Geibelson, Young & Co. – Husband and Wife Duo Treat Clients Like Part of the Family
Melody Young and Jeff Geibelson, the husband and wife team behind Geibelson, Young & Company, sat down with me to describe the ins and outs of being business managers and running their firm.
EMINUTES: Did you open your firm together?
MELODY: No. We were both part of Leventhal & Horwath. After it imploded in the end of 1990, I created a partnership with two other guys who were doing traditional accounting and added business management to it. Jeff and I got married, and he was a successful partner in his firm.
I had to decide what I wanted to do. I could go work for another one of the big guys and do things their way, which was a bit repugnant to me. It was just the old boys kind of way, and I was a new, different generation of business management. I didn’t want to argue about what could and couldn’t be billed. I don’t want to disparage those guys but I simply chose to do business management a little different than the standard guys. The only way to make that happen was to do it my way.
EMINUTES: You’re a wife, mother, and you run the business – can you talk some more about the “old boys way”?
MELODY: Traditionally business management was the older wiser guys who treated their entertainment clients more like they were children, and would essentially pat them on the head and say, “Don’t worry about anything, we’ll handle it all.” And they would do so in a very competent way.
The problem was that the clients never understood or appreciated what was being done. Sometimes the business manager was in jeopardy because they absolved the clients of responsibility, therefore making all the responsibility that of the business manager.
And most importantly, the business manager typically charged on a percentage or on an hourly basis. I felt that neither of those worked right. We don’t like hourly and we really discourage it. You’re often being second-guessed by your client. One month it was $2,000, the next month it was $3,800.
JEFF: When clients are charged by the hour, they are concerned with racking up time. They could have a problem and not want to make that phone call because they think it’ll cost a few hundred dollars, and it could be the most expensive phone call they never made.
MELODY: We don’t charge percentage fees, because the business manager is not actually acquiring income for the client, [not securing] the next movie or job the client works. And the business manager’s workload does not increase in line with the amount income the client makes. So if the client started out making $250,000 which suddenly went to one million dollars because their film did well, did the business manager’s responsibilities quadruple? Not likely.
And we’re the person on their team who’s responsible for saying what is the best deal. It felt hypocritical to me to assert that we were entitled to a five percent. Those were old style ways. A lot of them are still going on. But we don’t do it that way in this firm.
A difficult issue is that it’s important to balance being a mom with having a career. I have been grateful to see the new generations of clients appreciate it. I’m passionate about my career. I love what I do and yeah, the clients call me at home. My daughter rolls her eyes and says, “Which one is it this time?” But it takes five or ten minutes, and then life goes back to what it is. She’s been coming to the office since she was–
JEFF: Six weeks old.
MELODY: Yeah. It allows me to bounce in and out. I go to everything she does. We relocated our offices from Century City. It was becoming a two-hour commute, the time had to come from somewhere, and I didn’t want it coming from her. I’m very conscious about leaving that Blackberry alone.
JEFF: When Melody started her own firm, there weren’t many business managers that were women.
EMINUTES: It seems to me it was a very male dominated field.
JEFF and MELODY: Yes it was.
MELODY: When I was at Leventhal being groomed for partner, I would go to management meetings. Out of 100 people, there would only be a handful of women. And they’d be happy there were that many women. It was surprising. I’m homegrown from my dad’s construction / manufacturing company where you learn to swear like the truck driver just so they’ll listen to you because you’re this little punk girl. Most women capped out at staff accountants. They would maybe get to a senior level, and then they would stop.
JEFF: They’d go home, get married, have babies, and pursue something else because this was a fulltime career. Firms were unwilling to accept someone working on a part-time basis or coming back after the baby.
MELODY: But it’s getting better. I’m really happy about that.
JEFF: It’s very much better.
EMINUTES: What’s a typical day in your life?
MELODY: The most typical part of the day is that it’s not typical. Not at our level. You walk in with an agenda of what you really need to happen, and you’re just appreciative if a fraction of it happens. The emails and phone calls of every client’s life and their agenda for the day becomes my agenda for the day. It can be anything from a client with an employee problem that sends us off on a research mission with labor lawyers; to the buying of an exotic car that I know nothing about, and how I’ll accomplish that at a reasonable price; to a client who wants to start a new business or investment; or has a problem because they can’t live with their wife anymore. God knows what’s going drop in your lap when you walk in the door.
For bookkeepers, it’s routine. They have their responsibilities that happen day in and day out. Invariably in a day I’ll approve checks and look at deposits and see normal flows. But mostly I have no idea what the day will bring.
JEFF: I have three piles on my desk: things I have to do today, things I have to do this week and the third pile is things I have to get to. By the time I get to the third pile, it’s usually gone because it just didn’t get its importance. Sometimes I don’t get to the “today” pile because I’ll get an email or phone call from a client.
MELODY: The “have to’s” happen at night and on the weekends because they have to.
EMINUTES: So you work on the weekends?
MELODY AND JEFF: Yes.
EMINUTES: This is probably a misconception about your job – that you have a normal weekend.
MELODY: Right. It’s one of those 24/7 jobs. Because even if client’s aren’t calling, we’re thinking about their issues. We’re working out possibilities, solutions, and ideas. We’re running their lives, so we never leave it.
JEFF: I think the most common misconception about our job is that all we do is write checks and pay bills.
MELODY: And do tax returns. And the depth of what a true business manager does is significantly greater.
One of the problems in our industry is that a lot of people feel it’s as simple as paying bills and doing tax returns, and any firm can do it. So they’ll just hire a bookkeeper. I don’t mean to disparage them, but it’s a true undermining of the value of a business manager.
One of the great benefits of working in business before I walked into the generics of accounting, was I understood the diversification that comes with business and the problem solving techniques needed. A business manager is very much a generalist. Sometimes a client calls to ask about something, and we start to spew accurate, competent information and we’re surprised that we knew that. Where in the heck did we learn that? Well, over the years our clients have sent many research projects our way, so we built an enormous vat of knowledge. And knowing enough to know that you don’t know is important. Often you need to find another team that’s going to help solve problems. The client typically starts with us.
EMINUTES: So whether a client wants to buy an antique car or get divorced, they typically call you first?
MELODY: They tend to. And then we start to bring in the team as necessary. We’ll tell them if they need to talk to a lawyer because we’re not lawyers, we not registered investment advisors, we’re not insurance brokers. If the client has his own his own board of directors, we will sit on that board and add members to that team that help run that business. That information comes from us.
JEFF: We’re the 411 for their lives.
EMINUTES: You are the 411, and sometimes you will forward the call?
MELODY: Yes, but we don’t just forward and disconnect. We stay involved. So when our clients meet with their investment advisors, we meet with them. If they’re getting a divorce, we’ll frequently meet with their lawyers. We’re always in the middle of all this. We know everything going on.
EMINUTES: Do you have any advice for an entrepreneur starting a business?
JEFF: When starting a business, you have to know what you want to do. You have to have passion for it, and have the ability to finance it, and have the back-up. Look at other people who have dealt with the same products or services. Find out what the market is.
I would say that our business is helping clients in three ways. One, making sure our clients [actually receive all of the money they are entitled to]. Two, making sure they keep their money by effective tax planning and watching their budgets. And the third part is making their money grow. When I handled the rock groups, we used to say to them, “You’re going to sell a million albums, you’re going to make a million dollars. How much money do you think you’ll get from the record company?” And the answer would be, “A million dollars.” Well, it isn’t. The answer is you’re not going to make any money on that because of all the costs that are attributable. We get them to understand their business and understand their lifestyle.
EMINUTES: So you’re often the bearer of bad news.
JEFF: Very often. Or the bearer of advice that clients don’t want to hear.
MELODY: Even more so, I think we’re their conscience. You’re your own worst enemy when you’re listening to your conscience. You say, “I know I’m not supposed to do that.” We’re that person in their mind. They know from working with us what we think. Unquestionably it’s our job. We’re on their side and they know it. Every client has a different agenda, so our agenda is different. We have no straight platform that says this is the way it’s going to be.
EMINUTES: You’re rooting for them.
MELODY: Absolutely. We lose sleep over them. We’re passionate about them.
JEFF: Our job is to be the Vice President of finance for our client’s lives, which includes not only their business life but their personal life, as well. If they want to buy a house, they have questions: “How much can I afford? Where do I get insurance? Financing? A broker?” We take care of all of those things, leading them to the correct places.
EMINUTES: So you make a lot of referrals?
MELODY: We do. We’re a good source for referrals. We end up having that leverage which the clients win by. There are business managers out there who take fees from these things. We do not do that in any manner. So we have a great amount of power to use because of our influence with our clients when it comes to the deals that they get on their cars, or the rates that they lend. We go straight to a source when we deal with mortgage refinancing; we don’t use brokers. Some business managers do because it’s easy to just hand it over to a broker, but we don’t. Because our clients are not paying the brokers, the rates we get are great. So our clients win. We might buy and sell more houses than the average realtor out there. The same thing with mortgages. Our investment advisors are scared to screw up on a client, because it’s not that client. It’s the entire relationship, which is a whole lot bigger than any one of those clients. So we’re a great resource, and we’re constantly being hounded (smiling).
EMINUTES:: We generally have to talk them down from a two million dollar house to a million and a quarter house. We deal with the brokers up front saying, “Look, this is what they can afford so don’t go show them the two million dollar house.”
EMINUTES: Because you’ll be watching!
JEFF: I’ll be watching!
EMINUTES: Let’s talk a little bit about your background.
MELODY: My background is in private business. I started working in my father’s business when I was in high school. I filled in for a bookkeeper and learned how to do payroll. I ended up working for the next eight years within his organization. He was a self-made guy. He started with furniture manufacturing eventually worked in developing. I got a phenomenal education working with him. I went through school with the intention of being a lawyer but I fell in love with business.
I ended up in an accounting firm in business management, because I had such a good ability to deal with many different kinds of jobs at one time. I was an overqualified bookkeeper.
I was given opportunities and mentored partly by that man (points to husband Jeff) and went back to UCLA, took the accounting courses that I needed and strengthened my academic background. I eventually left and started my own practice.
JEFF: I started out as a traditional accountant and worked in the tax department as an auditor for what is now BDO Seidman. Then I went to a small firm in Beverly Hills. That firm grew and one partner was up to his ears. He just couldn’t handle any more and I was getting tired of the accounting side of the business. So I got involved in business management in 1974. I started out in the music business. My first client was Electric Light Orchestra.
EMINUTES: Did anyone give you great advice over the course of your career?
MELODY: My dad was great with advice. The first and most important thing he ever said was that you should never worry about the money. Just do what you love the money will come. That’s what constructing this business has been about for me. There have been times I haven’t loved this business because I marched to somebody else’s tune. It was disturbing. The more I made this business something I loved, the more successful we got. Our employees are phenomenal. We take priority in taking care of them.
EMINUTES: I’d like to talk to you both about your first job and your worst job.
MELODY: My first job was at Robinson’s Department Store. When you’re 16 years old, you’re pretty nervous and insecure, and you’re selling to people. You got a temp job at Christmas and you made it last. I learned that I was a people pleaser. I really liked helping and talking to them.
JEFF: My first job was working for my father when I was maybe 10 or 12 years old. He owned a Five-and-Ten in Van Nuys. And he had a post office – one of these substations. I used to help run it. It was when the discounts stores were starting, and his advice to me was to treat the customers well. He said, “Let’s remember Mrs. Jones, her children’s names, and ask how they’re doing.” An indoctrination into dealing with people and sales. My worst job — I was a landscaper’s assistant for about two days. I had to transplant a bunch of seedlings into little pots and by the second day they all died. So I have a black thumb.
MELODY: My worst job an auditing job. Oh god, it was brutal. Very monotonous.
EMINUTES: Jeff and Melody, you work together in the business but you have your own sets of clients?
JEFF: Yes.
EMINUTES: You have a joint set of standards regarding your goals and the quality of your business. But when you make a decision as to how you want to execute on your business plan, how does that happen?
JEFF: She does it.
MELODY: (laughing) I do it. Jeff and I are very different. In style, he is a manager. In my world, I am the planner. I’m the one that’s concerned about technology and changes and rules and growth. Thankfully, Jeff is amazingly easygoing. So I pretty much walk in and tell him what we’re doing (laughs). Jeff’s always been that business manager who didn’t want to be the partner in charge of an office. He just wants to run his practice and do his thing. So he does.
We take for granted each other’s level of integrity and ethics. They are identical. We’re husband and wife. There are never any issues there. There’s never concern about how something should be handled. It’s a non-issue for us. I remember when I had other partners and I wanted to fire a client because I felt that they were ultimately going to be detrimental to us as a firm, I would have to battle with those partners because of the desire for the fees on their part. There was reluctance to give me credibility. A true benefit of the marriage is that this doesn’t come up between us. I don’t even ask Jeff about firing a client if I feel it needs to be done. And if he needs to fire a client, he needs to fire a client.
Short of that, the rest of the responsibility of running the practice is really on me. I come from that entrepreneurial background and it’s something that I love.
EMINUTES: Would you say knowing when to fire a client is one of the toughest lessons you’ve had to learn in your career?
MELODY: Yeah, that’s probably the hardest thing. The great worry is that you wait too long.
JEFF: We don’t want to have a client who gets into trouble complaining about his problems at a cocktail party. And somebody says, “Don’t you have a business manager?” and he’ll say, “It’s Jeff Geibelson or Melody Young.” And they’ll say, “Well didn’t they do anything for you?” And it’s really the client. We can guide them, counsel them, try and pull them back. But when they’re going over the edge, you can’t control it. And that affects us. Because ultimately it’s the client’s money, and the client can do what they want.
MELODY: If we feel like they’re not listening, then we don’t want to have that client. We also don’t want that client to be abusive and damage our relationships with our employees. But we’re so invested with our clients, so we are always hopeful that we can turn them around by saying the right thing. Marlo Thomas wrote this great book, The Right Words at the Right Time (www.rightwordsbooks.com). Maybe you heard something ten other times, but somebody says it at the right time and boom — it’s life-changing for you. I’m always hoping that I’ll find those words and affect that client.
Also there can be employees that you had for years and really like, but there are little problems you hope to correct. God forbid you don’t and they make a mistake that costs you the firm. That’s a big issue.
JEFF: I have a lot of older clients who have been through their professional career, and they’re living off of the assets. One of my jobs has been counseling these clients to pull back on their lifestyle and take a look at what they’re spending. I’ll say, “If you keep going at this rate, you’ll only have X number of years before you’re going to run out of money and that’s too early. So you may have to sell the big house or you may have to get rid of the three house servants.”
MELODY: Hopefully that conversation doesn’t have to happen. I have a lot of young clients who we try to protect from getting to that place.