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Our bookkeeper came into my office last week clutching a bill that had just arrived from our accountant. She looked nervous as she handed me the hefty invoice – it was for our company tax return his firm had just completed.
That will be money well spent, I thought – and, as I told our bookkeeper, we need to spend our time making cabinets, not figuring out our tax liability. Plus, if we ever get an audit from Uncle Sam, we’ll be needing our accountants!
This outside help is pricey, no doubt – but it’s part of running a successful shop. You simply must have a few solid professionals around you to do some of the more technical work involved with operating a business.
So, how do you actually you find these people? One good way, we’ve found, is by talking to your peers and colleagues – either in your own industry or one that’s closely related. If you have a favorite remodeler you work with, for example, ask him who he used for his Website. Find out from the guy who’s doing the electrical work on that big kitchen project who he uses for his accounting.
You can also talk to your banker. These folks are always hooked in with accountants and lawyers or, at the very least, can refer you to someone to talk to. Once you find someone, ask if that person works with small businesses a lot, or if the person has done work for any shops in the past. Get some references and call to see how the service has been.
THE KEY HELP
We’ve found at our own shop that a competent firm of certified public accountants (CPAs) is critical if you’re to stay out of trouble.
How much you use them is up to you. The basic service is usually tax returns, though you may want the firm to take care of your personal 1040 as well, since it’s usually closely connected to the business reporting.
Some shops use CPA firms to guide them through financial reports every three months (“quarterly” in financial terms). This can get expensive, but if you don’t have a good bookkeeper at your shop, it may be a good way of keeping a handle on how you’re doing. One tip here, though: make sure the CPA firm gives you timely feedback on how things are. There’s no point to getting reports two months after the fact.
If you don’t feel good about paying for constant financial feedback, have your CPAs direct you to a good outside bookkeeping service that will be less expensive. That way you can perhaps get monthly reports and regular specific job costing done.
Finding a good (meaning “good value”) lawyer can be challenging, as well. While a small- or even medium-sized shop does not need an attorney on retainer, it’s good to have a relationship with counsel who’s familiar with contract law. This is usually the area where your shop needs help: with proposals, contracts or any partnership agreements you may get into.
Having a lawyer review these documents is money well spent, but beware the lawyer who wants to write every single document himself. That will get expensive fast. Ask him if he has a “canned” version you can use. Maybe he can customize it to your shop.
Your banker is a key person, too, and here the help can often be free. Get to know the senior person with the bank you use for your checking account for the shop. The bank is making money off of you, so use its services! A good banker can give you a hand reviewing profit and loss statements, as well as explain the mysteries of a balance sheet to you.
Many shops use a business coach as they grow in size. Once you’re over five employees, it’s a good idea to get a regular outside point of view – how you’re running your business, where you’re heading strategically. If you don’t have a board of directors or advisors, a business coach may be just the ticket.
Buyer beware here, again. These folks can be very expensive, so check out anyone before you commit. Some shop owners join business groups rather than hiring individuals. While this may be less money, they generally provide less specific assistance.
Your insurance provider, on the other hand, may be able to provide you with free advice. Of course, he or she will want to sell you insurance policies – often liability, health or workers’ compensation packages – but these people should be available to help guide you through your insurance issues. They also need to be very much around when it comes to claims and controlling any losses your shop might be facing.
Many shops use insurance brokers, who shop your insurance policies to several different insurance companies. Other shops buy directly from insurance firms, and a few use insurance consultants – people who charge a fee to find and review insurance products that fit your shop’s needs.
And, you may want to enlist the help of a marketing company to give you a hand making sure your name stays out there. So many shops spend all of their days producing, fabricating and engineering – not taking the time to ensure the sales keep flowing.
There are a few other outside people you may want to have available to your shop’s operation – and again, it pays to always be on the lookout with your colleagues, suppliers and subcontractors.
It’s useful to know a machinery leasing agent if you’re considering upgrading equipment, as well as a commercial real estate broker if you’re thinking about actually buying a building for your shop. If you go that far, a mortgage broker could prove helpful, too. All of these professions have their share of slippery characters, so get references before you hire!
A good outside graphic design person can be invaluable for your shop. This person can help you with your logo, business cards, letterhead – everything that shows you off to the outside world. Often, if you’re lucky, this kind of person can give you help with Website design, as well.
As your shop gets bigger and uses computers more, you may want to hire an independent Information Technology Manager to help keep the software and hardware in good shape. If you have a Website, perhaps that person can lend a hand there also, as well as fix the phones, the copiers and hand-held devices.
Outside help is often the least expensive way to go here; the hourly rates may seem high, but it’s probably less than having someone from your shop try do the work. You need to concentrate on the building part of your business.
Read past columns on Cabinet Shop Management by Stephen Nicholls, and send us your comments about this story and others by logging onto Kitchen & Bath Design News’ Website at www.kitchenbathdesign.com.