Volume 41, Issue 12 - December 2006


A Little Advice on Bankers, Lawyers and Accountants
by Dez Farnady

The plea for help, when it’s sorely needed in the business world, generally falls on deaf ears and is usually too little, too late. The last three guys you want to talk to in the everyday course of running your business are the banker, lawyer and the accountant. When you need to see those guys you are usually in nasty trouble with money, with the law or with the IRS.

The Three Horsemen 
If you think that the banker is the first guy to go to when you need money, you are in for a big surprise. You are broke and need money so you’re a bad risk he can’t afford to take. Sorry. Go to you father-in-law first. He has a vested interest because he needs to protect his baby, your spouse, from the wolf at the door. If he fails you or can’t afford you then go to your brother. Big or little, he will probably only remind you of the last time you borrowed money from him in high school and he still hasn’t seen a penny you owe him. 

If you go to your “old man” you will get enough “I told you so’s” to send you screaming for your 18 percent credit card. 
The lawyer is no easy task either because either you don’t know one or the guy suing you has one of those sharks from a Wednesday-night TV law firm. When you finally find one it is the one who has the midnight TV ad. Or, maybe it’s the shyster from those upstairs offices in that hundred-year-old office building “down town.” His office is just down the hall from Phillip Marlowe’s and you keep looking over your shoulder because you could swear you just saw Peter Loree following you out of the elevator. 

The accountant is usually harmless except for the fact that you probably need him to protect you from the IRS. They are asking questions about the company funds you spent at the glass show on the blonde who claimed to represent a large glass house, but who was more likely representing a friend of Heidi Fleis. What you really need now is your own barracuda but instead what you landed was Michael H. Mouse who thinks you should just pay them whatever they want.
Take My Advice
Well, let me help you out first with the money. Go borrow some. What? You don’t need any now? Come on, everybody always needs money, so go borrow some. Get yourself a secured loan with low interest rates. Put the money in a treasury bill that earns interest enough to pay for part of the cost of your loan and when the bill matures use it to pay off the loan. So you have now established credit and it only cost you the difference between what you earned and what you paid. The banker is now your buddy and since you paid in full and on time he now knows you are a solid citizen. Do this once or twice and he may not look quite as close the next time you really need some ready cash.

The lawyer and the accountant are not going to be quite as easy. Check to see if you have some school buddies who may have been nerds but only because they were smarter than everybody else. Then check out which one of them went to law school and is not now, or never has been, in jail. If he is in jail now, or ever has been, you better keep on ooking because he is not the smart one. Once you find a likely candidate, make an appointment for an interview. Since you don’t need him at the moment, you are interviewing him and not vice versa. It is probably worth paying for his time regardless of how the meeting turns out—you either like what you find or you just keep looking. These guys need work just like everybody else, so let them sell you their services or at least be prepared to provide it. 

Running a business without immediate access to money or reliable professional financial and legal help is like sailing a ship to Hawaii without a rudder. You can sail along just fine till you need a sudden change in directions and then you find yourself (mixing metaphors) up the creek without a rudder.

There is a story told about the owner of one of the local glazing contracting companies I know that goes something like this. He was in the process of buying out one of his competitors, a company whose two owners were planning to retire, and a contract negotiation meeting was scheduled. As he walked into the meeting with the two selling partners he was flanked by two people. They were his business bodyguards so to speak, his attorney and his accountant. The first thing he is reputed to have said as he walked into the meeting is “you guys are alone.” You may think that was a question. Think about it … 

Dez Farnady serves as general manager of Royalite Manufacturing Inc., a skylight manufacturer in San Carlos, Calif. His column appears monthly.

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No reproduction of any type without expressed written permission.