Tuesday, May 21, 2019

More Delusion than Illusion

The other day (ever notice how many of my columns begin with those three words?) I received a call from a sole practitioner in the New York area who, as he nears 70, was thinking not of slowing down, but rather inquired as to whether I had any opportunities for him to absorb.


He thought that a young owner with a smaller firm would be willing to merge in with an elder statesman who obviously gave little or no thought to client transition or a buyout.

I thought to myself that this was as self-delusional as buffoonish New York Mayor Bill de Blasio declaring his candidacy for the Presidency in 2020. And had about as much of a chance of succeeding.

But my warnings fell on deaf ears.

He had no intention of slowing down anytime soon and certainly had no one in his firm to take over when he ultimately did decide to slow down.

That’s what colloquially is known as truly a man without a plan.

Not to be outdone, literally a day later I was contacted by a practitioner in New England with basically the same scenario, - in his mid-60s, no one on his “bench” but stubbornly refusing to consider merging up.

Tuesday, May 14, 2019

More than a Remote Chance

Back in high school I had a friend whose father was, often, home, when I came over to his house. I assumed he was unemployed, but then my friend explained that he was a financial planner, just when that line of work was beginning to make inroads to the career mainstream and that he worked from an office in their house.

His office was rather austere, a single telephone, rows of financial and accounting-related books on the shelf, an adding machine, certificates on the wall and an overflowing rolodex – remember those?

Desktop computers were still roughly a decade away from becoming an office staple.

As someone with two working parents – one based in an office and the other in a hospital lab, I found it hard to wrap my head around the idea of a home-based office. I wasn’t so sure I wanted to see my parents both in the morning and the minute I returned from school.

But that was then, and this is now.

I won’t go out on a limb and say that working “remotely” as opposed to the old vernacular of “working from home” has become the rule rather than the exception, but in a recent survey of some 200 CPA firms almost half (43 percent) had staff who worked exclusively from home. While more than 40 percent of those polled said that remote workers allowed them to hire outside their established geographic markets.  And some 82 percent indicated that they retained the remote worker even when said worker moved away.

Friday, May 10, 2019

Where does it all go?

Someone once asked legendary financier J.P. Morgan what kind of gas mileage he got on his newly purchased Rolls Royce.

Without blinking Morgan casually replied, “if you have to ask, you can’t afford the car.”

I can honestly disclose that the purchase of one of the world’s most luxurious automobiles was never a consideration in my household budget. So, asking about mileage on a car like that was sort of moot.

Not surprisingly, items such as mortgages, college tuition, food, clothing, power and telephone jumped to the front of the line at Chez Carlino in lieu of a $300,000 Rolls Royce Phantom or Silver Cloud.

But in a sort of related storyline I recently came across a survey that tracked household finances, with a spotlight on the average month expenses of what the poll termed “non-essential items,” as opposed to   monies dedicated toward savings and other critical financial targets like life insurance.

As it turns out, the average adult in the U.S. spends roughly $1,500 per month on these non-essentials, which, if my math is correct, extrapolates to about $18,000 per year.

Food and beverage costs top the list, specifically eating out, ordering take out, having drinks or buying lunch instead of brown bagging it. Others include “impulse purchases,” gym memberships (personally guilty), and even bottled water.

Tuesday, May 7, 2019

Two Blueprints for Succession Failure

When it comes to facing succession and ownership transition within CPA firms, experience has taught me there are two types of practitioners – those who are proactive to securing their next generation of leaders and those who continue to procrastinate despite repeated efforts to convince them otherwise.

Cases in point.

Late last week I was speaking to an owner in his mid-60s who runs a CPA practice in the Northeast. He has no succession plan, nor has he taken anything but cursory steps to rectify his situation. I had him meet with several firms and not surprisingly he found something he didn’t like in each – mind you nothing that could not have been easily overcome.

In fact, in one of his meetings, he deliberately put his feet on the desk of the managing partner and told him he didn’t want to go from owning a firm to becoming an employee.

That would be the Webster’s official definition of making a wrong impression. Trust me, I heard about it chapter and verse afterward from the buyer firm. I said when something like that happens, it’s obvious he wasn’t the least bit interested from day one.

Not to be outdone, earlier I had visited a long-time client, who, as he approaches 70, continues to log ridiculous hours when at that period in his life he should be more concerned about lowering his handicap.

Tuesday, April 30, 2019

Now Hear This!

There are inarguable certainties that accompany the aging process.

Receding hairline? Check. Well, to be accurate, no hairline.

Expanding waistline? Check – sort of. I like to think I’m fighting the good fight against that one. But in full disclosure it’s a lot harder now than when I was 25.

And perhaps more importantly than the physical deterioration, less patience? Absolutely!

My waning lack of patience has progressed to the point where if I’m in the rare mood for a quick-service meal, I refuse to go to the drive through and sit there idling while the cashier inevitably screws up the orders of the cars in front of me.

Ditto for the bank. I will not be held hostage behind someone who decided they need $200 in quarters and simultaneously requests a stack of deposits or money orders to boot.

Which brings me to the topic de jour of which I’m only going to say once.

Now that we’re post April 15th, I will again restart my conversations with potential successor and seller firms.

But for the record I will make two attempts to contact you and help you with your succession plans whatever they may be. After that you’re on your own. 

Tuesday, April 9, 2019

Customer Service Overload

When it comes to hoarding – whether clothing or functional accessories – I’m a split personality.

For example, when I find a comfortable nightshirt – it will often last through several presidential administrations. Other times, I wear something once and then immediately donate it to a local charity.

As best as I can remember I have had the same soft briefcase for nearly 20 years. It has carried me through three different jobs, hundreds of airline flights and conventions, and I have often even taken it on vacations.

In other words, it’s a keeper. Or rather it was.

Alas, the other day I discovered a tear at the bottom ridge which sort of would defeat the purpose of carrying items in a briefcase.

So, I decided to visit one of our area’s large electronics and office supply retailer and pick out a new one.

I had a fairly good idea of what I was looking for so I figured my visit there would be relatively short since I had other weekend errands to run. Just pick one out, pay for it and then exit.

That is until I ran into an eager-to-please junior sales clerk.

I explained what I was looking for and in return I received an understanding nod and an escort to what amounted to at least five racks of laptop/briefcases.

The ensuing conversation went something like this.

Friday, April 5, 2019

The Not-so-subtle Art of Reinvention

When you work remotely, you seldom bypass an invitation for a free lunch. Not only for a chance to get out of the office, but also for the opportunity to interact with someone personally as opposed to receiving an email or hearing a voice at the other end of the phone.

So, with the signs of early spring in full bloom in the Northeast, I made a 60-minute drive up the scenic Merritt Parkway in Connecticut to meet with the CEO of one of the country’s Top100 firms.

I was greeted by the executive at white tablecloth Italian bistro, and instead of a menu, he had his iPad spread out over the table displaying a power point presentation that detailed the sea changes that have occurred at the firm since he assumed the leadership reins some three years ago. In the first 10 minutes he shooed the waiter away three times.

The firm, which by design I’m keeping anonymous, had previously been quite active in the M&A arena often to the detriment of organic growth. He explained that he put the brakes on that strategy immediately and instead focused on how to grow internally and concentrate on what they do best as well as explore other rapidly growing niches.  

Where they previously had assigned managing partners for each office, he streamlined that down to a single managing partner for each region. That firm had a footprint.