Higher Tariffs Are on the Way – Can Your Company Manage the Damage?

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As U.S. tariffs continue to rise, importers face mounting financial pressure. While these increased duties are designed to promote domestic production, companies with complex global supply chains are experiencing significant cost burdens. With duty rates climbing to 25% or more, many businesses are reassessing their pricing strategies to mitigate the financial impact. This surge in tariffs comes on the heels of recent policy changes and negotiations that could further complicate global trade dynamics.

The situation has grown even more complicated with the U.S. implementing tariffs on China, which had been delayed previously. Initially, there was hope that the tariffs would remain on hold amid ongoing trade negotiations. However, as of this week, the tariffs went into effect, targeting a broad range of goods, including consumer electronics, machinery, and raw materials. In response, China has imposed reciprocal tariffs, further intensifying the cost pressures for businesses engaged in trade with China. The Chinese tariffs are impacting industries such as agriculture, automotive, and technology, creating additional challenges for U.S. companies already facing supply chain disruptions.

In addition to these developments, the U.S. has paused tariffs on Canada and Mexico for 30 days to allow for negotiations, offering a temporary reprieve for businesses that rely on trade with these nations. However, this relief may be short-lived. If negotiations do not lead to a resolution, tariffs on these countries could resume, further escalating costs for businesses. The uncertainty surrounding these tariff negotiations means companies must remain prepared for potential tariff hikes after the 30-day negotiation period ends, and develop contingency plans accordingly.

Customs duties are typically calculated as a percentage of the inventory’s declared transaction value at the border. Historically, with average duty rates of around 2%, many businesses have deprioritized customs costs. However, the recent surge in duty rates has made strategic cost management essential. By reducing the cost of goods sold (COGS) on imported items, companies can achieve substantial savings—for example, a $100 reduction in COGS equates to a $25 savings at a 25% duty rate. Companies must focus on managing their pricing structures more closely and re-evaluating supply chain costs to maintain profitability.

However, businesses must also navigate the conflicting priorities of U.S. Customs and the IRS. Customs authorities scrutinize inventory prices to ensure accurate duty payments, while the IRS often seeks to raise taxable income by increasing intercompany transaction values. This discrepancy can create compliance risks, particularly for companies engaged in transfer pricing adjustments. The recent developments in tariffs only add another layer of complexity, as businesses must now consider the potential future adjustments to the cost of goods, especially with fluctuating duty rates on imports from China, Mexico, and Canada.

To balance these competing regulatory concerns while minimizing costs, businesses can explore strategic reallocation of expenses. Some companies may benefit from shifting a portion of their import costs to non-dutiable service fees and royalties, thereby lowering their customs duty obligations without triggering adverse tax consequences. Proper implementation of these strategies requires adherence to the arm’s length principle under U.S. and global transfer pricing regulations, ensuring compliance with both Customs and IRS requirements.

In addition to reducing duty costs, optimizing customs valuation strategies can improve cash flow, free up capital for reinvestment, and enhance overall operational efficiency. A well-structured approach can help businesses navigate the complexities of rising tariffs while maintaining compliance with tax authorities.

As companies continue to face an unpredictable tariff environment, proactive planning and strategic cost management will be key to navigating these new challenges. For businesses engaged in international trade, staying informed and adjusting strategies as tariffs evolve will be essential to minimizing financial impact.

For a more in-depth look at these tariff mitigation strategies, read the full article here: KBKG | How Companies Can Manage Higher Tariffs That Are on the Way

Organizations Dependent on Federal Funding Need to Consider Options

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REAL ECONOMY BLOG | February 04, 2025

Authored by RSM US LLP

As we have seen recently, federal funding operations and priorities often shift with new administrations or during economic uncertainty. Organizations relying heavily on federal funding are especially vulnerable. In the context of the Trump administration’s recent proposal to pause some categories of federal spending, organizations should consider the following best practices to mitigate liquidity and financial risk due to operational disruptions:

  • Diversify revenue streams, such as seeking other grant or contract opportunities, organizing fundraising events or collaborating with local corporations or nonprofits
  • Maintain clear communication with major supporters and those charged with governance
  • Review reserves on a regular basis
  • Establish a line of credit to cover immediate expenses
  • Develop a contingency plan
  • Monitor cash flow
  • Discuss potential audit implications early with your auditors

Federal agencies are responsible for determining which programs are implicated by executive orders. The only way for a recipient to know for sure that their program is affected is to receive written notice from their agreement officer or grant officer. If organizations receive notice that an award is being suspended, paused or terminated (fully or partially), recipients should consult with legal counsel and advisors.

Here are suggestions to improve the chances of cost recovery if an award is paused:

  • Read any notices of award suspension or pauses carefully for information about costs that will be allowable during the suspension period.
  • Read through award terms and applicable agency supplements to the Uniform Guidance for provisions that address suspensions to pause activities for non-disciplinary reasons. For example, USAID addresses suspensions at 2 CFR 700.14. Other agencies do not address non-disciplinary suspensions in their regulations, and they may or may not include separate award terms for non-disciplinary suspensions or pauses to the award.
  • For pre-pause costs, document allowable award costs incurred before the award was paused, any related in-progress reports or other award deliverables. Attempt to collect for allowable costs incurred prior to the pause.
  • For pause-related costs, separately track costs (e.g., setting up a separate charge code) that are related to the pause (e.g., winddown costs, legal fees), and costs you will continue to incur that are unavoidable or necessary to promptly continue activities if the award is resumed (e.g., lease costs, securing project property). Keep detailed documentation of your efforts to minimize costs during the pause period.
  • Communicate with your grant officer. Acknowledge receipt of the suspension or pause notice and confirm you are halting activities as directed. Explain that certain costs will continue to be incurred and provide estimates and justifications for pause-related costs.

If an award is terminated, here are some best practices to consider:

  • Read through the notice of termination, note the effective date and refer to the process described at 2 CFR 200.340 “Termination.” Also note any applicable agency supplemental regulations and specific award terms addressing the termination process.
  • Document pre-termination costs and in-progress work. Also separately track and document termination-related costs that are incurred to close out the program (e.g., staff time to close out activities, legal costs), including any unavoidable costs (e.g., pre-paid, nonrefundable vendor costs, costs of breaking leases). Be prepared to justify termination-related costs and develop a written request to be reimbursed for these costs.
  • Again, communicate with your grant officer. Acknowledge receipt of the termination notice and confirm you are complying. Explain that certain costs will be incurred to promptly and responsibly close out award activities and provide examples and justifications for termination-related costs. Indicate your intent to submit a request for reimbursement of these allowable termination costs.

Organizations can be ready in the short term for any pauses in funding by creating a plan for how activities can be wound down, which improves the chances of recovering pause-related costs. In the long term, organizations can mitigate the risk of a stoppage from any one funder by diversifying funding streams across multiple donors.

Kristen Blandford contributed to this article.

This article was written by Matt Haggerty, Carla Contreras and originally appeared on 2025-02-04. Reprinted with permission from RSM US LLP.
© 2024 RSM US LLP. All rights reserved. https://realeconomy.rsmus.com/organizations-dependent-on-federal-funding-need-to-consider-options/

RSM US LLP is a limited liability partnership and the U.S. member firm of RSM International, a global network of independent assurance, tax and consulting firms. The member firms of RSM International collaborate to provide services to global clients, but are separate and distinct legal entities that cannot obligate each other. Each member firm is responsible only for its own acts and omissions, and not those of any other party. Visit rsmus.com/about for more information regarding RSM US LLP and RSM International.

2025 Forecast: What Financial Institutions Can Expect in the Coming Year

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As we step into 2025, the financial services industry is poised for another year of transformation. With rapid technological advancements, evolving regulatory landscapes, and increasing consumer demands for transparency and sustainability, financial institutions are facing both new challenges and exciting opportunities. To stay competitive and continue driving growth, institutions must adapt to these changes and leverage emerging trends.

Here’s a look at what financial institutions can expect in 2025 and how they can prepare for success in the year ahead:

  1. The Rise of Artificial Intelligence and Automation

Artificial Intelligence (AI) and automation are expected to continue reshaping the financial industry in 2025. Financial institutions are increasingly using AI to streamline processes, enhance customer service, and reduce operational costs. From automated customer service to risk analysis, AI is enhancing efficiencies and providing more personalized services. The continued adoption of AI tools will drive innovation and improve customer experiences, positioning financial institutions for growth.

  1. The Continued Growth of Blockchain Technology

Blockchain technology continues to make significant strides in financial services. In 2025, blockchain will further enhance transaction speed, improve transparency, and reduce fraud. While blockchain is increasingly integrated into cross-border payments, lending, and compliance processes, financial institutions will need to stay aligned with evolving regulations and explore how blockchain can optimize operations and security.

  1. Green Finance and Sustainability

With sustainability becoming a core concern, financial institutions are expected to see more demand for green finance in 2025. Green finance involves investments and projects focused on environmental sustainability, including green bonds and ESG (Environmental, Social, and Governance) funds. Meeting the increasing demand for sustainable investments will not only attract environmentally conscious clients but will also position financial institutions as responsible corporate citizens.

  1. The Evolution of Cybersecurity

As digital banking continues to grow, cybersecurity remains a top priority. Financial institutions will face increasing pressure to protect sensitive client data from rising cyber threats. In 2025, investing in advanced cybersecurity measures such as AI-driven threat detection and multi-factor authentication will be essential to safeguarding customer data and maintaining trust.

  1. Regulatory Changes and Compliance

The regulatory landscape for financial institutions will continue to evolve in 2025, with a focus on transparency, data privacy, and ESG reporting. Financial institutions must remain agile to comply with new regulations, including potential climate-related disclosure requirements. Ensuring strong compliance programs and enhancing reporting capabilities will be critical to avoiding penalties and maintaining industry credibility.

  1. The Rise of Digital Banking and Fintech Partnerships

The digital banking sector will continue to expand as consumers demand more online and mobile banking solutions. Fintech companies, in particular, are disrupting traditional banking models with innovative offerings. Financial institutions that form strategic partnerships with fintech firms will be well-positioned to offer cutting-edge services while reducing operational costs. Expect more collaborations and acquisitions between traditional banks and fintech startups in 2025.

  1. Customer-Centric Banking

In 2025, customer expectations will drive financial institutions to place a greater emphasis on personalized, seamless banking experiences. Using advanced data analytics and AI, financial institutions can create tailored financial solutions that meet individual customer needs, fostering loyalty and differentiation in a competitive market.

  1. The Growing Influence of Digital Currencies and CBDCs

Central Bank Digital Currencies (CBDCs) are expected to make significant strides in 2025. As countries like the U.S. continue exploring the potential for a digital dollar, financial institutions must stay informed and prepared to integrate these new digital currencies into their services as they become more widespread.

Preparing for 2025: Key Takeaways for Financial Institutions

To thrive in 2025, financial institutions must stay ahead of emerging trends, enhance security, and meet the increasing demand for sustainability. By adopting technologies such as AI, blockchain, and cybersecurity, institutions can enhance operations, offer better services, and align with green finance initiatives. Staying prepared for evolving regulations will also be key to maintaining compliance and positioning for long-term success.

At Brady Martz, we understand the challenges and opportunities facing financial institutions in 2025. Our team of experts is here to guide you through these changes and help you navigate the evolving landscape. Whether it’s adopting new technologies, managing regulatory complexities, or exploring sustainable finance options, we’re committed to helping your institution succeed in 2025 and beyond.

 

Business Valuation in 2025: The Hidden ROI of Knowing Your Company’s Worth

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When most business owners think about valuations, they picture the final steps of a sale process—pinpointing a number that helps close a deal. But the truth is, an updated valuation can offer a powerful edge long before you ever decide to sell. Whether you’re growing the business, planning for ownership transitions, or simply striving to make better decisions, having a clear understanding of your company’s worth can unlock surprising benefits.

Below, we explore why valuations matter even (and sometimes especially) when an immediate transaction isn’t on the horizon.

1. Fuel for Strategic Planning and Growth

Why It Matters

  • Identify Profit Drivers: An updated valuation often reveals which products, services, or client segments generate the most value—insights you can double down on to boost profitability.
  • Spot Bottlenecks: The valuation process can unearth inefficiencies in operations, supply chains, or staffing that might otherwise go unnoticed.

How It Helps

Think of a valuation as a “health check” that goes beyond revenue and profit margins. By delving into cash flow patterns, asset utilization, and other operational metrics, you’ll have clearer direction on where to invest or cut back. Over time, these informed decisions can compound, driving sustainable growth and a more resilient business.

2. Stronger Relationships with Lenders and Investors

Why It Matters

  • Clarity Builds Confidence: Banks, private lenders, and potential investors want reassurance that their funds are going into a well-managed enterprise.
  • Better Loan Terms: Demonstrating a thorough, data-driven valuation can help you negotiate more favorable interest rates or credit lines.

How It Helps

If you need funding—whether for new equipment, an expansion, or bridging a slow season—having an updated valuation in your back pocket shows you know your numbers. Lenders appreciate transparent financials, and investors value forward-looking data about growth potential. That trust can translate into smoother financing experiences and stronger negotiation positions.

3. A Roadmap for Succession and Estate Planning

Why It Matters

  • Future-Proofing: Even if you’re not ready to retire, laying the groundwork for succession avoids frantic scrambling when circumstances change.
  • Tax and Gifting Strategies: A well-supported valuation helps clarify how to transfer ownership shares to family members or key employees without triggering unexpected tax consequences.

How It Helps

An up-to-date valuation ensures you have realistic targets in mind for any future transfer—be it to your children, a co-owner, or valued team members. You’ll also gain greater peace of mind knowing your estate plan reflects your business’s true worth, protecting your family’s interests down the line.

4. Clarity for Partner Buy-Ins or Buyouts

Why It Matters

  • Avoiding Disputes: Having an objective figure reduces tension between existing owners and those looking to enter or exit.
  • Aligning on Equity: Knowing your company’s fair market value clarifies what percentage a new owner should receive—and what that stake is truly worth.

How It Helps

Valuation disputes can fracture relationships and stall business momentum. Keeping a current, credible valuation minimizes guesswork and encourages smoother negotiations when partners or key employees want to invest—or when someone needs to step away.

5. Motivating Key Employees with Equity

Why It Matters

  • Retention and Engagement: Offering equity or phantom stock can be a powerful motivator—but only if you know how much that equity is worth.
  • Transparency and Trust: Employees will be more confident in your equity-based incentives if the company’s valuation is grounded in solid financial data.

How It Helps

When top performers see a tangible connection between their efforts and the business’s market value, they’re often more invested in hitting goals. An accurate valuation also helps you fairly structure equity grants without diluting ownership more than you intend.

6. Getting Ahead of Unsolicited Offers

Why It Matters

  • Knowing Your Range: If a buyer suddenly comes knocking, you don’t want to scramble for a rough, potentially understated value.
  • Avoiding Undervaluation: The best opportunities sometimes appear when you least expect them—being unprepared can lead to a rushed conversation and missed upside.

How It Helps

With a current valuation, you can quickly assess whether any unsolicited offers are reasonable or if you should hold out for a stronger deal. This readiness also demonstrates professional management to potential suitors, strengthening your position if negotiations proceed.

7. Bigger Vision for Community Impact

Why It Matters

  • Anchoring Legacy: For many owners, their business is the cornerstone of local economic development, jobs, and charitable donations.
  • Maximizing Local Benefit: A carefully planned strategy—rooted in a realistic valuation—helps ensure you have the resources to give back in meaningful ways.

How It Helps

When you understand the true worth of your company, you can plan philanthropic or community-related initiatives with greater confidence. That might mean earmarking a portion of future profits for local charities or investing in expansions that create more jobs. Either way, the clarity of valuation aids in creating a far-reaching vision.

How Brady Martz Can Help

At Brady Martz, our Valuation, Transaction, & Transformation (VTT) team goes beyond “just the numbers.” We help you understand why your business is valued the way it is—and how you can use that information to make smarter decisions, achieve your personal and financial goals, and strengthen the legacy you’re building.

  • Holistic Valuation Analyses: We don’t do cookie-cutter appraisals; we tailor our approach to your unique operations, industry, and strategic objectives.
  • Future-Focused Insights: In addition to pinpointing your current worth, we highlight growth levers that can elevate your value down the road.
  • Seamless Collaboration: From assisting with bank discussions to estate and succession planning, our integrated services help ensure no opportunity (or risk) is overlooked.

Curious about how a fresh valuation could help your business thrive—even if a sale isn’t on the horizon? Contact the Brady Martz VTT team today. We’ll help you unlock the hidden ROI of knowing your company’s true worth—and set you on a path to greater confidence, clarity, and long-term success.

Preparing to Sell in the New Year: Top Sell-Side Risks — And How to Address Them

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For most business owners, selling a company is a once-in-a-lifetime event—one that can shape retirement plans, family legacies, and the well-being of employees and the local community. Because so much rides on the outcome, it’s crucial to recognize the hidden pitfalls that often reduce a seller’s final proceeds or prolong the deal to everyone’s frustration.

Below, we explore the most common risks from a sell-side perspective, along with general strategies to ensure you enter the new year prepared for a smooth, value-enhancing transaction.

Why Sell-Side Risks Matter So Much

Every misstep in the selling process carries a real cost. If you go into a deal underprepared or lacking clarity around your company’s financials, you might receive a lower offer—or face extended due diligence that saps your time, energy, and leverage. Being aware of these potential pitfalls lets you position your business in the most attractive light and retain control of the process.

Common Pitfalls Sellers Face—And How to Address Them

1. Relying on Irregular or Outdated Financials

  • Why It’s a Problem: Many owners keep close tabs on annual results but don’t consistently track monthly or quarterly trends. When a buyer sees gaps or inconsistencies, they perceive higher risk—and can lower their offer or demand more scrutiny.
  • How to Address It: Work with financial advisors to standardize your reporting. Presenting well-documented, credible statements signals a healthy business and speeds up buyer confidence.

2. Underestimating the Role of a Quality of Earnings (QOE) Analysis

  • Why It’s a Problem: As acquirers grow more sophisticated, many expect a deeper look at revenue streams, customer contracts, and profitability drivers—beyond your standard financial statements. If you don’t prepare for this, you could face last-minute concessions.
  • How to Address It: Consider engaging professionals to conduct or review a QOE analysis on your terms. This proactive approach helps you spot and fix red flags before a buyer uses them to negotiate down the price.

3. Overlooking Working Capital Management

  • Why It’s a Problem: Buyers typically look at historical benchmarks to determine how much cash, inventory, and receivables are necessary to run the business post-sale. If you carry excess inventory or have slow receivables, you might effectively lower the proceeds you take home.
  • How to Address It: Identify ways to optimize inventory levels and improve receivables collection. A leaner working-capital structure often boosts your credibility—and your final payout.

4. Accepting a Single Offer Without Exploring Options

  • Why It’s a Problem: An unsolicited offer can be tempting, but going straight into one-on-one negotiations might mean missing out on stronger bids or better deal structures.
  • How to Address It: Before committing, at least gauge the market’s interest. A quick market test or strategic outreach can confirm whether you’re getting a fair price and terms.

5. Sharing Confidential Information Too Soon

  • Why It’s a Problem: Sellers sometimes provide proprietary data—like detailed customer lists or trade secrets—before nondisclosure agreements or careful buyer vetting are in place.
  • How to Address It: Protect yourself. Work with advisors to set up phased disclosures. An NDA is essential, but also confirm buyers have the financial capacity and genuine intent to proceed before revealing highly sensitive information.

6. Delaying Professional Guidance

  • Why It’s a Problem: By the time you bring in M&A advisors, attorneys, or tax specialists—often after an informal “handshake” deal—you may have already given away negotiating power or overlooked key tax-efficient deal structures.
  • How to Address It: Engage experts early. They can streamline the sale process, optimize deal terms, and let you focus on running your business instead of getting bogged down in technical details.

7. Letting Operations Slip During the Deal

  • Why It’s a Problem: Sellers often get so absorbed in negotiations that they neglect core operations—leading to missed sales or declining performance just when buyers are paying the most attention.
  • How to Address It: Delegate. Let your advisory team handle much of the deal process, and keep your attention on maintaining the business’s growth and profitability. Sustained strong performance only strengthens your negotiating position.

8. Not Maximizing Value for Your Family, Employees, or Community

  • Why It’s a Problem: When sellers don’t capture the full value of the business, that lost equity doesn’t disappear—it simply transfers to the buyer. This can mean fewer resources for personal retirement, community philanthropy, or employee rewards.
  • How to Address It: Recognize the broader impact of your sale price. Engaging professionals to secure a fair—and potentially premium—valuation helps ensure those resources remain with you, your family, or your local community.

9. Accepting Unclear or Prolonged Due Diligence Timelines

  • Why It’s a Problem: Buyers might drag out the due diligence phase, causing “deal fatigue” and creating opportunities to renegotiate. Sellers without proper support may feel compelled to accept these changing terms just to close the deal.
  • How to Address It: A structured, preemptive approach sets fair timelines and expectations. When you prepare documents and data in advance—and have advisors ready to manage buyer requests—you’re less likely to be at the mercy of endless negotiations.

10. Assuming All Buyers Have the Same Post-Sale Objectives

  • Why It’s a Problem: Private equity groups, strategic acquirers, and other buyers each have unique timelines and culture-integration approaches. Treating them as interchangeable can lead to misaligned post-sale expectations for you or your employees.
  • How to Address It: Early in discussions, clarify each buyer’s vision for your company—whether that’s rapid expansion, tighter cost controls, or something else. Aligning with a buyer who shares your values and goals can lead to a smoother transition.

How Brady Martz Can Help

At Brady Martz, our Valuation, Transaction, & Transformation (VTT) team understands that selling your business is about more than just signing on the dotted line; it’s about achieving the right outcome for you, your employees, and your community. We offer:

  • Financial and Operational Readiness Assessments to standardize reporting and optimize working capital.
  • Quality of Earnings Insights that ensure you’re equipped to handle buyer scrutiny.
  • Tailored Deal Structuring to safeguard your interests—legally, financially, and tax-wise.
  • Transaction Management Support so you can keep your attention on running a profitable operation during the sale process.

Interested in learning how to protect your hard-earned value in the new year? Reach out to Brady Martz today. Together, we’ll craft a proactive sell-side strategy that helps you avoid common pitfalls and secure the future you’ve envisioned.

Building the Future: How Succession Planning Sets Your Business Up for Long-Term Success

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For many business owners, “succession planning” sounds like a project for the distant future—until the unexpected happens. Whether you plan to sell to an outside buyer (like a strategic acquirer or private equity group) or transfer ownership internally (via a management buyout, ESOP, or family transition), the best time to start planning is always “as soon as possible.” By mapping out how your business will operate—both with and without you—you can protect its value, minimize disruptions, and create a smoother path for the next generation of leadership.

Below, we explore why succession planning matters, why you should start now, the key components of a strong plan, and how Brady Martz can help guide you through the process.

Why Succession Planning Is Crucial

  1. Safeguards Your Legacy
    You’ve built a thriving organization through years of hard work. A well-thought-out succession plan ensures that your company’s mission, culture, and impact endure—even if circumstances require your sudden departure or retirement.
  2. Maximizes Business Value
    Buyers—whether external or internal—look closely at continuity. If you demonstrate strong leadership development, clean financials, and clear operational processes, you’re far more likely to command a premium price. Even if you opt for an internal transition (e.g., selling to key employees or family), having a solid plan can help preserve and potentially boost enterprise value.
  3. Provides Clarity to Stakeholders
    Uncertainty about who’s in charge can lower morale, sow confusion, or spark disputes—especially in family-owned businesses. A documented succession plan keeps everyone on the same page regarding roles, responsibilities, and future leadership.
  4. Positions You for Strategic Growth
    The process of succession planning often reveals operational gaps and inefficiencies that, once addressed, can significantly increase profitability. Better processes, stronger internal controls, and a focused leadership pipeline make your business more competitive now—long before any ownership change.
  5. Reduces Risk of Disruption
    Life happens—health issues, economic downturns, or unsolicited buyout offers can appear at any time. Having a succession blueprint in place makes it easier to respond calmly and strategically, instead of scrambling under pressure.

Why You Need to Start Now

  1. Longer Runway for Developing Future Leaders
    Whether you’re transitioning to a family member, an ESOP, or a new management team, leadership skills take time to nurture. Identifying and mentoring successors early maximizes their readiness and minimizes transition headaches.
  2. Flexible Options for External or Internal Sales
    If you aim to sell to an external buyer (strategic or private equity), you’ll need well-presented financials and a compelling growth story to achieve the best valuation. If your plan leans toward internal buyers—like employees or family—additional considerations around financing and training come into play. Early planning leaves room for both scenarios to evolve.
  3. Tax and Financial Strategies Require Lead Time
    Techniques to optimize taxes—such as gifting shares or reorganizing your entity structure—often need multiple years to implement effectively. Setting the wheels in motion now ensures you won’t miss out on strategic advantages later.
  4. Smoother Transition for Employees and Customers
    Succession planning is as much about people as it is about profit. Transitioning day-to-day management with minimal turbulence keeps employees engaged and customers confident, safeguarding the relationships you’ve spent years building.

Key Components of a Successful Succession Plan

  1. Clear Ownership Path
    Decide whether you plan to sell externally (strategic buyer, private equity, etc.) or internally (management buyout, ESOP, family transfer). Each path has unique implications for financing, leadership, and ongoing governance.
  2. Accurate Business Valuation
    Establishing a fair market value is critical, whether you’re dealing with outside acquirers or internal shareholders. It also clarifies how much capital a management team, ESOP, or family member needs to secure if they’re the intended buyer.
  3. Formal Agreements (Including Buy-Sell Provisions)
    For multi-owner businesses (e.g., S-corporations with multiple shareholders), a buy-sell agreement is essential to define what happens when someone exits, passes away, or otherwise transitions out. While it may not reduce taxes on its own, it ensures continuity and helps avoid disputes over pricing or ownership stakes.
  4. Leadership Development and Mentoring
    If you’re grooming an internal successor—whether that’s a family member or a key executive—outline the skills and experiences they’ll need, and put a plan in place to get them there. This can include rotating through various departments, shadowing current leadership, or taking on more responsibilities over time.
  5. Tax and Estate Planning
    Succession often intersects with personal financial goals. Consider how estate planning tools and potential entity restructures might align with your transition strategy. By addressing these elements early, you can help protect wealth for you and your heirs while ensuring the business remains stable.
  6. Communication Strategy
    Transparency reduces anxiety and rumors. Be sure to inform key employees, co-owners, and family members of your vision. If you’re selling externally, keeping staff and important customers in the loop (at the right time) helps maintain relationships and operational momentum.

How Brady Martz Can Help

Our Valuation, Transaction, & Transformation (VTT) team at Brady Martz understands that no two succession stories are the same. We offer:

  • Business Valuation Expertise
    We’ll determine your company’s true worth and spotlight areas to boost profitability or reduce risk—making you more attractive to any buyer, external or internal.
  • Tailored Transition Strategies
    Whether you envision selling to a strategic acquirer, private equity, or transferring the reins to a key employee group or family, we’ll help you craft a roadmap that fits your goals, timeline, and financial considerations.
  • Ongoing Advisory for Leadership
    From identifying your future leaders to establishing their training pathways, we’ll work hand-in-hand with you to ensure the right people are in the right roles at the right times.
  • Holistic Tax and Estate Planning
    We’ll partner with you to explore entity structures, gift/estate strategies, and other key elements so that your personal and business objectives remain aligned through the transition.

Ready to chart a sustainable future for your company—on your own terms? Reach out to the team at Brady Martz today, and let’s start building a succession plan that protects your legacy and sets your business on a path to long-term success.

Key Trends in Public Administration for 2025

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As we step into January 2025, government agencies are gearing up for the opportunities and challenges that this new year will bring. With emerging regulations, evolving public expectations, and continued technological advancements, it’s crucial for agencies to remain proactive and stay ahead of the curve. The beginning of the year presents an ideal time to assess current operations, address compliance requirements, and set strategic goals for the future. At Brady Martz, we’re here to help government entities navigate these shifts and lay a strong foundation for success in 2025.

With fiscal year-end approaching for many agencies and critical deadlines looming for financial reporting and grant compliance, now is the time to focus on preparation. Below, we highlight key trends government agencies should be ready for as they enter 2025.

1. Managing 2024 Funding and Grant Compliance

The continued impact of federal funding through programs such as the Infrastructure Investment and Jobs Act (IIJA) and ongoing allocations from pandemic-related relief initiatives will require agencies to ramp up their reporting and compliance efforts early in 2025.

Key Focus Areas: Ensuring accurate tracking and reporting of federal grants, particularly with Single Audit deadlines coming up in the first half of 2025.
Why It Matters: Increased federal oversight requires airtight processes to avoid compliance risks.

How to Prepare:

  • Review your Schedule of Expenditures of Federal Awards (SEFA).
  • Collaborate with auditors to identify and resolve potential compliance gaps before reporting deadlines.

2. GASB Standards Updates Taking Effect in 2025

Government agencies need to stay ahead of updates from the Governmental Accounting Standards Board (GASB). The most impactful updates include:

  • GASB Statement No. 101 – Effective for fiscal years starting after January 1, 2025, this standard addresses compensated absences, requiring improved recognition and measurement of leave liabilities.
  • Implementation of Prior Pronouncements – Agencies finalizing processes for GASB 96 (subscription-based IT agreements) will need to refine reporting and disclosures heading into 2025.

How to Prepare:

  • Review how GASB 101 will impact your current leave accruals and ensure compliance.
  • Evaluate any subscription-based IT arrangements to ensure compliance with GASB 96.

3. Cybersecurity Threats and Federal Requirements

With cyberattacks on government systems increasing, cybersecurity remains a top priority in 2025. Additionally, federal and state mandates are ramping up requirements around cybersecurity protections.

Key Event: The Cybersecurity and Infrastructure Security Agency (CISA) is expected to release additional guidance for state and local agencies in early 2025.
Why It Matters: Agencies managing sensitive data—such as financial records and public services—face significant risks without proactive cybersecurity measures.

How to Prepare:

  • Conduct an end-of-year cybersecurity audit to identify vulnerabilities.
  • Develop a 2025 cybersecurity plan, including updated incident response protocols and employee training.

4. Leveraging AI and Technology for Financial Reporting

In 2024, there was a significant uptick in the adoption of artificial intelligence (AI) and automation tools to streamline public administration tasks. Heading into 2025:

  • AI in Financial Management: Agencies are increasingly using AI to automate budgeting, forecasting, and financial reconciliation processes.
  • Data-Driven Decisions: AI tools will improve the ability to analyze data for better resource allocation and program performance evaluation.

How to Prepare:

  • Explore tools that can automate manual processes in financial reporting to free up staff for higher-level tasks.
  • Invest in training to help teams adapt to and leverage new technologies effectively.

5. Preparing for Workforce Transitions

Many government agencies are facing staffing challenges due to retirements, talent shortages, and evolving workforce expectations. In 2025, agencies will need to prioritize:

  • Succession Planning: Preparing the next generation of leadership to ensure smooth transitions.
  • Recruitment Strategies: Offering competitive salaries, flexible work arrangements, and training opportunities to attract top talent.

How to Prepare:

  • Conduct workforce assessments to identify gaps in leadership and key roles.
  • Create professional development programs to retain and upskill current employees.

6. Increasing Demand for Financial Transparency

Public trust and stakeholder expectations for transparency continue to grow. Heading into 2025, government agencies must:

  • Provide timely and clear reporting on the use of public funds.
  • Implement interactive tools and dashboards that allow constituents to access financial and operational data.

How to Prepare:

  • Update reporting systems to produce clear, user-friendly reports.
  • Collaborate with financial professionals to ensure accuracy and transparency in year-end reporting.

How Brady Martz Can Help

As your trusted advisors, Brady Martz is committed to helping government agencies navigate these key trends and prepare for a successful 2025. Whether you need assistance with year-end audits, GASB compliance, or technology implementation, our Government Niche team has the expertise to provide tailored solutions that ensure accuracy, transparency, and efficiency.

Our Services Include:

  • Audit and Assurance – Ensuring compliance with GASB standards and federal grant requirements.
  • Strategic Consulting – Helping agencies adopt technology, implement cybersecurity measures, and optimize operations.
  • Financial Reporting Support – Assisting with year-end financial statements, SEFA preparation, and transparency initiatives.

Start 2025 Strong with Brady Martz

The new year brings both challenges and opportunities for government agencies. By preparing now, you can ensure your organization is ready to meet deadlines, adopt new standards, and thrive in 2025.

If your agency needs support, contact the Brady Martz Government Niche team today. We’re here to help you stay ahead of the trends and serve your community with confidence.

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Visit our Government Services page to learn more about how Brady Martz can help your agency prepare for the future.

Building a Sustainable Future: A Guide to Nonprofit Endowments

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Nonprofits are constantly challenged to balance their current financial needs with long-term sustainability. One of the most effective tools to secure a stable financial future is establishing an endowment fund. Endowments not only provide a consistent income stream but also signal financial stability and foresight to donors, stakeholders, and the broader community.

As we kick off 2025, it’s the perfect time for nonprofits to evaluate their financial strategies and consider whether an endowment is the right step forward. Below, we delve into the essentials of endowments, their benefits, challenges, and steps to establish one for your organization.

What is an Endowment?

An endowment is a fund established by a nonprofit organization in which the principal amount is invested. The investment generates income that the nonprofit can use to support its operations, programs, or other mission-critical initiatives. In most cases, the principal remains intact, allowing the fund to grow over time through additional contributions and investment returns.

Endowments typically fall into one of three categories:

  1. Permanent Endowments – These funds have donor-imposed restrictions that require the principal to remain intact indefinitely, with only the income available for use.
  2. Term Endowments – These funds allow the principal to be spent after a specified period or event, as outlined by the donor.
  3. Quasi-Endowments – Also known as board-designated endowments, these funds are created at the discretion of the nonprofit’s board and can be spent if needed.

Benefits of Establishing an Endowment

Creating an endowment offers nonprofits several long-term advantages:

  1. Financial Stability and Independence
    Endowments provide a predictable income stream that reduces reliance on unpredictable revenue sources like grants and donations. This stability allows nonprofits to plan ahead with greater confidence.
  2. Donor Engagement and Confidence
    An endowment demonstrates an organization’s commitment to sustainability and financial stewardship. This can inspire confidence among donors, particularly major contributors, and encourage legacy giving.
  3. Support for Mission-Critical Programs
    The income from an endowment can fund essential programs, operational costs, or new initiatives, ensuring the organization continues to fulfill its mission effectively.
  4. Flexibility for Future Needs
    Endowments can act as a financial safety net, providing support during economic downturns or unexpected challenges.

Challenges to Consider

While the benefits of an endowment are significant, nonprofits should also be aware of potential challenges:

  1. Initial Fundraising Efforts
    Building an endowment requires substantial upfront fundraising, which may divert resources from current programs or operational needs.
  2. Investment Risks
    Endowments are subject to market fluctuations, which can impact the income generated. A well-crafted investment policy can help mitigate these risks.
  3. Administrative and Compliance Responsibilities
    Managing an endowment involves ongoing oversight, compliance with donor restrictions, and adherence to federal and state regulations.
  4. Balancing Current and Long-Term Needs
    Organizations must carefully balance the use of endowment income with the immediate needs of their programs and operations.

Steps to Establishing an Endowment

If your organization is considering an endowment, here’s a roadmap to get started:

  1. Assess Your Organization’s Readiness
    • Mission Alignment: Ensure an endowment aligns with your long-term goals.
    • Financial Health: Evaluate your current financial position to determine if you have the capacity to establish and maintain an endowment.
  2. Define the Purpose of the Endowment
    • Will it support general operations, specific programs, or capital projects?
    • Clearly articulate the purpose and communicate it to donors.
  3. Develop an Investment Policy
    • Risk Tolerance: Define your organization’s comfort level with investment risks.
    • Spending Policy: Determine what percentage of the fund’s income will be spent annually. A typical rate is 4-5% of the fund’s value.
  4. Engage Legal and Financial Experts
    • Work with legal counsel to draft agreements and ensure compliance with donor restrictions.
    • Consult with financial advisors to develop an investment strategy.
  5. Launch a Fundraising Campaign
    • Create a compelling case for support that highlights the benefits of an endowment to your mission.
    • Identify potential donors, including board members, major donors, and legacy givers.
  6. Establish Governance and Oversight
    • Form an endowment committee to oversee the fund’s management and ensure adherence to policies.
    • Regularly review the fund’s performance and adjust strategies as needed.

Key Trends in Endowment Management

As we move into 2025, several trends are shaping the way nonprofits approach endowments:

  • ESG Investments: Many organizations are incorporating Environmental, Social, and Governance (ESG) criteria into their investment policies to align with their mission and values.
  • Increased Donor Involvement: Donors are seeking greater transparency and input into how endowment funds are managed and utilized.
  • Technology Integration: Nonprofits are leveraging technology to track endowment performance, manage donor relationships, and enhance reporting capabilities.

How Brady Martz Can Help

At Brady Martz, we understand that establishing and managing an endowment requires careful planning, strategic decision-making, and ongoing oversight. Our team of nonprofit experts offers a range of services to help your organization:

  • Develop comprehensive financial and investment policies
  • Ensure compliance with state and federal regulations
  • Provide guidance on donor engagement and stewardship
  • Offer tailored solutions to maximize the impact of your endowment

With decades of experience serving nonprofits across the region, Brady Martz is your trusted partner in building a sustainable future for your organization. Contact us today.

Fundraising in 2025: Creative Strategies to Engage Donors in a Digital Age

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In an increasingly digital world, nonprofit organizations face both opportunities and challenges in connecting with donors. As we enter 2025, the landscape of fundraising continues to evolve, driven by advancements in technology, shifts in donor expectations, and the growing importance of creating meaningful, personalized experiences. For nonprofits, staying ahead means embracing innovative strategies that engage donors and inspire action.

Here are some creative fundraising strategies to consider as you plan for the year ahead:

1. Leverage Social Media for Peer-to-Peer Fundraising

Social media platforms remain a powerful tool for nonprofits to amplify their message and engage supporters. In 2025, peer-to-peer fundraising campaigns are gaining traction, allowing donors to become ambassadors for your cause. By encouraging supporters to share personalized fundraising pages with their networks, you can expand your reach and tap into new donor pools.

To maximize results:

  • Use short, engaging videos to communicate your mission.
  • Provide supporters with easy-to-use toolkits for their campaigns.
  • Leverage trending hashtags and platform-specific features, such as Instagram Reels or TikTok challenges, to increase visibility.

2. Host Virtual and Hybrid Events

Virtual and hybrid events are no longer just a necessity—they are a preferred way to connect with donors across geographic boundaries. From online auctions and virtual galas to hybrid 5K runs, these events make participation convenient and inclusive.

Key tips for success:

  • Invest in high-quality livestreaming technology for seamless virtual experiences.
  • Create interactive elements, such as live polls or Q&A sessions, to boost engagement.
  • Offer tiered participation levels, including exclusive perks for high-level donors.

3. Personalize the Donor Experience with Data

Donors increasingly expect personalized interactions, and data-driven strategies make this possible. By leveraging donor management software, nonprofits can analyze giving patterns, preferences, and engagement history to tailor outreach efforts.

Ways to personalize:

  • Send targeted emails that align with donors’ specific interests or past contributions.
  • Use personalized thank-you videos or messages to show gratitude.
  • Highlight the direct impact of their gifts through tailored updates or success stories.

4. Incorporate Gamification into Fundraising Campaigns

Gamification transforms fundraising into a fun and engaging experience by introducing elements like challenges, rewards, and leaderboards. This approach is especially effective for engaging younger audiences and building community among supporters.

Ideas to try:

  • Set up a points system for donors based on their contributions or participation in events.
  • Create a fundraising leaderboard to encourage friendly competition.
  • Offer badges or incentives for reaching certain milestones.

5. Explore Cryptocurrency and Digital Wallet Donations

Cryptocurrency and digital payment platforms like Venmo and Apple Pay are becoming mainstream in philanthropy. Offering these as donation options allows nonprofits to connect with tech-savvy donors and new audiences.

Steps to get started:

  • Partner with a reputable platform to accept cryptocurrency donations securely.
  • Educate donors about the tax benefits of donating cryptocurrency.
  • Promote these options prominently on your website and in campaigns.

6. Harness the Power of Storytelling Through Video

Video remains one of the most impactful ways to share your nonprofit’s story and connect emotionally with donors. In 2025, short-form video content is dominating digital platforms, making it an essential component of any fundraising strategy.

Best practices:

  • Create compelling 60-second videos showcasing your mission and impact.
  • Use real stories from beneficiaries to highlight the difference donors make.
  • Share videos across social media, email campaigns, and your website.

7. Engage Corporate Partners with Sponsorship Opportunities

Corporate partnerships are a valuable way to diversify funding sources and increase visibility. Businesses are increasingly interested in aligning with nonprofits that share their values, offering a win-win opportunity.

How to approach:

  • Design sponsorship packages that include digital branding opportunities, such as website mentions or social media shoutouts.
  • Partner on cause-related marketing campaigns where a percentage of sales benefits your nonprofit.
  • Highlight corporate sponsors at events, in newsletters, or on donor recognition walls.

8. Implement Subscription-Based Giving Programs

Subscription-based giving, also known as recurring donations, is a growing trend that provides nonprofits with a steady stream of income. By creating a “giving club” or similar program, you can cultivate a loyal base of supporters.

Tips for success:

  • Offer exclusive perks to members, such as early access to events or quarterly impact reports.
  • Simplify the enrollment process to make signing up easy.
  • Use automated tools to thank recurring donors regularly and keep them engaged.

Looking Ahead: The Future of Fundraising

In 2025, successful nonprofit fundraising hinges on a combination of creativity, technology, and a deep understanding of donor behavior. By embracing innovative approaches and staying agile in the face of change, your organization can strengthen donor relationships and ensure long-term sustainability.

At Brady Martz, we’re here to support your nonprofit every step of the way. Our team of experts offers financial guidance, fundraising insights, and strategic solutions to help your organization thrive. Let’s make 2025 a year of growth and impact!

Brady Martz Welcomes Green & Miller

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Brady Martz & Associates is excited to announce that the Firm is expanding its dealerships team and footprint with the addition of Green & Miller, P.C. based in Corinth, Texas. This marks an important milestone for Brady Martz as they welcome additional talent to the dealerships industry team and expand the reach of their dealerships client base from 18 to 24 states.

“This transition represents not only growth in this particular industry but also an opportunity to combine the unique strengths of both firms,” Brady Martz CEO Stacy DuToit said. “Green & Miller brings expertise and valued relationships to the Firm, and we are eager to support them in delivering the high-quality service their clients have come to expect.”

Green & Miller has been providing accounting, tax, and advisory services to clients for nearly 30 years. Their experienced team will join Brady Martz, and the office located in Corinth will operate as Brady Martz & Associates.

Founded in 1927, Brady Martz has been delivering exceptional client service for almost a century. Headquartered in Grand Forks, the Firm operates across nine offices in North Dakota, Minnesota, and South Dakota, offering advisory, audit & assurance, and tax services to a diverse range of industries.