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Published: September 2007
Kevin Hedley CPA, talks about the importance of proactive accounting for business owners, smart risk-taking, and his work with the Red Cross Measles Initiative.
Success Magazine: What does success mean to you?
Kevin Hedley: Success is a journey. It is the freedom to be able to do what you like, and to always continue learning.
SM: How did you get involved in accounting and finance?
KH: I always wanted to be involved in the business world. I earned a bachelors degree in accounting, and began working in public accounting. I found that the aspects I enjoyed the most were personal and corporate income taxes, and later I grew into wealth management. Those are the areas where I feel I can really help people.
SM: When did you decide to go into business on your own?
KH: About fifteen years ago I decided to get my masters in tax, and the firm I was working for wasn't supportive. I knew at that point that I needed to either go to a firm that would let me grow or go out on my own. It made the most sense to strike out on my own.
SM: Did you have a business plan?
KH: A rudimentary one. I didn't have a sales plan, but I did have a business plan. More importantly, I maintain an ongoing business plan which I update every other year. I monitor my business so I can see where it is headed, and make educated choices.
SM: What services constitute the bulk of your business?
KH: We do both corporate and personal tax returns, but the vast majority of work that we do is with small businesses. We help clients with business planning both for start up and existing businesses. I look at a business plan like a road map. Would someone drive to Florida without looking to see where they're going? If you don't have a business plan, there is no way to know if you are headed in the right direction, or what to expect on the way. There are no milestones to help track your progress. I highly recommend people hire professional advisors to assist them in the planning and sustaining of their business. Creating a network of people, an accountant, a lawyer, people who have experience and understand the realities of business, will make a business much stronger. You don't have to reinvent the wheel if you tap into that network of knowledge and plan right. It is one of my favorite things to help somebody make their dream a reality; that starts with a solid business plan.
SM: What made you diversify into the financial arena?
KH: I wanted to make sure my clients were being taken care of, that they were making investment and insurance choices that were appropriate for them. We work with our clients on a routine basis, whether we are doing tax or accounting work, handling their pension plan, their investments or their IRA; we understand our clients' needs better than a broker who will see them once every few years. We meet with many of our business clients once a month, sometimes more. By integrating the many facets of their financial management, their business goals, and life changes, we can help them fully understand the implications of their decisions. For example, we can determine how their investments will affect their taxes. Diversifying has enabled me to provide better, more comprehensive service for my clients.
SM: Why do you think most businesses fail?
KH: I think there are three main reasons businesses fail. First, people let the business run them, they don't run the business. Second, they try to be all things to all people. Lastly, they don't pay enough attention to their accounting. It can be easy to believe that accounting doesn't matter; but by watching the numbers, you can see where the business is going. Accounting is a tool that provides you with information about your business, and I've found that my most successful clients are the people who use that information to guide their business decisions. Being proactive in your accounting is extremely important.
SM: Having the numbers makes your decisions less risky?
KH: Absolutely, but there is still risk. I'm a baseball fan, so I use the analogy that you can't get to second with your foot on first. That's a feeling that holds a lot of people back; they're just not willing to take that leap of faith. Not everything comes down to what my excel spread sheet says. You have to find a balance. Riding all your money on black on the roulette wheel might pay off, but it's not a good risk with your investment dollars. Other risks make sense. Andrew Carnage mortgaged his mother's home so he could get started. He made a calculated risk. Sometimes risks are necessary to make your dreams come true. If you recognize the inherent value in a business or a property or an idea and you have a network of people to support you, calculated risks can be worth taking. I'm not advocating get rich schemes. If something seems too good to be true, it probably is. Sound business investments are based on valuable ideas and hard work. Thomas Edison said "opportunity is missed by most people because it is dressed in overalls and looks like work." You have to be willing to put in the work, but you also have to be willing to take the leap. I think there are people who miss opportunities because they would rather have the newest 50 inch flat screen TV than make an investment in their future. You need to be willing to sacrifice to some degree. I don't need to have a brand new car in my driveway. I'd rather make an investment, be it in real estate or in the business.
SM: Your clients depend on your accuracy and your advice. Is there a lot of pressure to be perfect?
KH: There is definitely a lot on my shoulders when work is completed. We like to make sure everything is reviewed two or three times before it goes on out the door. But, you can never be perfect. You have to accept that there will be mistakes. I measure the quality of a business by how they perform when something goes wrong. We don't like making mistakes; I wish we could say we never made one. What's important is that if we do make a mistake in the office we rectify it as soon as possible. We handle it, and we prevent the problem in the future.
SM: How did you manage your staff and create a supportive, successful environment?
KH: I treat them the way I want to be treated, that old golden rule. I provide them with the tools and information they need to get the job done. I do not micro manage my staff; they are professionals, and they deserve to be treated like professionals
SM: What is in the future for you and the firm?
KH: We just moved from a smaller building to our new location. As our client base continues to grow, we need another CPA. Personally, I want to focus on tax planning and wealth management, with another CPA building the investment and tax aspects of the business. As we continue to grow, we want to grow in a smart way. We don't just take everybody that calls us up, that's not who we are. We're not the right firm for everybody. We interview our clients and let them know who we are and we can do for them. We want to make sure we're a good fit.
SM: How did you become involved with the Measles Initiative?
KH: I was working with the local Red Cross to help them become more involved in the community. We were looking for a way that would help children understand the work of the Red Cross, and the Measles Initiative was quite simple. The goal was to vaccinate 200 million children against measles in five years. Each shot cost one dollar, and that was something children of any age could understand. I went to the national headquarters to see how our chapter could become more involved in the Measles Initiative. Forty percent of people in Ghana live on less than a dollar a day they simply could not afford the one dollar shot so the money had to be donated. We decided to get local children involved in raising those dollars. The children could appreciate the impact they were making, because we weren't asking them to raise 200 million dollars. Every dollar they raised meant one vaccine for one child. The Red Cross asked me to go to Ghana as an official observer of the Measles Initiative, and I was happy to go. It helped me to better understand what we were doing, and to communicate that to other groups. I've spoken to several rotary groups about the Initiative. I've even spoken on some of the local TV stations. It has been a terrific experience. I've always enjoyed helping the Red Cross, and not just with this. I'm currently vice-chair of the board of directors for the Red Cross; I've been chair, treasurer, and vice-chair in the past. The Red Cross does so much for so many people throughout the country, I'm very proud of the work they do. I also work with the Twin Bridges Rotary, the YWCA in troy, Seton Health, and I'm the former congregational President and Treasurer for my church. I believe it's important to give back to your community, and I really enjoy it.
SM: How do you achieve balance in your life?
KH: I have a great support system both at home and in the office. I have wonderful staff that does a lot of great work and they frequently make me look good. At home, my wife is very supportive and she allows me the time and flexibility to do some of these things. She has started volunteering at the Red Cross as well. Even the kids know that giving back is important to our family, so they accept it, and enjoy helping out. They don't give me a hard time if I'm out for an evening meeting. There are days when I don't feel balanced, there's no doubt about that. There are days I feel like I'm slipping of the tightrope. But, I'm a very long term thinker, and that helps me through the unsteady times. I equate it to driving a car looking to the horizon and not the hood ornament. I always look to the horizon, and I focus my business and my life toward the future. Fortunately, my staff and my wife help me with the short-term details, so I can focus on the long-run. There's no way I could do what I do without my staff and my family
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