| Unlike executives with publicly-traded
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| | CO, has observed that some small business
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| companies who are accountable to its
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| | owners are in a perpetual state of crisis
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| shareholders, small business owners don't
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| | management since they are putting out one
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| have the luxury of resigning at the first
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| | brush fire after another."There's no plan
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| signs of trouble. Instead they have to
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| | and they are pulled in all directions,"
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| come to grips with whatever problems have
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| | said St. John. "Smaller businesses don't
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| hit their business and hopefully seek
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| | have five people to delegate to so it
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| help from a professional to repair the
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| | kind of implodes and it really becomes
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| damage before it's too late.Many business
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| | quite depressing. They lose their
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| owners realize that they're wearing too
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| | ability to manage and are dealing with
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| many hats so they decide to hire another
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| | one crisis after another."Another clue
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| employee. That suggestion invariably
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| | that the business is in trouble, St. John
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| comes from their spouse who reminds them
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| | says, is when the owner no longer has
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| that they haven't been home for dinner in
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| | time to interact with the family."If
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| many weeks and they haven't spent enough
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| | their life is their business they will
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| time with their kids."Spouses have a way
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| | typically end up in divorce," he said.
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| of bringing you back down to earth and
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| | "They've adopted another family and it's
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| telling you that your life is out of
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| | running their life. They think
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| balance," said Gene Polley, a senior
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| | workaholic is a good word instead of a
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| business advisor in Fiducial's San Diego
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| | bad word and they end up being a
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| office. "The first warning sign is that
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| | specialist in crisis management instead
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| you're working in the business and not on
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| | of being a business manager."Depressed
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| the business so you need to get another
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| | business owners know the solution to
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| employee."Owners are constantly putting
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| | their problems but instead of laying out
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| out one fire after another so it seems
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| | a course of action they let it go on."It
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| like they're getting a lifeline when they
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| | becomes a Catch-22 cycle and they don't
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| bring an employee on board to help with
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| | know how to break out," he said. "They
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| the increasing demands."It could be at
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| | need someone to throw them a lifeline.
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| any phase of the business where things
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| | They want to turn it over to
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| get out of kilter," Polley said. "It
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| | somebody."Unfortunately, not all clients
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| could be production, sales, marketing or
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| | seek sound counsel from their advisors
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| collections-you name it."Spinning out of
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| | and so they enter into some sort of
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| controlA crucial moment for the business
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| | arrangement that extracts a painful
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| is when it gets to the point where the
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| | price. Such was the case when one of St.
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| owner can no longer do all of the
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| | John's clients refinanced their home to
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| accounting in-house with whoever had been
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| | help fund their cleaning business without
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| doing it up until then. That's when they
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| | consulting with him. They fell victims
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| recognize that things are spinning out of
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| | to a scam, were afraid to ask for an
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| control."It's very difficult to figure
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| | attorney and ultimately lost both their
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| out when you need to hire somebody else
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| | home and their business property."By the
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| in your business," he said. "They always
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| | time they knew about it [the fine print]
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| think the first employee is going to fix
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| | the deal was too well-established," he
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| all the problems. They think that
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| | said. "They thought they had an
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| suddenly their life gets easier until
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| | opportunity but by the time we had found
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| they discover that this person can't wear
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| | out about it, it was a done deal."While
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| as many hats and things are going to
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| | advisors can analyze financial data and
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| start slipping through the cracks."Polley
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| | explain its relevance to clients,
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| cited the example of a computer reseller
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| | business owners can't benefit from the
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| who tried to use the in-house
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| | advice if they don't let give their
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| receptionist in a variety of job roles
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| | advisors the complete picture."We can
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| until she became the most important
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| | only make our recommendations from the
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| person in the business. She was doing
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| | information clients provide to us," St.
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| the books, had signature authority, sent
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| | John said. "If you're not disclosing
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| out the checks and balanced the checking
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| | anything then we're going to fall short
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| account. What anyone failed to notice,
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| | to be able to provide you good direction.
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| Polley says, is that she had a criminal
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| | If our data is flawed our
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| record in the background since she had
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| | recommendations are flawed."Don't ignore
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| discharged a firearm in the commission of
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| | vital informationWhat becomes frustrating
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| a grand felony auto. The computer
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| | for business counselors is having clients
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| reseller paid for not doing his due
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| | ignore vital information that's sent
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| diligence to the tune of $170,000 the
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| | their way."Most of our clients don't even
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| receptionist had embezzled from the
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| | read the financial statements we provide
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| company."That was the point he realized
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| | for them" said Mark Gabriel who handles
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| he needed to expand his accounting
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| | client acquisition and consulting duties
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| assistance," Polley said. "But it was a
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| | for this father, Ken, a Fiducial
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| $170K wake up. I came on board to help
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| | franchisee in St. Claire Shores, MI.
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| prosecute and do forensic accounting
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| | Gabriel is well aware of the tell-tale
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| since she had walked off with all the
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| | signs when a business owner is in way
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| accounting records. We had to
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| | over their head."When they start getting
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| reconstruct a whole year worth of
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| | a lot of government notices by then the
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| records."One of Polley's new clients owns
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| | horse is out of the barn," he said.
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| an airport shuttle business. They
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| | Other panic attacks occur when "they're
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| initially brought him in to do their
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| | completely lost, they can't make ends
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| bookkeeping and taxes but it wasn't long
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| | meet, they're running out of money and
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| before employee theft was exposed and
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| | people are pressuring them from all
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| they suspended giving out financial
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| | sides."Hiring employees for the first
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| information to him until they could
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| | time is another area where business
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| replace the entire office staff."They
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| | owners go off the rails, Gabriel
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| couldn't understand why they were losing
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| | says."People hire employees without
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| money when they were busy all the time,"
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| | having clearly defined duties for them,"
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| he said. "I showed them a couple of
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| | he said. "They don't know how to train
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| records where drivers were putting in
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| | them and they don't know how to pay
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| $100 of gas and driving 30 miles a day.
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| | them." In his experience, great
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| It was obvious somebody was turning in
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| | entrepreneurs "are not good at delegating
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| gas receipts that had nothing to do with
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| | or managing employees."Before enlisting
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| the company vehicles."Business owners
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| | the help of a hands-on advisor, Gabriel
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| don't always know when to ask for help
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| | noted that some business owners decide to
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| because it's usually a friend, spouse or
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| | hire a business or corporate consultant
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| acquaintance that suggests that they seek
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| | that charges from $3,000 to $20,000 and
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| assistance."Somebody used to doing it
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| | make recommendations that end up hurting
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| himself doesn't immediately seek help,"
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| | the business they were intended to
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| Polley said. "They've been successful
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| | help."I have not met one business owner
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| doing it on their own so they try to
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| | that had a good experience with one of
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| resolve things themselves."After the
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| | these consultants," he said. "I've never
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| alarm sounds and Polley's called in, the
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| | seen one yet that's worked out
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| first place he looks is the company's
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| | right."Rather, Gabriel says the
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| financial records. The red flags are
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| | professionals owners should enlist are
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| raised when tax penalties have not been
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| | accountants, their bankers and other
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| paid, were paid late or someone comes in
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| | business associates.A long-time
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| and does an audit because something
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| | restaurant owner called Gabriel in to
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| wasn't done on a timely basis.Other
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| | help inject some new life into the
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| signals that things are out of control
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| | business which was in need of
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| are when April 15 rolls around and the
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| | refurbishing. He soon found out that
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| business has a huge tax liability or if
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| | they had been using the same menus for
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| the operation shows a profit but there's
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| | quite a while and that the prices hadn't
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| no money to pay bills.Paying the price
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| | been raised in several years so he told
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| for bad decisionsJerry Shriner, a
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| | them they that had to change. The owners
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| Fiducial franchisee in Pickerington, OH,
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| | were leery of doing that thinking they
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| meets each month with his clients and
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| | would drive customers away while the
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| goes over their profit and loss (P&L)
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| | waitresses feared they would lose
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| statements from top to bottom so their
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| | tips.The owners eventually decided to
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| inventory makes sense, expenses are not
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| | raise prices 20% but the business
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| out of line and working cash is
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| | increased because of the perceived value
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| monitored."We can't solve all the
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| | of the food and the waitresses ended up
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| problems but this certainly helps," said
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| | getting more tips since the tickets were
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| Shriner who's been offering counseling
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| | higher.The need for a good advisorThere's
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| advice and tax planning to many long-time
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| | no denying that most small business
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| clients for 20 to 30 years.He's heard
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| | owners are very good at what they do.
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| just about every plea imaginable from
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| | But when it comes to understanding why
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| business owners but he dreads hearing the
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| | sales are up or are down they do not
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| words "I've made a bad decision" the
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| | understand all the factors
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| most. That's because they have got
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| | involved."That's when they need an
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| themselves involved in some sort of
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| | accountant," said Roger Bierman, a
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| egregious transaction without consulting
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| | franchise relations manager for Fiducial
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| their trusted advisor and have paid the
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| | for the Alaska, Northeast, Northcentral
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| price.One of those who learned the hard
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| | and Northwest regions. "They may have a
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| way was a restaurateur that decided to
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| | bill that covers three months and is
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| lease some equipment, a new security
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| | expensed all under one month. A good
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| system, for his family style restaurant.
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| | system would be expensed evenly over
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| The client told Shriner after the fact
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| | those three months."Bierman says business
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| that it seemed like a good deal at the
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| | owners need to have industry standards to
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| time. But as things turned out, he was
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| | go by so they will be able to fully grasp
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| charged a whopping 33% interest for this
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| | what they're looking at when given a
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| equipment which put quite a dent in the
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| | detailed monthly report on their
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| bottom line.Having monthly reports at
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| | operation. This enables them to look at
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| hand is always a plus but if owners don't
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| | their figures and make comparisons based
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| look at them on a regular basis they
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| | on data for a full year to date."If you
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| could suffer the consequences by making a
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| | have last year's figures to go by it
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| bad decision. To prevent that from
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| | gives you something to go on," he
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| happening, Shriner says it's essential
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| | said.Having been in the industry for 35
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| that entrepreneurs enlist the help of a
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| | years, Bierman has seen too many
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| professional "that wants to work close
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| | entrepreneurs place too little importance
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| with them."A client that came to him in
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| | on having a good accountant because they
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| March owned two corporations and wanted
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| | think an accountant is involved only with
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| him to take care of his accounting. When
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| | taxes."It's more than doing tax work, you
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| Shriner examined the owner's data they
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| | need a partner that is willing to take a
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| saw that his profit was $600,000 which
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| | close look at your business," he said.
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| seemed to be too high. He suggested that
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| | "They want to pay the least amount of
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| the client file an extension which paid
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| | taxes required by law but if they don't
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| huge dividends for him since the income
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| | have an accountant that's involved in the
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| tax was reviewed and recommendations made
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| | business then they'll never be able to do
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| that saved the client $82,000 in federal
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| | that."Business owners need a good advisor
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| taxes.Shriner noted that the CPA who
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| | to help them, someone who understands
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| originally worked for the client did not
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| | their business. Without one, getting
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| spend the time necessary to keep track of
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| | into a start-up enterprise is a dicey
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| his borrowing because he had heavy credit
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| | situation.Bierman cautions would-be
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| card debt."They did not take the time to
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| | entrepreneurs that before they make the
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| review things on an ongoing basis," he
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| | investment in any business, they need to
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| said. "The client and CPA did not meet.
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| | realize that it's a 24x7 commitment and
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| They just dropped the statement off and
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| | they need to have the right staff ready
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| some clerical person put it together.
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| | to go. If they get themselves in trouble
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| Once they put it together it was wrong
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| | it's usually because they haven't
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| but it balanced. These firms are more
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| | exercised due diligence.Back in his days
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| interested in balancing than in getting
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| | as a Texaco service station owner,
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| it right."That's not the case with
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| | Bierman made sure he knew every facet of
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| Shriner."We take that personal attention
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| | the business."I taught myself how to do a
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| and we get involved," he said. "We work
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| | tune-up because I never wanted anyone to
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| a lot harder for our money because we do
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| | say 'hey Roger you need me to do this,' "
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| a lot more for it."Losing the ability to
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| | he said. "Whatever the business is, if
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| manageOver the years Rocky St. John, a
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| | you're the owner you better know how to
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| Fiducial franchisee in Colorado Springs,
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| | get it done.
|
