneurs and executives face unexpected negative consequences after experiencing initial success, such as anxiety over being able to maintain their “winning streak”, fearing that they are being set up to fail, and experiencing the envy others feel towards their accomplishments. While some stress may be a good thing, when stress turns into anxiety, it can be detrimental both to your mental health and to the health of your business.

term goal or objective and work backwards to figure out what it will take to accomplish it.  But why start at the end?  Many times, the end-result seems so far away and impossible to reach.  Through backward planning, one can mentally prepare him or herself for specific challenges and milestones that need to be achieved to reach an important goal.

Don’t be afraid of letting go of the “we’ve always done it this way” mentality. You are bound to run into unforeseen challenges as you achieve success and grow your business. For an example of this, see our recent

ress turns into anxiety, it can be detrimental both to your mental health and to the health of your business.

Set bigger goals and work “backwards”. Once you’ve achieved initial success, map out your next long-business lessons write-up on Pablo Escobar.  A business in growth or scale mode faces a whole new set of different challenges and opportunities that may require a change in attitude and approach. Your ability to recognize this can mean the difference between spinning your wheels and achieving your next milestone.

Talley & Company understands the challenges facing entrepreneurs with generating and protecting income. Whether you’re looking to improve your profitability, build your brand through a business transaction, or wish to guarantee a legacy for your family, Talley & Company is the consulting and financial services firm dedicated to strategic business solutions that deliver meaningful results.

Connecting Entrepreneurs to Capital

Roughly seven years ago, the economy dipped into a deep recession and the ensuing “credit crunch” made it difficult for many small businesses to secure the capital they needed. Banks effectively closed the door on many small businesses seeking capital that did not fit their “deal” requirements.  Seeing an opportunity, many alternative lenders jumped into the marketplace, willing to provide capital at a time when traditional lenders were reluctant to take on risk. Fast forward to today: the rise of online and marketplace lending means small business owners have access to more options than ever to fund their strategic growth objectives. So what’s the right choice for your business? The answer might not be so simple.

Much like first time home buyers trying to pick the right loan for their mortgage, many business owners are overwhelmed by the countless options available in the capital market.  So many choices can lead to a lot of confusion.  Some lenders will talk to you about APR, others will offer you a short-term cash advance, and more will throw in various hidden fees that may be difficult to discern from all the details –and the list goes on and on.  Taking into consideration all the variables, the real challenge is not merely finding financing or capital resources, but ensuring they are a good fit for both you and your organization’s needs.

Talley Capital Group has managed complex financial transactions that maximize value for our clients while earning their trust and building a strong network within the banking and private equity industries. Securing financing or capital resources can be a complex process. Structuring a favorable deal requires extensive knowledge of debt and equity capital markets and sources, the analytical skills to compare competing offers, and the transaction expertise of a knowledgeable advisor to maximize after-tax value. Talley & Company can help you develop your best financing options, identify prospective banking institutions or private equity groups that fit your deal, and work with you diligently to obtain the capital that is suitable for your organization’s unique needs.

For more information about how Talley Capital Group can help you plan, negotiate, structure and execute on your growth strategy, contact us today.

August 1, 2014

Former Microsoft CEO Steve Ballmer’s $2 billion bid for the Clippers looks to be a gross over-valuation, at least according to the bid book of sale put together by Bank of America. Reporters from ESPN.com got hold of the valuation numbers through documents introduced in the trial determining whether Shelly Sterling has the right to sell the team without Donald.

The bid book showed Ballmer’s $2 billion offer for the Clippers is 12.1 times the expected 2014 revenues of the team. Purportedly, Bank of America also showed the average of teams sold over a five-year period was 3.4 times total revenue, and that no team has been purchased for more than five times its total revenues.

In the case of the Clippers, revenue alone might present an under-valuation if the team’s alleged years of mismanagement were to be taken into account. The Clippers also have a pending national TV deal that could be a slam dunk to raising the franchise’s popularity and profits.  

Of course, Ballmer’s serious bid is probably about a lot more than him just wanting to make another profitable business deal. Among the billionaire set who have most of what money can buy, we expect there’s immeasurable enjoyment and prestige to owning one of 30 teams that besides their exclusivity, hardly ever go up for sale. For this alone, any team on the NBA is a statistical anomaly in the world of business dealings. Like any near-priceless objet d’art up for auction, the emotional value of ownership can be equal to, if not greater than, the investment value.  

Outside of these outliers, most buyers looking to acquire a business, whether as a singular investment or a complement to an existing company, are more likely to focus on the financial returns they can expect to get for their purchase price. B2B valuation and legal advisory professionals, including those at Talley and Company, can provide comprehensive data and due diligence in these situations to enable decision-makers to make the most profitable investment choices. 

Before entering into any buy/sell agreement, Talley & Company can help you determine both optimal deal pricing and structure to achieve your goals from an ROI and tax perspective, accounting for factors that include revenues, future opportunities and contracts, industry trends, and market share. Of course, if you just plan to make a must-have power bid like Ballmer, at least you’ll know what you’re getting into and how far from the baseline to overshoot.

July 25, 2014

Crowdfunding is helping thousands of businesses acquire much-needed capital and build a core fan base. Businesses of all kinds and for many funding purposes are using crowdfunding platforms, from yoga studios looking to grow into larger spaces to tech innovators wanting to bring new gadgets to market.

If you’re considering a campaign to launch your business, expand a product line, or fund a special project, scheduling a few minutes with Talley and Company’s advisory team can ensure your campaign is set up properly from the start to avoid obstacles from a tax and legal perspective. (There’s nothing worse than obtaining hard-earned funding only to discover that federal and state tax obligations may keep you from fulfilling your vision.)

For businesses, there are two main avenues for crowdfunding, and depending on which you choose, the tax and legal implications will differ greatly. In the rewards-based approach, supporters are typically offered a chance to earn tiered rewards for different contribution levels. These can be anything from a branded T-shirt to pre-ordering a product still in development. Kickstarter and Indiegogo are two popular platforms.

With this option, the income you derive from your campaign will most likely fall under one or more of four categories: revenue, sales, investment or gift. In most cases, the money you earn from a campaign will have to be included as gross income for your business. If you’re offering a product or service in exchange for donations, you may also need to pay sales tax from customers in the state that you’re registered. The expenses you incur for fulfillment of rewards, products or services may be deductible against the income you earn. In some cases, funders will request nothing in return other than the joy of knowing they helped bring an ingenious idea to life. With meticulous records, these may be claimed as gifts. Just keep in mind that the IRS has stricter definitions for what falls under this category than you or I might.

In the equity-based approach, investors get a financial return or an ownership stake in the company for their support. Crowdfunder is one of the platforms in this newly developing category. If you’re using this option, the tax and legal obligations are a different animal entirely, since now we’re talking about investment money and not revenue. In fact, the laws in this area are still undergoing changes, so keeping in close contact with your legal team right from the beginning is essential.

No matter which option you choose, a successful campaign involves a lot of forethought, time and planning to reach funding goals and generate priceless media attention for your big idea. If you’d like to see the creative strategies and executions used by the most highly funded companies, check out the Top 100 Crowdfunded Companies. 

If you have been involved in the business world in the last 30 years, you have most likely had some experience with Microsoft Excel. Excel is the most common software program used for creating spreadsheets that businesses often use for tracking their financials. However, these same characteristics also make Excel a potential crutch for the entrepreneurially run business. In today’s fast-paced business world, business owners have become far too comfortable relying on Excel as an effective business solution.

So, how does this affect my business?

Excel leaves the creation of spreadsheets and the input of information in the hands of the individual tasked with maintaining key management metrics. Often, these spreadsheets are not reviewed for accuracy by someone else. Any auditor will tell you that this leaves the door open for serious errors in reporting, which can lead to costly fines or, in the worst case, the demise of your business. If this scenario applies to your company, stop and ask yourself two questions:

1. If the individual assigned the management of your business’ metrics had to leave work unexpectedly, how would that affect your reporting mechanisms?

2. What is the probability of error within your reporting due to manual input?

If your answers to either of these questions makes you nervous, rest assured there are automated reporting solutions available to give you back control of your key management metrics.

At the end of the day, who has control of your business’ metrics? What is it worth to you to have complete control of your financials and key performance indicators? Talley & Company and its affiliates have helped clients integrate their systems with automatic software solutions that help reduce the likelihood of reporting errors and provide reliable key performance indicators.

March 28, 2014

Earlier this week, the last contender for the $1 billion prize offered by Warren Buffet and Quicken Loans for the perfect March Madness bracket was eliminated. Considering the odds of winning per the contest’s own fine print were 1 in 9.2 quintillion (a trillion multiplied by a million) this comes as no shock to anyone.  

But the battle wages on for millions of others who’ve placed friendly bets in pools that carry much better odds, though of course for much smaller amounts of money. Everyone from the overly-excited guy in the office next door to the President has been excitedly cheering for their teams. Yet we’re willing to wager that few (if any) of them have been thinking about how winning would impact their taxes. Of course, here at Talley and Company, you know we do just that. That’s because whether there’s $1 billion at stake or $100, March Madness bets are classified as gambling, and gambling is taxable. 

Like with any day at the track, outing to a casino or purchase of a lottery ticket, cash and non-cash winnings from March Madness bets are taxable. All winnings should be reported on Form 1040 as “Other Income” (line 21). In addition, you may be required to pay an estimated tax on your gambling winnings.  

Special paperwork comes into play only if your winnings are over $600 or 300 times the wager (lucky you, if that’s the case). Gambling winnings in excess of $5,000 could also be subject to a tax withholding requirement before the winning payout is made to the recipient. If luck wasn’t on your side, take heart-some gambling losses can also be deductible if you itemize and keep good records.

If you enjoy the entertainment of a game like Keno periodically in the year or, in the rare instance that you make a living as a professional gambler, detailed win-loss records are a must.  

As for the Buffett/Quicken contest? Not all is lost. While the $1 billion prize is off the table, the contest will still award $100,000 to 20 eligible contestants with the top-performing brackets. To be eligible, you must have…well…entered the contest. Unfortunately, the gentleman who made it furthest along in the battle for the perfect bracket never did. To him we say, better luck next year. To you, we say, don’t forget about your taxes, and Talley & Company is here to help answer any questions you may have. 

March 21, 2014

As fans of the hit show “Shark Tank” can attest, it’s not easy securing funding for your small business.  Since debuting in August of 2009, millions of viewers have watched entrepreneurs try to convince one of the five “sharks” to invest in their business, not just financially but also with advice for long-term growth.  To quote head-“shark” Kevin O’Leary, “Building fast-growing, globally competitive companies is tough.”

In each episode small business owners make their pitch to the five sharks, all well-known millionaires who started out as entrepreneurs themselves, including Mark Cuban (owner of the NBA’s Dallas Mavericks) and Daymond John (founder of the FUBU clothing line), to convince at least one of them to invest their money and time.  But that isn’t easy.  Like all investors, the “sharks” have heard it all – from failures like the Life Caps Survival Pill (a vitamin and mineral pill that allows you to live without food for up to two weeks) to successes such as Ava the Elephant (an effective medicine dropper for children). Many contestants on the show get eaten alive by the “sharks” for the same reasons entrepreneurs outside of the reality TV show, by not having their financials in order or having a well-thought-out business plan.  As one “shark” put it, “Just because you have a hobby, doesn’t mean you have a business.”  This is a reality show that really is, well, real.

Whether you’re appearing on “Shark Tank”, seeking angel investors, or acquiring financing, you’ll need to do your research and be prepared. Talley & Company can assist you throughout the entire process.  From reviewing and preparing financial statements in a way that interests potential buyers/investors, to uncovering value from areas financials alone won’t reveal, the experts at Talley & Company are here to help your business ventures succeed.

March 17, 2014

Since January 1, when Colorado’s marketplace for the legal sale of recreational marijuana first opened, all eyes have been on the state to see what consequences unfold. Already, early estimates are showing tax revenues from pot sales to be far exceeding expectations-from the $70 million provided to voters to $98 million recently predicted by Colorado governor John Hickenlooper for the next fiscal year. 

Until recently, processing money from marijuana sales put federally insured banks at risk of drug racketeering charges. But just weeks ago, the Obama administration gave the “ok” for banks to lend to pot sellers, at least with a complicated list of due diligence requirements and over 20 red flags that must be reported to ensure business legitimacy and compliance with federal law. FinCEN, the Treasury Department’s Financial Crimes Enforcement Network, has a vested interest in helping to keep cash off the streets since it writes the rules that banks follow to mitigate money laundering and the financing of terrorism.

Yet many banks are reading the new guidelines as more of an outline to all the risks of doing business with pot sellers than a green light. The American Bankers Association says the new regulations simply aren’t enough, since they don’t change the fact that marijuana sales are still illegal under federal law. That means property used as collateral for loans would potentially be subject to federal drug-seizure laws. According to The Denver Post, Colorado’s two largest banks, Wells Fargo Bank and FirstBank, aren’t offering new loans to landowners with pre-existing leases with pot businesses.

You don’t have to be selling marijuana to run into obstacles with a financial institution, particularly when it comes to getting a loan or line of credit. If you’re seeking to obtain financing for cash flow and daily operations, growth plans or other needs, Talley & Company’s team and relationships with lending institutions can help. Our advisors can present and prepare your company’s financials in ways that increase favorability with lenders, helping to make sure your efforts don’t go up in smoke. 

March 7, 2014

Sadly, this isn’t the first time we’ve seen a story like acclaimed actor Philip Seymour Hoffman’s play out. Early this month, the headlines announced the lead Capote star’s premature death from an apparent drug overdose. This week, we find that as his loved ones attend to their grief, so must they contend with complicated issues arising from his poorly planned estate. Though Hoffman had thoughtfully created a will, it was over a decade old. Consequently, it not only contained gross omissions but was poorly designed to minimize the tax burden on his benefactors.

While Hoffman’s will included his son Cooper, his two daughters born after the will was made (and never amended) were effectively disinherited. New York law attempts to protect children with a special provision for this kind of scenario, but there’s no guarantee it will apply. These are not the kinds of matters you want to leave for the courts.

 Then there’s the mother of Hoffman’s three children-his longtime companion Marianne O’Donnell. She will reportedly inherit Hoffman’s estate outside the money allocated for his son. Had the couple been married, O’Donnell would have received an unlimited amount tax-free. Because they weren’t, O’Donnell will hand over anywhere from $11 to $15 million in taxes if the actor’s $35 million estate figure is right. No matter how the two felt about the institution of marriage, Hoffman’s estate planners could still have mitigated some tax expenses through other strategies, including trusts and gifted amounts during his lifetime.

Celebrities may be more likely to make the news, but they are far from the only ones with poorly planned estates. We understand how periodic reviews can seem less than urgent against the barrage of all of our growing to-do lists. So what’s our best advice? Schedule a regular time with your advisory team to review your will and update your estate. Once built into your calendar, you’ll not only have peace of mind but a signed legacy of caring and responsibility your loved ones will appreciate.

 So go ahead, make that appointment.

February 21, 2014

Michael Jackson had an amazing 13 number 1 hits as a solo artist, but the enormous disparity between the IRS and his estate’s executors in the valuation of his assets – to the tune of more than a billion – really tops the charts. 

How bad is it? Well, the IRS will tell you Michael Jackson’s estate was worth $1.125 billion at his death. Yet if you ask the estate’s executors, they’ll say it was more like $7 million. Yes, you read that right: billion versus million. From the IRS’s point of view, the estate’s undervaluation is so egregious that it qualifies for double the typical 20% penalty for underpayment. The agency is asking for the $505 million in taxes it finds the estate owes and an additional $197 million in penalties, totaling over $702 million.

There are points of contention between the two sides on almost every kind of asset, from music rights to automobiles. For starters, the IRS believes the use of Jackson’s likeness to create income is worth $434 million, yet Jackson’s executors assert it’s worth just $2,105. We can’t be sure who’s right on this one, but come on, there are washer/dryers worth more than that. Here’s another one – the IRS claims Jackson’s rights to certain Beatles songs are worth $469 million, not $0 as executors claim. Again, we’ll never know for sure who’s more on target, but a CPA did previously testify that Jackson borrowed $320 million against the music catalog.

As for MJ’s share to the rights of Jackson 5 master recordings? The IRS believes it’s worth $45.5 million, and the Jackson estate says $11.193 million. The battle that ensues over the taxable value of all these assets will be a big one, with both teams already singing vastly different tunes.

Getting agreement from the IRS on an asset’s value doesn’t just affect the likes of pop stars and celebrities. It’s true few of us deal with assets as unique and challenging to appraise as Beatles songs, master recordings, and the marketability of our likenesses. But even so, making sure appraisals of stocks, real estate, businesses, or any other more standard assets are fair and creditable can make all the difference when it comes to sailing swiftly through a potential audit – and maybe even avoiding one altogether.