In 1970, during the midst of an economic downturn, Ralph Summerford, an accountant at the time, was witnessing how his co-workers from the firm he worked for were becoming jobless. Due to the outcomes of his co-workers, Summerford explained in an interview with Fraud Magazine that, "Job insecurity convinced me that I wanted to be in control of my destiny," which led him to quit his job and start a firm on his own. In 1992, he founded his firm and named it, Pearce & Summerford, P.C., Certified Public Accountants, and only had himself as an employee. He explains that for six months he worked from home and, "bit the bullet and leased an office in the downtown [Birmingham] area right in the middle of the attorney firms I wanted to work with,". In 2006, he remaned his firm Forensic/Strategic Solutions, PC, becoming a shareholder with two other accountants. Summerford's business has grown, and he now has offices open in in Birmingham, Alabama; Dallas, Texas; and Los Angeles, California. He has fourteen employees working in his firms, and although he has shareholders, he is still president of his firm and his own boss. His fear of not knowing what his oucomes could be having to work for someone else, led him to become a very known forensic accountant specializing in all areas of fraud. In his interview with Fraud Magazine, Summerfold explains his journey from how he begain his firm to where he is now. He entails how he works to have fun, to be challenged, to be mentally stimulated, and to "get out of bed each day and go to work!"
An Interview with Ralph Q. Summerford, CFE, CPA, ABV, CIRA
What were the circumstances when you started your first business?
I had prepared very little when a partner and I started a traditional CPA firm in 1972; we just had lots of desire, dreams, and ambition. Luckily, I landed a client who was a professional sales training consultant who counseled us on how to sell our services. I sold my interest in the accounting practice in 1985; then I actually prepared a quasi-business plan when I bought a motorcycle and ATV business later that year. Unfortunately, I didn't complete the plan before starting the business, and I omitted two critical due-diligence items. I didn't consider the Japanese Yen's effect on the dollar. And, secondly, the U.S. Consumer Product Safety Commission had banned the sale of three-wheel ATVs in 1987 - that was more than 70 percent of my business. That regulation destroyed the industry for many years.I learned from missteps. When I began the forensic accounting business in 1992, I prepared a detailed business plan and the plan worked; I still have it today and use it as a model in current business planning and developing strategy.
What are some of the best reasons to begin a fraud examination/forensic accounting business?
There will always be a demand for these services. The work is absolutely fascinating and you get to work with true forensic and legal professionals. The work is mentally stimulating. Each day is different and the challenges are unique. And it's fun to get out of bed each day and go to work!
What kind of character traits, practices, and skills should a CFE possess to begin a business?
The needed character traits depend on your niche. If you want to testify as an expert witness, you'll have to have mental toughness, a thick skin, and a type-A personality to spar with attorneys. You'll have to accept the fact that an attorney might discredit you as a professional if he or she can't find a way to successfully discredit your testimony.If you work in a support or consulting role, you'll need to be a great technician, thoroughly understand this business, and be able to demostrate an outstanding skill set. You'll need the ability to stick with a job until it's done, whether that job takes 10 or 80 hours and your report is due yesterday.Dress like a professional, which most of the time is conservative business attire. We actually provide classes for new staff members on looking and acting like a professional. If you only get one chance to make a good first impression, why start off at a deficit?
When you first started your firm, how did you go about building your client base and your anti-fraud practice? What business development strategies worked best? What didn't work?
When I began my forensic accounting business in 1992, I made the commitment to only perform forensic services - no tax, no audit, and no traditional services. Back then, some folks thought that forensic accounting involved providing accounting services to dead people, so I had to educate my target!Marketing consists of advertising, public relations, and networking. I couldn't afford advertising so I depended on PR and networking, which are the strategies that still work best for the firm.I began speaking at local professional meetings and wrote articles for local professional publications. The combination of these activities in my marketing plan worked. Later I tried advertising but found it was very expensive, hard to do effectively, and didn't work. I tried publishing company newsletters extolling our services for potential clients, but that strategy didn't work either.
What do you see as your biggest challenge as a small business owner?
Staying on top of all the issues plus new regulations and standards affecting the practice areas in our strategic focus. Additionally, some states have archaic restrictions about practices that are extremely difficult to navigate.In the early days, we viewed perpetuation of our firm as our No. 1 challenge. However, we now have the people, processes, and procedures in place to make that happen.
Would you be willing to share something that no one tells you when you start a business, something you had to learn the hard way?
There will be many people who will tell you they will help you - they will not. However, others will help you whom you never expected. Also, if you don't have selling skills, acquire them.