Articles and Letters

Critical Succession Planning Tips for the Construction Industry

Do you have a succession plan for your business? Repeatedly our construction and real estate team will hear of construction owners simply closing up shop once they are ready to retire instead of developing a profitable exit plan. Typically the owner hasn’t invested time in proper planning due to the daily demands of running a construction business.

“Unlike many of our agricultural clients, often construction owners do not have the luxury of passing down the business to their family to operate,” Ian Grimbleby, Construction Team Lead mentions. “Nor is it as easy as selling land to your farming neighbor. There is more risk involved because it is an owner-operated service and there are no guarantees that the next generation has the skills required to run the business. “

 Understanding the Challenge

Succession rates are highest when the original business owner is passing it down to the 2nd generation, with a 30% success rate. Once the original owner is out of the picture, succession rates dip even further—with a 12% success rate from 2nd passed to 3rd generations and a mere 3% success rate from 3rd passed to 4th generation owners.

Even with careful selection of a future successor, inheritors are often ill-equipped to handle the transition due to a lack of understanding of what is needed to succeed, and undeveloped skills such as: a lack of management, financial, sales or leadership ability. Additionally, a lack of natural entrepreneurial grit can be to blame for the failed business.

Common succession struggles for business owners often include concerns about their employees through a transition, incentives to keep key employees motivated during uncertain times, long-lasting legacy uncertainties and of course – will I be able to maintain my quality of life?

 Where to Start

  • Have discussions about long-term goals with trusted advisors such as your legal and financial team, key family members, and key employees.
  • Conduct a business valuation (this is recommended for all types of businesses).  Recognizing the difference in fair market value and your emotional value is key, as they will not be the same. Understanding the value of your business assets, financial performance and opportunities is critical. To learn more about Business Valuations please click here
  • Consider all succession alternatives, including, but not limited to:
    1. Internal sale
    2. External sale
    3. Recapitalization
    4. ESOP (full or partial)
    5. Status Quo
  • Discuss buy-in tactics such as sweat equity.
  • Assess the management capability of the next generation and identify the “gaps” in required talent.
  • Evaluate the tax implications of any transaction.
  • Make your recommendations to provide the basis for a formalized succession plan.

 Our Construction team is here to help you navigate these discussions and uncertain times. Rule of thumb is…it’s never too early to start succession planning and being flexible will certainly help in the long run! Please give a member of our construction team a call today.

Ag Software Case Study

GC NICHE: Ag and Cloud Accounting Services Team

GC TEAMMEMBERS INVOLVED: Tami Davis (CAS); Jeff Coleman and Jeff Bowman (Ag Team)

TYPE OF INDUSTRY: Almond and walnut family farming operation




Two brothers and one sister, members of a third-generation farm, were unable to keep up with the business management and bookkeeping processes for their expanding operation. The sister took on bookkeeping tasks to help fill the need, but had no training or accounting background. Farm equipment, cultural and labor costs were often in question and cash flow was a constant struggle, as was accurate bookkeeping.


  • Track expenses across three entities and four orchards.
  • Access accurate information easily.
  • Raise awareness about the skills each member of the business needs to demonstrate.
  • Manage cash flow carefully due to recent plantings.
  • Transition the sister (at her request) away from day-to-day business responsibilities.
  • Identify and track profitability by entity.


Each sibling has a unique skillset and interest in the business; however, each sibling does not invest an equal amount of time in the business, which requires careful valuation. Early on, it became clear that each sibling is adept at technology and open to using it across a variety of devices to manage the business. The siblings are also open-minded and welcoming of regular outside counsel.


After much discussion, the final recommendation was four-fold:

       I.          Adopt and integrate and cloud accounting software technologies.

     II.          Utilize Grimbleby Coleman’s Managed Service department with an outsourced Accounting Manager to assist with ongoing, high-level bookkeeping controller needs.

   III.          Set up a dashboard with auto-generated reports for each sibling’s review.

   IV.          Conduct a monthly meeting to review income and expenses for the entire operation, orchard development costs per acre, financial results compared to budget by acre and crop by year, and impacts on cash flow.


After much discussion, the four recommendations were adopted and have been very helpful from an operational and financial perspective. The siblings now have the ability to:

  • Continuously manage the business anytime, anywhere.
  • Review financial results across all entities in a single report.
  • Remotely approve payments, sign checks, and manage cash flow.
  • Analyze planting, cultural and harvest costs by year, acre, or other criteria.
  • Use tools to compare financial results against budgets and industry standards, as well as analyze the effectiveness of irrigation, spraying, and harvest equipment.
  • Allocate expenses between orchards and entities.
  • Use an outsourced controller to implement protocol and increase accuracy. The ongoing presence of an “extended” accounting and bookkeeping expert has helped facilitate and develop accurate data.

 The siblings are now making business decisions with confidence and the family business is thriving.

To learn more about this case study or other ag related managed services capabilities please contact Jeff Bowman ( or Tami Davis ( 

Grimbleby Coleman Puts the Heart in Community – and I Love That.


We Won the STATEWIDE CalCPA Public Service Award!

I often get asked why I am no longer working in the nonprofit profession here in Modesto; that is subsequently followed by a probing question inquiring when I plan to return. The answer is easy! My role as Marketing Manager here at Grimbleby Coleman CPAs bridges this gap in the most fulfilling of ways — so I won’t be heading back soon!

After working in the non-profit world for more than 10 years, I’ve now managed to find a position where two of my passions — marketing and community activity — are encouraged to blossom simultaneously. I feel so strongly about this that I personally wrote the Grimbleby Coleman CPAs’ nomination for the Cal CPA Public Service Award. Each day I count my blessings that I found a place of work filled with inspirational, honest, and hardworking people.

CalCPA Public Service Award Recognition

This month, our firm was awarded the statewide honor of the CalCPA Public Service Award, exemplifying our commitment to firm-wide community support. The honor rewards visionary professionals, and the firms they lead, for extraordinary efforts in serving their communities. According to the award committee, we have demonstrated “firm-wide ethos exemplifying the community consciousness that all firms should adopt.” They went on to say, “We want to not only congratulate you for this achievement, but also hold you up as an example to others for adopting community service as a best practice.”

Grimbleby Commun — I Mean, Coleman

At Grimbleby Coleman CPAs, community service is more than just an opportunity to build relationships with the areas we serve, it’s part of our firm’s identity and mission statement: “Building success for and connections with our colleagues, clients and community … it’s the people behind the numbers.” Our commitment to social responsibility and serving people in our community is at the heart of everything we do. The “people behind the numbers,” is a constant theme that runs throughout our company; we care about one another and aim to support our associates with community involvement experiences.

Our partners understand that being locally connected is more than just sponsoring a baseball team or having an annual employee food drive. They lead by example by serving as board members and lending their time, talent, and financial resources to many important local organizations. Our employees are encouraged to get involved in community organizations that speak to their individual passions; in fact, our employees are encouraged to take the time and flexibility they need to pursue volunteer opportunities through our policy of unlimited volunteer time off.

  • 1,680 hours of team-wide civic and community service participation!
  • 60+ events sponsored annually!

Proudly Supporting…

Modesto Chamber of Commerce, Stanislaus Business Alliance, Central Valley Business Center and Opportunity Stanislaus, Modesto Rotary, Community Hospice, Love Modesto, Modesto Chamber of Commerce, McHenry Mansion, Women’s Education & Leadership League, Downtown Modesto Partnership, Historic State Theatre, Modesto Sunrise Rotary, Toastmasters, Modesto Sunset Lions Club, Murals in Motown, Del Rio Country Club, Hope Haven International, United Samaritans, United Way of Stanislaus County, CPA Firm Management Association, Valley Medical Group Managers Association, Hope Haven West, Cambodia Impact, Stanislaus County Estate Planning Council, Stanislaus Community Foundation, CalCPA San Joaquin Chapter, Modesto Neighborhoods, Community Hospice, Salvation Army, Beyond Borders and numerous others!

 Let’s All Do Our Part!

There are always ways to be part of making our community better, and my hope is that everyone is doing their part! Whether it’s at church, at school, or giving an ear to a friend or a smile to a stranger.

Back of the Napkin Valuations

“Just give me your “back of the napkin” opinion about the value of this business.”

This is how some conversations begin. Perhaps someone wants to buy your business. Or maybe you’re interested in selling an interest to one of your key employees. A business in town is up for sale and you want to know how to strike a deal with the owner.

While you shouldn’t expect a valuation professional to figure out the value of a business on the back of a napkin, do you really need to pay for a valuation report? Maybe not. You may be better served by investing your time and funds in more important issues.

I’ve received a good number of calls from business people who tell me they need to have their business valued. Many times, though, I find that the reason for their call relates to one of the situations described above. While we can certainly provide them with a valuation report, the fact is that it will usually be overkill for what they really need.

And what is it that they really need? More often than not, it boils down to education and information. Business owners are much better off spending time on discussing how a business is valued.

  • What drives the value of a business?
  • What factors are considered?
  • What about the assets owned by the business? Which ones are included in the value of goodwill or “blue sky” and which ones should be added to that value?
  • What are rules of thumb? How do they relate to the business’ particular industry?
  • What adjustments should be made to earnings?


 We also talk about deal structures and how they relate to the ultimate sales price.

  • Is it an asset sale or a stock sale?
  • What are the terms of payment (cash, debt, both)?
  • If debt, what are the terms of the loan?
  • What are the buyer’s expectations of the seller’s continuing involvement in the business?
  • Will the seller be paid for these efforts?
  • What are the tax effects of various deal structures?

I find that, once these discussions have taken place, the mechanics of coming up with a fair price between the buyer and seller are usually much simpler. The parties are often able to come up with a negotiated price on their own. When it comes down to it, a valuation analyst is required to gain an understanding of the business and industry, the current economic trends, and the business management structure. Usually, these are things that the buyer and seller already know.

As valuation professionals, we can also provide a lot of information from the resources we have available to us, such as industry benchmarks, transaction details from sales of similar businesses, salary information, etc. Business owners find this information to be very valuable in making decisions.

 Does this process always result in a smooth process where everyone is happy with the settled price? Of course not. Very often one or both parties decide not to move forward with the deal. Perhaps the seller needs more time to put his house in order so he can command a higher price. We can then spend our time on improving the structure and systems that can optimize the value of the business. The cultural basis of the business may not be a good fit between the buyer and seller. The price may be fair, but the wheels may fall off the business if too many changes are put into effect. Avoiding a bad deal is just as valuable as entering into a good one. Maybe more so.

 So, do we ever prepare valuation reports for these types of engagements? Yes, but in most cases they are structured as limited-scope “calculations of value” as opposed to a full-scope “opinion of value”.

 When engaging a valuation professional, it’s important that you get what will ultimately help you accomplish what you want. And sometimes, that starts on the back of a napkin.


The Big Ask: Why Your Financials Are Critical


If you’re in the construction business, you know that sometimes all that stands in the way of you and a big project is a little cash flow. Our construction clients often ask us if their companies are decent candidates for bank loans, especially if they’re looking to finish big projects and need cash.

“People often think the worst because they’ve been unprepared in the past, are out of money and don’t have their paperwork prepared to respond to bank requests in a timely manner,” says Partner and Construction Team Lead Ian Grimbleby.

Clients who are very organized and prepared are attractive candidates for bank loans, Ian cautions that timing is the bigger challenge — often, when you need a loan, it’s because you’re in a bind, and you might not have the proper information at hand.

At Grimbleby Coleman, we’ve helped many construction clients put their best foot forward before applying for a loan. Here are our top tips.

Get up to date. Be prepared — your bank may hit you with requests that require up-to-date information, and they will need it quickly. Make sure you have your most current financial statements before you head to the bank. Ian cautions, “Would you bid a job unprepared? Treat the bank like a new customer or job, because that is what you are to them and they are going to evaluate you.”

You should always have relevant financial information on hand, including information from the past 6-12 months. A tax return won’t be enough information for financing, even if you’re simply looking for cash to purchase equipment for an upcoming job.

Know what’s important. The bank will evaluate key performance indicators (KPIs) such as working capital, interest coverage, profit margins and return on assets compared to the industry benchmarks. Of course, it is good, sound protocol to keep these financials current even if you aren’t looking for a loan. However, your bank definitely will want to see a list of assets that can serve as collateral. “If you have current assets (receivables and inventory) and equipment, but you’re just cash poor, you’re probably a good bank loan candidate,” Ian says. “If all your assets or equipment is financed and there is little equity in the business (for whatever reason such as losses or you pulled cash out), the conversation with the bank is going to be tough.”

Don’t be afraid to ask for help. It takes discipline to maintain good quarterly financial statements. Make sure your company’s financial statements are intact each month, and take the time to analyze and reconcile your financials. Go the extra step to make sure more than just your cash, accounts payable and receivables are accurate. You will need to understand the health of the entire balance sheet including fixed assets, payroll liabilities and notes payable. If you or your bookkeeper are falling behind or need assistance, our team is here to help get you back on track. Please give a member of our Construction team a call before your next loan meeting.

Featured Article

Why Cloud Accounting Makes Perfect Sense for Ag Businesses
It's no big mystery why cloud accounting has become a popular and effective way to manage agricultural businesses. Cloud accounting offers a savvy, robust way to track complicated expenses such as water and labor - and especially when you're working across multiple partnerships, thorough records are critical.  "Oftentimes, our Ag Team works closely with our internal Grimbleby Coleman cloud accounting specialists to provide expertise to ag clients ready to make the jump to QuickBooks or Intacct," says Ag Team Lead and Principal Jeff Bowman. "This hybrid client-service approach has proven valuable for many of our ag clients recently, allowing them to evaluate income from the actual crop year, not just residual revenue from the fiscal year."  Why Should You Try Cloud Accounting on the Ranch? Cloud accounting allows you to scale based on your needs. For example, we recommend tracking by field to truly monitor actual costs. That information is invaluable, especially if you're trying to decide whether to reinvest in your orchard or evaluate new opportunities.  "With water being so scarce, our clients really need to know how they will be able to afford and nurture a young field or orchard," Bowman says.          Many family - and even corporate - ranches have operations within various partnership entities. That makes tracking paramount, especially when each entity is providing complementary services such as paying for labor, water rights, equipment rentals, or providing cash flow to another entity. Cloud services will allow you to capture and articulate your full financial portfolio.  In the past, growers have been able to evaluate production expenses by comparing fields side-by-side; however, actual field costs were harder to track. Now growers can account for costs, labor, and various expenses such as poling, pruning, and harvesting to provide comparisons between fields, seasons, or even varieties.   Recommended Cloud Accounting Tools The two most highly recommended and regularly used tools are QuickBooks Online and Intacct. works nicely as a way to pay vendors, as well. Our team is certified in all of these tools.  When using QuickBooks Online or Intacct, the first step is to determine what you would like to track regularly. Most customers opt to see cash by account, accounts payable, debt with available lines of credit, cash on hand for each entity, and cash requirements over the next week and month. Easy-to-read graphics and charts make it easy to understand your full picture - as long as you're working with good information.  "If you put garbage in, you'll get garbage out," says Implementation Specialist Tami Davis. "With cloud services, you have to be conscientious of your inputs to gain the information you need."  QuickBooks Online         QuickBooks Online provides plenty of power for small entities. It uses "classes" to track items such as acres and types of crops, and it's easy to customize the user-friendly interface for your needs. Our cloud accounting team can access your QuickBooks Online account remotely to assess records, which is an especially helpful perk if you need assistance or coverage for your regular bookkeeper.  Click here to learn more about our QuickBooks seminars, led by Linda Bossard.  Intacct We prefer Intacct for multi-entity businesses, especially those with several partners.  Intacct's customizable dashboard allows us to track expenses by lot, which means you can access a quick P&L report for each entity.         Intacct's security settings can be easily adjusted so parent companies can view the big picture while monitoring the books within each business. As with QuickBooks Online, our team can easily access the service and provide oversight and recommendations from afar. Intacct also offers storage for PDFs, Microsoft Word documents, bank statements, and other relevant attachments. Their easy tracking system allows you to include other non-financial information such as seed, chemical, and field service logs.  "It can be easy to get a little carried away with all of Intacct's features," Davis says, "but a simplified chart of accounts can actually provide better reporting."  How Can Your Business Work with Our Cloud Accounting Services Team? The Accounting Services and Cloud Accounting Services Teams can seamlessly integrate into your business on a temporary or permanent basis. We can serve as bookkeeper, controller, accountant, or even chief financial officer. We're excellent trainers for internal teams, as well.  "We're here to fill the gaps as needed," Lisa Mazza, Principal, CPA and Cloud Accounting Team Lead says. "Oftentimes our services are used to take accounting beyond the expertise of the client's bookkeeper.   This results in more meaningful accounting data for analysis, decision making and tax planning.    Is it time to tune up your books during this harvest season? If so, please reach out to your accountant, Jeff Bowman, or Lisa Mazza for a demonstration or to learn more.  

Featured Staff

Deborah serves in the tax department at Grimbleby Coleman, processing various types of tax returns. She also coordinates the firm’s bankruptcy and non-profit clients. She holds an economics degree from UC Santa Barbara and enjoys meeting new people and interacting with them on a personal level as well as a professional one. She says “I like helping people understand the meaning behind the numbers.” 

On a typical Saturday in June, you’ll find Deborah camping with her family.  In October, she will be cheering in the stands at their daughter’s marching band competition.  And in January, she’ll be sipping hot cocoa by the fire enjoying a day at home with her husband and 3 daughters. 

Deborah’s favorite number is 5.  “I adore my family of 5, we have raised 5 puppies for Guide Dogs for the Blind, and I walked in my 5th half marathon with Team in Training in the fall of 2015.”

Thanks! Would you like to provide some more information?