This year I decided to take on interns for the summer.  I've taken on interns before, usually one or two, but this year I've decided to take on six!  We knew it would be a big time commitment but I felt the experience would be invaluable.   ​

I'll be honest, the main reason for me to do this was not because I wanted to shape America's future accountants.  Instead, I saw this as a great opportunity for my team to get an understanding of managing and teaching.  I had two main objectives:

1. Allow my associates to manage projects where they would be accountable for the results  
2. To have the interns put relevant experience on their resume/LinkedIn profile. 

This internship program would be successful if the interns can also walk away with a great learning experience.   
To get started, we had to find the interns.  This was a great project for the Jr. Associates (Sam and Angie) to start on.  They were responsible for:

• Promoting our internship program with the various colleges in our area and also use our social media sites.  
• Collecting, reviewing, and filtering resumes that came in.  
• Scheduling and conducting the interviews.
• Selecting the interns.  

I, purposely, wanted to be hands-off as a way to give Jr. Associates more accountability in the entire selection process.  
They did a great job in selecting the 6 wonderful interns.

After the interns were selected, I was ready to get started.  The biggest reason for me to take on interns was because it was a way for the associates to improve their communication skills.  Accountants, in general, tend to explain complicated things and make them even more complicated.  They use accounting language which doesn't always make sense for someone who isn't an accountant.  I want to change this.  
I wanted my team to explain taxes in an easy-to-understand manner.  If an associate can explain taxes to interns where they can follow it clearly, we can apply it to clients.  This was a great platform to practice and improve the way we effectively communicate.  
We took common questions that we hear from actual clients and used those as discussion topics for our interns:

• Filing statuses 
• Who qualifies as a dependent
• How different business entities affect clients and their taxes.  
• How stock sales work.

This allowed for open discussions where interns can ask questions and we would try to answer it as simple as possible.  I found was that a lot of the questions that interns asked were similar to what an actual client would ask - so it was great practice for our younger associates to answer these questions.

We easily spent 10-12 hours a week for the internship program, but even with this large time commitment, I would recommend that any growing firm take on interns. It puts associates outside of their role as accountants and into a new role: mentors.   
We're still in the middle of our 10-week internship program and so far the associates are enjoying it (and hoping the interns are as well).  They get to share their knowledge with young students that genuinely want to learn; at the same time, practice improving how they communicate and manage people.  There are still a few projects lined up for the interns that will help showcase their experience here.  I'm hoping that by the end of this, all of us (associates and interns) have learned and experienced something that can be carried into our careers.   

To learn more about our associates and interns, please take a look at their LinkedIn profile:
Sam Patel                Angie Morado
Jenny Tran              Nick Polati 
Diem Huynh            Shyla Suri 
Han Nguyen            Dennis Li ​

First!  I want to put this disclaimer - this is not legal or accounting advice.  It's just my opinion as a business owner.  
So as a business owner there are three things to consider:

• Does my business have a high chance of being sued by anyone (customers, clients, patients, pedestrians, employees, etc.)
• Will being incorporated reduce my taxes?
• Will the cost of forming and maintaining a corporation be worth it?

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First thing to consider is if there is a high chance of liability in my industry.  Liability is if something goes wrong with the business, can anyone sue the business or file any type of legal claim/lawsuit?  "Liability protection" is what helps guard certain things from legal claims/lawsuits.  For a business owner, what needs to be understood is if anyone were to sue the business, what can they take?  It's broken down into two different types of assets - business assets vs. personal assets. 

Business assets are things owned by the business such as equipment, computers, bank accounts, etc that is owned and used by the business.  

Personal assets are things owned by individuals (not associated to the business) such as personal car, house they live in, furniture, retirement accounts, personal bank accounts, stocks in brokerage accounts, etc.  
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If anyone were to sue the business, what can be "up for grabs?"  If you are NOT incorporated, it's both business and personal assets.  If you ARE incorporated, then it would only be the business assets.

For example, if I'm a mechanic and NOT incorporated - I forgot to tighten up the lug nuts on the tires, then when the customer drives on the freeway a whole tire comes out causing a 10 car pile-up.  If everyone who got injured and property damage from that accident files a lawsuit against my mechanic shop, they would first come after the business assets - work computer, car tools/equipment, etc.  If that wasn't enough to cover the total cost to pay the lawsuit, then my personal items may also be "up for grabs" - house, car, savings.  If I was incorporated, theoretically, it should only be my work items.  All my personal items should be safe from the lawsuit.    
 
KEEP IN MIND - incorporating is nothing like insurance coverage.  Lawyers are probably freaking out as they read this because I haven't brought up insurance yet.  So I will say it now to satisfy those attorneys' gripe, YOU STILL MUST HAVE BUSINESS AND LIABILITY INSURANCE NO MATTER WHAT!  I also must note that there are more rules to follow as a corporation to make sure personal assets are protected against legal claims on the business.  Talk to an an attorney about this.    

So as a business owner, I must weigh what are the chances of me getting sued?  Would I get sued if I have a food truck business where a group of people got really sick?  Would I get sued if I was a daycare provider and one of the kids got badly hurt?  Different industries have different levels of liability.  Someone that does general gardening will not have a high chance of getting sued like a doctor's office.  
There's also more to consider when weighing the liability.  Most business owners think about customers suing them but are not aware of a possibility that it could be someone other than the customers filing a lawsuit.  

One example I heard from an actual attorney: a small insurance office with one owner and one secretary.  The secretary does general office work such as taking phone calls and filing.  One day, the boss needed important documents copied right away but the copier was out of toner.  So he urged the secretary to get this done immediately.  The secretary stopped everything she was doing and went to go change the toner as the boss demanded.  Simple task.  She then saw toner powder inside the copier so she blew into it to help clear it out.  What happened was that the toner powder flew back into her face and into her eyes.  She was rushed to the emergency room.  What if she wanted to sue the owner for this?  Would the owner be liable and possibly lose everything?  Yes, it's very possible.  

There are 6 industries where being incorporated may be a good idea for liability protection:

1. Construction - because someone can get seriously hurt from power tools.
2. Car mechanics - because if I forget to tighten up those lug nuts... 
3. Restaurants - because if someone were to get food poisoning... or I accidentally used beef broth in my vegetarian soup.  
4. Anything involving taking care of people or animals (child care, elderly care, pet care) - because people trust me with their loved ones, and pets are people too, nowadays.  
5. Medical - with this being one of the highest industries for lawsuits, it's a must.  
6. Taking care of people's money (financial advisors, accountants) - well.. because it's money and people get mad when someone else is losing it.  

Not only does the industry matter but also two other factors:

1. Partnering up with someone else
2. Having employees 

Partnering: When starting a business, it's very common to want to start it with someone else.  For the most part partnering up with someone is fun and beneficial at the same time.  Well, too many situation can come about where a partner can be so much more costly.  If my friend and I start a business together, we're both responsible for each other's actions.  If I mess up, he's just as responsible for it as I am - and vise versa.  Too many stories where a partner cheated a client without others knowing.  The client comes back and sues the entire business.  Too many stories where a partner took out a loan using the business name and forged documents to leave the other partner responsible for the debt.  Would I want to take the heat for someone else's action?  I might be ok with losing the business but not the home I live in.  

Employees.  Having employees is vital to a growing business.  They are assets but also potential liabilities.  If my employee does something wrong in the office, I, as the business owner, am responsible for it.  If my employee gets hurt because she dropped the 5 gallon water jug on her foot, I can be responsible for that.  If my employee is going through tough times at home and ends up punching a rude customer, I'm responsible for that.  If my employee sends out confidential information to scammers, I'm responsible for that (this actually happened to Seagate this year).  So many things can happen with employees, most of the time it probably won't but should I risk possibly losing my family's home?  

Many business owners may think, why do I need to incorporate if I already have business liability insurance?  Or if I'm a doctor, why would I need to incorporate if I have malpractice insurance?  For me, I'm not very confident in insurance companies to really take care of me when something goes wrong.  This just allows one more barrier just in case.    

What are the additional costs of being a corporation and how much will I save in taxes?

As a business owner, I must be aware of additional cost but also potential savings.  I must evaluate if having a corporation would really be cost effective.

 What I mean by being cost effective is how much more does it cost to be a corporation but how much less taxes will I pay?  If I save more in taxes than it cost to maintain the corporation, then being a corporation is a no-brainer.  For example, if my yearly cost to maintain a corporation is $5,500 but I save $10,000 in taxes, it mean's I'm positive $4,500 so it's well worth it to incorporate - no matter what industry I'm in.  

Cost:
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In general, filing for a corporation can be from $250-$2,500.  Not only that, there are certain fees and possibly other charges to consider just to maintain it year-after-year.  I work out of California and the corporate tax here is the highest in the country.  There's a minimum $800 that CA charges as a tax - even if the business doesn't have any income, CA will still charge this tax on zero income!  
Below is the general cost of starting and maintaining a corporation.  Of course overall cost will vary on location and types of service you choose - filing the incorporation documents myself vs. using an attorney.  Same goes for maintaining a corporation - doing the bookkeeping myself vs. hiring a firm to handle it for me.  

If my business is a part-time IT consultant where my total income is $5,000, incorporating may not be worth it from a cost effectiveness point of view.  I may very well be spending more than that just to cover the cost to maintain a corporation.      

Determining tax savings can be difficult as it depends on various factors such as total revenue, type of corporation, and industry.  I would talk to an accountant to see the numbers for tax savings vs cost*.    
*shameless plug: Alpha B Group created a calculator to help determine this for clients who asks me about incorporating.  We can run samples to see if actually being a corporation would be more beneficial financially or not.* 

So, as a business owner, I would evaluate the whole situation like this:

Does my business have a good chance in having any lawsuits against it?  If yes, then incorporate because cost doesn't matter.  I'm not risking the home my family lives in when it can potentially be avoided by incorporating.   

If there isn't a high liability, will I still save more money overall?  If yes, then incorporate, industry doesn't matter.  I rather spend money to save even more money.  

The last thing I would advise as one business owner to another - you do not have to be incorporated to be a business.  
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**** please be aware that there are way more things to discuss than I can write in this post regarding this subject.  Always seek professional, competent, and reliable advise with an attorney AND accountant.**** 

​When you think of customer service, you normally think of people smiling, saying "hello" and being really nice. When you hear complaints of other tax firms, it’s broken down into three types of complaints. The first would be how the accountant made a mistake, 2) how rude and condescending the accountant was. Do you know what the third type of complaints are? The accountant being unresponsive. It’s common to hear, “I emailed him 3 times and called 5 times - still haven’t heard back from him.” I believe this accounts for over 50% of all complaints in tax offices. It could be because most accountants are too old to hear the phone and do not understand how email works. Or, simply, they just don't care.

When anyone calls our office and we do not pickup - that’s being unresponsive.

When no one picks up and a client leaves a voicemail and we don’t return the call immediately – that’s being unresponsive TWICE.

Not replying to emails - big no-no with my firm.

The first crucial step to great customer service is responding. If you’re responding, you’re providing a service. If you’re not responding, you’re not able to provide any service. Simple as that.

​Bad customer service is not only the rude experience a customer had but also, keep in mind, the experienced that they never got to experience!

​However, there were some major hiccups that we experienced from setting up a new office, training new employees for their first tax season, and changing the original processes. Returns took longer to prepare, we took on too many new clients, and certain procedures were inefficient. Speaking for myself, this tax season was the hardest I have ever gone through. I thought the tax season before was harsh, but this one was brutal. I've never worked so many hours and dealt with so much stress. I don’t wish this kind of work-life on anyone. I love what I do, but this year I actually became burnt out.

​One of my goals this year is to concentrate on our talent—you all. I really want each associate to take on bigger roles and accept new challenges. I encourage you to let me know what additional projects you would like to work on. When you're confident enough to take on bigger roles, it makes my job easier. I want to give you more responsibilities and more accountability. Take ownership of your work. My vision is that all associates will be part of a bigger system in which everything is streamlined and efficient—making everyone's life easier.
I know that I can still improve in my area of teaching/training. I feel that it's important that everyone's goal is to outgrow their current role and to take on bigger opportunities, so I will try my best to help you do just that. I have a responsibility to do more for you guys—not just give you work to do, but to also give you opportunities to produce results.

Tell me your ideas. Let me know what can be done better. You are the mechanism of this firm— working together and seeing the details that I don't see. I need your eyes and ears to let me know what we need to do to make this firm strong and relevant.

​The greatest challenge that I'll need your help with is to win over current clients again. Alpha B has been very fortunate to receive so many new clients. We doubled the size of this firm in all areas: number of clients, number of associates, and office space. Last week, thanks to an honest email from an old client, I realized that something is wrong with what we have right now. He told me that we had lost touch with him. He noticed that we grew these past 3 years and is happy for our success, but he's also concerned that we’ve lost the quality and real customer service we use to provide when we were a smaller office. He's right. I've been so focused on marketing and getting new clients that I had neglected our old clients. These clients stayed with our firm when it was small; they trusted me at the very beginning when I was new and still learning about taxes. I owe it to them to continue to provide the same quality service, even as our firm continues to grow. I'm glad that he sent me that email. As hard as it was to read, it gave me a head start to fixing the problem.

Everyone at this firm has been an instrumental part to our success and I am very fortunate to work with you all. Know that I will try hard to focus on improving each of you, and at the same time, improve our relationship with our clients.