Images_Digital_Edition_January_2019

www.images-magazine.com JANUARY 2019 images 121 KB BUSINESS DEVELOPMENT Similarly, when you need accounting services (and all business owners do), you must choose your practitioner based on the complexity of your need. You might only need someone with basic bookkeeping skills and the input or review of a fully qualified accountant from time to time. But as your business grows and becomes more complex, you might have to head for the plush offices of one of the big accounting firms. Regardless of the nature and size of your business, though, you’ll need accounting services as surely as we all need medical services, not just as the business grows, but indeed, to help the business grow. Your accountant as an advisor Small business accountants will primarily fulfil the traditional role of maintaining accounting records, preparing financial statements and completing tax returns, but they can also contribute valuable, basic, day- to-day business advice. They can be helpful when you need someone to crunch the hard, cold numbers and shine the light of reality on concepts such as the latest sales- boosting scheme or discounting programme. Failure to consult with someone knowledgeable, most particularly an accountant, on key matters such as costing, pricing and margin determination can be very costly and, in some cases, disastrous. Greg’s ‘happening place‘ Greg was the production manager at a large Canadian textile screen printing company that, for the sake of this story, I’ll refer to as Nordic Imprinted Sportswear. Nordic printed large volumes of imprinted sportswear and counted among its customers most of the large brand-name sporting goods wholesalers. Another prized customer was a North American wholesaler of promotional garments for big musical events, primarily rock concerts. They referred to this prized customer as their ‘rock ’n’ roll‘ customer. Nordic’s customer list was the envy of the company’s competitors. Unknown to most, though, the enviable volumes were secured by virtue of very low per-unit prices and hence, very tight margins. During negotiations with my company regarding the price of inks and chemicals Nordic bought from us, Nordic’s accountant was frank. The figures he disclosed indicated razor- thin margins. That, as you can imagine, placed a lot of pressure on Nordic’s management to keep input costs down and production volumes up. They had an extensive infrastructure, including a large number of automatic presses that had to be paid for and therefore kept occupied. This left them with very little leverage in price discussions because their large customers knew that Nordic needed volume to survive and could therefore be ruthlessly squeezed on pricing. Greg had struck up a friendly relationship with a rock ’n’ roll customer executive that led to him leaving Nordic, persuading a few Nordic employees to join him, taking the rock ’n’ roll account with him and starting his own textile screen printing company. I visited Greg’s new business about a month after he started up. He proudly gave me the grand tour, boasting, “It’s Michael Best shares his business wisdom in a witty, easy-to-read format Accountants stand between survival and failure