Sheltering His Business

After nearly 10 years, James Wiley walked away from corporate America. Now he’s on the path to entrepreneurship. Taking $22,000 from his IRA, the 34-year-old CPA opened J.E. Wiley CPA & Associates in June 2004. His Atlanta-based company has 45 clients, including high-net-worth individuals and local businesses. Wiley is growing the business through referrals, networking, and forming joint ventures with other CPA firms.

In February, he partnered with two larger, well-established CPAs to form another company called VAAS Professionals L.L.C., which specializes in audit assignments. By partnering with other firms, Wiley says he’ll have a better chance of winning larger contracts. “We can do more than tax returns and bookkeeping,” he explains. “We can audit companies, and that can add to my revenue streams.” Wiley estimates $100,000 in total revenues by the end of 2005. Add to that another $10,000 generated through his work as an adjunct professor of accounting principles at four local colleges.

By establishing his own company, Wiley is committed to Declaration of Financial Empowerment principle No. 8: to support the creation and growth of profitable, competitive black-owned enterprises. As with any newfound entity, the road to success is paved with obstacles. In Wiley’s case he has a mountain of debt — $60,000 in student loans and $15,000 in credit card balances. He’s depending on his CPA skills as well as prudent money managing strategies to help wiggle his way out of debt.

By adhering to DOFE principle No. 4: to engage in sound budget, credit, and tax management practices, Wiley says he’ll work his way into a financially sound position. “Owning my own business has given me a very good tax advantage,” Wiley says. “This year, it’s safe to say that I’ll save more than $7,000 because I’m claiming expenses involved in starting up and maintaining my company.” That includes the purchase of computers, laptops, fax machines, and printers, in addition to other business expenses.

As far as credit is concerned, Wiley had a credit score of 700 when he established his firm, which meant he could borrow at a lower interest rate. He currently has an American Express card and a Visa card, both of which have an 8% interest rate. Wiley notes that he checks his credit history twice a year and follows up on any mistakes on his report. He has no intention of applying for any more credit, nor has he initiated any inquiries, all of which can bring one’s credit score down.

Wiley’s situation is similar to that of many professionals who pay a high price for higher education. He received his B.A. in accounting from Oral Roberts University in Tulsa, Oklahoma. By the time he earned his M.B.A. from Clark Atlanta University in 1995, he had amassed $75,000 in student loans. Wiley had hoped to knock down his debts quickly once he entered the workforce. But working for the financial controller at a government contracting firm in Maryland and later in the accounting office of Service Merchandise in Tennessee didn’t prove financially rewarding. “At both