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| Client Testimonials |
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I was referred to Don, Jr. His professional and courteous service has been outstanding and I really appreciate and value his style and approach. |
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Beverly G. |
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John is professional, friendly and especially diplomatic in dealing with our family finances. He always takes the time to help us understand what is in our financial best interest. He is truly outstanding in his field. |
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Greg & Jennifer L. |
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Rick has my Company's and my personal financial matters in order. He has given me advice on how to improve my cash flow, etc. during these tough times. Rick is very professional. |
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Thomas H. |
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I have shared my experience with other small business owners and new/starting businesses. Comparing notes, I am excited to have such professional excellence serving my business' accounting needs. |
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Bob J. |
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I have received exceptional service by this firm for over 40 years. Mellott & Mellott is a firm of high standards, providing personal attention at all times. |
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Marianne S. |
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| Business Anniversaries: First to Fiftieth - How to Get There
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June 2006
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Sixty six percent of new businesses don't reach their second anniversary, and of those that fail, 80% don't reach their first anniversary (U.S. Bureau of Labor). Only 9% of businesses with fewer than 20 employees celebrate a tenth anniversary (Dun & Bradstreet).
So how does a new business reach its first anniversary? How does a family-run business survive long enough to celebrate its fiftieth anniversary?
To answer these questions, an interview was conducted with Don Mellott, Jr., Managing Partner of Mellott & Mellott, a family-lead CPA firm of 35 employees located in downtown Cincinnati. In addition to providing accounting, auditing and tax services, they provide business counsel to entrepreneurs and closely held businesses, and this year are celebrating their 50th anniversary.
Q: What advice would you give someone interested in starting a new business?
A: My first piece of advice is to write a business plan. This critical process helps the founder take his or her ideas and concepts and put them into the form of a business model. A key part of the plan, and an area where we often help, is in developing financial projections. What are projected sales, cost of goods sold, expenses, and resulting profit for the first five and ten years? While this exercise has many purposes, it serves to crystallize the investment required. This is a critical factor when going to other potential investors or to banks for financing.
I also strongly recommend that the founder surround himself with outstanding professionals such as an attorney, a CPA, and a banker who will be integral to his or her success.
Q: So tell me about the start of Mellott & Mellott and its keys to success in the early years.
A: In the mid 1950's, my grandfather, Leo Mellott, was working for an accounting firm that also did legal work. When the Bar association required a split of accounting and legal functions, my grandfather and Henry Nuelson opened the accounting firm Nuelson and Mellott in November, 1956. Then in 1958, my father joined the firm after spending a few years in the Army and graduating from Xavier University.
In 1963, Nuelson split off and the firm was renamed Mellott & Mellott. Like most founders, my father and grandfather had to work long days to grow the business. They also realized the value of their clients and went above and beyond delivering a quality product and providing unmatched service.
Another key was the ability to generate business. My dad was aggressive in his business development efforts and networking - and did the hulk of it after hours. He sat on boards, joined clubs and worked hard to generate clients and establish relationships with those who could refer clients to the Firm. Many of the clients referred from those initial contacts are still with the Firm today. Lastly, they worked hard to keep costs under control. Francis, my grandmother, served as the firm's secretary in the early days. They truly watched their pennies.
Q: O.K., so a new company gets through the fast couple of years, what do you advise their leaders to do to take their company to the next level?
A: People become key. When a company starts out, its founders are dedicated, work hard, and must wear a variety of hats. As the business grows, the founders must relinquish some of their responsibilities to others, and this typically creates a number of issues.
First, founders must understand their own strengths and weaknesses. For instance, hiring great people is a skill, and a skill that founders may not have. Yet great people are critical to success. So where entrepreneurs have weaknesses or need expertise, I advise them to hire or retain others to fill those needs.
As the firm grows in size, it is important for everyone to be on the same page. Businesses evolve, and I have never seen a new business play out as exactly as detailed in its original business plan. Therefore, the business plan must be updated to reflect the realities that exist at different points in time. This can help focus efforts, especially with new employees.
Q. After Mellott & Mellott's early success, how did the firm continue to facilitate its growth?
A: Client service has always been a key. We were fortunate that many accounts that started small grew large. I believe that the level of personal service we provided was the primary factor in retaining these growing businesses and that we helped facilitate this growth.
Q: A firm enjoys success and the founder's children are beginning college. What is your advice?
A: Communication is key. My advice is to set rules well before family members are ready to join the firm. The rules should include hiring qualifications, expected performance, requirements to advance, etc. The entire extended family, including spouses, should be informed about the parameters for joining the firm and potential advancement. The Goering Center's Next Generation Institute is an outstanding program that covers the issues family businesses encounter, including succession planning. We have had several of our family business clients complete the program and they have nothing but great things to say about it.
Q: Looking back, what were the keys that position the firm to celebrate its 50th anniversary and what advice would you give to others interested in sustained success?
A: My grandfather and dad established key traditions of quality, service and integrity that continue to contribute to our success today. Understanding what has lead to previous success is important, but it is also critical to understand the changing marketplace and to implement a strategy that makes sense to the business in the long-term.
The following is an example of a time where we decided to change one key philosophy of our business while maintaining another. Shortly after I became managing partner, two factors threw the accounting industry into a state of flux. The labor pool was tightening significantly and accounting firms were beginning to provide financial services. We brought in an outside strategic planning consultant to help us better understand these issues and opportunities and to develop a strategic plan.
Based on the process we went through, it was clear to us that we needed to change our HR policies. While we have always paid above market rates to attract and retain great people, we made a strategic decision to improve the working environment for our employees and to enhance the benefits we offered in order to better compete for human capital.
At the same time, it seemed like most of the industry was raving about the money they were making in financial services. Yet as we examined the issue, we realized two key factors. First, financial services were not a part of our core competencies. And second, a key source of clients was referrals from financial service professionals. Here, our strategic decision was to stay the course and to stay focused on our core competencies and not to compete with a key source of referrals.
My advice is to know what has contributed to your success, set and communicate rules regarding the employment of family members, and hire and retain great people. You also have to take special care of your clients and continually market for new customers, and make sure that you continually evaluate your business on a strategic level and then share the strategic direction with your employees. |
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