The most dreaded words a salesperson can here are, “I need to talk it over with my accountant.”
Accountants have a reputation for breaking deals. Behind the scenes we are actually called ‘Deal Breakers’ as a derogatory term. But the name isn’t fair. What we really are doing is protecting our clients.
The investor or business owner already thought of all the things that can go right. Accountants throw cold water on the deal by examining the numbers. They don’t always stand up to the hype.
And then there is my last blog post where I play a Sad Gus with robo-investing and Betterment. I think a lot of people really believed the tax benefits were much higher than they really are. There are real benefits, just not as many as some would have you believe.
That is where accountants shine. If you are going to serve your client you had better have the stomach for laying the truth on the line, even if the client doesn’t want to hear it.
The most common deals I review involve real estate. Multi-million dollar commercial properties or multi-unit residential properties need a second look by a trained eye before signing your name. Over half the deals I review get a thumbs down. All the work to get to that point is wasted. At least the money is preserved.
Usually the client accepts my analysis and cancels the deal. The sales agent thinks nasty things about me and my parentage. They dread the next deal I review.
Then there are the times the client goes forward anyway. In a few years I am hired to clean up the mess. And quite a mess it is. Money is lost. Lots of money. It is rare for an investor or business person to beat the odds when they are against them.
The numbers don’t lie. My goal is to help the client make a good decision. Too often, small business owners and investors see things with rose-colored glasses.
Once or twice every decade I am proven wrong. It happens. But two deals working after I raise serious concerns does not trump the 100 deals that sour. Accountants are sometimes wrong, but it is rare. Investing and business ownership is all in the numbers.
Business as Usual
Business owners and potential business owners have it worse. More real estate deals get my approval than existing business purchases. Business owners want too much too often when they sell. So I break the bad news to my client.
You would be surprised at what I find upon review of the books. Business owners think they can hide certain things, but there are ways to ferret out the facts. The seller wants to get top price, but wants to use her books instead of the tax return where she didn’t report all the income. Too bad. We use the tax return and verify it was the return filed.
Buying a business has problems all their own. Sometimes clients leave. Sometimes there is a learning curve for the new owner. It isn’t easy picking up where someone left off. Nothing is more common than the new owner of a business pissing away a profitable enterprise.
Investments are the worst of all. Even good ideas can turn bad. It has happened even to your favorite accountant. When you think you are smartest is when you get your head handed to you.
Affiliate programs change your view of a product no matter how honest and honorable you are. I am not immune. This blog needs to turn coin to pay the few bills blogs have and compensate me for my time. I could be doing something else, you know.
Payment changes how we think. A client paying me to review a piece of real estate or a business will get a thorough review, even better than I might review my own deals. In fact, reviewing my own deals is when I take the greatest risk. I am not better than you or any investor or business owner. I am just as capable of self-delusion as the next guy.
Bloggers have offers pour in as their traffic rises. Most offers are pure junk. Fortunately, I have a sizable nest egg to live off of if all goes south. A younger—and poorer—version of me might be tempted. Or worse, totally deluded. Except, older does not mean wiser. I am just as human now as I was twenty or thirty years ago. I am only slightly less prone to delusion than I was years ago due to experience.
A Gift for You
And then the gifts show up. I am a sucker for t-shirts. Love’em! I’d live in t-shirts 24/7 if I could. A few days a year I wear a dress shirt just to remind me I am supposed to be a professional.
If my research works out I’ll be using a new product in my office to handle a facet of my business. Then I will share it with you guys. Of course, an affiliate program will be involved. They sent me several t-shirts. So, how do I tell if I am doing it because of the affiliate program or because it really is the right thing to use? My policy is to always review the product as if it was for a client and I am paid to conduct the review. Then I use the product in my practice and if it still passes the sniff test I will present it to you.
So far I haven’t been invited to a company’s headquarters where they can put the heavy sell on. Other bloggers might accept what they see and hear. The accountant in me believes everything is bullshit until proven otherwise.
The last few years business owners have come to me wanting to organize as an S corp because they saw me on other blogs doing just that with great success. They come to this blog and read more of what I offer. I can hear the disappointment in their voice when I tell them they are not ready for an S corp or would be better served by a different strategy.
Selling My Soul
Sometimes I am disappointed in the financial results of this blog. My traffic is good and growing, but as a good accountant, I record everything. The numbers don’t grow fast enough at times. The Wealthy Accountant turns a profit because there are no real expenses to speak of. Unless you consider my time. Then it is a big, fat bust.
I spend a lot of hours writing this blog. Like any business, it takes time to hit a critical mass. Where the blog kills it is new tax clients. There it is a resounding success. Affiliate revenue, not so much.
Writing is something I do regardless so writing this blog is no big deal. No matter how big the numbers get, I will always review and examine the results. I am a hands-on type of business owner. It’s not about money. It’s about the game of business. The scorecard is money. The wealthier you are the more you will understand what I just said.
It also requires caution. When my accounting practice started I tracked every detail of the business. Still do. Budgeting and goals are not for me. My goal each year was to beat last year. That’s all.
It sounds simple, but after a few decades those numbers become daunting. Stuffing more business into the same building gets harder each year. Expanding to multiple locations was never in the cards for me. I like things just the way they are.
But never underestimate the ingenuity of a country accountant. I found ways to expand the business without hiring half the county’s tax professionals or opening new locations. I added payroll and bookkeeping to the mix. Now I am selling those departments of the business. I found a way to grow without doing more work myself or expanding the structure of my practice.
Now The Wealthy Accountant is on the scene. I can leverage the entire business like never before. The ability to grow the practice while staying put in one location is possible. The contortions I must go through to manage this feat is entertaining at best.
And then I start thinking. If I were to review this idea for a client, what would I say? I’m afraid to ask.