"Entrepreneur's Show's" Interview of George Famiglio, Sarasota CPA
George was interviewed by The Entrepreneur's Show and discussed the state of the economy, the history and ideals of our firm, tax preparation, and how we help our clients grow. Listen in, or read the transcript:
Host: Alright, well, with a very warm welcome let’s introduce George Famiglio of Famiglio & Associates and, George, could you say hi to our folks and could you give us some information on what you do...
George V. Famiglio
Famiglio: Well, my name is George Famiglio. I’m located in Sarasota downtown on Main Street—1634 Main Street—I’ve been a CPA for over 30 years, had a firm and been practicing, you know, CPA-ship with my own firm since the 70’s and that’s been helping the small business, mostly the entrepreneur—mostly investments. And then today, of course, the biggest thing is holding hands with people, trying to get them through the slack off in the economy and then the real estate problems that we have.
Host: Well, let me back track just a little bit. You got into…you got into CPA work about 30 years ago… where did you go to school and, did you…I understand you have a Master’s Degree in Tax Law, is that right?
Famiglio: Well, if you want the quick background, I didn’t start out as an accountant. I had this vision of being a…going into Nuclear Physics, and I was a physics major first and then I realized soon in college that I might be 55 with a PhD working for a big company and I didn’t think that was my path in life. I really wanted to…I wanted to really to be an…I wanted to be on my own, you know, and I figured, okay, so I changed. So that was my start. That was out of Philadelphia, you know, I went to Saint Joe’s University first for that. And then later on…later on I went to Villanova Law School and I got a Master’s in Taxation after I became a CPA.
Host: Woah. Isn’t that, well that’s quite a switch going from physics to a CPA. I guess for some people like me they might both be equally confusing though. (Laughter)
Famiglio: (Laughter) Well, actually, I want to add a little more confusion to … I went from physics, I ended up with a psychology degree, went back to Drexel University in the meantime, and got all by business courses including all my business law and accounting and everything that was necessary, became a CPA, then went off to Villanova Law School.
Host: Oh my goodness. Oh my goodness. That’s…that’s an incredible background and then you opened up your accounting firm here so over the years you’ve seen and helped quite a few businesses locally and I guess in the state of Florida?
Famiglio: Well, yes, originally I practiced outside of Philadelphia until 1984 when I moved down here to Sarasota.
Host: And then, down here. And it was interesting cause I talked to various people and there’s little start ups, little company here and there, and then your name keeps popping up and they go, “Well you got to call George because he really knows how to start businesses”. Let me pick your brain on some issues. Today the real estate is going through such a turmoil. Do you have any thoughts on what people might consider doing going forward whether buying or selling? Where does your limited crystal ball tell you the industry’s going to go?
Famiglio: Well, we all like to say we’re… we’d love to turn the corner tomorrow, but that’s not happening. But I do see a ray of light right now because with a quick survey between the real estate brokers that I handle and my construction clients and clients in general there’s a little more optimism in the last two or three months than before. I’d say 80% are saying that a) we’ve got some jobs coming in and some of my construction clients all the sudden have landed some bigger jobs and they’re actually, there are two or three that I know that are actually thrilled to death because they say…they’re like, they are doing phenomenal but, whether that’s all across the board, I’m not so sure. But I do think that it’s a buying time for real estate anyway, but that’s my own personal feeling on it and I think it’s going to last a while.
It’s not necessarily a short, you know, time fuse…we don’t have a short time fuse here.
Host: Uh huh. Where do you see the future of this, I guess I would call it an Obama economy, if you will, do you think this huge debt is gonna keep pulling money out of the private sector or do you think it’s… how long do you think this is going to last. And again nobody’s going to hold you to this. This is just, you know, a gut feel.
Famiglio: Well, my gut feel is we’ve got five years of cleaning up and what the credit market did to everyone is pretty serious.
Host: Uh huh.
Famiglio: We’re… when the deficit is so large, the outgoing money is so large… they’re going to have to get the money from somewhere. Everyone believes that tax rates are going to go up, but I don’t think I’ll have a fight on that.
Host: What about the foreclosure rate in the state of Florida? How do you see that?
Famiglio: Well, you know, we’re still in the, the mist of it, and that’s still… unless the…there’s going to be a lot new legislation or some other plans coming out we’re still going to have to fight through that. That’s going to be the… we’re in the front lines right now of that type of war or that type of battle and a lot of people are getting very much stressed out. There’s a lot of anxiety out there. I found in the last year or so, I became, I guess, a business psychiatrist—I’ll coin that phrase—I’ve done a lot of hand holding, offering a lot of ways out we do try to map out different courses people can take. Some take experienced some stress related to the real estate market that they’ve never knew in their life and so we’ve had to actually help people in terms of mapping out a course whether it’s a short sale or whether, you know, foreclosure’s the answer or, you know, what about the tax effects—they can be pretty serious. They can… there are some damages and some opportunities they can take advantage of to get out of the, you know, the debt relief, you know.
Host: You know…you know, it seems like again from the people that I’ve spoken with and nobody’s really, nobody’s really talking a lot about you, but what they’re saying is that you’re almost like a, almost like a silent partner in a way. You help people out. So, it seems like you and your skill set go way beyond just compiling somebody’s books at the end of the year.
Famiglio: Well, I, I have a major love of people. It’s always been in me. I love helping people, it’s just who I am, and I, you know, I’m sensitive and when people have problems, I make it my own so that I can maybe walk in their shoes and try to help them with the strategy that will, you know, get them to the next level.
Host: You’ve seen a lot of businesses, George, and these businesses—some have failed some have succeeded, some just continue going on. As a general perspective, when you look at businesses that fail and succeed. Maybe I can touch on a few topics—management skills. Where do you see, what do you see are the common management skills that allow businesses to move ahead?
Famiglio: Well, I’ve always been strong on customer service. If a business person has the attitude or a manager has the attitude that you always want to give 110% of what you’re paid for. That, to me, always works. That doesn’t mean that you routinely throw money away. I mean, in terms of attitude, in terms of quality, in terms of caring, in terms of understanding, and people are generally good. They’re going to sense that. Now, I’ve experienced this because that’s the way my staff is trained. You know, people, when they know that your whole staff is working for the customer, the client, the patient, and they feel caring and an honesty and knowledge and confidence. That is, to me, a great business model.
Host: So, that would also tie in with your …with the things you look for, let’s say, when you’re hiring new people.
Famiglio: Well, I…when I hire new people I like motivation. I like people that have the passion. You know, you need to work with people that have like-kind goals and ideas and so I tend to be passionate, I tend to love what I do and I try to look for people that have the zeal for progressing and if someone has the mind and even if they need knowledge I’ll help them get that knowledge, but they have to be motivated to w ant to serve people, and they need to be motivated to be creative in their business in terms of finding a better way tomorrow of how to do it more efficiently with technology, with people skills, you know, and to have an understanding of people in general.
Host: Sure, now it’s interesting sometimes I talk to people and their starting businesses or even growing businesses and they go, “You know, don’t plan too much, don’t try laying it out, just do it”. And then, (laughter), and then there’s other folks I talk to and they go “Well, if you don’t plan, you’re really…you’re really going to screw up”. Where’s your psyche, so to speak, fit on the plan everything out or just go ahead and do it and see where it shakes out. How do you see that?
Famiglio: Well, the rolling the dice and the shooting the darts on the wall doesn’t have too much common sense or science behind it.
Host: Uh huh.
Famiglio: Sometimes experienced professionals, experienced business people, experienced medical personnel… they can do that once they have a lot of experience down the road, but up front—no. Because you get a sixth sense after a while, because it becomes 2nd nature to you when you’re business—your judgment acumen and your judgment abilities become so entwined that it’s easy later on, but never upfront. When you’re starting a new business you’ve got to have a plan. Now, I’m not one to overdo the plan and get into such detail that you’re mesmerized or you become obsessed with the detail, okay? Because that could maybe throw you off to the wrong road too. I believe in the principle of balance. So, yes you do need a plan, you need to have knowledge in that area, you need to do a market analysis whether you hire professional help or you’re qualified to do it on your own—you have a gut feel—you know, or you have a sense of it. You know, that’s fine. It really has to be, you know, planned and the one key there that I…the one weakness…let me back up—one weakness that sometimes people have when they’re starting businesses is that they put off their bookkeeping and quality control and turn it off for a while and they figure they’ll fix it later on or a year later. We sometimes get new clients that come in and, you know, after—way after the fact—and maybe their books are a mess and they didn’t do things right. It’s money well spent because it’s a very conservative type of money. It’s inexpensive to do it right from the start. Learn it from the start and keep the right set of records, and that’s just a side point, but we see that a lot. Sometimes business people, not spending enough attention and time up front trying to, you know, do the right thing there.
Host: Sure. Now over the years you’ve probably been involved with buying and selling businesses, helping your clients buy a business and helping your clients sell a business. And those are really… those two things are so close together. Would you have any thoughts on folks interested in either buying or selling a business? What to look for? What to…what to focus on?
Famiglio: Well, if they’re going to buy a business, number one they have to know that business. I mean they have to know the type of business. They shouldn’t go into an area where they have no knowledge on, I mean, we all know the saying the grass is not greener on the other side or the acres of diamond principle, you know, from Earl Nightingale. You really need to know your own backyard. You need to become a specialist at knowing what you’re going to get into. So, buying a business—you need to know, understand the business, you have to look at the history of that business. You have to really look at that cash flow, you must analyze the income statement and see what’s in there and see if the bookkeeping’s correct or has it been, you know, dolled up if you were to sell.
Famiglio: There’s techniques you that can do when you buy a business to compare, you know, analyze the bank statements for a number of years and do your own comparison and then pass the smell test. Do your own budgets. Say, “What should my rent be? What should my utilities be? What should some of these expenses…and why are they out of whack?” Then on the other end, you know, when they’re selling a business—when someone wants to really sell a business—prepare to sell that business. Make sure the books are correct. Make sure there’s analysis done ahead of time and make sure the buyer is going to get the right information he needs. You’re not going to try to sell…you’re not going to have me real successful buying a business by not having proper records and hiding things or being procrastinatory about things or just not being correct and sometimes we see that whether it’s a sloppiness or just a laxness whatever the motivation is sometimes it’s “You sell it, you sell it”, “I’ve had it”… you’ve got to prepare to sell it and a buyer really wants a nice clean accurate set of books, he wants to know—hey what did you really do? A good sale is good for the buyer and seller.
Host: Huh. That’s fabulous. Now, as a final question—we’re kind of running out of time here—as a final question, you’ve been involved with the CPA profession for as long as you have do you see any major changes coming over the horizon, let’s say in the next few years that people should be aware of?
Famiglio: I wish we had two hours.
Famiglio: Yeah, there are. There’s a lot, actually, especially with the IRS. I’ve said this to a lot of people. The government needs money. They’re stepping up audits. They’re stepping up rules for preparers especially non-CPAs and non-EAs. There are a number of preparers out there that aren’t licensed that, you know, that might not be up on all the rules as applied to their clients and they’re really looking hard on that and ,of course, with the advent of QuickBooks some people think, “Well QuickBooks you can just, you know, garbage-in and garbage-out and that’s okay”. There’s going to be more quality that’s gonna be needed. The rules are just making it that way all across the board. That’s a major trend.
Host: Wow. So, definitely watch your…watch your I’s and cross your T’s and do it the right way or…you think the enforcement’s definitely kicking up?
Famiglio: Oh, they have to. They have to.
Famiglio: They need money and it’s … and we see it happening. I mean, they’ve been writing about it. They’ve been saying that’s what they’re going to do and so the government’s well aware that they need to bone-up their enforcement. So, as for…as professionals, as clients, as customers…all, everyone in business needs to know that. They can by just having the proper records, you know, and not getting behind and having it done in a very intelligent basis. And, you know, the other thing is, too, there’s a lot of credits out there. There’s going to be maybe some other changes in tax law that not everybody’s taking advantage of. That’s…that’s actually a key element.
Host: On the plus side, sure. Well, George, it was just fabulous having you here and thank you for sharing your time. And most of all, thank you for sharing the years of experience that you’ve had with the listeners. It was very kind of you to take the time.
Famiglio: Well, I’m glad to do so and I’m happy to speak. So, thank you for having me on.