POSITION YOURSELF.

• Author: STERN, ADRIAN
• Position: Moving towards client advocate role

To call the economy's growth over the past 10 years anything less than an explosion would be an understatement. Although America has experienced periods of high economic growth before, what differentiates this expansion is the unprecedented wave of transactions between small businesses. A small business is one that employs less than 500 people, according to the Small Business Administration. With this as a benchmark, more than 98 percent of businesses in the greater Los Angeles area are considered small businesses. So, it's safe to assume that the opportunities available for professionals to work with small businesses are numerous.

Here's an interesting fact: When small business owners were asked in a Harris Poll who they rely on the most, the CPA was rated as their number one adviser--ahead of attorneys, insurance brokers, money managers and investment bankers.

If CPAs are small businesses' most trusted advisers, why is it that when our clients sell or purchase a new company, our fees are traditionally the lowest of all the professionals involved? Typically, attorneys, investment bankers and even business brokers earn two to three times what the CPA does on such transactions. It's an issue of client perception and the CPA's role in the business transaction. Fortunately, perceptions can change, as can the CPA's role.

PERCEPTION

As CPAs, we understand and cherish our role of independent watchdog. However, in many ways, the marketplace fails to compensate CPAs and other watchdogs to the same degree as other professionals. Let's look at some related examples: a police officer with 10 years experience earns about $55,000 per year while a law school graduate with no experience commands around $120,000. Similarly, an Army sergeant earns about $30,000 per year, while a Web designer with one year's experience could pull down as much as $75,000 plus stock options. Or closer to home, a CPA firm's audit fee might be $30,000, while an investment banker takes in around $500,000 for closing a deal.

Clearly, society does not economically reward the enforcer of the rules as highly as the designer. CPAs traditionally have been perceived as the enforcers who say, "No, you can't," not the individual who masterminds the plan for getting the job done. To expect change, we need to reposition ourselves as managers of transactions, not just monitors.

POSITION YOURSELF

To maximize our economic potential, it might be time for some of us to drop the role of independent watchdog and become client...