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Saving Your Clients by Helping Them Save Themselves

This week I've been talking to a variety of Accounting Professionals across the country and have been working on getting a better feel for the kinds of clients who are suffering the worst of it during the last three months. As a starter, here is a bulleted list of the kind of clients who seem to be dropping off:

Car dealers, large and small… ancillary services associated with the dealerships such as Autobody Shops with exclusive deals… Realtors (surprise, surprise?)… Home inspection services… Small mortgage brokers… Some or all restaurant locations… Day Spas… Small to mid-sized contractors…

Well, the auto and realty industries are not likely to recover any time soon, but those restaurants, day spas, and contractors might have a chance!

Now here is where my Organizational Management brain starts talking to my keyboard... those of you reading this, whether you know it or not, have a pretty good understanding of how this works. The ultra short form of what the field of Organizational Management attempts to do is this: build and/or clean things up where business processes collide with HR management. As an accounting professional who has insight into the payroll of multiple clients, you get to see a little bit of everything. You know who the client's suppliers are, how many people they employ, if they own or lease their properties and even if the IRS is likely to find anything ‘odd' if they came sniffing around. The client may have even confided in you through casual conversation, or asked your advice about an HR issue they are up against. In other words, there is no one else out there with a better understanding of what is under the hood, either making that business purr like well fed cat, or run in circles like a gerbil in one of those hilarious plastic balls.

The question right now is what can you do with this knowledge that will help a troubled (not hopeless) client keep their head above water?

I would put on your graduation hat, flip the tassel back to the other side and put pencil to paper to write a mini case study on one of your clients who is in trouble. Start by writing down everything you know about the client. Nothing is irrelevant. It is likely that a troubled client has not changed much since the economy did a high-dive into an empty pool three months ago, and if they did, it was probably a band-aid on a gaping chest wound (I did remember something from Boy Scouts!).

Take this pile of data, and throw it a mixing bowl with the ingredients known as ‘Recession', local variables, and a healthy dash of fear. Stir it up in your head and then start brainstorming about why the client is feeling the pain.

Imaginary Case Study:

Let's pretend that the client is a five location restaurant owner. After stirring the pot, we realize that they have two of their restaurants in troubled locations. One is next to a mid-sized manufacturer who you know just laid off 25 of 200 employees. Not only did they lose 25 potential customers, but the rest of the employees are brown bagging their lunches now. The other businesses in the industrial park are also likely to be feeling the pain and looking at some strategic layoffs to keep afloat. The other troubled location recently opened and was strategically placed next to a brand new business park that now has 10% of its pads filled, and lots and lots of, "Build2Suit… For Lease… and Vacancy" signs everywhere. On the other hand the other three locations are in secure areas for drive-by visibility from all walks of life and haven't seen any significant drop off in clientele. The business is on sound financial footing, other than taking a big loss from the two sites that aren't performing. They lease their locations from a property management company, and have been in the black for the past five years - until Q4 of CY08.

Now with your knowledge of their business, could you put together a scenario in your mind where they could live or die this year depending on core decisions made about the two locations that are not performing? Can you assist them in either unloading the properties, or mothballing them, or re-structuring their operation to remain or become successful?

What if we advised the client to make the following changes:

Properties A, B, & C (doing well in high traffic areas)
1. Don't fix what isn't broken
Property D (losing business, but not failing, in the impoverished industrial park)
1. Modify their operation to keep costs down
2. Reduce their hours of operation
  1. Reduce head-count
  2. Take a shift or two as the manager/owner
3. Modify the menu to 100% value items
4. Get on their feet for some direct marketing to the local businesses
  1. Recession coupons, etc.
  2. ‘Bailout Burgers'
  3. ‘Economic Stimulus Energy Smoothies'
  4. …you get the picture

Property E (throwing away spoiled food in empty industrial park)
1. Cut their losses and break the lease
2. Mothball the operation until things get rolling again

This client could be seeing black in a sea of red, sooner than their competition, after taking a mild, but humbling hit up front. If they take your advice to take the steps today to make tomorrow brighter - you will have a client for life.

Logan Cashwell is a Business Consultant with Adaptasoft, Inc., and has been working with Payroll Service Bureaus and Accounting Professionals since 2002 to enhance their business processes, and their bottom line. Prior to joining Adaptasoft, Logan was a Sr. Marketing Manager with Intuit, Inc. working with their Complete Payroll Services business unit. Logan received a Bachelor of Science in Organizational Development from the University of La Verne, and a Master of Science in Leadership and Management with an emphasis in Strategic Management from the University of La Verne.

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