My accountant said to hold off on hiring until Q3, and I should have listened.

I run a small machine shop in Sterling Heights, and back in January, my accountant, a sharp guy who's been in Detroit for thirty years, told me not to bring on a second shift lead until at least July. He said he was seeing a dip in orders from the big automakers and that the summer would be a safer bet. I was swamped with work at the time and thought I knew better, so I hired a guy in March. Sure enough, by May, two of our main contracts slowed way down, and now I'm stuck paying a full salary with not enough work to keep him busy. It's costing me about $4,500 a month I didn't need to spend. I should have trusted his view of the bigger picture instead of just my own shop floor. Has anyone else gotten burned by expanding their team too fast around here?

3 comments

3 Comments

patricia_kelly2mo ago

My accountant is basically my business psychic.

faithn512mo ago

Yeah like my friend's tax guy told him to hold off on a big buy last year, saved him a ton. Totally get what you mean @patricia_kelly, some of them just see things coming.

mark6118d ago

Saw a piece in Crain's Detroit last month about how the auto supply chain usually lags behind the big guys by about 4-5 months. @faithn51 basically nailed it about accountants seeing things coming, that's the whole point. My old shop in Warren got hit the same way back in 2019 when we hired a second press brake operator right before a GM parts order got cut. Ended up eating that salary for almost six months before we could get enough side work going to keep him busy. The worst part is you know better for next time but that doesn't help your bank account right now.