Business Exit/Succession Planning

The ORBA Manufacturing and Distribution Group works with many entrepreneurs to determine the best time and method of exiting the active management of their closely held business and realizing or transferring the value of this major asset.

Whether looking to transfer the business to the next generation, considering a management buyout, or selling to the highest bidder, we can help develop and implement a plan. Of equal importance, we can consider and quantify the risks of different strategies on your overall personal and family financial situation.

State of Illinois Credits and Incentives

While state and local tax incentives present many opportunities, identifying the available incentives and determining which ones your organization qualifies for can be a daunting task.

Many companies fail to pursue incentives available to them due to time constraints and other competing priorities. With ORBA by your side, the credits and incentives that are available to you can become an important part of your business strategy.

Illinois offers numerous incentives to encourage manufacturers to expand or relocate to the state. The Illinois incentive programs are subject to varying qualifying requirements, application processes and procedures; most are subject to some ongoing documentation and compliance requirements.

Other states are continuously creating or expanding their incentive programs to encourage businesses to create or retain jobs in their states as well. Incentive programs also vary tremendously from state to state. To benefit from these opportunities, it is imperative to understand the implications of both statutory credits and negotiated credits and incentives in the early planning stages of a project.

ORBA professionals are familiar with the many credit and incentive programs available to manufacturers. We help identify which programs offer significant, bottom-line savings to your company based on your unique status and goals. For example, obtaining a jobs tax credit that reduces tax liability in a state may be great on the surface, but if your company will never use the credit due to lack of taxable income, such a credit may be wasted.

Staying on top of credit and incentive opportunities at the state and local level and realizing actual benefits can be challenging. By working closely with your company to identify potential expansion or relocation plans, ORBA professionals apply their experience and state-specific knowledge to maximize the appropriate programs.

Profitability and Productivity Improvement

Improvements in productivity alone are not enough. The goal for any manufacturing or distribution company is to see improved profitability without sacrificing quality. The ORBA Manufacturing and Distribution Group is positioned to advise companies on how to achieve measurable productivity improvements with the goal of achieving improved profitability.

Lean Manufacturing

One common concept to improve productivity is through Lean Manufacturing. The concept of Lean Manufacturing is one that has been around for many years and has helped companies improve their productivity and profitability. Lean Manufacturing involves finding efficiencies and removing wasteful steps that don’t add value to the end product. There are eight components of waste that can be monitored:

1. Overproduction – Does production exceed demand?
2. Waiting – How much lag time occurs between production steps?
3. Inventory – Are supply levels and work in process excessive?
4. Transportation – Are materials moved efficiently?
5. Over-processing – Is there too much work done on the product?
6. Motion – Do people and equipment move efficiently between production steps?
7. Defects – Is there too much time spent finding and fixing production errors?
8. Workforce – Do workers work efficiently?

The Lean Manufacturing process has three key stages:

1. Identifying waste
2. Analyzing and finding the cause of waste, and
3. Solving the cause of the waste to improve efficiency

Once wastes are determined by using the three key strategies above, there are a number of tools and techniques available to manufacturers that can further reduce waste.

Six Sigma

While Lean Manufacturing is a concept applied to reduce waste, Six Sigma is a concept used to increase quality and improve manufacturing productivity. The fundamental objective of the Six Sigma methodology is the implementation of a measurement-based strategy that focuses on process improvement and variation reduction through the application of Six Sigma improvement projects.

This is accomplished through the use of two Six Sigma sub-methodologies: DMAIC and DMADV. The Six Sigma DMAIC process (define, measure, analyze, improve, control) is an improvement system for existing processes falling below specification and looking for incremental improvement.

The Six Sigma DMADV process (define, measure, analyze, design, verify) is an improvement system used to develop new processes or products at Six Sigma quality levels. It can also be employed if a current process requires more than just incremental improvement. Both Six Sigma processes are executed by Six Sigma Green Belts and Six Sigma Black Belts, and are overseen by Six Sigma Master Black Belts.

ORBA’s Manufacturing and Distribution Group is available to work with manufacturing companies to apply these concepts to achieve the desired result of improved manufacturing productivity.

State and Local Tax

The tax burden facing manufacturers today can be both large and complex. ORBA’s Manufacturing and Distribution Group is in your corner to provide innovative and proactive strategies to maximize your tax savings and minimize your risk. We endeavor to manage tax compliance while providing you with guidance, planning and advice throughout the year to avoid surprises and capitalize on opportunities.

Strategic Planning

As a business owner, the time required to stay on top of your company’s historical and current financial information and operational issues often takes precedence over long-term strategic planning. Strategic planning is an important element of running a business. You need to know how your company’s financial and operational metrics compare to the industry and what action steps could be taken to improve key areas and enhance value. You want to consider whether you want to grow the company organically or through acquisition, and what financial or other resources are needed to pursue your goal. During the strategic planning process, a number of critical questions are raised, for example:

• Are key members of management close to retirement?
• Does the company have a succession plan in place in the event that there is turnover in the leadership of the company?
• When was the last time your company documented a business plan defining your business and outlining goals through expected financial components and operational objectives?

ORBA’s knowledge of the manufacturing industry and depth of resources allow us to assist you in evaluating strategies, brainstorming ideas and articulating a business plan with appropriate financial projections. At ORBA, our goal is to develop long-term, hands-on relationships with our clients that include the development, implementation and periodic updating of strategic plans.

Value Enhancement Strategies

Sophisticated business buyers consider a number of factors in their evaluation of a company. Next Plateau, an ORBA subsidiary, has identified more than 50 important factors that buyers need to consider when determining the value of a particular company. These factors are divided into personal, business operations, industry, legal/regulatory, financial and the current economic/M&A market. Each factor should be rated as an area of strength, an area of potential improvement, or as neutral with no major effect on the value of the company. The company can then focus on highlighting strengths and mitigating weaknesses.

Value enhancement involves all aspects of a business, including facilities, production and personnel, as well as financial performance. It focuses on improving the profitability and cash flow of the business, mitigating the risks involved in business ownership and making the business an “excellent” performer in its industry.