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As the COVID-19 crisis continues to impact small businesses in the Towne Advisory circle, we take a look at another business that’s found a way to thrive during these tough times.

sarah tetlow firm focus small business success covid 19Sarah Tetlow is the founder of Firm Focus, a company designed to help business professionals, especially lawyers, find proactive ways to control their workday. By leveraging and controlling their billable hours, business professionals are less overwhelmed, experience less stress, and ultimately, less burnout.

When things shut down in March, Sarah saw many of her revenue streams slow down to a trickle. Many of her clients put off hiring consultants because they were simply trying to stay afloat themselves. Other clients were dealing with furloughs, layoffs, and more. Sarah also saw the speaking engagements she booked months ago, pushed out indefinitely.

Sarah didn’t let the setback stop her. She reevaluated and went virtual. While she used to hold that first client meeting in-person, she has now shifted to client intake via video conferencing. She holds video presentations instead of in-person speaking engagements and she has changed the way she approaches her business.

Changing Her Business to Fit the Climate

Now, she successfully helps business professionals navigate the pitfalls of working from home. The boundaries between work and everyday life have blurred, so she is teaching clients to rethink what being “productive” means and shift what productivity looks like. This includes focusing on what the professional does best and outsourcing everything else. When it comes to team management, it’s about playing to a team member’s strengths.

Sarah is focusing on business professionals struggling with the work/life balance. She is offering complimentary 30-minute consults, as well as a cost-effective program she calls ApPEERing Productive.  The next ApPEERing Productive program is scheduled for Wednesday, September 2, 2020 and is focused on the #WFH “Parent Edition”.  To find out about a complimentary call or the ApPEERing Productive program, visit the Firm Focus website at www.firm-focus.com or email Sarah at sarah@firm-focus.com.

Towne Advisory is very proud to know great business owners like Sarah. If you would like to find more small business owners who are doing their best in times of crisis, check out our previous posts. Orion Stang, owner of Dilecta Wines, who has figured out how to transform his wine tastings to deal with the difficult times. While Security & Cabling Solutions is helping small businesses stay safe through new safety monitoring measures. Meanwhile, SchillerLearning is offering parents of young children an alternative to the current distance learning that many parents are experiencing. Way to go everyone!

In this week’s small business success story, we check out a business that practically ground to a halt during the shelter in place.

Business at Dilecta Wines in Paso Robles, Calif. froze in March when Governor Gavin Newsom issued the stay at home order. The tasting room was suddenly closed and there was no word on when it would reopen. Overnight, owner Orion Stang found himself facing an uncertain future.

Orion says it was scary in the beginning. He took quick action by cutting payroll and streamlining the workflow. He also spent much of his time planning for what to do when things reopened. Now that restrictions are easing, he has a plan in place to succeed.

small business success dilecta wines orion strang paso roblesA Plan for Success

Even before the shutdown, Dilecta Wines offered tasting appointments so clients could receive the wine maker’s personal attention and story. Now, those tasting appointments are spaced out and have smaller groups to allow for social distancing. While that might seem detrimental to business, it has had the opposite effect. Clients are receiving a deeper level of connection with the winemakers and that’s translating into sales. It’s also offering a unique experience that visitors don’t get with other wineries.

Orion says he expects to book more in-home wine tastings in the future. He is developing more one-on-one experiences for club members and tasters. He’s also exploring the idea of a satellite tasting room in another city or a pop-up tasting in a desirable vacation spot.

How the Past Shaped the Future

Orion built Dilecta Wines slowly, from the ground up, so it’s no surprise that he’s weathering this storm too. He released his first vintage in the fall of 2011 but took his time before opening his tasting room in 2017.

Along the way, Orion has used pieces of his past to help further shape his business. Growing up with an artist mother, he used his unique eye to create the artistic labels that grace the front of each bottle of wine.

Orion is both a sommelier and a professionally trained chef. He has used that experience to add extra flavor to the handcrafted Rhone wines Dilecta specializes in.

Orion also spent years in the wine industry before opening Dilecta. He did everything from hoeing weeds to driving a tractor to doing spreadsheets. That experience helped him streamline when he needed to.

Orion is confident in where Dilecta is going in the future and his experience and spirit make us confident as well. Cheers!

If you’re interested in a remote tasting, please reach out to Orion Stang at Dilecta: orion@dilectawines.com or visit the tasting room virtually at www.dilectawines.com.

Towne Advisory is very proud to know great business owners like Orion. If you would like to find more small business owners who are doing their best in times of crisis, check out our previous posts. Professional Coach Amber Setter is tackling new challenges in the work from home reality. While the Securion Group is helping small businesses deal with the pitfalls of these difficult times. Meanwhile, Killroy Pest Control is offering new services to help people deal with their latest worries. Way to go everyone!

In this week’s small business focus, we’re talking to someone who was perfectly positioned to help small businesses when the shutdown happened. Regina Unegovsky is the founding attorney of Regal Tax & Law. They’re tax controversy specialists that help businesses out with issues like wage garnishments, bank levies, income tax penalties, and bankruptcy. Basically, if owning someone money is stressing out a client, Regina helps slay those dragons.

Regina closely followed what was happening with the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) in Washington, DC. The minute it was approved, she acted. Regina recognized that the provisions within the CARES Act would have a profound impact on her clients. She started reviewing older returns and getting client refunds right away. It helped get cash into the hands of her clients long before government relief loan funds had gone out.

As the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) portions of the CARES Act started to take effect, Regina was ready to help clients maintain their payroll and take on that cheaper debt.

Regina Unegovsky Regal Tax and Law small business successNow, she’s working with clients to figure out what’s next. Funds are running out for many small businesses. She’s helping them navigate the difficult decisions like bankruptcy or litigation against non-paying vendors. Regina is also finding them relief from tax debt and helping them renegotiate settlement programs.

Advice for Business Owners

Her best advice for business owners is that this may not be it. There could be a second wave of financial pressure and business owners need to think ahead. The deal to avoid rent now will eventually be due.

Regina thinks many people may consider bankruptcy and if they do, she says get a lot of opinions and get them now.

“Most professionals will give you half an hour or something to get their view. Use this. People are mostly happy to share a little bit of knowledge. Do this ahead of any problem so you have the resources,” said Regina. “You go to the dentist when you notice something wrong, you don’t wait for the root canal. Procrastination is not a strategy.”

As for Regal Tax and Law, Regina is looking towards the future. As a smaller firm, she is already operating lean and mean. She recognizes bigger firms may be laying off quality talent and she’s ready to expand if the right person comes along.

Regal Tax & Law is just one of the many small businesses in the Towne Advisory circle that quickly pivoted and prepared to help clients in the midst of a crisis. For more small business success stories, check out how SchillerLearning began offering options for parents forced into home school. Or how the Wine & Liquor Mart evolved their business to deal with COVID-19. There’s also Security & Cabling Solutions, which is offering safety options for businesses moving forward.

The outbreak of the novel coronavirus and the shutdown that followed forced businesses to take a hard look at their business model. Even small and medium-sized business owners who made it through relatively unscathed are considering cost cutting measures. They’re looking at what they have, what they need, and what they need to do.

We spend a lot of time working with businesses in various stages of development. From the startup to the generational businesses, we’re hearing a lot of the same things from owners. They know they’re doing okay now, but they’re worried about the future.

Longtime business owners know that they need to think long term. They’re not just looking at next week or next month, but next year and three years after that.

Is it Time to Upsize or Downsize?

cost cutting finance accounting saving money small businessDuring times like these, it is tempting to think that cutting is the only solution. However, for some businesses, cutting costs can be more detrimental than helpful.

Before you decide to cut, make sure it’s the right business move. Look at the 1-year and 5-year plan for your business. Ask yourself some of the following questions:

  • What awesome plans do you have in place to grow your business through and out of the recession?
  • What will a strategic pivot or expansion require from your finance and accounting team?
  • What core competencies are you missing from the team to support this growth?
  • How will your new efforts rely on your finance and accounting team?
  • Is there enough capacity on your current team to absorb new people quickly?

Examine these questions. If downsizing is going to hurt the growth of your business and impede your plans, then it may be the wrong solution.

What if I Need to Downsize?

If you’ve looked at these questions and still think downsizing is the right option, then it’s time to evaluate your business. The following are some of the most common mistakes we’ve seen small and medium-sized businesses make with their financial teams.

The Difference Between a Bookkeeper and a Controller

Most often we see business owners that don’t know the difference between a bookkeeper and a controller. Many small companies employ people with bookkeeper skills but give that person the title and salary of a controller.

What is a bookkeeper?

As Monster.com explains, “Bookkeepers oversee a company’s financial data and compliance by maintaining accurate books on accounts payable and receivable, payroll, and daily financial entries and reconciliations. They perform daily accounting tasks such as monthly financial reporting, general ledger entries, and record payments and adjustments.”

In other words, a bookkeeper is responsible for the day-to-day financial tasks a company may require.

What is a controller?

Conversely, a controller does much more high-level accounting work. According to Investopedia, “A controller is an individual who has responsibility for all accounting-related activities, including high-level accounting, managerial accounting, and finance activities, within a company. A financial controller typically reports to a firm’s chief financial officer (CFO); although these two positions may be combined in smaller businesses.”

In other words, a controller is closer to the CFO of your company than it is to the bookkeeper. A controller is responsible for helping prepare operating budgets and overseeing financial reporting. He or she can analyze financial data.

Are You Paying Your Bookkeeper Too Much?

When evaluating your company, examine the level of skill your “controller” has. If that person only has the skills of a bookkeeper, you’re paying too much. If you need more guidance, Robert Half and Associates (which normally places finance and accounting workers) publishes a great guidebook of salaries by title, function, and location.

As the employer, it’s your job to assess the skills of your people and make an honest appraisal of where they fit into your business based on those skills. Make a skills gap analysis to identify unmet needs.

Are your employees in the proper roles within your financial team? Are they getting paid the salary their skill demands and not what their title demands? Compare the skill sets of your current team to what you will need in the future.

You want to make sure you have the right employees in the right roles and that those employees have the room and ability to grow into larger roles in the future.

Cost Cutting by Utilizing Part-Time Roles

Many small companies that we work with are in a transitional stage. They are too small to require high-level employees like a controller but too big to go without them. Going without stops the growth of the business. We have seen a lot of companies hire a full-time controller and then have that person fill a hybrid controller-bookkeeper role. The person does high-level work like cash flow projections, but also work much below their level like writing checks and Quickbooks entries. They are paid at a controller’s salary.

Don’t make this mistake. When a high-level employee uses their time on menial tasks, important issues are often missed or pushed aside. On the finance side, you’re paying extra money for lower-level work.

There is a better option. Consider part-time roles. A part-time accounts payable employee would help free up your controller for higher level, higher value work. Meantime, a part-time controller or CFO can help with month-end closes and quarterly budgeting without the full-time pay.

If you’re worried that these guys don’t exist, don’t worry, they do. In fact, it’s a service that Towne Advisory offers all the time.

How Cost Cutting is Blocked by the “Trust Premium”

We also notice that small business owners reward loyalty or relationships much more than large corporations. Many small businesses we have worked with place a long-time employee or relative in a top leadership position because the owner trusts them. We call this the “Trust Premium”. Many times, this employee doesn’t have all the skills needed for the job, but the trust is worth more.

Paying a premium for your peace of mind makes sense to many small business owners, but often they’re not seeing the financial burden it puts on their company. If your long-time bookkeeper makes little mistakes because of a lack of skill, your CPA is the one to clean it up. That means you’re paying extra professional fees to clean up the work of your employee.

There’s also the worst-case scenario, one that doesn’t get talked about a lot because it’s an uncomfortable topic. With the right opportunity, environment, and motivation, even good people commit fraud. Because the person committing fraud is often trusted, it usually takes small business owners longer to recognize that it’s happening.

According to the Association of Certified Fraud Examiners (ACFE), fraud within a company lasts approximately 18 months before it is reported. Worse yet, a 2016 study by ACFE found small businesses suffered the same median fraud loss ($150,000) as companies with more than 10,000 employees. The ACFE says 87% of the people committing that fraud are first-time offenders.

It is okay to pay a “Trust Premium”, but if you do, also pay for an outside CFO to look at the books once a month. Reconciliations like this can relieve the pressure on an internal employee and give you better information. It will also reduce the risk of costly mistakes or even fraud.

Cost Cutting Through Geography

cost cutting finance accounting savings small business downsizingDo you live in an area that has a high cost of living? Does your team have to live in that same area? If parts of your team can work remotely, why shouldn’t they? In some cases, your financial team will perform just as well with a college grad living in Salt Lake City as it would with one living in Palo Alto.

What if you had accounts payable running out of Salt Lake City, your controller sitting in Wichita, but your CFO sitting down the hall? We’ve seen it work many, many times. Once only feasible for multinational corporations, outsourcing to other parts of the country is now an option for companies of all sizes.

Recent events have forced a taste of this on all companies, so why not try going all the way?

Accounting is unique in that it has its own language. That language can transcend an accent or a foreign language. Given the current economic state, there will be plenty of high-quality talent on the market. Do not disregard a potential employee simply because she lives 1,000 miles away or even 3,000 miles away.

Don’t Let Technology Be a Barrier to Finance & Accounting Savings

As you consider outsourcing, do not allow a lack of technology to become a barrier.

Finance and accounting pros know that it’s important to get the right information to the right people at the right time so decisions can be made. However, because that mission is so critical, we’re often slow to change. Many finance people operate in an “if it ain’t broke, don’t fix it” philosophy.

It’s time to change that way of thinking.

We live in an age of technological marvels that are relatively inexpensive and save a lot of time. Software like Bill.com speeds up your working capital inflow, while Expensify allows for automation of expense reimbursements. There’s file-sharing software like Google Docs and Egnyte and timekeeping software like TSheets and Harvest. There’s so much to choose from!

It may seem hard to justify spending an additional few hundred dollars per month on software licenses but think about the savings. What’s more? The $500 a month you’re spending on licenses or the $2,000 a month you’re saving because your accounts payable manager lives in Salt Lake City instead of Palo Alto?

Cost Cutting by Financing Your Lumpy Expenses

Many small business owners we meet hate payment plans. The idea of being indebted to anyone is scary. However, there are times when it makes sense.

Consider financing your lumpy expenses. Instead of writing your CPA a check for $3,000 every April, what would happen if you paid $250 per month? Monthly payments are often much easier to manage and they may be beneficial to you. A quick call here and there during the year won’t add to the overall bill but will get you better service throughout the year. Speaking from experience, most CPAs are really bad about billing those short phone calls! Just be clear what is in the scope of the arrangement to make sure you know what’s included and excluded from the deal.

Still Unsure?

If you’re still not sure of where to go or what the next steps for your business are, please feel free to reach out to us here at Towne Advisory. We’re always happy to talk through any questions you may have.

A few months ago, we started looking at small businesses within the Towne Advisory circle that are doing great things to help their businesses survive during this COVID-19 crisis. Recently, we talked to Tony Quintong, the owner of Securieon Group.

Securieon is a company designed to deal with times just like the ones we’re facing now. It offers insightful tactics and implementations for founders and investors experiencing pivotal points in their company’s growth. Whether it’s leadership alignment or sustainable and scalable revenue growth, Securieon is there to help its customers succeed.

Tony Quintong Securieon Group small business consulting expertsTony recognized early on that COVID-19 was changing his marketplace. He pivoted his business to focus on business owners facing the difficult question of whether to stick it out or find an exit strategy.

Over the years, Tony has learned that tough times are what precipitate action with business owners. When they feel both an emotional and compelling financial pain, they start to evaluate their lives and business very seriously. As a child, we would play a game and ask for a do-over. An opportunity to learn from a mistake and re-enter the game with a new strategy. Today, COVID-19 presents an opportunity for a “do-over” where business owners can analyze their past mistakes and embrace a new approach to survive. Securieon was there to help them through that.

When he looks at the current business landscape, Tony believes social distancing is here to stay. He thinks there will be a lot less emphasis on in-person meetings for the next three to five years and his company is adjusting accordingly. They’re building and leveraging their technology and being more strategic on the time spent.

His advice for business owners is, you MUST empathize, connect, and lead with a renewed purpose.

“People need hope combined with strategy and decisive leadership,” said Tony. “Life is full of challenges and perplexing situations. In our line of work, you gotta love jigsaw puzzles! Founders need our expertise and years of experience to guide them through the process of fitting the right pieces together for their next move.”

We’re very excited to see our list of featured businesses growing! It’s nice to see so many businesses in the Towne Advisory circle innovating to survive and thrive.

This week we’re highlighting business owner James Basurto, President of Security & Cabling Solutions, better known as SCS. For more than a decade, James’s company has served the Silicon Valley by putting the customer first. It is that customer care that has enabled SCS to be nimble during this latest crisis.

When the stay at home order was issued in March, James sent home his employees and immediately looked at his business model. He realized that clients were going to need new products if they were going to get back to work.

SCS started offering new services, including infrared temperature reading cameras. The move immediately paid off. The company received new construction clients looking to have temperature taking machines installed on construction sites (they kept operating as essential services).

Building off of that, James is investigating FLIR cameras that can take the temperature of retail patrons or employees. The extra security would allow companies to send people home if their temperatures spike.

James believes that many companies may also install check-in kiosks asking people about COVID-19 symptoms before they enter a building. He’s looking into how he can service customers that way.

James has worked in the industry long enough to remember what it was like after the 9/11 attack. There was an influx of business then. He expects to see another surge in industry demand following the COVID-19 shutdown.

James is also preparing for when retail establishments are allowed to reopen. He’s scheduling projects now so that his employees can jump back into work safely when the time is right.

If you missed any of our other small business features, check out Sift+Pour Bakery, Wine & Liquor Mart, Killroy Pest Control, and Professional Coach Amber Setter.