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Janicek Valuation and Forensic Services, PLLC

Janicek Valuation and Forensic Services, PLLC

(615) 822-8342

115 Shivel Dr­. City, Hendersonville, TN, 37075

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We Are Your Valuation and Forensic Accounting Firm

We provide focused, individualized and specialized valuation, forensic accounting, and litigation support services to clients on a full-time basis.

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Janicek Valuation & Forensic Services, PLLC

615-822-8342

115 Shivel Dr. Hendersonville, Tn 37075

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Litigation Support & Forensic Accounting, Fraud Investigations, Valuation Services, and Commercial Damages Calculations Please call us to schedule a free consultation at 615-822-8342

Litigation Support & Forensic Accounting, Fraud Investigations, Valuation Services, and Commercial Damages Calculations Please call us to schedule a free consultation at 615-822-8342

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When you hire Janicek Valuation & Forensic Services, PLLC, you get valuation and forensic accounting professionals who are prepared with the knowledge and experience necessary to come out on top in the most challenging situations.

When you hire Janicek Valuation & Forensic Services, PLLC, you get valuation and forensic accounting professionals who are prepared with the knowledge and experience necessary to come out on top in the most challenging situations.

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Why Baby Boomer Business Owners Need a Valuation Now More Than Ever

In today’s world, a huge percentage of businesses are owned by the baby boomer generation—those born from 1946 to 1964. Now, in 2016, almost all of these business owners are nearing retirement and looking to sell or pass on their business. What they get for their business can significantly impact their quality of life during retirement and be the difference between being able to leisurely enjoy retirement or get a part time job to make ends meet.

This is no small need. Over the next ten years, 65%-75% of small businesses will change hands—the equivalent of approximately $10 trillion dollars. When a small business accounts for roughly 75%-90% of each business owner’s total net worth, it becomes imperative to get an accurate and fair price for their business when they sell. Unfortunately, many do not—and oftentimes, this is due more to lack of preparation than anything else.

Many businesses owners wait until just before they are ready to retire to start preparing their business to change hands, but in reality the bare minimum amount of time it takes is two years, preferably five if the owner is forward thinking. Why is this?

It takes time to get your business in order, and unless everything has been running perfectly, there is most likely a good deal of supplementary work to be done in order to improve the primary business value drivers. Often times small, closely held businesses start out on the right foot but fall behind in the area of bookkeeping, accounting, equipment upgrades, workforce diversity, and more. Their business is still running, and probably still making a decent profit, but it is nowhere near as successful as it could be after so many years—which makes it less appealing to a potential buyer.

Addressing these issues several years out is the key to making a profit when you sell and getting a fair price for your small business. It gives you enough time to address issues, make improvements, and bring your business up-to-date for the 21st century, which will motivate buyers and help you get the most out of your business for retirement.

Many people put off having such a valuation done, but for baby boomer business owners nearing retirement, it is an absolutely essential part of their exit plan and should not be procrastinated any longer.

Should you need business valuation assistance or have questions, please call one of our credentialed professionals at (615) 822-8342 or visit our website at janicekvfs.com to learn more about all we offer.


Commercial Damages and Lost Profits

Commercial damages and lost profits can be one of the diciest parts of commercial litigation, and one of the most common reasons to seek a valuation from a qualified professional experienced in contract law. These sorts of suits or cases usually, but not always, occur when someone working under a contract had failed to do or insufficiently completed what they were hired for, resulting in a loss of income for the hiring party. They also sometimes happen when a person unrelated to the business damages the business or causes them harm in some way due to negligence or lack of caution.

In each instance, in order to arrive at a proper compensation for the harm done to the contracting business, it is important to determine four factors, and the extent to which each affected the business and their loss of profits.

- Proximate Cause: Was the damage actually caused by the accused party? Not surprisingly, when it comes to contract and negligence disputes, there can be a lot of heresy involved. It is important to determine that the failure of the accused party is not just a coincidence, and is what actually caused the damage they are being accused of.

- Reasonable Certainty: Can the damage be calculated using reliable methods? When it comes to contract law, ballpark-figure estimations are not enough. The damage done needs to be calculated in reasonable, reliable ways that will be convincing to a judge and make sense when analyzed by a third party.

- Foreseeability: Could the damages have been avoided? Proving that the damage was a preventable event that could have been avoided had the offended party taken more care or given more notice is essential to winning compensation.

- Mitigation: Did the affected party try to fix the problem within reason? As soon as the wronged party finds out about the negligence or failure of the offending party, it is their duty to make reasonable efforts to mitigate the damage and try to fix the problem or find a replacement. If they do this, there is a higher chance of succeeding in court.

Conducting a valuation to determine lost profits can be difficult and complicated, but keeping the above goals in mind will ensure the optimal outcome for the wronged party and help produce a fair verdict.

If you need help getting a valuation for damages done and profits lost to your business, or if you feel you are being wrongly accused of causing damages to a business, contact Janicek Valuation and Forensic Services today. Call (615) 822-8342 or visit janicekvfs.com for more information.


Why You Need a Business Valuation for Your Business If You Are Getting a Divorce

There are few divorces that happen without any assistance from a lawyer or legal guidance of some sort. Most people have property, vehicles, children, and other factors that complicate things and require the aid of a professional to sort out. But if you and your spouse own or manage a business together (or even separately), it is absolutely essential that you hire a valuation professional and have a comprehensive business valuation done as soon as possible. Why?

In an ideal world, divorces would all be conducted honestly and amicably. But this is rarely, if ever, the case, and when a business venture is involved, things are usually even messier. At least one spouse is almost always attempting to be deceitful about their investment in the business or conceal certain assets so that the divorcing partner is unable to lay any claim to them. Secret condominiums out of state, employee salaries for new partners, and thousands of dollars in stolen petty cash are just a few of the things we have seen in divorces during our decades in the business.

It does make a difference who started the business, and whether the business was started prior to or after the start of the marriage, as the increase in value since the beginning of the marriage will have to be measured. But either way, a business valuation and investigation conducted by a qualified forensic professional is essential to ensure that you as a partner get what you are entitled to in the divorce, and that everything is settled smoothly and honestly.

And if you are the partner in a divorce who primarily handles the business accounts and paperwork, it is important to emphasize this point: do not try to “cook the books.” You will be required to produce records and a balance sheet of all of your assets, and they will be looked at closely and with much scrutiny. Divorce cases in court involve a judge so giving a judge a reason to distrust you or believe you are a dishonest person is absolutely the worst thing you can do for your future and the business if you want to keep it running. It is absolutely essential to be honest and forthright in all of your dealings and not to make an attempt to hide things from your lawyer, the judge, or your divorcing partner when it involves the business you own or manage together.

If you are the owner or manager of a small business with your spouse and are facing an impending divorce, contact Janicek Valuation and Forensic Services today. Give us a call at (615) 822-8342 or visit our website at janicekvfs.com for more information.


The Essential Characteristics of a True Expert Witness

For a small, closely held business, the need to call on an expert witness for matters of dispute and litigation can arise at any time and take many shapes. When this happens, it is vitally important that the experts you call upon manifest some essential characteristics to ensure not just the outcome that you desire but also the maintenance of you and your business’ reputation and integrity.

What are the essential characteristics of an expert witness?

- True Qualifications. The good expert witness has both education and experience—not one or the other. Experience without education and education without experience will both harm, rather than help, your case in the end. Furthermore, the education must be with recognized, respected, and accredited institutions in their field.

- Written Communication. The good expert witness must be able to write comprehensive and meaningful reports and know how to put them together in a way that is compelling. It may sound hard to believe, but many times a case can come down to which side is able to write better reports.

- Oral Communication. Once reports are written, the good expert witness knows how to communicate the content of his or her reports in a court setting to either a jury or a judge in a way that is meaningful, accessible, and interesting.

- Apparent Credibility. The good expert witness will be as impartial and objective as possible, and not appear to jury or judge like a so-called “hired gun.” A fair verdict depends on expert witnesses reporting their findings without regard to what one side or the other wants their findings to be.

- Likable Demeanor. No one wants to rule in favor of someone who is arrogant, rude, or haughty. Some expert witnesses think that because they are the experts, they know better than everyone else and others are less intelligent. This is an attitude that will ultimately harm your case and cause people to distrust both you and your witness.

All expert witnesses are not created equal, and keeping these characteristics in mind can help you ensure a positive outcome any time the need for litigation arises. By calling on expert witnesses that are qualified in the area they are testifying to, compelling in their writing and speech, and truly impartial and likable, you can be confident that your case stands the best chance possible of being ruled in your favor.

Janicek Valuation and Forensic Services specializes in helping small businesses with all of their business dispute and litigation needs. We have real world experience helping a multitude of small businesses assess their true worth and compile the information they need to settle their disputes.

Should you have questions or need litigation support services, please contact one of our

credentialed professionals at (615) 822‐8342 or visit our website at janicekvfs.com for more information.


How and Why to Get a Regular Business Valuation

Making it a point to get a regular, objective, and comprehensive valuation for your business is one of the most overlooked tasks of owning a business. Many business owners assume that they only need a valuation if they are planning on selling or retiring in the near future. But the reality is that the time for a business valuation is long before you actually need it, and knowing exactly what your business and assets are worth on a regular basis is one of the most helpful and important things you can do for your financial future.

A business valuation is essential in a huge variety of circumstances. It is vital for tax purposes such as charitable contribution, employee stock ownership plans, and gift and estate taxes; for management support like creating and maintaining a business plan, measuring performance, and deciding whether to lease or buy; for litigation situations like divorce, fraud, or partner disputes; and for general business reasons such as mergers and acquisitions, financing, liquidation or reorganization and succession planning.

It is far better to plan ahead and have your business valued regularly so that when these situations arise, you are able to handle them quickly and efficiently because you know exactly what your business is worth. Sadly, it is estimated that over 90% of closely held businesses in the United States have never had a business valuation prepared and most will not have one until they are in desperate need.

Your CPA can help you in the implementation and maintenance of the goals set during business valuation, but most CPAs are not trained in the specifics of valuation to be able to do it themselves in an objective and unbiased fashion. Janicek Valuation and Forensic Services will work with you and your CPA to let you know exactly what your business is worth and give you specific and achievable goals to enhance the value of your business.

Since Janicek Valuation and Forensic Services is an objective third party, we can offer you truly independent valuation services of the highest quality. We will help you understand the value drivers of your business in order to maximize the value of your business now and in the future.

We are your business valuation solution!

If you are ready to have your business professionally and objectively evaluated, give Janicek Valuation and Forensic Services a call today at (615) 822-8342. For more information about all of the services we offer, visit our website at janicekvfs.com .


Implementing Business Value Drivers to Sell Your Business at a Premium Price

When the time comes to sell your business, whether or not it sells at a premium price largely depends on your commitment to cultivating business value drivers during your time as an owner.

There are many different business value drivers, and they change over the course of time. Generally speaking, though, these are the things you want to keep in mind while you are a business owner if you are anticipating selling someday in the near or far future:

- A diversified and growing customer base. Many times, small businesses have one or two large customers that keep them afloat, and any time a single customer makes up more than 10% of your total business, that is a huge risk. Valuable businesses have a customer base that is varied and growing each year.

- Quality management team and sales force. If you as the owner make up the entirety of your management team and sales force, then there is nobody to do those things once you sell. Valuable businesses have a separate management and sales team from the owner, preferably people who are not related to the owner.

- Skilled and experienced employee workforce. Do your employees know what they are doing? Are they able to manage their own time well and meet their goals? What is the competency level of each employee—honestly? Valuable businesses are those in which the employee workforce does not need to be replaced or retrained once the business is sold.

- Well-maintained facilities and equipment. Unless they are a wellspring of expendable income, no new owner will want to invest thousands and thousands of dollars in updating facilities and equipment that should have been updated by the previous owner. Valuable businesses keep their facilities and equipment as well-maintained and state-of-the-art as possible.

- Good reputation in both the industry and community. Many businesses have one or the other, but the number of businesses who have both is surprisingly low. Valuable businesses meet and exceed industry standards while also being liked and recommended by lay people in the community.

- Documented business systems, procedures, and policies followed by management. Many businesses do not have documented policies and procedures to follow, and often times those that do, do not enforce those policies—especially if the owner or management is not following them.. Valuable businesses have all of their policies and procedures written down, from accounting to operations and followed them in great detail.

- Accurate and reliable financial and business records. The number of businesses who do not keep accurate and reliable record of their finances can be surprisingly high—especially with small businesses. Whether you use a CPA versus a tax preparation person, a family member versus an unbiased third party, or a bookkeeping service vs. a do-it-yourself approach—all these have an effect on whether your business sells at a premium price. Valuable businesses have all of their financial affairs and records in order.

- Consistent revenue growth and positive cash flow. It should go without saying, but being able to keep operations afloat without having to borrow money on a regular basis is a must. Valuable businesses demonstrate growing revenues and cash flow yearly.

When it comes to building their businesses, too many owners work in the business, rather than on the business. And if you want to sell your business at a premium price and make a profit when the time is right, working on your business is something that each owner must dedicate his or her time, money, energy, and resources to on a regular basis.

Janicek Valuation & Forensic Services, PLLC can help you get on track. Should you need business valuation assistance or have questions, please call one of our credentialed professionals at (615) 822-8342 or contact us via email.


The Importance of the Qualified Appraiser in IRS Tax Valuations

In a 2014 decision by the U.S. Tax Court (Estate of Richmond v. Commissioner T.C. memo 2014-26), the IRS was successful in imposing a 20% accuracy related tax penalty because the valuation on the estate tax return was less than 65% of the proper value as determined by the court (a substantial valuation misstatement).

In order to avoid this penalty the estate had the burden of proving it acted both reasonably and in good faith in the valuation of the decedent’s assets. The court determined that the estate failed to prove it acted reasonably or in good faith by relying on a draft valuation report prepared by a CPA who was not a qualified appraiser as defined in the Pension Protection Act of 2006.

This Act and Internal Service Regulations define a qualified appraiser as an individual who:

1. Has earned an appraisal credential from a recognized professional appraisal organization.

2. Regularly prepares appraisals for compensation.

3. Demonstrates verifiable education and experience in valuing the type of property being appraised.

4. Has not been prohibited from practicing before the Internal Revenue Service at any time during the three year period ending on the date of the appraisal.

5. Is not an excluded individual (donor or recipient of the property being appraised).

The Tax Court decision in the Richmond case is a warning to taxpayers, estate attorneys, and tax professionals that all valuations prepared for the IRS (gift, estate, or other tax matters) should be prepared by a qualified appraiser. Use of a qualified appraiser will help to avoid valuation errors and provide a valid defense should the IRS attempt to impose any accuracy related tax penalties.

Should you have any questions on business valuation or who is considered a qualified appraiser, please call one of our credentialed professionals at (615) 822-8342 or contact us via email .


Hiring a Forensic Accountant During Your Divorce

The dreadful "D" word.

Divorce is never easy, but in today’s world, it is all too common, becoming an industry within itself. While the pain and heartache that attach themselves to a separation can be difficult to navigate through, complicated finances usually comprise a large bulk of the dispute.

Hiring a forensic accountant can bring enormous help to those figuring out the financial aspects of a divorce in Middle Tennessee . Because of its complex nature, it is critical to hire an expert who can assess the situation and provide valuable advice regarding the legal and financial status of your business.

Regardless of whether one or both spouses own a family-run business, the question of distributing equity arises during a divorce. To evaluate the situation, the following questions must be answered:

- Did the business begin before or during the marriage?

- Did the non-owner spouse contribute to the business in a way that promoted its growth and profits?

- Are you planning to sell the business, or is your spouse planning on buying it out?

- Who is responsible for the liabilities associated with the business?

At Janicek Valuation and Forensic Services in Hendersonville, Tennessee , our forensic accountants sort through a series of complicated legal and financial documents in order to assess a particular business situation. We assess a string of variables that affect a family law dispute, including:

- When money is coming into the family

- Where assets are stored

- How assets are being distributed

An untrained eye is at a great disadvantage to catching the many different aspects of financial evaluation. By enlisting the help of an expert, you put yourself in a much better position to manage the financial issues that arise during a divorce. At Janicek Valuation and Forensic Services, we are here to help you with all the complex aspects of a divorce. Give us a call or visit our website for more information.

Phone Number: 615-822-8342

Website: janicekfvs.com


Whom Should You Contact for Assistance with Financial Discovery?

In cases involving business ownership, financial discovery can be extremely complicated. Obtaining complete financial discovery in the early stages of a case is important. Certified or Accredited Valuation Analysts are trained to know exactly what should be requested for business financial discovery. Call a Certified or Accredited Valuation Analyst when your cases involve business ownership.

Should you need business valuation assistance or have questions, please call one of our credentialed professionals at (615) 822-8342 or contact us via email .


What’s the Difference Between an Expert Consultant and Expert Witness?

As an expert consultant, the CPA/CVA/CFE is engaged to develop information that will be used by the attorney in a variety of ways, including settlement negotiations with the opposing side. In these instances, the CPA/CVA/CFE is usually not expected to testify or to develop an opinion that will be entered in to the court records. The documents created by the CPA/CVA/CFE may be protected by attorney-client privilege. In this situation, the CPA/CVA/CFE is working for the client’s advocate.

When a CPA/CVA/CFE is hired as an expert witness, the CPA/CVA/CFE will often have to provide deposition and courtroom testimony, and all of the documents created, including reports relating to the case, are subject to “discovery” by the opposing side. Professional standards prohibit the CVA from being an advocate for the client in situations where an opinion of value is rendered. A valuator is considered to be acting in an unethical manner if he or she advocates the client’s position.

The CVA valuator may be an advocate for his or her own opinion of value. The valuator is supposed to be unbiased and completely independent in rendering an opinion of value. Certified Valuation Analysts are highly trained ethical professionals who have earned the respect of the professional community. Allow us to help in your next case.

Should you need business valuation assistance or have questions, please call one of our credentialed professionals at (615) 822-8342 or contact us via email .


What Is the Difference between Enterprise Value and Equity Value?

Sometimes people use the two terms interchangeably. However, for legal purposes there may be a significant difference in the two terms. Let’s assume your client is involved in a divorce action, and it is important to know the value of the business for settlement purposes. In this instance, you want the value of all assets less all liabilities. Enterprise value is often referred to as the value of the hard business assets (property, equipment, etc.) and the goodwill of the business. Equity Value is the Enterprise Value PLUS cash on hand, accounts receivable, inventories, and LESS all liabilities of the business. When dealing with legal matters, it is important to understand exactly what a definition of value includes, or excludes. A Certified or Accredited Valuation Analyst can always assist you in these matters.

Should you need business valuation assistance or have questions, please call one of our credentialed professionals at (615) 822-8342 or contact us via email .


Forensic Considerations In Divorce

When representations made by an opposing spouse appear questionable, a CPA/CVA/CFE may be engaged to test the financial representations by performing forensic procedures. For example, a family incurs annual living expenses of $90,000 and the earner spouse claims to make only $40,000 per year. If one spouse makes a representation that is challenged by the opposition, a CPA/CVA/CFE may be requested to perform certain forensic procedures. These forensic engagements may be add-ons to an existing divorce-related engagement or they may be stand-alone engagements. In either case, the CPA/CVA/CFE will perform forensic procedures of financial data as required under the particular circumstances. This situation can be greatly enhanced if the attorney has done a thorough job in the discovery process.

Forensic procedures require a good deal of information. If the attorney (representing the spouse that is requesting forensic procedures) has not done a thorough job in the initial discovery phase, the cost of performing forensic procedures will be greatly increased. At the same time, the benefits of the forensic procedures may be lessened. This is why it is extremely important for the attorney to enhance the financial discovery process at the very beginning of a case. A CPA/CVA/CFE engaged to assist in the initial discovery phase will generally provide benefits beyond the cost.

Should you need business valuation assistance or have questions, please call one of our credentialed professionals at (615) 822-8342 or contact us via email .


Are Rules of Thumb Appropriate Valuation Methods for Litigation Matters?

Rules of thumb exist for several types of businesses. They were developed by business brokers over time, based upon actual sales transactions involving businesses in a particular industry. While a rule of thumb can provide buyers and sellers of businesses with an indication of value, it cannot be substituted for a formal valuation method under existing valuation standards. A Certified or Accredited Valuation Analyst should always be consulted when a business valuation is needed in any legal matter.

Should you need business valuation assistance or have questions, please call one of our credentialed professionals at (615) 822-8342 or contact us via email .


Why You Should Hire A Forensic Accountant In Middle Tennessee

To many, the term “forensic” might elicit images of high-profile government work, cases that seem relegated to the kinds of investigations we see on primetime television. But acquiring a forensic accountant for the daily operations of small to mid-sized businesses is a much greater necessity than noted at first glance. So why should you hire a forensic accountant in Middle Tennessee ?

A business will often elect to hire a fraud accountant due to suspicious activity regarding their financial resources, typically committed by an employee. At Janicek Valuation And Forensic Services , we bring a combination of experience between accounting and investigative services, using this skill set to identify and analyze committed fraud in a wide range of everyday cases.

Though we may wish to believe the best in those we hire, it is often those we trust the most who understand a company’s vulnerability, and therefore possess greater insight into the most efficient ways to commit fraud.

The “Fraud Triangle” represents the incentives and mode of operations used by those who commit fraud within a business. First, an employee might feel an enormous amount of pressure to reign in further income, due to stresses from family members, cyclical and expensive addictions, or compounding debt. Next, they go through a rationalization process; knowing what the end result will be, they find a way to justify the means of their actions. Lastly, fraud committers seek out the right opportunity to perform their operation; they search for loopholes and access ways into a company’s assets and resources to leverage for their personal benefit.

Another common use of a forensic accountant is to investigate financial matters that pertain to marital dispute and dissolution cases. It is often the case that a business might be owned between two divorcing spouses, and an attorney will suggest hiring a forensic accountant to research expenditures, assets, and allegation of resources.

Hiring a forensic accountant to sort through committed fraud is certainly a worthwhile venture. However, the cheapest and most efficient way to make use of forensic accountant services is to hire one in a preventive mode.

According to the ACFE, the median amount of money lost in small to mid-sized businesses due to fraud in 2014 was a grand total of $145,000. By paying due diligence to a business’ accounting controls, you can help diminish the amount of fraud that could potentially wreak havoc on your company.

Finding someone you trust to set up these accounting controls, and having an orderly system with a set of rules and standards and a proper division of responsibility, is one of the most crucial aspects to protecting your business against fraud.


Family Limited Partnership Discounts May Be at Risk in the Future

The IRS enacted in 1990 Internal Revenue Code Section 2704 to eliminate what was considered to be valuation abuses in family asset transfer transactions. The overall goal of this code section was to require the valuation analyst to ignore any provision in agreements that transferred a partnership interest or privately held stock interest to family members that would not be accepted by an unrelated third party in an arm’s length transaction.

However for taxpayers involved in these type of transactions, Family limited partnership federal tax court cases have determined that IRC Section 2704 arguments by the IRS attempting to enforce these provisions are not always valid and that these entities should be valued like other business interests when:

1. The family limited partnership has a defined business purpose and is not merely a device to avoid taxes.

2. Restrictions on partners comply with state law.

3. The family limited partnership articles are followed in actual practice by all partners.

The IRS, in an effort to bolster its arguments against allowing discounts in family asset transfers, is in the process of proposing new IRC Section 2704 Regulations that may restrict or eliminate all discounts for transfers in family owned entities to family members. The major concerns among valuation practitioners is that these proposed regulations when issued may severely limit or eliminate the currently available lack of marketability and minority ownership discounts. It is anticipated that these proposed regulations will be issued in the fall of 2015.

It is recommended that any family group that is considering forming a family limited partnership should do so sooner than later to avoid family member transfer restrictions that would be in the proposed regulations when issued.

Should you need business valuation assistance or have questions, please call one of our credentialed professionals at (615) 822-8342 or contact us via email .


The Attorney/Valuator Partnership In Divorce Cases

Equitable distribution in divorce causes the need for emphasis to be placed upon the economic aspects of marriage. This includes the valuation and division of marital property, as well as any resulting tax consequences. This economic emphasis in divorce proceedings has created a very important relationship between matrimonial attorneys and financial experts such as CPAs and business valuators.

The attorney and the financial expert each have important and complex tasks to perform. Accordingly, it is extremely important for the two to coordinate their efforts to best serve the client.

All Certified Valuation Analysts (CVAs) must first be Certified Public Accountants in order to proceed through the rigorous valuation training and certification process. When you need expertly prepared business valuations, and valuation advice, call a CVA.

Should you need business valuation assistance or have questions, please call one of our credentialed professionals at (615) 822-8342 or contact us via email.


Should As Much Emphasis Be Placed On The Willing Seller As The Willing Buyer?

While it is important to consider a potential buyer’s positions in a business valuation, it is equally important to give consideration to the potential seller’s positions in a valuation. Some Tax Court decisions have either modified or completely rejected an expert’s opinion of value because the expert focused solely on the buyer, with no consideration given to whether the value would be acceptable to the hypothetical willing seller. While the hypothetical buyer will only pay so much, the hypothetical seller will only accept so little.

A good valuation report will address considerations of both the buyer and the seller. Should you need business valuation assistance or have questions, please call one of our credentialed professionals at (615) 822-8342 or contact us via email.


Is The "Capitalization of Excess Earnings Method" Reasonable For Determining Goodwill In Divorce Valuation?

In divorce valuations, no sale exists to measure the price paid for the business, so a residual method is not appropriate when parties with adverse economic interests cannot agree. Many times,the most reasonable method for assigning goodwill value is the “Capitalization of Excess Earnings Method.” This method may be preferred because it measures both property and historic profits.

Extreme care must be taken to “normalize” the historic financial statements, determine risk factors, and determine the industry internal rate of return before attempting the “Excess Earnings” Method.

Should you need business valuation assistance or have questions, please call one of our credentialed professionals at (615) 822-8342 or contact us via email.


Improving Financial Discovery Can Lead To Improved Financial Outcomes

Complete financial information provided to a financial expert can lead to more credible work product produced by the expert. Unfortunately, many attorneys bring the CPA/CVA into the picture too late in the case!

The danger here can be that if the financial expert isn’t experienced in working with these cases on a regular basis (such as the CPA who does not possess specialized training in business valuation or forensics procedures), then the expert may try to use only the original information provided, and that may produce a woeful product that will collapse under aggressive cross examination. If, an expert identifies the deficit in available information, additional documents and information must then be requested. This can lead to stalling tactics, motions being made, waiting on rulings, etc. In general, this is disruptive to the flow of the case, and can substantially impair and prolong the case, to everyone’s detriment.

Consider the benefits of getting a CVA involved in the early stages of discovery. CVAs are CPAs with special financial and valuation training. Their early involvement in the discovery process can help move the case along and improve your chances for success.

Should you need business valuation assistance or have questions, please call one of our credentialed professionals at (615) 822-8342 or contact us via email.


Planning Your Business Exit Strategy

As a society that thrives on constant labor, we give very little thought to what happens when we are ready to end our work. We spend a vast majority of our time working that we rarely focus on creating a strategy to dissolve our businesses successfully. With the professionals at Janicek Valuation & Forensic Services, you can wisely plan when and how you will transfer ownership of your business.

At Janicek Valuation & Forensic Services in Hendersonville, TN , our certified experts help you plan a successful transition when selling your business. We have teamed with the Hendersonville Chamber of Commerce to host a seminar on the transference of business ownership. This seminar will be held on September 24, from 12:00 to 1:00 PM, and is open to the public.

It is estimated that 4-7 million small business owners in the United States are a part of the Baby Boomers generation, a segment of the population that is rapidly approaching retirement age. While so many of these people have worked tirelessly to enjoy these golden years ahead, many are at a loss as to how they can navigate the business exiting process. With 75-90% of a small business owner’s personal wealth tied up in their business, it becomes difficult to plan a systematic and strategically beneficial transfer of their ownership.

There are several reasons why people fail to adequately plan their business exit. First, many feel they are too busy to focus on it. Fears that no one else will be able to properly take over, that key employees will leave, navigating the successful transition of ownership to another family member, and the belief that health and competence will continue indefinitely are all factors that impede successful planning of business exiting. For all these reasons and more, it is essential to have well-trained and experienced experts giving help and advice along the way.

But what happens when you are forced to enact an instant exit plan? The Four D’s—Divorce, Disability, Death, and Departure—can require a business owner to dissolve or transfer ownership in a moment’s notice. And without a comprehensive strategy put into place, people fall victim to a slew of mistakes that would be otherwise avoidable.

Acting under the pretenses of haste and urgency, many will sell to the first competitor who approaches them, without taking stock of its economic benefits. The sale price often becomes the primary focus, and business owners ignore the terms and structure of the transaction. Failure to sufficiently prepare business financial audits, use of inexperienced advisors, and a lack of understanding toward the key business drivers and market forces can lead to a haphazard transference of ownership.

When selling your business in Middle Tennessee , it is important to address several different questions: What is the worth of my business? How much do I need to comfortably retire? How much will I net after taxes? What can I do to increase the value of my business? And when should I plan to sell it?

With a quality exit planning team, you can reap the benefits of transferring your business ownership in an efficient and successful manner. You will be given more control of how and when you exit the business and of your imminent financial success from its sale, and you will be in a better position to maintain the integrity and success of your company.

Give us a call today to find out more about business exit planning at 615-822-8342. For more details on the upcoming seminar at the Chamber of Commerce in Hendersonville, TN , find us on the web at janicekvfs.com .


Divorce: Business Valuations & Forensic Accounting

Business valuations during divorce proceedings are extremely complex. Whether or not you and your spouse share ownership, it is extremely critical to seek early legal and financial advice to protect your own financial future as well as the future of the business.

Business Valuation During Divorce

When a marriage ends, all marital property must be equitably distributed which includes any interest in a family-owned business, whether only one spouse has an ownership interest or whether both spouses have an ownership interest in the business. In this scenario, the following questions must be answered:

- When did the business start? Was it before or during the marriage?

- Were there any contributions to the business by the non-owner spouse? Did the non-owner spouse contribute to the family and the marriage in a way that enabled the owner-spouse to operate the business?

- Will one spouse buy out the other or will the business be sold?

- Who will be responsible for the liabilities associated with the business?

Forensic Accounting During Divorce

Forensic accountants analyze money which requires sorting through complex financial documents in order to gain an accurate assessment of the relevant financial situation. Once involved in a family law dispute, a forensic accountant will evaluate when money is coming into the family, where assets are stored, and how assets are being distributed.

The forensic accountant is an important part of the process of evaluating assets for equitable distribution. Equitable distribution requires a full understanding of the marital assets. If both spouses have not been actively involved in the management of family finances, one might not be aware of all investments. Also, if one spouse is attempting to conceal assets, it can be very difficult for an untrained person to find financial assets. A forensic accountant can investigate and review finances to determine whether there are hidden assets and to ensure that equitable distribution accounts for all assets.

When Is A Forensic Accountant Necessary?

Not every divorce requires the expertise of a forensic accountant; here are a couple circumstances where a forensic accountant is very valuable:

- Self-Employed Spouse(s): When one or both spouses are self-employed, the forensic accountant will more than likely be tasked with verifying that a spouse is not using the business to conceal marital assets. Business owners have the ability to manipulate financial statements in various ways, however, a forensic accountant can ensure that assets are properly classified and disclosed by thoroughly reviewing business records. Additionally, the forensic accountant can assign a value to the business and analyze any distinctions between separate and marital property as related to the business.

- Determination of Income: In this situation, the forensic accountant can assist with disputes over the reported income or assets of either spouse, which is the most important factor for determining child support and alimony. Who earns what? Is the income reported to the IRS complete? Are the books cooked? Were there any cash transactions? Can the CPA calculate imputed income from the spouse's monthly spending? Does a spouse's loan application contain admissions of a much greater income than reported in the case? A forensic accountant can investigate to ascertain whether there is a misrepresentation of income.

The circumstances surrounding a divorce proceeding will often determine the necessity of working with a forensic accountant. Generally, the complexity of the estate as well as the cooperation of the spouses are important factors to consider before engaging a forensic accountant. When something does not make sense with one or both spouses during a divorce, the knowledge and advice from a forensic accountant and/or valuation professional will be a worthwhile expense.

Contact One of Our Credentialed Professionals Today

The division of marital property in a divorce can be very complicated. Contact us today or call us at 615-822-8342 to schedule a consultation and receive preliminary information about the specifics of your circumstances and what strategies might be available to assist you and your attorney during divorce proceedings.


Characteristics of The Valuable Expert Witness

It has become common in business disputes and complex commercial litigation to hire expert witnesses to assist the attorney in preparing for deposition and trial. Attorneys will look for expert witnesses who possess all the following characteristics:

1. Qualifications: The expert will have been educated by a recognized university, possess appropriate licenses or certifications, hold memberships in relevant professional organizations, and have real world experience in his or her area of expertise. Experts without real world experience may be viewed as a “Professional Witness” and less credible.

2. Report Writing: The strength of an expert’s written report can influence the final outcome of mediation or trial. Experts who draft a well written and bullet proof report demonstrates knowledge of the key facts in the legal dispute.

3. Oral Communication: An expert is hired to express a professional opinion. The expert who can communicate his or her opinion to a jury or trier of fact in an understandable and persuasive manner will be viewed as more credible.

4. Credibility: An expert witness must be viewed by a jury or trier of fact as credible. The expert must never appear to be a “Hired Gun” who will say anything that the attorney wants he or she to say. An expert without credibility is of no value.

5. Demeanor: Attorneys and their staff like to work with experts who are reasonable and not arrogant or think they are smarter than everyone else. An expert that is likeable will have more credibility and can influence a favorable outcome for the attorney.

Attorneys look for experts that can help them win in court. Experts who possess the above characteristics are valuable and can assist in achieving a favorable outcome in a business dispute.

Should you have questions or need litigation support services please contact one of our credentialed professionals at 615-822-8342 or contact us via email .


Importance of Business Exit Planning

A large number of business owners in the Boomer generation (born 1946-1964) are planning to transition out of their business in the next 10 years (University of Connecticut and Price Waterhouse surveys). However, it is estimated that less than fifty percent of business owners have been proactive in planning for the orderly exit from their business.

A well designed and fully implemented business exit plan will enable business owners to :

1. Control how and when they exit the business.

2. Preserve business value in both good and bad economic times.

3. Achieve business and personal financial Goals

4. Facilitate owner retirement planning.

5. Minimize federal and state taxes upon exit from the business.

6. Maintain key employee loyalty and eliminate family member stress and uncertainty.

7. Give the owner strategic options from which to choose for a successful business exit.

Past experience has shown that business owners who fail to plan for an orderly business exit generally sell the business for less money, lose control over the exit process, and do not achievetheir financial goals. This is not the legacy business owners want to leave employees and family.

Should you need business valuation assistance or have questions, please call one of our credentialed professionals at (615) 822-8342 or contact us via email.


Will a Daubert Challenge Derail Your Expert?

As an experienced provider of litigation support services, I am aware of the unique challengesfinancial experts face. When a “financial expert” provides written or oral testimony to a trier offact, the following considerations are crucial:

- What professional credentials and designations does the expert possess?

- What is the expert’s overall experience relative to the subject matter?

- Can the expert’s methods be tested?

- Have the expert’s methods and procedures been peer reviewed or published?

- What is the error rate or potential for error associated with methods and procedures used by the expert?

- Have the methods and procedures used been accepted, or are they part of the “general body of knowledge” associated with the specialty?

Don’t take chances with issues involving financial discovery and analysis, please call one of our credentialed professionals at (615) 822-8342 or contact us via email.


About Us:

The successful resolution of your business and personal matters takes an empathetic ear and an experienced hand. It takes commitment to your unique needs and goals, and it takes resourcefulness. At Janicek Valuation & Forensic Services, PLLC, we provide focused, individualized and specialized valuation, forensic accounting, and litigation support services to clients on a full-time basis. We have the experience, resources and talent necessary to serve a diverse clientele with a wide-range of issues such as business disputes, fraud investigation, preventive accounting controls, economic damage calculations, marital disputes, and business valuations.

We are your valuation and forensic accounting firm when you:

- Face complex litigation and other challenging financial legal issues that will require knowledge from a specialized financial professional

- Need a business valuation that will stand up to scrutiny in court

- Need prompt and proactive investigative forensic accounting services

- Need to protect your business assets with solid accounting controls

- Need assistance to recover from damages and losses in the case of serious personal injury, divorce, and business disputes, requiring complex economic damage calculations

- Are an attorney looking for a dedicated forensic accountant and valuation professional to assist you in litigation and mediation processes

When you hire Janicek Valuation & Forensic Services, PLLC , you get valuation and forensic accounting professionals who are prepared with the knowledge and experience necessary to come out on top in the most challenging situations.

We have a history of proven results. From business disputes to marital dissolution cases– we have been the difference. When you need an expert, we are your valuation and forensic accounting firm!

CALL US TODAY FOR A FREE CONSULTATION!

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Bios:

John Janicek, CPA

John Janicek is the managing member of Janicek Valuation and Forensic Services, PLLC. John has been extensively involved in business valuation and litigation support. In this capacity he has provided financial analysis and consultation and is regarded as an expert witness. To see John's certifications and experience click here.

J.R. Janicek

J.R. Janicek is the chief executive officer of Janicek Valuation and Forensic Services, PLLC. J.R. has been extensively involved in fraud investigation and litigation support and is regarded as an expert witness. To see J.R.'s certifications and experience click here .


Valuation Services:

Successfully operating a business enterprise and making sound financial decisions in today’s fast-paced, complex world presents significant challenges. These challenges create a need for a specialized professional — the business valuator! The specific role of the business valuator is to determine the value of tangible and intangible assets held by businesses or individuals. Valuation professionals provide a broad array of services to meet the unique needs of businesses and independent clients. A business valuator may be necessary for financial, legal, business, family, or personal reasons. Business valuation professionals with practical experience as Certified Public Accountants (CPAs) are well prepared to meet the client’s exacting needs. Their varied experience and training in valuation theory and application, litigation support, accounting, tax, auditing, finance, insurance, economics and investments prepare the business valuation analyst to provide the client with a comprehensive analysis and a competent valuation.

Numbers, facts, figures, balance sheets and financial statements simply are not adequate to accurately measure the true fair market value of an asset. Many different approaches and methods of valuation analysis should be reviewed and selectively matched to the asset being valued. Selecting the most appropriate methodology, supported by various types of analysis, including sophisticated mathematical calculations, ratio analysis, industry comparisons, economic and market analysis, relative business risk assessment, and many other considerations, is required to achieve a competent valuation.

When valuing your business or assets it is important to have the assurance that the valuation analyst considers all the relevant information and facts so you get the full economic benefit you deserve. Using a qualified business valuator will give you confidence, peace-of-mind, and the advantage of knowing you will receive a professional product.

Independent & Objective Analysis

Independence is a primary reason for engaging a business valuator. Problems involving a lack of independence, fairness, competence, and disputes among interested parties may be avoided through third-party objectivity. The goal of the business valuator is to provide you with an independent, knowledgeable, credible valuation without personal or emotional issues influencing the analysis and conclusions.

Professional Quality & Standards

A skilled business valuator must meet rigid professional training and testing requirements. Many business valuators earn accreditation through professional organizations such as the National Association of Certified Valuators and Analysts (NACVA). NACVA’s credentialed analysts have completed in-depth and advanced training necessary to competently provide a wide range of business valuation services, using recognized industry standards.

Understanding Value Determination

Most clients seek a business valuation in order to determine an appropriate value of their business or personal assets. Different approaches must be used to determine values of businesses and property, depending on the specific purpose for the valuation. Value is usually expressed in terms of fair value, fair market value, or investment value. Business valuators are specifically trained to identify and determine the most appropriate standard of value for the valuation engagement.

Services Provided

Understanding the full scope of business valuation services is important in identifying specific areas of interest and need. Business valuation clients come from all professions and industries. Included are: attorneys, judges, financial planners and institutions, insurance companies, Certified Public Accountants, business consultants, business owners, real estate appraisers, and business brokers. Reasons to hire a professional business valuator may include:

Tax Purposes:

- Adequacy of Life Insurance

- Allocation of Acquisition Price

- Charitable Contributions

- Employee Stock Ownership Plans (ESOPs)

- Gift and Estate Taxes

- Executive Compensation

- Gifting Programs

Management Support:

- Business Plans

- Strategic and Market Analysis

- Lease versus Buy

- Incentive Stock Options

- Performance Measurement

Business Reasons:

- Buy/Sell Agreements

- Mergers and Acquisitions

- Fairness Opinions

- Financing

- Bankruptcy and Foreclosures

- Liquidation or Reorganization

- Initial Public Offerings (IPOs)

- Franchise Valuation or Evaluation

- Sale/Purchase of a Business

- Split-ups/Spin-offs

- Succession Planning

Litigation Situations:

- Disruption of a Business

- Dissenting Shareholder Actions

- Divorce

- Economic Loss Analysis

- Fraud

- Partner Disputes

- Eminent Domain

- Mediation and Arbitration

- Wrongful Death


Fraud Investigation & Prevention:

Without a solid internal control system to help deter and prevent fraud, your business is taking a grave risk. According to the Association of Certified Fraud Examiners’ 2014 Report to the Nations on Occupational Fraud and Abuse:

- It is estimated that companies lose approximately 5 percent of revenues to fraud annually.

- The median length of a fraud scheme, from the time it began to the time it is detected, is 18-months.

- The median loss to organizations is $145,000.

- Anti-fraud controls have a significant impact on the amount of loss.

- Frauds involving multiple people (collusion) involve much larger losses than those committed by single individuals.

- The presence of anti-fraud controls is associated with reduced fraud losses and shorter fraud duration.

Janicek Valuation & Forensic Services, PLLC’s fraud investigation team assists businesses, attorneys, insurance companies and others by conducting detailed investigations of suspected fraud and providing fraud prevention services. Our team members consist of Certified Forensic Accountants (CR.FA), CPAs Certified in Financial Forensics (CFF), and Certified Fraud Examiners (CFE). Services include:

- Investigating financial statement fraud

- Investigating employee theft

- Investigating check kiting

- Tracing money or assets

- Determining the reasonableness of insurance claims

Internal Accounting Controls Analysis

With an internal accounting controls analysis, we can help identify weaknesses in your business processes and recommend policies and procedures to help lower your fraud risk, and help detect it should it occur. Businesses of all types and sizes are susceptible to fraud, but small businesses are often the easiest targets.


Litigation Support & Forensic Accounting:

Even the best require support. Janicek Valuation & Forensic Services, PLLC’s litigation support and forensic accounting team are retained by law firms and their clients to assist with financial investigations, marital dissolution, calculation of economic damages, valuation disputes, and other forms of economic analysis in business and personal disputes.

We have assisted clients by assessing the financial merits of a case, responding to interrogatories, assessing the work of other experts, and providing expert testimony at depositions, mediations, arbitrations, and trials. Our litigation support team has extensive experience both behind the scenes and on the witness stand.

Litigation Support Services:

Support for disputes related to–

- Accounting

- Antitrust actions

- Bankruptcy

- Breach of contract

- Business valuation

- Business transactions

- Civil & criminal tax cases

- Fraud

- Infringement & misappropriation

- Intellectual property (patent, trademark, copyright, trade secrets)

- Marital dissolution

- Ownership interests

- Patent

- Tort claims

- Economic damages analysis

- Defendant’s profits/unjust enrichment

- Diminished business value

- Lost profits

- Pre-judgment- & post-judgment Interest

- Reasonable royalty

- Statutory damages

Investigative & Forensic Accounting Services:

Investigation related to–

- Accounts receivable schemes

- Asset misappropriation schemes

- Bankruptcy fraud

- Check kiting

- Computer forensics

- Embezzlement

- False & misleading financial statements analysis

- Financial reconstruction


More Information:

- For Frequently Asked Questions click here.

- To Read our Blog click here!

- To Read our Newsletter click here!


Privacy Policy:

Types of Information We Collect:

We collect certain personal information about you – but only when that information is provided by you or is obtained by us with your authorization. We use that information to prepare your personal income tax returns and may also use it to provide various tax and financial planning services to you at your request.

Examples of sources from which we collect information include:

- Interviews and phone calls with you

- Letters or e-mails from you

- Questionnaires.

Parties to Whom We Disclose Information:

As a general rule, we do not disclose personal information about our clients or former clients to anyone. However, to the extent permitted by law and any applicable state Code of Professional Conduct, certain nonpublic information about you may be disclosed in the following situations:

To comply with a validly issued and enforceable subpoena or summons.

In the course of a review of our firm’s practices under the authorization of a state or national licensing board, or as necessary to properly respond to an inquiry or complaint from such a licensing board or organization.

In conjunction with a prospective purchase, sale, or merger of all or part of our practice, provided that we take appropriate precautions (for example, through a written confidentiality agreement) so the prospective purchaser or merger partner does not disclose information obtained in the course of the review.

As a part of any actual or threatened legal proceedings or alternative dispute resolution proceedings either initiated by or against us, provided we disclose only the information necessary to file, pursue, or defend against the lawsuit and take reasonable precautions to ensure that the information disclosed does not become a matter of public record.

To provide information to affiliates of the firm and non-affiliated third parties who perform services or functions for us in conjunction with our services to you, but only if we have a contractual agreement with the other party which prohibits them from disclosing or using the information other than for the purposes for which it was disclosed. (Examples of such disclosures include using an outside service bureau to process tax returns or engaging a records-retention agency to store prior year records.)

Confidentiality and Security of Nonpublic Personal Information:

Except as otherwise described in this notice, we restrict access to nonpublic personal information about you to employees of our firm and other parties who must use that information to provide services to you. Their right to further disclose and use the information is limited by the policies of our firm, applicable law, our Code of Professional Conduct, and nondisclosure agreements where appropriate. We also maintain physical, electronic, and procedural safeguards in compliance with applicable laws and regulations to guard your personal information from unauthorized access, alteration, or premature destruction.

Please call us at 615-822-8342 or you can e-mail us if you have any questions or concerns regarding the firm’s privacy disclosure statement.


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