Carry-out consultants - outside business consultants

Nation's Business, June, 1988 by Kathleen Kerwin

Carry-Out Consultants By Kathleen Kerwin

Clark Balderson knew more about making bulldozer blades than about exporting them to China. So when he considered shipping his company's heavy-machinery attachments overseas, he sought outside advice. He discussed his plans with his accounting firm's China experts, who looked at Balderson's trade documents and suggested some business contracts in that country.

Balderson in president of Balderson, Inc., in Wamego, Kan. The company manufacturers heavy-equipment parts such as snow plows and mining-machinery buckets. It does a lot of exporting and chalks up sales of $24 million a year. Yet, like many companies, it is not big enough to keep on its payroll at the financial experts whose advice may be needed from time to time.

"We really can't afford to have internal expertise," says Balderson, who turns to outside accountants or lawyers for advice on matters beyond his company's experience. "It's nice to have access to experts who can pretty quickly cut through the crud," he says.

Many companies find that they increasingly need financial services from outside specialists such as accountants, lawyers or consultants.

"Life is just getting a lot more complicated," says Dave Nordstrom, vice president of Nordstrom Oil Company. The firm, based in Cedar Rapids, Iowa, has expanded into fields other than petroleum marketing, and it now operates a fast-growing convenience-store chain. "For things you used to feel comfortable handling yourself, now you go out and get somebody to do it for you," he says.

Accounting firms, lawyers, government-sponsored groups and brokerage houses can help with an array of matters such as strategic planning, marketing, buying insurance, choosing health and retirement plans, tax preparation and planning, systems analysis and succession planning. They may find capital for a new company struggling with product development, or they may play matchmaker for client companies that want to acquire or be acquired.

"A lot of times an entrepreneur is really great with ideas -- the creative side," says Bryan Becker, a partner at Ernst & Whinney and director of the accounting firm's emergining-business services in Detroit. "Maybe he's not as good at putting his ideas into action. That's where we can help."

Sometimes a manager just needs a second opinion on a new product line or marketing approach. "Thet want someone to critique the process and their ultimate decision," Becker says. "They want a business adviser, a seasoned person who can say, 'Yup, I've seen it before, and you're on the right track.'"

Balderson says his accountants recently convinced him he was "throwing away too much money on development" of a new product. "I think he's right, but I didn't want to admit it." He asks his attorneys to find the unseen legal or financial obstacles in a proposed plan, to "pick the holes in it."

Many professional advisers can steer a growing business to alternative financing sources such as venture capitalists, insurance companies and pension funds. "The problem with most small businesses is accessibility to this world of deeper pocket," Becker says.

Deciding when to let an outsider handle sensitive business tasks is one of the tougher jobs a business owner faces. The Jayme Organization, a Cleveland-based advertising agency, had been run for 25 years by its founder, who "used his cronies to provide business services," says George Havens, chairman and chief executive officer. When Havens and the new management team took over 15 years ago, he says, "we decide we wanted to grow, the agency more dramatically and aggressively. We decided we needed better financial services."

Calfee, Halter & Griswold, a Cleveland law firm, studied the agency and presented 10 recommendations, including increasing group life insurance, signing contracts with top managers, devising a plan to repurchase stock, recapitalizing the firm and setting up a pension plan. All the suggestions were enacted eventually.

Jayme's managers hired the accounting firm of Price Waterhouse to solve a cash-flow problem when billings grew eightfold in 12 years to $40 million but collections lagged. The accountants instituted an accelerated billing system. Havens says the accounting firm also has helped with executive retirement plans and major real-estate decisions.

Accountants, lawyers and other financial experts may advise you better than you could advise yourself on matters such as marketing, borrowings, insurance, health and retirement plans, taxes, finding a buyer or choosing your successor.

Sometimes, however, using an outside consultant is not the right approach. "We often go outside to get someone to make recommendations," says John Bender, chairman of Bender Lumber Company, a $20 million retailer in Bloomington, Ind. "But we've found that we often don't use their advice. The problem with having someone outside come in and take a look at our business is that they often only see the problems on the surface -- and a lot of times their suggestions are hard to implement." Bender adds that outsiders' suggestions sometimes irritate employees. "There's a great deal of resistance to change."