If Obama’s 2012 presidential victory proved big data’s ability to accurately predict elections, Trump’s 2016 win most likely proved the opposite. Prior to Trump’s triumph, the vast majority of national polls showed him as trailing Democratic nominee Hillary Clinton.  Many thought Clinton’s win was inevitable, with most political pundits focused on debating how big her victory would be. And when Election Day came and went, voters proved a lot of experts wrong. So what went wrong with the polling data going into the presidential election?

Before you decide to throw all statistics and business KPIs out the window, it’s important to acknowledge a fundamental tenant of data crunching: The results are only as good as the data that is used.

According to a report by The Washington Post, Clinton’s campaign used an algorithm called Ada that staff input  a “raft of polling numbers, public and private” to help Clinton’s team decide when and where they should dedicate their resources. In retrospect, it apparently overlooked “the power of rural voters in Rust Belt states.” On the other hand, The New York Times reported that Trump’s campaign seemed to have relied on much more simple methods for determining where best to concentrate resources nearing the end of his campaign, citing that “their analysis seemed more atmospheric than scientific.”

The two presidential candidates utilized very different analytical means to tackle the same challenge: where to devote key resources going into the final stretch of their campaigns.

As an entrepreneur, do you have enough of the right data to make predictions that are important to the growth of your business?

Translating a business’s infinite streams of data into decision-making tools that help increase growth and profitability is no easy task. To get it right, analysts need to sift through and consider a company’s operations from the inside, knowing what to look for in detail. Working closely with the data particular to your business, you and/or your advisors can pinpoint the right key performing indicators and accurately interpret information to ensure your company is on track to meet goals.

Talley & Company and its affiliate, Group 11 Advisors, offer a uniquely combined platform of services that give business leaders the ability to both analyze and decipher leading as well as lagging indicators. Talley & Company not only provides timely, accurate historical financial data, (where you’ve been) but also reporting metrics that can anticipate where your business is going. To determine whether your business is taking advantage of all metrics available to make the most informed picks for future success, schedule a time to talk with us today.

Microsoft recently announced that it will scoop up LinkedIn for $26.2 billion in the largest acquisition in its history, placing a bet that the professional social network can rivitalize the tech giant’s software offerings despite recent struggles by both companies.
Microsoft’s Chief Executive Satya Nadella is ponying up a hefty sum of cash for a firm that has suffered its fair share of setbacks. Although LinkedIn is the largest professional social network, with around 430m registered users and 100m visitors to its site each month, some analysts have questioned how much growth is left in its tank. While LinkedIn’s revenue growth has been slower than expected, if Microsoft’s CEO can make this deal worth the money and the effort, he could improve Microsoft’s questionable track record with acquisitions. So what potential challenges are standing in his way?
There are three major hurdles Microsoft will have to deal with:
Many analysts are questioning if the deal makes financial sense. Microsoft is spending the equivalent of approximately $260 for each monthly active user of LinkedIn. To keep shareholders content, it will need to grow LinkedIn’s user base amid concerns about slowing growth, or be more explicit on how Microsoft can capitalize financially from obtaining LinkedIn’s data.
Microsoft’s recent history of acquisitions leaves something to be desired. Its purchase of Skype in 2011 for $8.5 billion has not been as fruitful as once predicted. Microsoft squandered over $6.3 billion on aQuantive, an online-advertising firm that it bought in 2007, and $7.6 billion on Nokia’s handset business in 2014. Nadella, not at the helm when these acquisitions took place, is looking to steer the ship in a positive direction with the acquisition of LinkedIn.
A shift in workplace culture and behavior will be required. Nadella wants LinkedIn to become the go-to hub for news and other details about people’s professional lives, but firms are unlikely to want to give their employees more of an excuse to spend time on a social media site, regardless of its professional nature. It’s not uncommon for large firms to block or restrict access to LinkedIn on their networks, which might have something to do with executives fearing that recruiters scouring LinkedIn are out to poach their staff.
While many are questioning the purchase of LinkedIn, only time will tell if Nadella will be able to capitalize on Microsoft’s latest acquisition.
Talley & Company understands the challenges facing entrepreneurs with generating and protecting income. Whether you’re looking to improve your profitability, build your brand through a business transaction or capital raise, Talley & Company is the consulting and financial services firm dedicated to strategic business solutions that deliver meaningful results.

Tesla’s CEO Elon Musk is one of the more ambitious entrepreneurs the world has ever seen, routinely drawing comparisons to Steve Jobs, with some even putting him ahead of the late Apple co-founder and CEO. Now Musk is trying to accomplish something few manufacturing companies could ever dream of: Musk recently announced plans to ramp up capital expenditures to support an incredibly aggressive plan to increase the current production capacity of 20,000 vehicles in the current quarter to 500,000 per year by 2018.

“It’s not a question of demand,” Musk said. “Demand is not our issue, production is our issue. We have more demand than we can address and levers we can pull to increase demand, and we’re not doing it.”

Musk’s point was that if Tesla engaged in conventional advertising (they do very little advertising outside of PR events), it could increase demand, but its more prevalent issue now is being able to produce its cars, and build them well.

“It’s worth saying that making one of something is quite easy,” Musk said. “Making lots of something consistently that’s going to last a long time is extremely hard. In fact, it is way harder to make the machine that makes the machine that it is to make the machine in the first place.”

From his perspective, Tesla has people lining up around the block to buy its cars and is far more worried about being able to build the vehicles and properly support them than it is about seeing demand drop off.

Scaling is hard. As many seasoned entrepreneurs will tell you, once you’ve achieved a certain level of success (it might take form of earning a few million in revenue, hiring more than 10-20 employees, etc.), the hard work really begins. A business in growth or scale mode faces a whole new set of different challenges and opportunities that may require a change in attitude and approach. Your ability to recognize this can mean the difference between spinning your wheels and achieving your next milestone.

Talley & Company understands the challenges facing entrepreneurs with generating and protecting income. Whether you’re looking to improve your profitability, build your brand through a business transaction or capital raise, Talley & Company is the consulting and financial services firm dedicated to strategic business solutions that deliver meaningful results.

The Association of Certified Fraud Examiners (ACFE) released its biannual 2016 report last week.  According to the report, the typical organization loses 5 percent of its revenue to fraud each year.  The losses caused by fraud reported in the study found an average loss of $2.7 million per case, with $150,000 being the median loss. We’ve compiled a shortlist of their findings focused on small to medium sized businesses.

The most common form of occupational fraud found was asset misappropriation, which occurred in more than 83% of cases and caused a median loss of $125,000.  Financial statement fraud was much less common (less than 10% of cases reported) but caused the most damage, with a median loss of $975,000.

While corruption was more a common fraud risk in large organizations, check tampering, skimming, payroll and cash larceny schemes were twice as prevalent in small organizations as in larger organizations.

Small Organizations are at the most risk. Organizations with fewer than 100 employees were the most likely to suffer from fraud in the study, representing about 30% of the cases reported. The median loss suffered by those firms was $150,000, the same as those suffered by large organizations (10,000+ employees) and more than organizations with 1,000-10,000 employees.

Small organizations are particularly vulnerable to fraud because they a significantly lower implementation rate of anti-fraud controls and have fewer resources to withstand losses. Small organizations also are much less likely to have anti-fraud controls in place than larger organizations.

For the full ACFE executive summary, go here.

While no company, even with the most robust internal controls, is completely protected from fraud, it’s important that entrepreneurs put measures in place that protect their company’s financial and management data.  Internal controls are critical in the process of setting and achieving operational objectives, accurate and reliable financial reports, and compliance with applicable laws and regulations.

For more information, contact Talley & Company today.

If you’re planning to do some egg-dyeing or egg-hiding for Easter, prepare to spend a little more for a carton than you did last year. In February 2016, the average retail price of eggs was $2.27 per dozen, which is considerably higher than the $2.07 per dozen last Easter. Grocery-store prices are still showing the effects of the avian influenza outbreak that hit the U.S. last year, which drove prices up almost 18% nationwide in 2015, when nearly 40 million egg-laying chickens died. While that won’t stop Americans from spending $17.3 billion on Easter this year, here’s what you can learn from it.
Costs of eggs not your problem? If you are a business owner, you most likely know just how much cost increases outpacing revenue gains can affect your profitability. Even if you’re in a field as remote from food as the semi-conductor business, changes in your supply chain, production process, logistics or distribution system, and any number of additional forces can have a major impact on your profitability. While there’s little anyone can do about sudden disasters like the Avian flu outbreak last year in the egg industry, there are plenty of warning signs that come with more everyday events impacting your business.
With the right advisors working with you to set up and analyze your financial data, you can effectively ascertain many negative and positive trends affecting your bottom line well before they hit mainstream news. Knowing where to look and having it at your fingertips can help you develop solutions before experiencing deep cuts into your bottom line.
Talley & Company has helped clients find best practice solutions to implement systems and controls that identify leading & lagging indicators, allowing them to capitalize on growth trends in their product lines while maximizing profits. From inventory controls that help monitor and actively increase cash flow on a day-to-day basis, to budgeting & forecasting tools to see both where you’ve been and where you are going, Talley & Company has your business’ profitability covered.

The professionals at Talley & Company are here to help monitor, protect, and put to work your hard-earned money in the most profitable way possible. Call Talley & Company today.

John Elway: 2004 Inductee to the Pro Football Hall of Fame. Back to back Super Bowl wins. It would be hard to argue that the number one pick of the 1983 NFL Draft did not have an illustrious career as a football player. One thing he wasn’t quite as good at apparently though, was investing his money.
Back in 1998, Broncos owner Pat Bowlen proposed a no-brainer deal to Elway. In the deal Bowlen offered Elway the right to buy a 10 percent share of the Broncos for $15 million. But that wasn’t all. Elway would also be given the option to buy another 10 percent of the franchise by forgoing the deferred salary Bowlen owed him on the condition Elway would become a special assistant to Bowlen, which would lead to a COO position. The amount of deferred salary on the table? $21 million.
If Elway wasn’t pleased with his investment in the Broncos, Bowlen offered him the opportunity to back out by selling back his interest in 2-5 years for $5 million more than the original purchase price. In addition, Elway would receive eight percent interest on his investment a year. He would also have right of first refusal to buy any other stake in the team if the family sold to another interested party.
So, what did Elway decide after having nine months to mull over this seemingly no-lose deal? He walked away from it and decided to invest his money elsewhere, often with mixed results.
Fast forward to 2011: Elway is named Executive Vice President of Football Operations and General Manager for the Denver Broncos but has no stake in the franchise. According to a Forbes estimate, the 20 percent stake he passed on, based on a Forbes 2015 valuation of the team at $1.94 billion, is now worth $388 million, which would have been a whopping 646 percent return on the 1998 investment, adjusted for inflation, had Elway accepted Bowlen’s offer.
While only John Elway and his closest advisors can say for certain why he would pass up what seemed to be a “touchdown” deal, it sounds like he fumbled the snap on a very good investment opportunity.
Founded in 1989, Talley & Company is the premier consulting and financial services firm dedicated to advising high net worth individuals and their closely held entities with the strategic business solutions that deliver meaningful results.
Depending on where you call home, you may have noticed lately that more and more items ordered from Amazon.com are being delivered by fleets of white trucks with the Amazon logo emblazoned on their sides.  In a move signaling a bigger push into the shipping industry, Amazon is expected to acquire French shipping company Colis Privé, as part of a plan to go head to head with FedEx, UPS and DHL according to The Seattle Times.
Amazon’s acquisition of Colis Privé is part of a bigger move by Amazon to rely less on multinational shipping companies to ship their products.  The potential benefit of owning the shipping network could potentially have a substantial impact for Amazon’s bottom line when taking in account rising shipping costs. In 2014, the company spent over $8.7 billion on shipping, up from $6.6 billion in 2013. It seems likely that after managing the logistics of its core revenue-generating, Amazon could then extend their logistics capabilities as a service to other organizations. 
This move would not surprise many, as Amazon is no stranger to disrupting industries. What started as the computing infrastructure that powered the company’s website (the largest retailer in the world) became the building blocks to what would transform into the biggest business in cloud computing by far. Amazon has transformed the way organizations utilize computing power by allowing clients to purchase computing power on an hourly basis which is ideal for projects whose capacity needs fluctuate at certain times. 
With the pending acquisition of Colis Privé, Amazon appears ready to disrupt another industry.
Growth through acquisition, is often mistakenly considered the exclusive domain of the largest companies. However small and midsize company looking to achieve substantial growth can benefit just as well. For more information about how Talley & Company can help you plan, negotiate, structure and execute on your growth strategy, contact us today.
The latest reports from Yahoo indicate that it plans to spin off its core business and leave little else behind, while allowing Yahoo shareholders to keep their stake in Chinese e-commerce giant Alibaba. Yahoo’s most recent move underscores the profound changes the internet environment has underwent and how Yahoo failed to adjust to change. Why does this all matter? Entrepreneurs can learn a valuable lesson from Yahoo’s inability to reinvent itself in the smartphone age.
For many people in the mid-1990s, Yahoo was the hub of the internet. After all, who didn’t have a Yahoo email address that we’re now too embarrassed to disclose the name of? (I’m sure a support group exists for all of us out there!)  Fast forward twenty years later and the internet environment is almost unrecognizable when compared to Yahoo’s heyday. Since then, it has been overshadowed by internet companies (Google, Facebook, Amazon, etc.) better able to keep pace with the times.
Taking a Reactive vs. Proactive Approach to Change. Yahoo wasn’t turning a blind eye to the obvious changes the internet was experiencing. Google and Amazon rose to prominence during the same dot-com boom as Yahoo, yet they now look radically different. Whereas Yahoo focused on its core business and tried to reactively adapt it to the change, other internet companies forged ahead into uncharted territory: Google took a proactive approach and expanded past search, building successful smartphone software, email and word processing services, and the very popular browser, Google Chrome. Amazon, not satisfied with being the largest e-retailer in the world, became a streaming video/music provider and a provider of global internet infrastructure that other businesses pay to utilize.
The lesson being that failure to innovate and keep up with the changing times can humble even the largest of companies. While Yahoo concentrated on its core business, these other companies were pioneering new services and products. Google, Amazon, and Facebook have all taken a proactive approach to the rapid pace of online change, in part because they have been helping drive that change themselves by constantly innovating.
Talley & Company understands the challenges facing entrepreneurs with generating and protecting income. Whether you’re looking to improve your profitability, build your brand through a business transaction, or wish to guarantee a legacy for your family, Talley & Company is the consulting and financial services firm dedicated to strategic business solutions that deliver meaningful results.
In his prime, infamous Medellín cartel boss Pablo Escobar pulled in an estimated $20 million a day in revenue, easily making him one of the wealthiest drug lords in history. In 1989, Forbes named Escobar the seventh richest man in the word with a net worth of roughly $25 billion. When you have more money than you know what to do with and the feds slowly closing in, losing money to rodents is probably the least of your worries.  For the rest of us who run honest businesses, Pablo Escobar’s story provides remarkable advice. Here are some of the highlights.
According to Pablo Escobar’s brother and chief accountant Roberto Escobar, Pablo’s wealth grew at such a rate he was forced to stash mountains of cash in Colombian farming fields, warehouses, and in the walls of his cartel member’s homes. “Pablo was earning so much that each year he would write off 10% of the money because the rats would eat it in storage or it would be damaged by water or lost”.  Doing the math, Escobar lost nearly $2.1 billion a year – and it didn’t even matter.
You’re bound to run into unforeseen challenges when scaling your business. Escobar made so much money that he allegedly spent $2,500 on rubber bands a month just to keep his cash organized.   (What an inconvenient expense, right?) Growing businesses face a range of challenges. As a business grows, different problems and opportunities demand different solutions – what worked a year ago might now be not the best approach. All too often, avoidable mistakes turn what could have been a great business into one that falls to the wayside.
Surround yourself with a team that complements your strengths. Escobar began his illustrious criminal career by allegedly stealing gravestones and reselling them to smugglers. At the height of his powers, Escobar was responsible for 80 percent of the cocaine smuggled into the United States. As the Medellín Cartel grew, Escobar would enlist the help from other notable “colleagues” (we use that term loosely here) in the business of drug trafficking. This allowed him to concentrate more on growing his business and less on the day-to-day operations of his empire.
While we don’t advise anyone attempt to create a drug empire following Escobar’s example, Talley & Company understands the challenges facing entrepreneurs with generating and protecting income. Whether you’re looking to improve your tax position, build your brand through a business transaction, or wish to guarantee a legacy for your family, Talley & Company is uniquely equipped to provide the technical and managerial expertise to help you plan, negotiate, structure and execute upon your goals.

Connecting Entrepreneurs to Capital

Roughly seven years ago, the economy dipped into a deep recession and the ensuing “credit crunch” made it difficult for many small businesses to secure the capital they needed. Banks effectively closed the door on many small businesses seeking capital that did not fit their “deal” requirements.  Seeing an opportunity, many alternative lenders jumped into the marketplace, willing to provide capital at a time when traditional lenders were reluctant to take on risk. Fast forward to today: the rise of online and marketplace lending means small business owners have access to more options than ever to fund their strategic growth objectives. So what’s the right choice for your business? The answer might not be so simple.
Much like first time home buyers trying to pick the right loan for their mortgage, many business owners are overwhelmed by the countless options available in the capital market.  So many choices can lead to a lot of confusion.  Some lenders will talk to you about APR, others will offer you a short-term cash advance, and more will throw in various hidden fees that may be difficult to discern from all the details –and the list goes on and on.  Taking into consideration all the variables, the real challenge is not merely finding financing or capital resources, but ensuring they are a good fit for both you and your organization’s needs.
For over 25 years Talley & Company has managed complex financial transactions that maximize value for our clients while earning their trust and building a strong network within the banking and private equity industries. Securing financing or capital resources can be a complex process. Structuring a favorable deal requires extensive knowledge of debt and equity capital markets and sources, the analytical skills to compare competing offers, and the transaction expertise of a knowledgeable advisor to maximize after-tax value. Talley & Company can help you develop your best financing options, identify prospective banking institutions or private equity groups that fit your deal, and work with you diligently to obtain the capital that is suitable for your organization’s unique needs.
For more information about how Talley & Company can help you plan, negotiate, structure and execute on your growth strategy, contact us today.

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