Scott Goldsmith is the managing shareholder at JamisonMoneyFarmer, an accounting firm based in Tuscaloosa and Birmingham that has served the private companies of central Alabama since its founding in 1920. Beginning with keystone clients such as the city of Tuscaloosa, Stillman College, The Tuscaloosa News and Druid City Hospital, the firm has grown alongside the economy of the state and now includes many of the privately-held supplier firms of the automotive industry, including many foreign-owned suppliers. We asked Goldsmith for his insights into the Alabama economy from the perspective of what these clients are seeing.
One of the main differences is probably that in small private companies the owners typically are involved in the day-to-day business operations. They are seeing things more closely, monitoring the business operations as well as the books. They can see what’s going on daily.
Bank financing did get tight during the recession, but we’re seeing banks loosening up and being more open to new business ideas and loaning money for equipment and remodeling. We’ve seen that definitely change in the last 12 to 18 months, and I would anticipate — depending on what the current administration does — that will only get better for privately owned businesses. We’re seeing this with our clients and also around the Southeast. Things are starting to look up for all industries. There are some industries that are growing significantly more than the 5.5 percent average that some recent surveys of private companies have reported. Some sectors are not up to that 5.5 percent, but most of the folks we see are optimistic going forward. Many are considering adding employees.
Around Alabama the sectors that are seeing the most growth are construction and manufacturing. In the central region of the state, with Mercedes and its suppliers, that translates into new construction and new plant facilities. The manufacturing expansion extends across the state, down to Mobile with Airbus, and to Montgomery and Talladega County, with expansions at Hyundai and Honda. You can see evidence of the activity just driving around the state. You see construction cranes everywhere, especially building apartment and condo developments.
Tuscaloosa has changed significantly in the last five to 10 years, and you could say the same thing for Huntsville and downtown Birmingham. We learned a lot about business succession from the 2011 tornadoes. We had a lot of clients who lost their entire life savings and businesses that had to be relocated. It was a learning experience for the entire city. From that we’ve had a lot of retail development that has generated new sales tax dollars. And a lot of housing that didn’t rebuild saw developers come in and build new neighborhoods, which has turned into new sales tax dollars.
While we primarily do straight-up accounting and business taxes, we are also business advisors and consultants and best friends of our clients. We talk with and advise our clients on more than just debits and credits and filling out tax returns. We also offer estate planning and retirement planning. We advise clients on selling businesses and entering new businesses.
Small business owners have a fairly good understanding of what their business is worth.
When they go to trade association conferences, they meet with people who have the same types of businesses and talk about mergers and acquisition prices. They typically can find a similar company that is a public company and get information on what their trading value should be.
In forecasting, it just depends on the industry that the private company is in and what they feel like the future is going to hold for their industry, what they are seeing for their customers. They may see more orders coming in or know that a big customer of theirs is going to be remodeling or expanding. They can plan for that happening.
Information technology has changed things for all businesses. Our retail clients are competing in a bigger market for the same dollars. They have got to generate and drive traffic to their website. Everybody’s slogan is “buy local, ” but the reality is that it is a lot easier not to leave your house when you shop. For the most part, they are very innovative in coming up with fresh ideas and new product lines and getting those on the internet and on their websites. It’s just a matter of survival — to survive and compete for those sales dollars.
We are always assessing new areas of expertise, new markets where we have some experience and need to be developing more than we are, as well as reassessing and asking whether we should still be continuing some activities.
Some companies look for an accounting firm that has experience with clients in industry. A lot seek firms just based on the reputation they hear about from their peers and associates. But we also get new clients based on specific areas of expertise, such as auto suppliers and timber, which are two that come to mind.
We’re a member of CPAmerica, a large international accounting association, and through that association we have gotten together with our counterparts in Germany. We go over there and they come over here. That includes auto suppliers coming over here, and once you get into a market such as that, you become known. Plant owners know that’s an area we specialize in, and we also have a young lady with our firm who was born and raised in Germany, and she’s been able to communicate with clients and potential clients in their native language, and that has been a very good advantage. And all but a few suppliers are privately owned companies, so they’re used to dealing with a non-national CPA firm in Germany, so they’re ready to do business with a large regional firm such as ours.
Chris McFadyen is the editorial director of Business Alabama.
Interview by Chris McFadyen
