We meet with new entrepreneurs on a regular basis, and I had the pleasure of speaking with three new business owners recently who had never worked with a CPA before.
One of the owners said, "What do you do? I mean, I know you do taxes and stuff, but what else do you do?"
After our meeting ended, I began to wonder how our clients view us through the lens of their daily challenges as business owners. When a financial decision is about to be made, does our client think, "You know, I should run this by Jonathan to see what he thinks?"
I wasn't sure.
I wasn't sure.
We are knowledge workers, and our most valuable asset is the knowledge and experience that we draw upon and share as part of our small business engagements. When clients engage us to work with them, depending on how involved we are, that knowledge is theirs when they need it....via email, phone or face-to-face. No by-the-hour billing; no invoices with 7 lines on them showing you what we did last month. A flat fee and BAM! Our knowledge is theirs. In that situation, why in the world would you not call?
Here are five scenarios in which we feel our clients could better utilize our talents to their advantage:
1. I'm About to Spend a Lot of Money:
If the decision involves spending a large amount of money, you should probably discuss it with us before you commit to it. I'm not saying that we need to be involved in the smaller decisions, like where you buy your paper clips and how much you spend on them, but I wouldn't decide to change my investment strategy or invest a large sum of money in the market without speaking to my financial planner first. Why would you, as a small business owner and the one responsible for the financial health of your business, decide to commit a large sum of money to these things without running it by us first?
A new employee
A new piece of equipment
A new rental property or commercial building
A new business opportunity
Emptying your IRA to buy a new house or investment property....
I have a client to whom we provide outsourced CFO services. He won't take on a new customer without first calling me and allowing me to run a margin analysis, to make sure he's obtaining the margins that his company needs to produce profit and grow. So, with each new proposal, he contacts me and we run the numbers. He knows that if he takes on a new customer, he has costs involved: a new employee, technology costs, maybe travel expenses. We have built a model for determining whether each new customer is profitable, so he knows with certainty what's going to happen when he makes a decision.
2. I'm About to Receive Money:
I'm not talking about revenue you receive in the normal course of business. I'm talking about something extraordinary....a life insurance settlement, a loan from your mother, or (heaven forbid) an early distribution from a retirement account. These are not run-of-the-mill occurrences. I have been in meetings that went something like this:
"So, is there anything out of the ordinary that I need to know about?"
"Not really....no, wait. I did take $50,000 out of my IRA in September to help me fund the business and didn't have any withholding taken out."
"OK, how old are you again?"
"I'm 49."
"OK, are you prepared to pay the $16,000 in federal and SC taxes that come along with that?"
Silence.
Lesson to be learned here: if you are about to receive money that you don't normally receive, it helps to contact your CPA and ask questions regarding how your financial picture will be impacted.
3. I've Formed an LLC. Hooray!
I hear this statement about once every, um, 36 seconds. While the states have made it SO EASY to set up an LLC, there is hardly any guidance that the average person can find that addresses the tax issues surrounding such a decision. This is how the conversation usually goes:
"So, you said in your email that you have set up an LLC?"
"Yes, I did. I knew it was something I needed to do."
"Who told you that?"
"LegalZoom."
"OK, how is your LLC taxed?"
"Um, as an LLC."
"You know that an LLC can be taxed four different ways, right?"
"No, I guess LegalZoom didn't tell me that."
And we're off! I love tax planning, so I don't have any problem whatsoever having this conversation with a client. It never fails that they leave the office knowing way more than when they came in, because LLC's are the most used and least understood entity choice around. But, before you form one, you really should come in and discuss it with us. Fixing a mistake down the road because you weren't informed can cost you more in time and heartache, I promise you.
4. I'm Worried About My Business' Cash Flow: (Why don't I have any money?)
My biggest point of frustration with my career is that people consider a CPA to be the bean-counter or the tax guy. I only like to eat beans, and while I like the world of tax, I don't live and die with each scintillating tax return I prepare.
When we decided to price our business engagements differently about four years ago, I make purposeful statements like "It doesn't have to involve taxes for you to call me" or "Anything to do with your business' cash flow is important, and we need to talk about it." Here is a snippet from a recent meeting:
"So, how are things going?"
"Well, cash has been tight lately and I've been really stressed out about it."
"Really? When did you notice the slowdown in your cash flow?"
"About six months ago."
" Six months! Why didn't you call me?"
"I don't know. It didn't really have anything to do with taxes, so I didn't want to bother you. I just figured things would right themselves."
Bother me? What is it you think you pay for?
When you work with Godwin & Associates, you never have to worry about "bothering" us. If you were a bother, we wouldn't be working with you. Life is too short. So, assuming you're not a bother, we have an open knowledge policy. If there is a concern about your business' cash flow, we need to know about it. Because guess what? We've all been there. I might know of a way to help that you haven't yet thought of.
A man is walking down the street and falls into a hole.
He sits there for hours, calling out to people for help.
A priest walks by and throws in a prayer written on a sticky note.
A doctor walks by and throws down a prescription.
A friend walks by, then jumps in the hole with the man.
The man asks "What are you doing? Now we're both stuck in here."
The friend says "Yes, but I've been in here before and I know the way out."
5. I'm Frustrated and I Don't Know What To Do: (Nothing is happening.)
Sometimes I'm a cheerleader; sometimes I'm a counselor; sometimes I serve as a sounding board; sometimes I am the good angel to your bad angel.
I'm always a truth-teller, however. I won't sugarcoat the truth no matter how much you want me to, and I'm going to ask the hard questions.
Sometimes, a sole proprietor or the sole owner of a corporation just needs someone to talk with. Things happen that throw us off our game. The biggest problem with being a solo owner is the risk of isolation, and making too many decisions in a vacuum.
If you always have your head down, doing work and just getting by, it's easy to just make decisions on the go and not consider the far-reaching effect of what you're about to do. You've been trained to look down and keep moving, but decisions have consequences that serve as dominos for your life.
I've had meetings where a sole owner comes by, and just sits there....silent....for a few minutes. The consternation is obvious, but they've been sitting by themselves for so long they don't know how to tell me what's wrong. I consider myself a good listener, so I just wait until the right time and start asking questions to coax the issue out of my client. As painful as it might have seemed in the beginning, some wonderful things come out of those meetings. Insight....a new way to think about the problem....a laugh or two....and the comfort of knowing that as a small business owner myself and fellow entrepreneur, I am right there with you.
Our goal is to help you prosper, so when the phone rings or the email pops up and you need us, we want to help. To help your business grow, to help your employees continue to make money so they can support their families, and to help you provide the wonderful service or product to our community and the world. If we don't do our job, other people (not just you) suffer.
So, the next time you wonder whether or not the question of the day is something we can help you with, drop us a line.
How can we help you today?
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