Elevate 2019: Business Leader Slides

How Management and
Leadership Transition
Planning Impacts
Business Continuity
Linda L. Bluso, J.D.
Adaptive Knowledge Institute
Founder and CEO
2

How Management and Leadership
Transition Planning Impacts Business
Continuity
Adaptive Knowledge Institute
Founder and CEO
3

• Knowledge Transfer.
• Talent Retention.
• Early Detection of Leadership Gaps
and Development Opportunities.
• Operational Effectiveness and
Strategic Execution.
Increase success in navigating change.
• Better ROI – Improved bottom-line
financial performance.
4

Management and Leadership:
The Process
•Assess
•Develop
•Execute
5

Assess
• Interim Succession.
• Long-Term Succession.
6

Assess
• Functional Job Responsibilities.
• Leadership Competencies.
Present.
Future.
7

Founder and CEO
e: LBluso@edgepointbc.com
p: 216.533.7476
14
CPE Code: MLT

Preparing for a
Recession
David Mustin
Partner, Skoda Minotti

16
David Mustin, MBA
• Partner, Advisory – Cleveland
• 25+ years of professional management consulting
• Business and IT growth and transformation, and post-
merger integration
• Experience in manufacturing, distribution, high tech,
health care and life sciences among other industries
Introductions

17
Agenda
• Introduction to Recessions
• Addressing Internal Challenges
• Preparation and Seven Key
Best Practices
• Benefiting from Recession
Planning
Image by Andreas Riedelmeier from Pixabay

18
Market Update: Bears & Bulls
2003 – 2007
Bull Market
Dow Jones hit a
high of 14,165
2007 – 2009
Bear Market
12-year low of
6,547 on
3/9/09,
54% loss in 17
months
2009-2019
Bull Market
 Remains volatile losing 20% during
summers of 2010 and 2011
 2/1/13 closes above 14,000 for
first time since October 2007
 All-time high 27,359 7/15/19
Chart source: Yahoo Finance

19
The Recession of 2008
"Arguably the financial shocks of 2008 were bigger than those of 1929.
The outcome was not as disastrous because the policy responses were
quite different.“
- Jeffrey Shafer, a former Federal Reserve and Treasury official.
- Ben Bernanke, Former Head of the Federal Reserve

20
Market Update Today:
Earnings & Taxes
https://tradingeconomics.com/united-states/corporate-profits
https://tradingeconomics.com/united-states/corporate-tax-rate
Corporate earnings are up Corporate tax rates are down

22
What is a Recession?
A recession is a
significant decline in
economic activity
spread across the
economy, lasting more
than a few months.
http://www.nber.org/cycles/jan08bcdc_memo.html
Note: NBER does not define a recession as a minimum of six months.
• Real GDP
• Real Income
• Employment
• Industrial Production
• Wholesale-Retail Sales

23
Recession Indicators
Inverted Yield Curve
Stock Market
Unemployment Housing Starts/Prices

24
Market Update:
Bond Yield Curves - 2019
https://www.treasury.gov/resource-center/data-chart-center/interest-rates/pages/TextView.aspx?data=yieldYear&year=2019
YieldPercent
0
0.5
1
1.5
2
2.5
3
3.5
1/2/2019 2/2/2019 3/2/2019 4/2/2019 5/2/2019 6/2/2019 7/2/2019 8/2/2019 9/2/2019 10/2/2019
2 Yr 10 Yr 30 Yr

25
Market Update:
Dow Jones Industrial Average – 2019
https://finance.yahoo.com/chart/
DJIA is up 16.4% YTD, Nasdaq is up 21.4% and S&P 500 is up 24.6%

26
Market Update:
U.S. Job Creation – 2017 - Today
https://data.bls.gov
Thousands
0
50
100
150
200
250
300
350
Jan,2017
Feb,2017
Mar,2017
Apr,2017
May,2017
Jun,2017
Jul,2017
Aug,2017
Sep,2017
Oct,2017
Nov,2017
Dec,2017
Jan,2018
Feb,2018
Mar,2018
Apr,2018
May,2018
Jun,2018
Jul,2018
Aug,2018
Sep,2018
Oct,2018
Nov,2018
Dec,2018
Jan,2019
Feb,2019
Mar,2019
Apr,2019
May,2019
Jun,2019
Jul,2019
Aug,2019
Sep,2019

27
Market Update:
Single Family Housing Starts
(Z)
50
100
150
200
250
300
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2017 2018 2019
Thousands
https://www.census.gov/construction/nrc/index.html

29
When Is Our Next Recession?

30
Manufacturing Production YoY:
2009 - 2019
Manufacturing production in the United States averaged a 3.79 percent increase
YoY from 1920 until 2019
https://tradingeconomics.com/united-states/manufacturing-production

31
What Are Your Internal Challenges
to Preparing for the Recession?
Images courtesy of www.pixabay.com

32
Preparing for a Recession
Plan
Cash Flow
Capital
ClientsStaff
Sales &
Marketing
Dashboard
Prepare

33
1. Be Prepared: Have a Plan
• Develop/Refine a Plan
• Develop Different
Scenarios and Diversify
the Strategy
• Identify New Markets,
Client and Products not
Affected by a Recession

34
2. Manage Cash Flow
• Develop 13-Week Rolling
Cash Flow Forecast
• Accelerate A/R
• Decelerate A/P
• Expand Lines of Credit
• Eliminate Expense

35
3. Manage Capital
• Reduce Inventory
• Limit Capital Purchases
• Reduce Debt
• Expand Lines of Credit
• Sale/Leaseback of Capital
Assets

36
4. Attend to Clients
• Tier clients to A, B, C, D
levels
• Prioritize A & B Clients
• Address Clients Seeking
Lowest Cost/Favorable
Terms
• Seek New Clients
• Diversify Clients

37
5. Attend to Staff
• Push Back New Hires
• Address Low Performers
• Retain Valuable Staff
• Staff to the Bottom of the
Production Curve
• Utilize Temps for Demand
Fluctuations
• Outsource Non-Strategic
Centers
• Train, Train, Train

38
6. Focus on Sales and Marketing
• Continue Marketing
• Understand Your Value
• Train/Retrain Sales Staff
• Accelerate Time to Close
• Increase Marketing to Key
Customers
• Refine/Differentiate
Messaging

39
7. Utilize a Dashboard and
Track Early Warning Indicators
• Monitor, Monitor, Monitor
• Create Visibility to Core
Business Drivers
• Include Early Warning
Indicators
• Focus on Key Areas of
Business

40
Why Now?
“The time to repair the roof is when the sun is shining.”
- John F Kennedy

41
Managing to a Recession …
Preparing for and running your business in a recession is really
just executing sound business practices!
Preparation

42
Summary
• Engage and Align the Team
• Reduce Costs
• Build a Strong Relationship with
your Executive Team
• Engage and Follow the Seven
Key Approaches
• Be Proactive

43
Questions
David R. Mustin, MBA
Partner
440-605-7222
dmustin@skodaminotti.com
CPE Code: PFR

Search Engine Optimization
What is Search Engine Optimization?
• SEO is the process of optimizing your website’s presence
in search results.
• SEO refers to non-paid/organic
search results.
• Search results can include articles,
images, videos, map results and more.

How Can SEO Benefit Me?
• Increased visibility for search
terms relevant to your business
can increase opportunities for
online leads.
• Attract “free” traffic to your website
via organic search.
• Better understanding of how your
customers look for your
products/services.

What SEO Capabilities Are Available?
• Keyword research is the process of determining which search terms your
audience is most likely to use when seeking out your products and
services.
• On-page optimization is the process of ensuring that your existing
website content is well formatted to appeal to search engine crawlers (e.g.,
page titles, meta data, etc).
• Content creation involves things like the creation of relevant articles on
your website, infographics, videos, podcasts and more.
• Link building is proactively seeking out third party website links into your
website such as industry associations, via directories and press coverage.

Three Questions to Ask Yourself About SEO
1. Do you appear in search results for your
company’s products/services?
2. Are you appearing above or below
your competitors?
3. What content can you create for your
website that would be a valuable
resource to your customers/prospects?

Google Ads
What Are Google Ads?
• Google Ads encompasses AdWords
(Search), Google Display Network
(Banner ads) and YouTube (Video ads).
• Ads run on either a pay-per-click or pay-
per-impression basis.
• Budgets are set on a daily basis and can
be adjusted or canceled at any time.

Google Ads
How Can Google Ads Benefit Me?
• Ads allow you to reach your customers and
prospects during Google web searches, while they
are browsing third party website or before, during
and after viewing YouTube video content.
• ROI of Google Ads campaigns can be tracked when
visitors to your site convert via a website form or
even via a tracked call.

Google Ads
What Google Ads Capabilities Are Available?
• AdWords allows you to run text ads on search results
pages for targeted keywords and phrase.
• Display ads let you run banner ads of various sizes to
audiences who are visiting sites that fit your targeting
criteria.
• Video ads allow placement of short video
“commercials” before, during and after targeted
YouTube video content.

Google Ads
Three Questions to Ask Yourself About Google Ads
1. What percentage of my website
visitors become leads/customers?
2. What is an average click to my
website “worth”?
3. How does this compare to an
estimated cost-per-click in Google Ads?

What Are Social Media Ads?
• Social ads refer to paid promotional space on
networks such as Facebook, Instagram, Twitter
and LinkedIn.
• Ads run on either a pay-per-click or pay-per-
impression basis.
• Budgets are set on a daily basis and can be
adjusted or canceled at any time.
Social Media Ads

Social Media Ads
How Can Social Media Ads Benefit Me?
• Detailed targeting allows you to reach users by
location, age, gender, job title, interests and
more.
• The ads allow users to “share” the promotional
content with their followers, potentially
enhancing the reach of your ad campaign.
• When compared to search ads, social ads are
typically a lower cost-per-click due to the high
volume of potential users to be reached.

Social Media Ads
What Social Media Ad Capabilities Are Available?
• Depending on the social media platform, a wide
variety of ad types are available:
 Text
 Static images
 Videos
 Rotating carousels
• Ability to track ROI through site visitors who
convert via a website form or even a
tracked call.

Social Media Ads
Three Questions To Ask Yourself About
Social Media Ads
1. What social media platforms are my
customers most likely to use?
2. How am I currently interacting with
customers on that platform?
3. What type of social media content has
the most value to my target audience?

On-Site Conversion
What Are On-Site Conversions?
• On-site conversions refer to opportunities to
collect leads via your website.
• Conversion opportunities can include:
 Forms
 Online chat
 Premium content
 Newsletter signup
 Special offers

On-Site Conversion
How Can On-Site Conversions Benefit Me?
• More easily assign ROI to your digital marketing efforts.
• Streamline communications for both your customers and
your staff.
• On-site conversions can be entered directly into many
CRM systems, bypassing manual data entry.

On-Site Conversion
What On-Site Conversion Opportunities Are Available?
• Website forms can function to collect basic contact requests,
newsletter signups, quote requests, reservations and more.
• Online chat can be a convenient way to serve customers
while also collecting a lead’s contact details.
• The ability to offer something of value to your customer (e.g.,
promotional coupons, discounts, special content) in exchange
for their contact details.

On-Site Conversion
Three Questions To Ask Yourself About
On-Site Conversions
1. Am I collecting customer/prospect data
from my website?
2. If so, am I tracking how these
customers found me and what
happened to them after they submitted
their web request?
3. What can I offer on my website that
my customers would find valuable to
generate more leads?

Contact Us
Jonathan Ebenstein
(440) 605-7231
jebenstein@skodaminotti.com
CPE Code:
DMV
Bob Goricki
Director of Digital Marketing,
Skoda Minotti
(440) 605-7234
bgoricki@skodaminotti.com

The Next Big Thing
Value Acceleration/Exit Planning
Mike Trabert
CPA, CVA, CMAP, CEPA, CM&AA

Agenda
• Market Prospective
• Value Acceleration Methodology
• Building Value

Mike Trabert
• Mike leads Skoda Minotti’s Value Acceleration/Exit Planning Group, and
is a leader in the firm’s Transaction Advisory Services Group
• He is a Certified Valuation Analyst, Chartered Merger and Acquisition
Professional, a Certified Exit Planning Advisor and a Certified Merger
and Acquisition Advisor
• Mike graduated from Kent State University in three years where he
received his Bachelor of Business Administration degree in accounting
• He is chair of the Leading Edge Alliance (LEA) Certified Exit Planner
Advisor Group
• He is President of the Northeast Ohio Chapter of the Exit Planning
Institute
• Mike was recognized in the National Register’s Who’s Who in
Executives and Professionals
• He has been recognized as the 2017 Exit Planner of the Year by the
Exit Planning Institute
• He is chair of the LEA Family Business Special Interest Group
• Mike was awarded the LEA 2018 Initiative Champion
• He is a frequent speaker nationally and internationally
• Mike has attended a regular-season Major League Baseball game in
over 60 venues
Skoda Minotti
440-449-6800
mtrabert@skodaminotti.com

Change the Outcome
for Business Owners

Historical Transition
Success Rates
• 70-80% of businesses put on the market
don’t sell
• Only 30% of all family-owned businesses
survive into the second generation
• 12 months after selling, 75% of business
owners surveyed “profoundly regretted”
the decision

A Tidal Wave of Exits is Coming

• Within seven years, ALL
baby boomers will be over
age 60
• Own 63% of the 6M private
businesses in U.S.
• 80-90% of their wealth is tied
up in their businesses
• EPI research confirms: 48%
in the next five years; 76%
plan to transition over the
next 10 years
The Age
Wave
4,500,000
Businesses
$10 Trillion
in Wealth

Market Dynamics
• What impact do you think this will have on the
market when these business transitions begin
to flow?
Multiples are likely to fall
Only the best businesses
have the option to sell

What Can You Do?
• Build a system that positions the business for a
successful transition in good times or bad
• Identify what they already have
• Initiate steps to mitigate risk
• Build value
• Position the business so that
they can unlock the wealth

“Father time is
undefeated.”
- LeBron James

Always Be Ready to Transition
• The 5 Ds
1. Death
2. Disability
3. Divorce
4. Disagreement
5. Distress
• Unsolicited offer to sell

LIFESTYLE
90% are lifestyle
businesses
VALUE CREATION

Why Focus on Value?
This business is 70% of
the owner’s net worth
assuming he/she
can monetize

Three Keys to a
Successful Transition
“Three Legs of the Stool”
1. Maximizing the value of
the business
2. Ensuring you are personally and
financially prepared to maximize
net proceeds
3. Ensuring you have a plan for what
you are going to do next
Integrate exit strategy
business practices into the
daily operations of the
business

Value Acceleration
A proven process that focuses on value growth and aligning
business, personal and financial goals
• Integrates the three legs into one Master Plan
• Is grounded in ACTION
• Promotes use of teams in an engaging process
• Creates a road map to success
• Provides owner key deliverables and metrics
• Creates a Leap in Value

Additional Benefits
• Focusing on value makes the timing of the exit irrelevant – always “ready”
• Very predictable results
• Breaks big strategic programs into 90-day chunks (sprints!)
• Connects daily activities to value growth
• Acts as a driver of organizational behavior
• Mitigates risk
• Gets employees and management thinking more like owners – what are the
financial impacts of their performance?
• Ensures owner and family wealth are at the center of the plan
• Can be used as an intergenerational and employee development,
transition and measurement tool

Core Concepts
• 5 Stages of Value Maturity
• 4Cs
• 3 Legs of the Stool
• Relentless Execution

Value Maturity Index
5 Stages to
Identify, Protect,
Build, Harvest and
Manage Value

Business Value = Simple Math
Simple Math
MULTIPLE
CASH
SALE
S
X =
You control You control some
Predictable Cash Flow
Clean Balance Sheet
Size Matters!
Private Capital Market Conditions
Terms/Exit Option
Intangibles (Value Factors)

What is Intellectual Capital?
“…the sum of everything everybody knows in
a company that gives it a competitive edge.”
– Thomas A. Stewart
The Wealth of Knowledge

Tangible Versus Intangible Assets
Traditional
accounting
systems are set up
to provided regular
feedback on
tangible assets…
…yet, your
intangible assets
are the direct
drivers of business
attractiveness.
Can you
measure the
value of your
intangible
assets?

Most Valued Companies
What do
these
companies
have in
common?

The 4Cs
Human
Capital
Structural
Capital
Customer
Capital
Social
Capital

Common Sense Scoring
1 532 4 6
STRONGWEAK AVERAGE
CAN INTELLECTUAL CAPITAL BE MEASURED?

Scoring Exercise
1 532 4 6
STRONGWEAK AVERAGE
1 532 4 6
1 532 4 6
1 532 4 6
Human
Customer
Structural
Social

Focusing and
Sustaining Improvements
“We have this list to build value. And we know what value
enhancement is worth…so now what?”
“5 Business and 5 personal actions that
we can complete in the next 90 days,
every 90 days.”
Keep Score!

Myth vs. Reality
About Exit Planning
• Myth: Exit planning is something owners do when they are ready to leave the
business
• Reality: Exit Planning is Business Strategy. It’s about building a management
system to keep the organization focused on building value that “one day” can be
extracted, harvested and monetized from the business
VALUE is all about transferability
Focusing on VALUE produces all other positive outcomes

Exit Planning Institute
• Teaches Value Acceleration Methodology
• Certified Exit Planner Advisor (CEPA) – Value Advisor
• Approximately 1,000 CEPAs in 15 countries
• Approximately 30 chapters

Communicating With the Owner
Advisors:
Left Brain
Owners:
Right Brain
Info processing
Process info in a linear
manner
Process info holistically
Project engagement Identify important details See end result with clarity
Perception Analytical Creative
Workflow Move in a sequential order
Move randomly from task
to task
Problem solving Use logic to solve problems
Use intuition to solve
problems

Summary
• It takes time to get ready; starting is difficult
• Readiness correlates to value
• This is a once-in-a-lifetime event

Contact Me
Mike Trabert
(440) 449-6800
mtrabert@skodaminotti.com
CPE Code: NBT

Life Insurance 360
A Client-Centered Comprehensive Approach To
Life Insurance Policy Design and Management
The Right Strategy…
Right Policy…
Right Design…
Right Management
Terry Bork
Aurum Wealth Management

Paradigm Shift…
Life Insurance as an Asset
• Term Insurance Can Be an Expense
• Permanent Insurance Is an Asset
Death Benefit Design Is a Deferred Asset
Cash Value Design Is a Current Asset

Unique Financial Instrument
As “A Lifelong Asset” permanent life
insurance has a unique combination of
characteristics unavailable in any other
financial instrument or cash
accumulation strategy.

Tax Characteristics
Inherent to Life Insurance
• Tax-Deferred Cash Value Growth (tax-free if held for life)
• Tax-Free Access to policy cash value during lifetime
through a combination of withdrawals and loans
• Tax-free Death Benefit (Death Benefit may be accessed
during lifetime for terminal or chronic illness)

It Starts With…….
WHAT’S IT FOR?
Policy death benefits and/or cash value can be
the funding asset for multiple planning strategies
designed to help individuals achieve their
lifetime and legacy goals, and businesses of all
types and sizes to grow and prosper.

Individual Planning Objectives
Lifetime funding asset for:
• Retirement Income
• Higher Education
• Postretirement Medical
• Long-term Care
• Tax Diversification
Legacy Funding Asset For:
• Estate Liquidity
• Estate Equalization
• Asset Replacement
• Enhance Charitable Gifts
• Asset Hedge

Business Planning Objectives
Executive Compensation
and Benefits
• Business Owner
Retirement Income
• Executive Retention
Protection and Exit Planning
• Key Person Protection
• Buy/Sell Funding

Policy Design
• There is more to making good permanent life
insurance decisions than shopping for price,
or picking a product based upon numbers
from a sales illustration.
• Today’s products are complex and have great
flexibility to address each
individual’s/company’s unique circumstances.
Each policy is custom engineered to
individual specifications.

Cash Value or Death Benefit?
• Based on “What’s it For” the first
determination is whether to custom build the
policy for its cash value or its death benefit
- Accumulation life focuses on
maximizing policy cash value as a living
benefit.
- Death benefit design focuses on
maximizing the Internal Rate of Return
(IRR) at life expectancy

Accumulation Life…
“Tax-Favored Asset Container”
• Major corporations and financial institutions
have benefited from this concept for decades.
• Defined contribution funding – determine the
level and duration of the premium first
• Minimum death benefit design to minimize
expenses

Accumulation Life…
“Tax-Favored Asset Container”
• Insurers price different products for different
markets...Retail, Institutional, Experience-rated
• Cash value growth can be based on fixed
account, variable sub-accounts, hedging
strategy
• Tax-free access to policy cash value during
lifetime
With proper design and policy selection policy,
expenses can be less than fees and taxes on a
taxable alternative

Death Benefit Design
• Defined benefit funding strategy
• Premium amount and duration generally not fixed and not
guaranteed
• Major determinants of premium are policy charges and cash
value crediting rate
• Function of cash value is to support the death benefit
• Secondary guarantees can be included
• Death benefit may be accelerated to pay for terminal or
chronic illness
The goal is to pay minimum premium,
consistent with risk tolerance, to maintain
death benefit for life

Design Considerations
• Safety……choosing financially strong carriers
• Certainty…..conservative assumptions
• Flexibility……ability to make modifications
• Equity…..proper method to determine cash
value growth
• Premium…..proper level and duration

Policy Selection
Policy selection takes into account both the
intent of the policy and design considerations
• Whole Life
• Universal Life
• Variable Universal Life
• Indexed Universal Life

Product Pricing
Insurers price different products for different
markets determined by the risk characteristics
associated with the pool of policyholders for
which the policy is designed.
• Retail
• Institutional
• Experience-Rated
Policy selection considers policy costs
and construction of those costs when
determining optimal use

Policy Underwriting
Underwriting Advocacy is the art of packaging, clarifying
and negotiating to obtain best possible outcome
• Full Underwriting
• Express Underwriting
• Group Underwriting
• Simplified issue
• Guarantee issue

Life Insurance Portfolio Management…
Bridges Expectations With Results
• Multiple policies, each custom engineered to
individual specifications, designed and managed
over time to meet specific financial goals
• Policies can be repurposed, recalibrated or
replaced (1035 exchange) as products evolve
and/or needs and circumstances change.
• If required a policy can be surrendered to the
insurance company for its cash value, or sold
in the open market (life settlement) for an
amount greater than the cash value and less
than the death benefit.

1035 Exchange
A 1035 exchange is a provision in the tax code
which allows a policyholder to transfer funds from
a life insurance, endowment or annuity to a new
policy without having to pay taxes.

Life Settlements
A life settlement is an option for individuals or
businesses that desire funds for other needs
General criteria to consider:
• Individuals age 70 and older
• Life expectancy of 14 years or less
• A recent decline in health
• All policy types $250,000 and greater
• Owner can be an Individual, Trust, Corporation,
Charity or other entity

Summary
Permanent Life Insurance is a valuable asset
and should be viewed and managed as such
It starts with “What’s it For?”
The Right Strategy
The Right Design
The Right Policy
The Right Management

Contact Me
Terry Bork
CLU, ChFC
President, Aurum Insurance
(440) 605-7230
tbork@auruminsurance.com
CPE Code: LAA

440-571-7777
www.gertsburglaw.com
www.covermysix.com
How to Keep Your Business
Out of the Courtroom

How to Stay Out of Court
“Lawyers are like nuclear
warheads. They have theirs, so I
have mine. Once you use them,
they @#$% up everything.”
Lawrence Garfield – Other People’s Money

How to Stay Out of Court
TODAY’S MISSION
Make each of you
a hard target.

CoverMySix
1. Insurance
2. Customer Relations

CoverMySix
1. Insurance
3. Vendor Relations

CoverMySix
1. Insurance
3. Vendor Relations
4. Corporate Structure

CoverMySix
1. Insurance
3. Vendor Relations
5. Employees

CoverMySix
1. Insurance
3. Vendor Relations
5. Employees
6. The Internet

CoverMySix: Insurance
• Statutory / E&O

• Statutory / E&O
• EPLI

• Statutory / E&O
• EPLI
• Read your policy; get familiar
with exclusions

• Statutory / E&O
• EPLI
• Read your policy; get familiar
with exclusions
• Give notice at the right time

CoverMySix:
Customer Relations

CoverMySix: Customer Relations
• Dispute Resolution Clause

• Dispute Resolution Clause
• Salesforce training
CoverMySix: Customer Relations

CoverMySix: Vendor Relations
• Time, place and manner of delivery

• Time, place and manner of delivery
• What happens if there’s a breach?
CoverMySix: Vendor Relations

CoverMySix:
Corporate Structure

CoverMySix: Corporate Structure
• Corporate documents

• No commingling

• No commingling
• No fraud

CoverMySix: Employees
• Employee handbook

• Non-competes

• Non-competes
• Safety Audit

• Non-competes
• Safety Audit
• Proper classification

CoverMySix: Internet And It
• Strong internal, written IT policy

• Security/licensing audit from a
reputable company

• Security/licensing audit from
a reputable company
• Periodic training

• Security/licensing audit from
a reputable company
• Periodic training
• Address online defamation

Bonus
How to Save a Ton of
Money on Legal Fees

Saving On Legal Fees
Realities of the Legal Marketplace
• There are tons of lawyers out there
• You have more power than you
think you do

Realities of the Legal Marketplace
• Location, location, location
• Big firms bill more per hour than
small firms
• Specialized lawyers bill more
than general practitioners

• Negotiate fees, caps, flat fees,
contingencies; get budgets;
always counteroffer
• Shop around
• Use an RFP

The engagement letter

Outside counsel
guidelines

A note about leverage

• Be organized
• Do some of the work
yourself

Review bills closely;
ensure they match the
guidelines and budgets

www.CoverMySix.com
www.covermysix.com
440-571-7777

Any Questions?
www.covermysix.com
440-571-7777
CPE Code: HBC

FINDING GOLD:
IDENTIFYING AREAS TO IMMEDIATELY SAVE
AND REDUCE UTILITY EXPENSES
Presented by:
Roger S. Zona
CEO & Founder
TPI Efficiency Consulting

Ohio House Bill 6
Includes charges to cover subsidies for two FirstEnergy nuclear
plants and coal production facilities and a “rollback” of energy
efficiency and clean energy standards.

Roger S. Zona
CEO & Founder

CONFUSED
YET?
Roger S. Zona
CEO & Founder

1 of 45 components in FE Ohio
Ohio House Bill 6
Includes charges to cover subsidies for two FirstEnergy nuclear
plants and coal production facilities and a “rollback” of energy
efficiency and clean energy standards.
Roger S. Zona
CEO & Founder
FOR AGAINST
China Tariffs
International Politics
Commercial Activity Tax Rider
Universal Service - Total KWH
CEI Delta Revenue Recovery
Deferred Fuel Cost Recovery
Deferred Generation Cost Recovery Rider
Economic Development Rider-
Standard Charge Provision
Phase-In Recovery
Government Directives Recovery Rider
Ohio Renewable Resources Rider
Non Market Based Services
Delta Revenue Recovery Rider
Advanced Metering Infrastructure
Rider/Modern Grid
Delivery Capital Recovery
Capacity Charges
Reactive Demand Charges
Distribution Modernization Riders
Distribution Uncollectible Riders
Line Extension Cost Recovery Riders
Demand Side Management
and Energy Efficiency Riders
PIPP Uncollectible
State kWh Tax Riders

IT’S CONFUSING OUT THERE.
Roger S. Zona
CEO & Founder

IT’S CONFUSING OUT THERE. WE GET IT.
Roger S. Zona
CEO & Founder

SO, HOW CAN YOU MAKE SENSE OF IT ALL?
Roger S. Zona
CEO & Founder

BY GETTING YOUR DUCKS IN A ROW
Roger S. Zona
CEO & Founder
1: CONSIDER YOUR ENTIRE ENERGY BILL1: CONSIDER YOUR ENTIRE ENERGY BILL
2: KNOW THE MARKET PRESSURES
1: CONSIDER YOUR ENTIRE ENERGY BILL
3: ADDRESS COST AVOIDANCE & EFFICIENCY

Regulated Portion 41% (aka: distribution/transmission)

Regulated Portion 41% (aka: distribution/transmission)
Deregulated Portion 59% (aka: retail/supply/generation)
Source: Current U.S. Energy Information Administration Annual Energy Outlook

Regulated Portion | Overview
• In Ohio’s FirstEnergy territory alone,
over 45 separate components
• Fees
• Taxes
• Riders
• Rate Class
• Special
Arrangements
∞ Constant Change

Case Study 1: Cold Storage Facility

• Pennsylvania Sales Tax Exemption (Electricity)
Pennsylvania sales tax (regulations vary by state and use type)

1. Process detailed invoices
Standard Bill Detailed Bill

1. Process detailed invoices
2. Identify exempt load percentage from detailed bill analysis

• Pennsylvania Sales Tax Recovery (Electricity)

• Pennsylvania Sales Tax Recovery (Electricity)
≈3 years recoverable

$75,722:“Lump-sum” Pennsylvania Sales Tax Recovered

+$23,537: Annual Pennsylvania Sales Tax Avoided

$99,259: Total Client Savings Year-1

$99,259: Total Client Savings Year-1
+$23,537 Annual Sales Tax Exemption (go-forward)

Case Study 2: Manufacturer

• Rider: D38 (Energy Efficiency) Opt-out:

• Rider: D38 (Energy Efficiency) Opt-out:
Qualifying customers may opt out of Energy Efficiency
and Peak Demand Reduction programs offered

• Rider: Ohio State kWh Tax Reduction: (Self Assessing Purchaser)
Tax payed directly to state rather than through utility

$135,817: Annual D38 Opt-out Savings

+$68,117: Annual Ohio State kWh Tax Avoided

$203,934: Total Ohio Annual Savings

$696,000: “Lump-sum” Pennsylvania Sales Tax Recovered

$928,000: Total Pennsylvania Annual Savings
$1,131,934 Total Client Savings Year One!

Deregulated Portion: 59% (aka: retail/supply/generation)
• Large portion of total bill
• Infinite purchasing strategies and products
available on a globally traded market
• Easy switch:
not a physical
conversion
• Complex offers,
contracts, and
relationships

Is deregulation working?

Is deregulation working?
$31.7 Billion in Estimate Commercial Savings
Achieved by Switching 2011–2017

• Ohio House Bill 6
• China Tariffs
• LNG Exports
• Renewables
• Capacity
• Coal
• Black Swans

• Ohio House Bill 6
• China Tariffs
• LNG Exports
• Renewables
• Capacity
• Coal
• Black Swans
A black swan is an unpredictable event that is beyond what is normally expected of a
situation and has potentially severe consequences. Black swan events are
characterized by their extreme rarity, their severe impact, and the practice of
explaining widespread failure to predict them as simple folly in hindsight.

THE SWANS
Unpredicted legislation change of component cost spikes electricity costs in New
York for 12 months (to finance carbon impact infrastructure)

KEY MARKET INDICATORS
Bearish (utility prices decrease)
• US/Northeast production slows but grows
• Recession?
• Regulatory Changes
Bullish
• Demand is not slowing, exports to increase
• Fiscal Discipline by producers
• Regulatory Changes
• The swans

CHECKING IN…
Careful consideration of
all Fees, Taxes, Riders, Rate Class…
Contracts negotiated
based on market conditions

CHECKING IN…
Careful consideration of
all Fees, Taxes, Riders, Rate Class…
Contracts negotiated
based on market conditions
Address cost avoidance & efficiency

3: ADDRESS COST AVOIDANCE & EFFICIENCY
• Wind
• Solar
• HVAC
• BAS
• BMS
Capital expense? Yes.
But supply is no longer in conflict with affordability
and on-bill financing options are hard to beat.
“The cheapest kWh,
is the one you don’t use.”

LEADS TO A CALM OUTLOOK FOR THE FUTURE
QUESTIONS?
PROACTIVELY ADDRESSING THESE ISSUES…
CPE Code:
RUE

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