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Hedman Partners marks two decades of success

Posted: July 2, 2014 6:29 p.m.
Updated: July 2, 2014 6:29 p.m.

From Left, Mike Tonthat, Mike Ciolfi, Calvin Hedman, and Ken Raleigh.

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Hedman Partners’ success can probably be counted by the number of firms it has helped to become successful.

Celebrating its 20th anniversary, the full service tax, accounting and business consulting firm has grown over the years into a 22 person firm.

Founded in 1994 by Calvin Hedman, Hedman knows that it takes a group of people with varying disciplines of expertise to make any business successful.

His firm most often works with entrepreneurs who are extremely proficient in their line of work, great at building a business, but need the help of a larger family of advisors – advisors most small firms can’t afford to put on staff, or don’t need on their staff full time.

“Many times the companies are family-owned. They don’t have a full management team that a larger company would have and truly have to rely on advisers,” Hedman said. “We’re more than just a CPA firm. We bring best practices. We become involved with the owners by brainstorming or helping them with decisions.”

Typical Hedman Partners’ clients are business owners, or managers of corporate clients, and high net worth individuals. Working with firms throughout Southern California, the firm’s clients generally have revenue between $10 million and $150 million – many have multi-state and even international operations.

Among the many clients the firm has helped along the way not only relied on Hedman Partners to grow, but later to sell their business.”

Planning to sell

“We helped them with respect to the purchase of their first building, and with respect to their growth throughout the years including the purchase of additional equipment and long term planning,” Hedman said. “And then we sold their business for them.”

Clients often know how to start and grow a business, but they don’t know how to exit the business they started, and 80 to 90 percent of business owners will say they want to sell the business in 5 to 10 years, he said. But often they don’t start planning far ahead enough to position themselves for a successful sale.

While Hedman Partners works to make sure the firm is legally structured to maximize the net proceeds it can realize from a sale, business owners often don’t realize how many factors will affect the successful outcome of a sale.

Buyers want to make sure a business will continue to prosper and that takes planning, Hedman said. The right management team has to be in place to ensure the continued success of the business; key management people have to be in place. It’s critical that the salespeople and operational people are very strong, as well as the people that oversee those departments.

Hedman was faced with the same challenges as he grew his own firm. When he first launched Hedman Partners in 1994, it was because he had been working with a partner in another firm that didn’t want to continue growing, and he did, he said.

“It was a big change going from a large firm to a small firm where I had to take over some clients and grow my business at the same time,” he said.

For the business owner who wants to sell a company that is equipment or technology-related, it has to plan to have the resources to operate and go to the next level of operation because its business may be one which is subject to a lot of change. A company also needs to be sure that its customer base is diversified.

“There’s a risk for buyers if the business is concentrated into just a few customers,” Hedman said.

Bottom line, one or two years just isn’t enough time to plan to sell a business. A sale requires long range planning to get the most out of a sale. The goal is to put a business owner in the position where the company is structured to minimize their taxes and maximize net proceeds in any sale so that the owner can retire comfortably, and ensure their employees have a job to continue on with, he said.

Citing his own firm as an example, Hedman said his company grew to the point where he needed to bring in partners with expertise in particular areas. Today he has one partner who specializes in audits of financial statements and two who have an expertise in taxes.

“We’ll look at a business and see if selling segments of the business may be worth more than selling the business as a whole.”

The firm also takes pride in having protected their clients by properly structuring joint venture processes to ensure their clients receive their appropriate share of profit participation or auditing 401K plans for companies.

Hedman Partners also developed specialties in the real estate arena, working with investors, land owners and large residential builders to ensure accountability when there are joint ventures involved. It also handles 1031 exchanges.

But Hedman’s firm grew into its specialty areas over the years.

Beginnings

After college, Hedman first worked for international CPA firm Grant Thornton, the sixth largest U.S. accounting and advisory firm where he worked with middle market companies and large public companies. A resident of Santa Clarita since 1977, Hedman went on to work at another company before splitting off to form his own firm in 1994.

“I enjoyed working with lower middle market companies much more,” he said.

Saying he’s “enjoyed it ever since,” Hedman hasn’t looked back since starting his own business. But Hedman has witnessed some changes in the business community over the past 20 years.

“Back in 1994 many of the business owners lived here and they enjoyed working with someone who lived in the community; they enjoyed being part of the community,” he said. “It’s changing as a result of the success of Santa Clarita in attracting so many businesses. The business owners often live elsewhere. They enjoy the benefits of having their business here, but they’re not as community-focused. They have ties elsewhere.”

Looking back, Hedman said that for him personally the ability to live and work in the same community, be involved in different community events, and having his base here is very rewarding.

He feels that his tie to the community and the longevity of the employees, the majority of which live in Santa Clarita, has been the key to the success of Hedman partners.

“We have a great team. It’s not me, it’s the people that are on the team - that’s what’s contributed to our success,” he said. “Without them we wouldn’t have been able to grow and provide the service we do.”

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