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Running head: ABC BUSINESS & ASSOCIATES INTERVIEW Submission no. 931cf7da-bae0-4a53-b589-5a03f57ac4f4 1

Interview with Dan ABC BUSINESS, Owner and President of ABC BUSINESS & Associates

With S.W.O.T. Analysis

Student Name: Anonymous

Montgomery College

Business Name: ABC BUSINESS & Associates, PC

Owner:

Dan ABC BUSINESS

Type of Business: Professional Corporation

Business Address:

Falls Church, Virginia 22043

Years in Operation: 30

Number of Employees: 7 full-time, 3 seasonal

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Dan ABC BUSINESS is the founder, current owner, and president of ABC BUSINESS and

Associates, a small, Falls Church, Virginia based firm of certified public accountants. Services provided by ABC BUSINESS & Associates include tax preparation, estate planning, financial services, business valuation, litigation support, forensic accounting and more. Dan is a CPA himself who started the business in 1987 after developing a faithful client base as an employee of another firm. ABC BUSINESS and Associates works with individuals and families, professional advisors, and other small businesses.

ABC BUSINESS & Associates is a professional corporation (PC). In the state of Virginia, a professional corporation is comprised of shareholders, is based on shares of stock, and usually pays a business income tax. A PC can elect s-corporation tax status or otherwise may face double-taxation. Double taxation occurs when earnings are taxed twice, first at the corporate level and again at the personal level (Collins, 2010, p. 195). PCs provide liability protection for their shareholders (Steinberg, 2017), that is, shareholders (owners) cannot be held personally liable for the debts and obligations of the corporation (Collins, 2010, p. 193).

The mission statement of ABC BUSINESS and Associates, which can be easily located on their website, reads:

We are a proactive local accounting firm providing a wide range of services with integrity, honesty and a commitment to excellence. We are an aggressive advocate for our clients’ tax savings and empathetic to all of their needs. We are a growth-oriented firm that values our employees and seeks to provide opportunities for their personal and business success (ABC BUSINESS, 2015).

According to “Mission and Vision Statements” by MindTools.com, a mission statement should define an organization’s primary objectives and its purpose, it should be set in the present tense, it should explain why the business exists, and it should be short, clear, and powerful (MindTools.com). ABC BUSINESS & Associates’ mission statement fulfills these requirements: their stated purpose/objective is to provide a range of services with integrity, honesty, and excellence, advocate for clients’ savings; it is written in the present tense; it also uses powerful language like “success,” “commitment,” and “excellence.” When asked what made him want to open his own business, Dan explained:

Because the sky’s the limit when you have your own business; there’s no limit to how much you can make, and you get more control over how much you make. If you’re willing to put in the hard work, it can be very profitable. If you work for somebody else, even if you work hard, you might not get any recognition, also [sometimes] you’re trying to figure out how they became the boss in the first place… I felt like I could have more opportunities.

In Collins’ book, An Introduction to Business (2010), she explains that according to the Small Business Administration, among the top reasons for starting a business are to achieve financial independence, to accommodate a desired lifestyle, and to be your own boss (p. 216). It seems like Dan had these commonly shared ideas in mind as well when he made the

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decision to branch off on his own – he wanted more money, to have more control, and to achieve a desired lifestyle. From his 30 years as a business owner and working with other small business professionals, Dan believes that the most common reason that causes other small businesses to fail is lack of preparation for the lean times, either because they don’t start out with enough funding or because they don’t generate revenue quickly enough. He explained:

A lot of people start a business that aren’t ready for the lean times. When they first start a business, they can spend a lot of time trying to generate business, trying to get the business off the ground, they are working very hard but they’re not making a lot of money. So, they haven’t necessarily prepared to get through the first couple years when they’re not making very much… So I guess one of the main reasons [small businesses often fail] is they aren’t ready for the initial low start.

However, he did offer some optimism as well: “If you can stick it out through the first few years, eventually you’ve got people coming to you and you’ve got a reputation.” This coincides with what Collins explains in An Introduction to Business (2010) – ways to succeed in owning a business include getting adequate funding to get your business through the startup phase (which can last over a year) and managing that funding effectively. The text explains that third of small businesses go out of business within the first two years, more than half of small businesses have closed by the end of their fourth year, and 70 percent do not make it past their seventh year. Some common reasons for failure named by the book, which also support Dan’s ideas, include being underfunded – that is, the owner borrows enough money to set up the business but doesn’t have enough extra cash to operate during the start-up phase (p. 256- 259). It seems like Dan’s experience has given him a lot of wisdom surrounding what leads to success. Another key to success for businesses is having an advantage over competing firms. Dan believes ABC BUSINESS & Associates has this. He says the advantage his business holds is a combination of a very knowledgeable and experienced staff, providing a personalized service, being easy to access, having a quick return time when getting back to clients (2-3 days), and keeping their prices competitive. Part of the ease of access that clients have is their easy-to-use website, ABC BUSINESSCPA.com, which includes lots of information about the business, including a page on multiple ways to contact them. Dan explained that he tries to only hire experienced CPAs, which can be very hard to find in that area, but he believes that is what helps give his business its competitive edge. According to the supply and demand model, by trying to keep his prices relatively low, or “competitive,” it will theoretically help to increase the demand of the services he offers (Collins, 2010, p. 28). Furthermore, because ABC BUSINESS & Associates does not have a monopoly on financial and accounting services, they must keep their prices close to those of other firms to compete with them (Collins, 2010, p. 33-34). Dan believes this competitive edge that ABC BUSINESS & Associates has helps to contribute to his business having a positive reputation.

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When Dan was asked about how he feels about the reputation of ABC BUSINESS & Associates, he said he believes it is good. This, he believes, is indicated firstly by the fact that he has been able to keep his business alive and functioning for thirty years now. Also, he says he sees a lot of positive online reviews and gets a lot of referrals from his current clients to new clients. One of the keys to this success has been offering good customer service. Dan believes the most important rule of providing good customer service is to be compassionate and empathetic towards the clients and their needs – showing them that the business cares and that the staff is trying their best to provide a good service at a good price. This concept could be said to fall under practicing good business ethics, specifically, treating customers fairly and communicating core values of compassion and empathy to all members of the business (Collins, 2010, p. 58) so that they are carried out with each and every client. We can see from the example given with ABC BUSINESS & Associates that being an ethical business and conveying it to the customers can have a very positive impact on the business. Although Dan has experienced great success through the creation of ABC BUSINESS & Associates, he does feel that there are some disadvantages to one owning their own business. First, he says, “you generally don’t work just 40 hours per week, you can’t just go home and forget about it like you generally can being an employee. With your own business, you’re always thinking about it. The buck stops with you, so you can’t just get somebody else to worry about the problems.” This parallels a negative aspect outlined in the textbook about being a business owner, that is, “stress: As a business owner, you are the business. There’s a bewildering array of things to worry about—competition, employees, bills, equipment breakdowns, customer problems. As the owner, you’re also responsible for the well-being of your employees,” (Collins, 2010, p. 234). Another disadvantage that Dan pointed out is that “a lot of people think that you can be your own boss, but in reality, your clients are your boss, and in a way, your employees are your boss. In small businesses, you almost depend on your employees as much as they depend on you. Each employee has an impact on the firm.” Although, as a business owner, technically there may not be someone above you in the chain of command who is in charge, you are really not your own boss as long as you are trying to succeed, because you depend on revenue from customers and you depend on employees who carry out the job of the business. This could be a rude awakening for some who start up a business and truly want to do whatever they want, whenever they want. In An Introduction to Business (Collins, 2010), “independence” is stated as an advantage of owning your own business because, “as a business owner, you’re your own boss. You can’t get fired. More importantly, you have the freedom to make the decisions that are crucial to your own business success,” (p. 233). This is partially true, but we can see from Dan’s advice that your level of independence may not be as great as one hopes, and it is contingent on your desired success level. From the interview, it is apparent that Dan ABC BUSINESS, founder and president of ABC BUSINESS & Associates knows the keys to a successful small business. Many of his ideas line up with common business practices and theories as outlined in Karen Collins’ An Introduction to Business. In the next five years, Dan expects little change to come to ABC BUSINESS & Associates, but he hopes to see revenue grow by about 30-40%.

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References

Collins, Karen. Exploring Business. Adapted Version of the 2010. Print. Adapted version

licensed under the Creative Commons by-nc-sa 3.0 license and available via the University of Minnesota Libraries Publishing through the eLearning Support Initiative.

ABC BUSINESS & Associates. (2015). Company Profile: Mission Statement. Retrieved October

06, 2017, from https://www.ABC BUSINESScpa.com/certified-public-accountant- virginia-profile/

MindTools.com. (n.d.). Mission and Vision Statements: Unleashing the Power of Purpose.

Retrieved October 06, 2017, from https://www.mindtools.com/pages/article/newLDR_90.htm

Steingold, David M. (2017). How to Form a Professional LLC in Virginia. www.nolo.com.

Retrieved 9 October 2017, from https://www.nolo.com/legal-encyclopedia/how-form- professional-llc-virginia.html

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Strengths

1. Strong business ethics 2. Experienced staff 3. 30 years of operation 4. Location (relatively high-income,

populated area) 5. Easily accessible 6. Wide range of financial services 7. Flexibility among types of

clientele

Weaknesses 1. May be subject to double-taxation

depending on tax-filing status 2. Website is not entirely up-to-date 3. Underwhelming online social

media presence 4. Only a handful of online reviews 5. Having experienced accountants

could drive prices up, a deterrent to some clients

6. Only one location 7. Prices may be in line with the

high-income area in which the business is located, but the prices may seem inflated to out-of-town clients

Opportunities 1. Expansion to other locations 2. Addition of other services (legal,

etc.) 3. Using the internet to advertise &

establish a greater knowledge of the firm

4. Increasingly complex tax codes could bring them more clients (less people/businesses who know how to do their own taxes)

5. Because shareholders have limited liability, they can take greater risks as a business and try new things

6. Hiring experienced CPAs can add their client list to the ABC BUSINESS & Associates business

7. Getting a jumpstart on cryptocurrency culture

Threats 1. Increasingly complex tax codes

could make employees’ jobs harder

2. Very small pool of experienced CPAs in the area (according to Dan ABC BUSINESS)

3. Competition from other firms/CPAs

4. Business income taxes (depending on filing status)

5. New cryptocurrencies (bitcoin, etc.) which may grow in popularity (could be a threat if the business does not adapt to this)

6. Programs like TurboTax and H & R block

7. Rapidly advancing technology (MS Excel, online support, etc.) could eventually render financial services less necessary