Career Focus – Valley of dreams

After ending 25 years in accountancy, passed as a partner and as a member of the English ICA council, one of the things that makes Peter Smith happy is that he is now able to limit his liability.

A career change when he thought it was all up in accountancy has brought him to the small town of Montreuil-Bellay in the Loire Valley, France, where he and his wife Sally have restored a 16th century mansion to accept paying guests.

His new business means he no longer has to live with the risky position of being liable for the acts of his peers.

‘If you talk about business risks, wandering around with unlimited liability has got to be one of the riskiest businesses in the world, no matter what your position,’ he says, obviously relieved the situation has changed for the better.

Smith is reflecting on his departure from the profession to his own business venture which, while it has provided its sleepless nights, is clearly giving the former council member plenty of satisfaction.

In his mid 50s Smith says he knew his career in accountancy was over.

He had reached senior positions but felt his chances of going further were low.

Now, sitting in the dining room of a French nobleman’s house that has taken two years to restore, he looks back on a long career which, though successful, was ripe for transformation. It may have been a risk in itself but the career swap was a change he was more than happy to make.

‘The risk I manage now is that people say they won’t come back or recommend it to anyone else,’ Smith says.

French connections
Life as an accountant began at the intensive study centre Donald Rich & Co where Smith was offered a job as a tutor on qualification. Boredom soon set in, however, and in January 1973, he was on his way to Paris to work for Turquans Barton Mayhew. Five years then followed in the French capital until the firm’s Spanish branch and a possible partnership beckoned.

While there the firm’s UK parent, Whinney Murray, merged with Ernst & Ernst to form Ernst & Whinney, the forerunner of Ernst & Young.

Smith found himself with an invitation to become a training partner in Brussels and spent six years there before heading for the UK to work for Binder Hamlyn as national training partner.

BDO Stoy Hayward
Next came the watershed event – Binder Hamlyn merged with Arthur Andersen and Smith believed he could not progress in the new organisation. A year as a freelance consultant followed until he found himself back in Brussels as part of BDO Stoy Hayward’s management team at the end of 1995. But by this stage plans were advancing for his break with the profession.

Deciding that he was probably in his last accountancy job Smith looked at his pension arrangements to find they were in a mess. Advisors told him the best thing to do was start a business. And he did.

The idea of running his own hotel-cum-guesthouse had been kicking around for some time and a short while later he and his wife had bought their property, La Maison Aubelle. Contracts were signed in August 1997, just 24 hours after the property was found, and restoration work began seven months later to be completed early this year. Smith finished full-time as an accountant in October 1999.

Ask Peter Smith what it’s all about and he says: ‘What you see here is a dream.’

Valley of dreams
You can’t help but agree. La Maison Aubelle sits in a sleepy town where the sun beats down intensely, wood pigeons coo in the trees and crickets chirp away in the undergrowth. The former partner and his wife occupy a wing of the house while the rest of the building has been converted to three luxurious, self-catering apartments with views onto the garden.

One apartment even has its own tower that gives the building the impression of a chateau.

As his wife oversees the menu, Smith serves the local wine, which he bottles himself. He’s a happy man and determined to enjoy his plan. Gregarious and ebullient, he entertains guests with jokes and the history of the local area. He has turned from high-powered accountant to professional genial host, a job that includes not only opening bottles of Anjou for guests but scrubbing the toilets as well. It’s all quite a change.

Sound beginnings
But he is the first to admit that his accountancy background has been crucial to the whole project. Managing the restoration from his home in Brussels was quite a challenge, but his training meant that he was well equipped.

‘Being an accountant is all about projects and having deadlines. There’s no doubt my profession helped,’ he says.

Indeed he believes it was the broad training as ‘a five-year article man’ that gave him the necessary education to be able to cope and there was never any fear that he could not do it.

‘When I was in Paris we were doing lots of investigations for acquisition. And even though I was a manager I was expected to go out and collect the fees.

‘And the thrill I got from appearing back in the office with the cheque in my hands was good. We were very entrepreneurial in the way we ran the practice.’

He adds: ‘Couple that with my year on my own, when I suddenly discovered I could earn my own money and survive, meant that doing this didn’t frighten me at all.

‘And that was the benefit of the training. I’m not just talking about passing exams, but the whole training I got over the 25 years of being a chartered accountant. It made me wonder why I’d never done it before.’

Observers may immediately say he always had the security of the firm and never had to take any real risks, but Smith is quick to point out the nature of being offered a partnership and the status of unlimited liability.

He is also keen to make it clear that the whole project of creating La Maison Aubelle is a partnership with his wife, who has also put in huge amounts of work getting the place up and running and also bears both the credit and the risks.

But it’s clear that Smith’s background in offering advice to clients had rubbed off when he took advice on how to structure his own business.

Top Paris tax lawyers Bureau Lebfevre produced a report that has allowed the Smiths to take advantage of the French fiscal regime.

Legal manoeuvre
A company was set up to acquire the house and then a second company was created to rent the property back so it could be exploited commercially.

This was done for three reasons. Firstly it helped the Smiths sidestep Napoleonic law which says you cannot disinherit your heirs by selling property. The couple now own shares in a company that owns the property.

Secondly, tax is paid at the company rate and they can therefore live off dividend income, or a salary, depending on which is best for them. Thirdly, the structure allows them to claim back VAT paid on the restoration – 20% of the total costs.

‘That’s big money. If you enter a project of this type without the knowledge that you can handle the VAT you are making a big mistake,’ says Smith.

The fact that accountancy training equips people with transferable skills is something that has not gone unnoticed among recruitment specialists.

David Kidd, national executive search manager with AOC, says he has heard of partners leaving to run farms and to become consultants.

One, he says, earns a fortune and works only nine months a year advising on how to reclaim VAT. Other examples include moves to sales and marketing, personnel, managing a jazz band and becoming a wine merchant. One former accountant works as a cartoonist in Covent Garden.

Moving from practice into the commercial sector is a well-trodden path.

‘Generally speaking, chartered accountants are massively marketable and there’s a huge skills shortage. Every company needs accountants and that’s why recruitment is going through a boom at the moment,’ says Kidd.

Strangely though top partners may be the hardest to place because they command such huge financial deals and can only be found jobs with blue chip companies.

Peter Smith has found his way around this by striking out on his own.

It has its pitfalls. Working with his wife means establishing a new relationship and defining new roles. Working from home means creating self discipline and making sure you remember you’re working, says Smith.

He says: ‘In the nineties, when things got rough, there were many people, who were made redundant and of the people I know they’ve all gone on to do different things and most, if not all, are happy with the ways things turned out.

‘What is true to say is that their training provided them with a wide enough band of skills to be able to do that.

‘The most difficult thing to me is how to do it on your own without being pushed.’

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Skills and barriers: Are you equipped for your job?

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Leader – The case for work life balance

The millionaires’ club

Career focus: The valley of dreams

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