cpa targets fast-growing business sectors facing common problems.
by liz gold
cannabizcpa.pro
for sean robinson, cpa, mba, and founder of tebaja consulting llc, his company is helping him answer his calling.
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robinson spent a decade at citigroup in various roles. during that time, he always had a fondness for his first role, which was managing several teams that supported and expedited the financial close process for private equity funds and venture capital investors.
“i love the responsibility of both the role and the function and i wanted to get back to it,” he said.
so, after close to a decade of being in demanding positions that took him away from his family, he took the plunge (with encouragement from his wife, a serial entrepreneur herself) and launched his own consulting firm in 2016.
based in tampa, fla., tebaja consulting is a virtual company, formed from the first two letters of the middle names of his three children. the firm provides contract cfo and controller support and accounting services with a focus on minority and women-owned business enterprises and cannabis and hemp businesses. his services span from tax planning and cash forecasting to month-end closes to capital raise support. his sweet spot is those companies with $1 million to $50 million in annual revenues, in all phases of growth, that are ready to go to the next level.
as it turns out, his clients – whether they are women, minority-owned or in the cannabis industry – all face similar challenges, the first one being they don’t have an accounting infrastructure in place. typically, they have been running their business for one or two years but they don’t have an accounting platform, a general ledger or any type of system to support their books and records. or, robinson commented, they have an accounting system established, like quickbooks or intacct, but it hasn’t been maintained effectively in over a year, hence inaccuracies that result in the need for some serious accounting cleanup. a third issue, he said, is taxes. many of his clients, before they became his clients, hadn’t filed a tax return in two to five years.
“i call it paycheck-to-paycheck living,” robinson said. “they are collecting cash receipts from customers and paying bills as they become due, on a come-and-go basis.” as more and more minorities and women get into the cannabis industry, the demand for reliable, trustworthy and competent finance and accounting professionals who can cater to this demographic will continue to increase.
“minority and women-owned businesses are the two most rapidly growing business demographics in the country. small business owners – specifically women business owners – are the fastest. right behind them are minorities,” robinson said. between 1997 and 2018, the growth rate of women and minority businesses was 58 percent and 45 percent, respectively, in comparison to all other firms (which only grew at roughly 12 percent).
they also have some of the biggest gaps in obtaining resources. for instance, they have limited access to capital and they may not have essential qualitative skills such as accounting, legal, operational management, and marketing.
robinson wants to help those business owners fill some of those needs. being a licensed cpa in new york, washington d.c, california, and florida, he works with clients all over the country. his first cannabis client came from a friend who knew someone with a hemp farm in north carolina who needed a cfo, controller, and general accounting support. the success of that engagement led to referrals from the hemp farmer, which brought in at least a handful of new clients.
“my first stopping point is to get a full sense of all the moving parts of the cannabis client – what is their business experience, how do you make revenues, how many revenue lines, expenses, vendors, etc.,” he said. “once i have the gravity of all the complexities of their business, it allows me to make a sound decision.”
with inventory, for instance, he recommends the fifo (first-in, first-out) method and stresses the importance of a good inventory tracking system. part of what he does for clients is research and vetting of various technology systems so he can match the right system to his client.
“i want to make sure it’s a good fit for a client and make sure it’s economical,” robinson said. “it’s a very cash-intensive business. you don’t want to buy the porsche if you can get it done with the honda.”
that said, keeping up with all the moving parts of the cannabis market isn’t for the faint of heart, given the industry is changing at a lightning pace and there is so much information out there. yet robinson has found his ways to keep up to speed, pointing to trade conferences such as mjbizcon as a tremendous resource. he subscribes to various marijuana and cannabis publications such as marijuana business magazine, mj ventures and the cannabis business times.
“i may not remember everything, but i always walk away remembering something,” he said.
he also pointed to a mobile app that he checks daily, called new cannabis ventures. it provides much of the major cannabis and hemp company activities such as acquisitions, ipos and what stocks are doing well. robinson has also spent time talking with other accounting firms and lawyers who are working in cannabis.
“initially, i thought the biggest thing was 280e but then there’s 263a (uniform capitalization) and (section) 471, which provides guidelines on what items can be considered as cost of goods sold,” he said. “i’ve learned so much now compared to when i first started and it’s a much bigger arena than i initially thought.”
from a business standpoint, regardless of industry, robinson said he sees a lot of potential in business owners but sometimes they fall down because they are not investing in their company’s growth and success.
“you have a lot of really great business owners out there, but several of them end up not being successful, either dying a quick death or slow suffering because they are not taking the time to identify what their critical needs are,” he said. “having the initial conversations with business owners on identifying what their critical needs are and how to address them is crucial – those are the conversations i love to have. i assure them these discussions are an investment and it will pay itself back.”
