Academic journal article Journal of Accountancy
Jacqueline L. Babicky, CPA, president, Babicky Consulting Group, Portland, Oregon.
The Portland area, where small businesses are the rule rather than the exception, is on the upswing. People are feeling good about themselves and are optimistic about the future. The types of businesses doing well here are those that have taken steps to differentiate themselves or their products from the mainstream. For instance, companies that have found a niche are doing particularly well.
Some companies have been able to keep their margins high either by carefully picking a product line or customer base. One of my clients was a wholesale computer distributor. When it tried to compete by offering a wide line of goods, it was forced to compete on a price basis. However, by offering special services to a small group of clients, it was able to raise margins and improve profitability.
The companies that seem to be having problems are those committed to traditional ways of doing business: those that have not looked at ways to refocus their businesses and eliminate unnecessary functions and that have not invested and retrained the work force.
More and more, CPAs are viewed as important business advisers rather than as auditors or reviewers of financial statements. Small businesses need CPAs who can help them make their operations more efficient. In companies I work with, CPAs are an integral part of the management team, responsible for forecasting, budgeting and planning.
Larry Field, CPA, partner, Field, Sarvas and King, P.C., Phoenix, Arizona.
The Phoenix region has become a small business mecca. We've witnessed a tremendous influx as small businesses relocate here because of our climate, social stability--even the lack of earthquakes. The population also is booming, so the residential real estate market is going great guns.
There are a few big businesses in the region--Phelps-Dodge and a few others--but our economy is focused primarily on smaller businesses. The service industry is very strong. As an Arizona CPA Society board member, I know firms have been rapidly expanding--everyone seems to be hiring--which isn't the case in other parts of the country. …