Lately, we’ve been focusing on small businesses that have figured out how to navigate these unprecedented times. We talked to Elizabeth at Sift+Pour Bakery who created a social distancing survival kit to help bring in a new stream of revenue and Frank and Peggy Tavarez, who completely pivoted the Wine and Liquor Mart to a virtual sales space to make sure they were following social distancing guidelines.

Killroy Pest Control Family Run Silicon Valley Business

Courtesy: Killroy Pest Control

This week, we look at essential business Killroy Pest Control, which has served Silicon Valley for more than six decades. Lynn Olavarri-Schmidt and Richard Schmidt have seen almost every economic twist and turn imaginable while running Killroy Pest Control in Campbell, CA. So they knew what to do when business in California stopped because of the stay at home order.

Even as an essential business that deals with pests such as roach, spider, and rodent control, Killroy found itself with no revenue coming in. Lynn and Richard sent everyone home and began formulating a game plan for the coming weeks. They contacted customers to make sure the demand was still there. They adjusted the office to adhere to social distancing guidelines.

Employees now take trucks home and go directly to customers instead of meeting in a centralized location. Administrative staff have laptops and home offices to do their work. They now email bills to customers instead of sending them via mail or delivering them in person.

Four weeks later and the essential business is running at about 75% to 80%. Lynn and Richard are already looking at new potential business avenues so Killroy can be #buildbackbetter when the order is lifted. They say the changes have worked, but they’re hoping to be back to the old ways soon. Social distancing has forced them to cut one of the most important aspects of their business, the camaraderie.

Great job Lynn, Richard, and the entire Killroy family!

During times like these, it’s always interesting to see what new and innovative ways small businesses are working to reach out to old and new customers alike. About a week ago, we highlighted the Sift+Pour Bakery in Dallas, Texas. This week, we want to take a look at a shop that’s a piece of the Towne Advisory extended family.

frank peggy tavarez wine liquor mart poughkeepsie new york small businessesThe Wine and Liquor Mart in Poughkeepsie, NY is a family business opened by Frank and Peggy Tavarez in 1999. When the novel coronavirus started closing down non-essential businesses, the couple had the opportunity to stay open as an essential business located between two hospitals. Competitors were remaining open and it might have made sense for Frank and Peggy to follow suit.

Instead, they chose the health of their employees and patrons. They shut their doors for the duration and pivoted their business. They invested in a new website, upgraded their inventory system, and added an online ordering system all in under 10 days. They used social media to highlight the business changes and it’s paid off, allowing The Wine and Liquor Mart to continue serving the community once again since the new site launched.

Frank and Peggy have proven that it’s possible to stay in business while still keeping employees and the community as healthy and safe as possible. Way to go Frank and Peggy!

If you know of a small business that’s found a new or innovative way to serve its customers, let me know.

I need a quick break from the madness, don’t you?

I wanted to highlight a small business in our circle that has taken this opportunity to think outside the box. They have brought smiles to faces while adding a helpful new stream of revenue during this time!

Elizabeth Ging, the owner of Sift+Pour Bakery in Dallas, makes custom cookies and treats. She started playing around with the idea of everyone buying up all of the toilet paper in stores. Elizabeth drew toilet paper on a cookie and said: “There is no shortage here!”

coronavirus business success story toilet paper masks cookies

As the news evolved of potential shutdowns and a decrease in foot traffic, Elizabeth realized it was her job to find ways to bring her product to her customers. She has created “The Social Distancing Survival Kit” and a Rice Krispy Treat Decorating Kit!

Check them out at

Kudos to Elizabeth and Sift+Pour for taking steps to be Disaster Proof!

If you have a story of a small business doing something fun, novel, or just extra caring that is helping make them Disaster Proof, I’d love to hear about it. #DisasterProof. #TASC

In these incredibly uncertain times, I’m fielding a lot of calls from current and past clients about what they can do to manage the current state of their businesses and hopefully emerge on the other side battered, but still in business and ready to ride the good times upwards. You are not alone!

The problem with a situation like the one we’re facing now is that no one knows when it will get better. It could be next month, it could be next year, it could be a lot longer than that. In the past few weeks, business has slowed in most professional industries. Most companies have gone into a holding pattern as they try to react to what’s going to happen next.

Please do not react, be proactive instead.

If you haven’t read it yet, check out our previous post about how businesses can responsibly and ethically use a situation like the one we’re facing to grow their business.

In this post, I’m going to look at how you can prepare your business for the worst without destroying your team or your business.

Expand Your Customer Base

Now is a great time to look at other avenues that your business can expand to. Some people call this diversifying your revenue.

“If any single buyer represents more than 10% of your business — or your top five clients together account for more than 25% — you need to diversify,” according to Forbes.

Think of this as putting all your eggs in one basket. If you drop that basket, the eggs break. By the same token, if a company that represents 10% of your revenue goes bankrupt, what’s going to happen to your business?

Look for ways to create relationships with new clients. Is there a service that you can offer that will help businesses or people feel safer during these uncertain times? Is there another market that your services can enter into at this time? Is there another use for your services in an industry that is impacted at this time? Once you have revenue, you have choices.

For example, if you normally deliver flowers but your business is at a standstill, can you use those same delivery trucks and drivers to deliver something else? Can you offer your services to a local supermarket? Can you start package delivery for Amazon? You already have the infrastructure set up, can you fill an emergency need and expand your customer base?


There are hundreds of apps out there to manage workflow within the office, keep track of your social media accounts, and manage your daily calendar.

If you haven’t already, set up some of these apps.

Automation of common tasks within the office will help manage employee time and make your business move faster. A program like Zapier, for example, will help you integrate various software systems within your office.

When you use it, you can set it up to take an order from a customer on your website, create an invoice in QuickBooks, and then send that invoice to your customer through MailChimp all without lifting a finger. Suddenly, a sale is made without a person getting involved. It’s all automated.

When done correctly, automation frees up your employees to focus on what truly matters within your business—serving your current customers and growing your customer base.

Look at every line, not just the bottom line

During good times, it’s easy to look at the bottom line and think if your net profit keeps growing, then the business is doing well. But while you’re watching that bottom line, the number of line items above it could be growing.

Now is the time to stop and take a look at everything your company is spending money on and what percentage of the revenue that spending represents. You need to ask yourself, is this cost essential to the business or is it discretionary?

Note: You should be looking at your spending two to three times a year whether or not the economy is doing well, but at this time, it’s a must-do.

Essential expenses such as salary, taxes, utilities, etc. are expenses that are necessary to run your business. But are there any ways to cut this down temporarily? Or even permanently with technology?

Discretionary expenses such as travel, food allowance, video production, and advertising are expenses can be cut down or cut out if necessary. They are more wants than needs.

Keep that discretionary spending under control. Ask yourself, can this expense be reduced? If it can, then will that reduction hurt the business or the growth of the business? Weigh all of these factors and then decide if cuts can be made.

Odds are, you’ll find one or two cuts that can be made without hurting your business or your business’s growth. You’ll also be able to identify cuts that can be made in the future if revenue streams slow down.

Manage your debt

Once those cuts are made, put that money to good use. Spilt it between paying down your company’s debt and socking the money away.

You do not have to pay down your debt all at once. Some debt is considered healthy for a business and in tough times, it’s important to find a balance between debt and a nest egg. If you’re uncertain, talk to your financial adviser or accountant. Interest that you pay on business debt is usually tax deductible and your tax CPA can advise you on that.

You also need to remember that some debt is worse than others. If you’re feeling uncertain about what debt is “good debt” and what debt is “bad debt” ask us. Every business is different and you always want to make sure you get professional advice for your specific situation.

Keep an eye on what the government is doing

Federal, state, and local governments are all working to make sure that local businesses and workers are not completely flattened by this sudden stoppage. On Wednesday night, President Trump signed the Families First Coronavirus Response Act into law. Among other things, the law creates rules for small and midsized businesses to offer paid sick leave and family leave to employees forced to stay home because of the coronavirus. NBC in Washington has a good Q&A about what the bill means for employees and looks at some of the key provisions of the bill as they affect businesses.

States like California are also taking extra steps to try and make things easier for businesses and individuals. California’s Franchise Tax Board has extended the filing and payment deadline to July 15 without penalty. While in Illinois, the Governor’s Office is working to secure federal grants from the Small Business Administration to try and offer relief to small businesses. The SBA is (and has for a long time) had special disaster relief loans which are being strengthened specifically for this time period.

Cities and counties are doing what they can. In the City of San Jose, where Towne Advisory is based, city officials have set up a specific webpage to help small businesses navigate these difficult times and get help when possible.

Keeping an eye on what your local, state, and federal governments are doing will be an important step to making sure your business gets the best help possible.

Please stay safe and healthy.

Ben Towne

No one wants to see something like the recent outbreak of the novel coronavirus make headlines around the world, but it happens. It’s undeniable that the worldwide spread of the novel coronavirus has had an impact not just on our everyday lives, but in the way that we do business. World markets have felt the impact as well as supply chains and to a lesser extent, consumers. And with the full impact of the virus still unknown, the economic impact could get worse before it gets better.

Now businesses can react to this impact in a few ways. Some businesses will conduct business as usual, operating as if the novel coronavirus will have little to no impact on what they do and how they operate. Other businesses will plan for the worst and lose sight of what they’re doing in the present.

And some businesses will see the novel coronavirus as the unfortunate business roadblock that it is. It’s something that exists whether we like it or not and we can either run from it or find a moral and ethical way to make sure our business comes out on the other side of it stronger.

Never take advantage of the customer

Before I get into the ways a business can overcome novel coronavirus and come out the other side stronger, I want to make sure people understand what I’m talking about. In no way, shape or form am I suggesting that a business take advantage of the consumer. Price gouging, also called profiteering, is not only bad karma but it can be illegal.

If you own a company that makes hand sanitizer, by all means, advertise but don’t price gouge.

No matter what you do as a business, remember that human decency should always come first.

Do satisfy a new, temporary need

However, your business can still use a world issue like the novel coronavirus to its advantage. Ruth Fisher, economist and CEO of Quantaa says, “During pandemics and other such crises, people avoid crowds and public spaces. A company can commercialize on this by tailoring products or services to this situation: enable people to access or use the product or service at home or in a venue that’s physically separated from others.”

A great example of this is Netflix. As the New York Post reports, while the S&P 500 lost points in the final week of February, Netflix’s stock rose. Netflix is a company that’s specifically set up for people who want to seclude or quarantine themselves. “Social distancing” as a business model.

Think of this in terms of yourself. What would you do if you were stuck inside all day, whether it’s just for one day or a series of days? There’s a reason why companies like Amazon, Zoom Video, and Netflix as well as work applications like Slack are gaining so much attention during this outbreak.

Sometimes a temporary method becomes permanent

The spread of the novel coronavirus could be the opportunity a company needs to infiltrate a saturated market.

“When the pandemic subsides, a lot of people will have found that the stopgap (temporary) product/service fills their more general needs, and thus adopt that measure permanently,” says Fisher.

In particular, Fisher sees the novel coronavirus as having the potential to speed up current trends in home delivery of products and services, as well as employees working from home.

Company goodwill

Sometimes your company is not in a position to fill a commercial need during a pandemic or crisis. That does not mean that you should pretend that the crisis does not apply to you.

“A company can earn reputational benefits or goodwill by putting the needs of its employees or the community ahead of its own,” says Fisher. “This will increase loyalty of employees or community. For there to be real value (and not just empty virtue signaling), however, the act must be costly to the company.”

Johnson & Johnson, for example, is a leader in the health industry. To date, the company has donated 1 million surgical masks to impacted areas of China, 48,000 bottles of alcohol, as well as money and other supplies necessary for battling the outbreak in China.

Companies like Facebook and Google, who don’t have the healthcare inventory that Johnson & Johnson does, can use its buying power to build company goodwill. According to CNBC, Google will donate $1 million to Mountain View organizations to support small businesses after the company canceled its annual Google I/O conference. Facebook is donating $500,000 in San Jose after canceling two of its conferences in the city. Both companies are also donating millions of dollars in free advertising to help the World Health Organization (WHO) battle misinformation on the internet.

As these actions show, goodwill doesn’t have to be a concept thrown around by valuation professionals, it can be real positive karma that your company builds by the actions it takes in the world.

When it comes to finance, it’s hard to know all the special terms and abbreviations that get tossed out in the middle of a conversation. By the time you Google the meaning of a term, you’ve missed about 30 seconds of the meeting and you’re at a loss.

When consulting, Towne Advisory Services principal Ben Towne likes to include a glossary of terms that he provides to new clients. It helps make sure everyone is on the same page. But not everyone has the benefit of that, so here are some key terms that we at Towne Advisory think you should know anytime you’re working with a business valuation professional.

A quick note before you read further. Many of these definitions can be used differently from person to person, but this is the most common use and the way that Towne Advisory Services uses them.

Comps (comparables)

What does comps (comparables) mean?

Comps, also known as comparables, are other companies or transactions that have some similarity to the company that we’re trying to value.

Why are comps (comparables) important?

Just like in real estate appraisal that compares your house to similar, nearby houses that have sold, looking at business comps gives us pricing info based on actual market evidence relying on real buyers and sellers. By using multiples, we can value the subject company by analogy (see below!)

Discounted Cash Flow (DCF)

What does discounted cash flow (DCF) mean?

Discounted cash flow (DCF) is a method to calculate value using future forecasts of cash flow and a risk rate. DCF estimates the cash flow of a business for a certain period of time. DCF uses the risks associated with the business to convert those future cash flows into today dollars.

Why is discounted cash flow (DCF) important?

DCF specifically shows what the effects of the expected changes in the business are going to have on the value of the business. In other words, it specifically factors in the expectations of the future, not just the past operations of the business in coming up with the business value.

EBITDA (ee-bit-dah)

What does EBITDA mean?

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. Wow, that’s a mouthful.

In a conversation, EBITDA is sometimes called “operating earnings”.

Why is EBITDA important?

Sometimes EBITDA is used as a proxy for cash flow. It’s useful because it provides comparability between companies that might have very different debt structures, tax positions, and asset ownership.

Enterprise Value

What does enterprise value mean?

This is not the value of your starship. (Cue groans)

Enterprise value is the operating value of a business as a whole. It can be calculated a lot of different ways, but a popular way is to look at the value of the total assets of a business minus the cash.

Why is enterprise value important?

The enterprise value is often similar to what a third-party buyer might consider the value to be.

Equity Value

What does equity value mean?

Equity value is the amount that the owners of the business have a claim on in the value of the business. It’s just equity.

Like a house, you have to consider what the mortgage is before you know how much value the owner has in the house. It is often not the same as the price that a buyer would pay for the house because of that debt.

Why is equity value important?

It’s the amount a business owner would receive if they sold the business after paying off all of the debts of the business.


What does multiple mean?

A multiple is a measurement of value in comparison, usually, to a financial metric. It’s a way to compare relative value between companies regardless of size and potentially other factors. Example: value divided by revenue when you are thinking about multiple. If the value is $2 and your revenue is $1 then your multiple is 2x.

Why is multiple important?

A multiple is necessary to compare the values of entities that are similar, but not the same. Ben likes to say, “It’s pricing by analogy or valuation by analogy.”

Example: Company A sold for eight times EBITDA. Company B is similar but is growing faster and therefore should have a higher EBITDA multiple.

Risk Rate

What does risk rate mean?

The risk rate is a percentage that represents the required rate of return that someone would demand to invest in a business. It’s also called the “discount rate” or “rate of return”.

Why is the risk rate important?

Under the financial theory that risk equals return, the risk rate helps us identify what the value of the business should be based on the amount of profit that a company is expected to earn.

Risk rate can be calculated a lot of different ways, but essentially encapsulates the risk inherent in the business’s industry as well as risks that are specific to that particular business.

Seller’s Discretionary Earnings (SDE)

What does seller’s discretionary earnings (SDE) mean?

Seller’s discretionary earnings (SDE) is EBITDA plus the compensation of the business owner. This is the amount that the small business owner has discretion over how to spend or distribute after all the regular operating expenses are paid.

Why are the seller’s discretionary earnings (SDE) important?

SDE is particularly important for small businesses because the owner exercises so much control over the company’s finances. They can pay themselves whatever they want. To provide comparability between companies, the SDE measurement of earnings removes the effects of that decision making.

Trailing Twelve Months (TTM)

What does trailing twelve months (TTM) mean?

TTM stands for trailing twelve months.

It’s usually used in combination with financial statements or a metric. An example of TTM is trailing twelve months of profit and loss through the end of the year, or TTM revenue through June 30.

Why is trailing twelve months (TTM) important?

TTM is important because it shows a whole year’s worth of operations. It factors in whether seasonality has affected revenue or not.

Valuation Date

What does valuation date mean?

The valuation date is the specific date that the value of the business is getting measured. This is drawing a line in the sand about what was known at a certain time and what conditions existed at that point.

Why is the valuation date important?

A valuation project cannot be an ongoing activity; things change in a business all of the time. Therefore, a valuation is a snapshot of a single point in time. We look from the perspective of that date when we do a valuation.

The valuation date is the date that the valuation pertains to, not the date the valuation is issued.

I write a lot of business advice on the website Quora. Actually, I write a lot of advice in general, but since this is a business website I didn’t think you’d be interested in the advice I offer as a parent of a six-year-old. A lot of small business owners go to Quora and Google for that matter, looking for guidance. If I think I can help, I offer my two cents. Recently, I responded to this post: “How can I spot dangerous entrepreneurship advice? A lot of contradictory advice given, e.g. they say you just have to start up even though you don’t know business. Next moment they say most businesses fail because people don’t know how to run a business.”


Advice is actionable, not just a fortune cookie saying.


Advice isn’t inherently good or bad (exceptions are dishonesty or incompetence). Your goal is to learn as much as you can since only you can decide if the advice you receive is applicable to your situation or not.

In this instance, the “advice” put forth suggests there’s a perfect set of conditions for success no matter what you do. That’s not really true. It is not solution oriented and I argue it’s not advice at all but simply an adage. A fortune cookie saying.

There are some principles you need to learn that are more science than art, but there is no magic recipe. You cannot perfectly identify good advice from bad, but you can tell advice from fortune cookie wisdom. Advice is solution oriented. It is actionable.

“Just start up” or “Don’t start without business knowledge” are true in their own way, much like fortune cookies have a kernel of truth to them, but actual “advice” would guide you into getting that much needed business knowledge.


You don’t have to do it alone. In fact, finding a mentor is a great place for that learning to start.

Talking to someone with more business experience than you may help you assess your own situation and help you identify whether you fall short of what you need to succeed.

So now that we can discern actual advice from fortune cookie wisdom, let’s go back to your question of identifying good advice versus bad advice. Man that’s hard in some cases. Most of the time, sincere advice is given and can’t really be considered “good” or “bad” but rather “applicable” or “not applicable”. Much like considering whether a tool is the correct one for a job—we have all used a wrench to pound in a nail, but wouldn’t a hammer have been better? A wrench is awesome for other applications but was it the most applicable tool in that case?

When looking at the applicability of advice, look at the source. Does this person giving the advice really know what they are talking about because they have done something similar to what you are doing? Did they face similar challenges to yours? If your situation is different, can their advice be adapted? If someone does not check those boxes for applicable experience maybe they don’t have the competence or relevance to your situation.

Most often you should not only get one source of advice since no other person’s past experience will be a complete match for your particular circumstances. Even if that person generally gives great advice, it is still worthwhile to hear other applicable perspectives in educating yourself in making your own decisions.

Where “bad” advice is relevant is when it’s advice that seems sincere but isn’t. Is the advice you’re getting going to enrich the giver in any way? If so, generally that advice is going to be bad, not just irrelevant. Lots of times this type of advice will be attached to someone selling something or perhaps someone who is willing to guide you but wants some ownership in the company for it. There are great reasons to give part of your company to someone, but be paranoid about it. It’s the type of decision you get to make once! In a co-owner you need someone who will live and fight and die at your side (probably metaphorically).

Knowledge is power (so saying the fortune cookie), so get some! Learn as much as you can. Get a mentor. Even better get several mentors. Better than that, make as many people into official or unofficial mentors as possible and learn lessons from them. This will help you decide whether advice is applicable to you or not.

Stack the odds in your favor as much as you can before you take a leap—there is nothing noble about taking on more risk than you absolutely need to in any given circumstance. A successful entrepreneur is not the person who takes on the most risk and hopes for big rewards, but rather the the one who identifies the biggest reward and works to undertake the least risk possible in achieving it. Learning—by educating yourself and surrounding yourself with trustworthy, knowledgeable people with relevant experience—can help you see risks and mitigate them as much as possible. Only you can decide what is applicable advice for you.

Guest written by Erika Towne.

I write a lot of posts for my husband because he’s a finance guy by trade and I’m a writer by trade. He’s actually very good at writing, but it sometimes comes across as more technical than personal. I’m a write for the spoken word kind of gal.

I say this so you understand the kind of guy my husband is. I was sorting through the mail the other day when I came across an Amazon box. It’s not a strange find. We’re frequent Amazon shoppers. What was strange was what was inside. Three new copies of the book Talk Triggers: The Complete Guide to Creating Customers with Word of Mouth.

I laughed and asked him why he bought three copies. His reply got me thinking.

“I liked the guy’s presentation,” he said. “So I bought three more copies to give out.”

I laughed again, but I didn’t question it because it made sense. My husband is in the business of meeting people, helping people, advising people. Much of his business relies on client interaction and interaction with referral sources. For him, sometimes it’s not so much about getting paid, but helping someone out.

I know what you’re thinking, “That’s a great story, but what’s it mean to me?”

The story got me thinking about how we create value for our clients. A lot of you are visiting this site and reading this article because you’re searching for something. Whether it’s to build your client base or take your business to the next level, you’re struggling with how to do that.

I imagine that you are very good at what you do, but these new business challenges are taking you out of your depth.

Building a Lasting Relationship

When it comes to building a lasting relationship in today’s business world, there’s a lot of noise to compete with. Customers are inundated with Facebook and Instagram posts. They’re tweeted at constantly. Spam frequently shows up in their inbox burying the important emails in a pile of junk mail.

Most of this content is worthless. It’s words slapped together that add little or no value to the everyday operations of your clients. But you put it out because that’s what you were told to do. Content is supposed to lead to customer conversion. At least, that’s what you’re told.

Which is why your content needs to rise above. It needs to add value for the sake of value and not for the sake of the sale. You need to be a resource for your clients, someone they’ll turn to when they have an actual problem.

Ben Towne News

I know what you’re thinking, isn’t CPA just a fancy term for an accountant? No. CPA stands for Certified Public Accountant, which means she’s passed the CPA exam and met her state’s certification and experience requirements. An accountant has not done that. That’s not to say she isn’t experienced in bookkeeping or can’t read a financial statement, but she is not certified by her state. And that’s what you want, someone who is certified.

The Search Is On

So how do you find a CPA?

Start out by looking for personal referrals. If you have a friend you trust, maybe he has an accountant he trusts. It’s a good place to start.

You can also check in with your state’s CPA society. That’s right, we gather in packs. The CPA society works with large and small firms alike. It would be easy to find one that fits your business style and budget.

Before You Call

Before you contact any of the CPAs, figure out what you want. Are you looking for weekly bookkeeping or monthly reconciliations? Do you need someone to deal with the annual tax filings and quarterly estimates? Do you need help preparing financial statements?

You may need some or all of these and it’s important to know what that is before comparing service providers. Ask you business-owner friends about this. You might ask your business banker as well if they have some ideas. You need to be comparing apples to apples.

When you shop around I would not automatically take the lowest price. You are buying someone’s time (whether it’s of the CPA themselves or someone they supervise) so if the price is very low, then a few things may be going on like using very inexpensive staff, taking shortcuts or just not giving that much attention. It’s always okay to ask, “How are you able to offer a lower price than competitors?” These people are accounting professionals, if they are not able to answer with a sound business reason it stands to reason that they are very likely taking it out on the client service end.

If price is an issue, it’s sometimes a good idea to look for a CPA who has just started his or her own practice. By definition, a CPA has to meet certain educational and experience requirements, so whoever has the license is qualified to help. Usually, these types of people are entrepreneurial like you, are hungry to establish their book of business, and maybe more affordable even than a comparable CPA who works within an established firm. The added bonus is depending on how old you are, getting connected earlier on in both of your careers can lead to a long-standing relationship, which often leads to reasonable fees and good service in the long run.