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When Russ Kleinhans received a referral about a professional business advisor from his long-time insurance agent, he knew he was onto something. That’s when he was first introduced to Fiducial business advisor Mike Bucher back in October 1998 and he has been a satisfied client ever since.

Kleinhans owns a National Automotive Parts Association (NAPA) store in a small town in northern Michigan called Pinconning. He bought the existing business from someone he used to work when he was a teenager. After acquiring the store he drew upon Bucher’s expertise to help make the process a smooth transition.

“Mike basically helped me get started with all the corporate information,” said Kleinhans who had previously been a partner in another business and did not know what to expect after taking control of his own operation. “When you get right down to it with all the taxes and paperwork involved starting your own business it opens your eyes in a hurry,” he said.

The current auto parts market is a difficult one throughout Michigan due to layoffs by major industry suppliers and automobile manufacturers in the state. With that in mind, Kleinhans has diversified his stock to cater to a number of different markets such as tractors, agricultural, lawn and garden vehicles. His store has also branched out into the heavy-duty truck market.

Bucher along with Fiducial district manager Dale Ellery have been instrumental in positioning the NAPA store to prosper despite the tough market. Early on they helped him set up his business entity as an S Corporation to keep real estate separate from the corporation.

“Dale and I explained the advantages to him of choosing an S Corporation because if you dispose of it there are some big tax implications if real estate is sold,” said Bucher.

Steady, ongoing relationship

They also suggested that Kleinhans form a C Corporation for the business end of the venture which has given him certain tax advantages.

“He has a large inventory that was growing constantly and it was hurting him tax-wise,” Bucher said. His client’s primary area of concern is inventory control to make sure he’s fully stocked and competitive.

“People are much more price conscious in northern Michigan,” he said. “The farther north you go the less people make.”

On the importance of inventory, Bucher explained to the owner that’s basically profit reinvested back into the business. The lesson has not been lost on Kleinhans.

“He’s an astute businessman,” Bucher said. “He knows what he had on hand and keeps key items there. To be successful, he knows he has to specialize in certain areas. He has part of the store set aside for high performance items and that gives him a niche market.”

It’s not just the typical business advisor-client scenario between Fiducial and the NAPA store owner. As Bucher says, it’s more of a steady, ongoing relationship.

“If I can’t answer the questions immediately, I will find the information,” Bucher said.

Taking away the burdens

This fall will mark eight years that Ellery, Bucher and Fiducial have been in the store owner’s corner.

“They took a burden off the personal end for me,” Kleinhans said. “Probably the biggest thing they’ve done for me and my business is when we sat down and separated the corporation to try to divert some of the income which lessened my tax burden.”

Fiducial pros have also outlined some inventory and earnings goals that they wanted the NAPA store to attain. They meet with the owner about 60 days before year-end to gauge the company’s progress and offer some suggestions for improving performance.

“That’s been excellent,” Kleinhans said. “My thing is I don’t want to wait until two weeks before the end of the year and find out there’s nothing I can do about it.”

So far, it’s been a mutually beneficial relationship for both parties. Over the years, Kleinhans admits that he’s saved “some good amounts” on taxes thanks to Fiducial’s proficiency.

Just as he was once referred to Fiducial, Kleinhans now spreads the word to fellow entrepreneurs looking to improve their businesses.

“I’ve told people this [Fiducial] is where I get it done,” he said. “Here’s the phone number and this is who to call.”