Down with the Experts

By Lloyd Graff

Onlookers snapping shots on the Royal couple’s wedding day, 2011

The do-it-yourself wedding photography approach asks wedding guests to take pictures with their phone cameras or digital cameras, email them to the bride and groom and let them edit the photos for an online or printed album.

Is this a better approach than the traditional wedding photographer who poses the family and walks around shooting candids, and then charges a small fortune for the finished product? Maybe a great wedding photographer can come up with a few unforgettable images which frame a memory of the historic event. But the potential of the guest photo shoot approach, if you can really enlist friends and family in the effort, is sensational. And the price of the product is a fraction of the pro’s work.

This idea of forsaking the “expert” by using new tools available to the masses has interesting ramifications in business.

This week I have been analyzing our machinery business’s performance last year, and two glaring expenses leaped out at me, accounting and insurance. In both cases we relied upon big firms with good reputations. They let us down with big fees and mistakes.

On insurance, we changed Workers’ Comp firms and the new firm doubled our rate after one year, without any reason. It took the credible threat of a lawsuit to extract us from their clutches. Our insurance brokers just threw up their hands and left us to fight with them. They did not offer to mitigate our losses resulting from placing our business in the hands of an unscrupulous firm.

Our new national accounting firm won our business by telling us an amount to expect to pay for their services. Their fees came in three times their estimate, partly because they forced us to redo everything because they messed up which year to put certain sales in. We had to pay extra because they misunderstood the way we identified the sales dates of machines.

Now I am wondering if we should dump the experts who failed us badly last year. I am considering hiring consultants for insurance and accounting to advise us on how to do them ourselves. The CPA could put their name on the financial statements for our lender. I think we could save major money, but I wonder what you folks think. There is a lot of good software and data to help us on this.

On the machining front, I see many companies bringing work in-house that they had thought was beyond their expertise. With good machines, tooling and support, they can take control of vital processes from distant suppliers in China.

I take a cue from our lawyer, Russell Etheridge, a solo practitioner in Detroit who has helped us out of many legal hassles over 20 years. He operates without a cumbersome, expensive staff and pursues a common sense approach, not a legalistic one. I think he is ahead of his time.

Question: Do you prefer to work with small firms or large firms?

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9 thoughts on “Down with the Experts

  1. Jim Goerges

    Like in politics, are you sure it’s someone else’s fault?
    Small if they meet the requirements of the job and they are on time and on budget.
    Good luck!, third time’s a charm!

  2. Bob Lindquist

    We prefer to work with the smallest of firms for tax accounting, insurance, and outsourced machining. The main reason was that with previous large national firms, our small business account had gotten thrown to the intern who offered little incite, advice, or experience. Each year we started over with someone who knew nothing of our operation history. Secondary was that we cut our costs by more than half, while getting actual personal service. When outsourcing machining to a small shop, I get to talk to a person with actual machining knowledge, that could answer questions, listen to needs, and communicate that to their machinist directly. Although it sometimes prevents “one stop shopping”. I’ve been told that several of our customers use our small tool and die / job shop for the many of the same reasons. The drawback is that it’s hard to time much time off…..Life goes on.

  3. Barbara Kitchen, Synergy Grinding

    Small businesses are well-advised not to fall for the big promises of large professional firms, as you will forever be the “small fish in their big pond”. If they fail you by throwing their trainees at your account, they loose nothing, in the big arena in which they operate. I have seen this for years with accounting firms, insurance companies, legal firms and certainly, the banks. They all operate on the same premise: they’ll take your business and if they fail to perform appropriately (and they always do), they suffer no embarrassment or punishment. Your experience with the solo attorney tells you the complete story; stick with smaller practitioners. Don’t hire consultants, just ask your peers for referrals. We’ve all gone through the same thing and found good independent resources who care about your business and perform so much better then the “big guys.”. Find someone who you KNOW will value your business.

    1. Marvin

      Well put! I whole-heartedly agree. The big companies don’t care anything about us, nor are they going to take any accountability for the mistakes they make with YOUR business.

  4. Victor

    I have found in banking and financial services big companies have the highest fees and worst service.

    1) I do all payroll filings in-house. All of my employees do their own payroll stub, using a simple Excel spreadsheet. So, they have to understand and write in all the payroll taxes and witholding. As the owner, I cut the checks, and finalize and mail off state/fed filings. In this way, each employee understands the entire payroll witholding exercise, but employees don’t see each other’s payroll information. It’s not hard, and it saves thousands.

    2) Wells Fargo inundates you with smiles and greetings when you walk into their store, but try finding someone who is either able or willing to reverse or mitigate a fee and you get no love. I routinely have many accounts with float that routinely exceeds $30K, but when dealing with their export department (Letters of Credit, wire transfers, etc.), they are pretty ruthless about their high fees. Quite frankly, I get much better and more friendly service from the international departments at Bank of Pakistan and Bank of India – and lower fees! For now I’m able to keep the fees very low for my normal banking at Wells Fargo – but if that ever changes I’ll switch to one of the local banks. If Wells Fargo isn’t loyal to me, why should I be loyal to them. For my next export Letter of Credit, I would happily use Bank of Indian or Bank of China.

    3) I started our company’s defined benefit pension plan at a local pension benefits company. It’s pretty sophisticated stuff and those folks aren’t cheap, but there is a lot of stake to do it right, and to optimize things. After a few years they were bought by American Express and I was dealing with some younger corporate guy. Nothing against younger corporate guys – I was one, once, but for this I need someone who thinks like the owner of a small business. I just didn’t get the feeling from the American Express folks that they had my highest interest at heart, and they even knew what it was. After some months with American Express, I was able to hunt down the folks who left the original company and went with my original people in their new company.

    4) About 8 years ago I started with my current cpa and he had about 4 employees and a small office. Now he has 10+ employees and a very fancy office and he delegates my filings to one of his employees. His fees are still low ($1200 corporate, $400 personal), and I’m able to catch their mistakes. So, I’ll stay with them, for now.

    1. Emily Halgrimson Post author

      Wow, Victor. Impressive. I don’t own a business, but I’m on top of my personal finances and planning for retirement and the future. I get a high from credit cards companies paying me to use their card, paying an extra $100 on my mortgage each month to shave off 7 years, and watching my retirement accounts reap the benefits of compound interest. I feel that my attitude towards money benefits my employers too. I try to save them money whenever possible. I think people underestimate the importance of saving the money they make, only focusing on making more money. It’s a mindset. So often when we make more money, we spend more.

  5. Dick Crosby

    Small! My tax lady is the same one I/we’ve used for years without a problem. $200 for my business, and $100 for our personal. Used to be less. Can’t beat it ,so far.
    And, we just employed an attorney, today, reported to have bulldog teeth, to guide us through a sticky wickett, with a business friend, in/with an investment problem. A 2-man firm. Tremendous background and credentials. Not sure of the costs yet. Anxiously waiting for the deal.

  6. Mike

    As a succesfull Photographer I take offense to the remarks within this post. You hire professionals for a reason.. because they have mastered their craft, the latest tools available to them and now how to professionally react to a myriad of conditions. Would you hire any old Joe with a hammer to build your home? Would you bring your car to just anyone..simply because he has a torque wrench? PLEASE save yourself a whole lot of regret and just do the job correctly the first time. This applies to any field.. manufacturing, photography.. etc. The philosophy behid this post is not a philosophy I as a business owner and personal consumer will ever subscribe to.


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