Dynamic Duos: Local business owners lean on their key advisors
As a business owner, processing payroll and expenses can be challenging. Add determining when and how to finance things like expansion and major purchases, and follow that up with the yearly changes in tax laws, and it’s clear that unless you’re an expert or have plenty of time to become one, it’s beneficial to have an outside accountant or firm on your side. For that reason, many include their accountant as a key member of their team.
Filmmaker Rich Brauer says he wouldn’t even be in business if it weren’t for Dan Hofstra, a certified public accountant with whom he’s worked for more than 30 years.
“From the start, Dan has been a sounding board for how we structure the various film projects,” said Brauer, who structures each of his movies as separate LLCs per Hofstra’s advice.
He said the two complement one another, one’s knowledge and experience filling in for the other’s lack of expertise. “I don’t want to do what he does,” Brauer said. “My brain doesn’t think on that side. I’m more on the creative side.”
Hofstra concurred. “He and I couldn’t be further apart in our ways of thinking. He’s so creative, I’m a by-the-numbers guy,” said Hofstra, whose firm Schepers & Hofstra has offices in Traverse City, Cadillac and McBain. “I don’t presume to know his business and he relies on me for numbers.”
One way in which Hofstra said they are alike is in their independent approach to their respective industries. Brauer started his company in 1977 soon after graduating from the Brooks Institute film school in Santa Barbara, while Hofstra started his after, working for another accounting firm.
“Starting your own business is the greatest learning tool,” Hofstra said. “Rich had no experience with numbers; he’s grown and learned.”
Brauer agreed. “We’re kind of on call for one another. It’s been a good thing,” said Brauer.
Mike Stimac, entrepreneur and Jim Taylor, CPA, CFP
Traverse City entrepreneur Mike Stimac has consulted with Jim Taylor and a number of others at Dennis, Gartland & Niergarth (DGN) for many years. “They manage four companies for me,” said Stimac about his three real estate entities and an aviation business.
The management of four companies means myriad tasks are outsourced to DGN, said Stimac. “It starts with bookkeeping and goes to another level with CPAs and tax preparation,” he said. “They get invoices and make sure bills are paid. They’re reviewed by me and paid by them. I get monthly statements.”
Stimac said it frees him up to do the business he wants to do. “If you want to run a restaurant, you don’t want to be in the back room with a headlight,” he said. “It’s an amazing thing for a company not to have to spend time on economics. It allows us to do what we do in business. To have a staff like that would be unaffordable.”
Taylor, a partner at DGN, said the relationship with Stimac is similar to that with other clients. “It’s a team approach: people with different specialties, like accounting and payroll, tax compliance, business structuring,” he said.
He said being responsive and accessible goes both ways. “The dialog is what allows us to have a good result. We know what to expect,” said Taylor. “From our standpoint as a CPA firm we are looking to partner with our clients.”
Bottom line is the personal attention, said Stimac. “They know my business and pay personal attention,” he said. “They keep things in order.”
Edson Farms Market & Deli is in the midst of an expansion on the heels of a recent renovation. Co-owner Jessica Edson, who owns the natural food store with her husband Chris, said certified public accountant Jon Damhof has been invaluable in helping them determine how and when to make crucial business decisions and plan for capital improvements, such as the current expansion.
“When to purchase, how to finance, whether it’s cash or a loan, how things are depreciated – there are lots of different [variables],” she said.
For example, while she and Chris are the owners of Edson Farms, different corporate entities own the business and the building.
Their partnership goes back many years, said Damhof, who works in Cadillac. “I got with Jessica because I worked with her parents’ excavating business in Wellston,” said Damhof. “I’ve been doing her personal [tax] returns for a long time.”
Edson said that lengthy relationship gives her peace of mind, providing assurance that his advice is both sound and based on what is best in the long run.
Damhof said he and the Edsons communicate regularly. “We share information via email. I visit with her a couple times a year,” he said. The ease of email has made it easier for Damhof, who works not only with clients in the Traverse City area, but also in Texas and Hawaii.
Nick Wierzba opened Suttons Bay Bikes and Grand Traverse Bike Tours, a bicycle shop and tour company, six years ago. He says he enjoys selling and servicing bikes, and setting up bicycle and snowshoe tours.
The bookkeeping … not so much.
“I’m a business owner. My strong suit is creating, running, managing the business,” he said. “Not so much the back end.”
Wierzba was introduced to Polly Carlton, a CPA and owner of Carlton & Company in Traverse City, by a mutual customer. “He couldn’t say enough good things about her,” said Wierzba.
Now Carlton handles most of his banking and bookkeeping. “It’s lifted a burden off me,” Wierzba said of the time prior to hiring Carlton. “[I was] always thinking of the next bike tour or the next product, [but] I’d spend most of January in my office trying to line up numbers.”
For Carlton, the most important thing is being able to communicate regularly with her clients. “That’s one of the reasons I like working with Nick,” she said. “I think getting to know them as people and how they internalize data – not everyone is a numbers person.”
Because she likes to get to know her clients, Carlton has restructured her business and no longer does tax preparation.
“I was having conversations just on an annual basis,” she said. “To me that didn’t cut it.”
That’s not a problem for Wierzba, who still does some payroll and taxes. And while he said the two don’t actually meet in person that often, he said they are always in communication with one another.
“She always checks in on me,” he said, noting that if he forgets a deadline or submission on some aspect of his business, she’s there to remind him. “It’s got to be someone you trust and can ask dumb questions of. She’s like my knight in shining armor.”
Tina Zinn, owner of the The Cheese Lady, has a whole financial team partnering with her. It includes her sister in Muskegon, Mark Andresky of Performance Business Advisors in Charlevoix, and the folks at Harris Group, especially Mike Navarre, a partner with the Traverse City CPA and financial advisory firm.
“Mike sits down with me and his team. I hired him to help move money around when starting the business,” Zinn said.
With Navarre’s assistance, she was able to utilize funds from her 401(k) to do so. “I have been so fortunate,” she said.
For his part, Navarre feels the same way. “It’s been a pleasure working with Tina since she started her business,” he said. “We’ve enjoyed every opportunity we’ve had to give advice to her as she grows.”
Zinn said before opening her shop, she read numerous books on starting a business.
“The biggest thing I learned was to know your strengths, and pay money to help your weakest part. Pay for what you don’t know. I made one mistake in taxes, then said to them, ‘It’s all yours,’” she said.
Navarre believes the future is bright for The Cheese Lady, and he said his firm is optimistic that their partnership will continue.
“We’re looking forward to being valuable to her as she moves forward,” he said. “We think she’s doing a great job knocking it out of the park; [she] is a great operator.”