Vern Remiger | Crain's St. Louis

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Vern Remiger


Remiger Design provides architecture, planning and interior design services in learning environments, institutional and medical facilities, corporate offices and retail and hospitality environments. Clients include Edward R. Jones and CityArchRiver, the agency overseeing the redesign of the St. Louis Gateway Arch grounds.

The Mistake:

Not fully understanding the tax burdens and cash flow needs when borrowing money to get this business off the ground.

I spent 25 years of my career at another firm and, six years ago, went out on my own. At the same time, I purchased another architectural firm. I took over the contracts the firm had and I knew most of those clients. I didn’t take the accounts receivable. So I was collecting the income from that day on. Basically, I was creating instant cash flow, but I should have worked with my accountant to develop a financial plan and decide what we expected this cash flow to be and determine what we were putting out up front.

I was providing the cash flow for three to six months. For that, I had obtained a line of credit from my bank and used that line of credit to pay salaries and other expenses. In year two, we started making some money, so I turned around and paid off that line of credit.

At my previous firm, I was in charge of operations. I was the person who was out there meeting with clients, and working with project teams to make sure clients were happy. I was making sure the projects were making money for the firm, but I really wasn’t involved in the running of the business from the cash flow or the tax implication end of things. Being out on my own, I should have tapped into my accountant more about these types of questions.

Basically, I paid off that line of credit and, at the end of the year, I meet with my accountant and he says, “Now, we owe taxes on that because, in effect, that was profit you made and you used profit to pay off that debt.”  

I felt good about paying off that debt, but now I had to come up with additional money to pay taxes. My accountant said, “Debt isn’t necessarily a bad thing when you look at cash flow. Perhaps what we should have done is paid half off, or a quarter off. Then you would have had money to pay taxes and have some cash flow going forward.”

Paying off all that debt brought tax implications and it took two years to get beyond those implications. If I had, first of all, talked to my accountant more, and, second of all, had I really understood the implications of borrowing that money and how it should have been paid back, I wouldn’t have spent a couple of years staying awake at night worrying about money and cash flow.

Age does not imply wisdom.


The Lesson:

That is one of the things I am very big on now. We are looking out a year out just to understand where we’re going to be from a cash-flow standpoint and how we’re going to support our staff. One of the ways things have changed is that I have an accountant who comes into my office once a week to meet with me, and who comes in to do our invoices and look at our cash flow. Before, I had an accounting firm I would call occasionally. They’d meet with me in the middle of the year and at the end of the year to see where we were.

I thought I knew a lot about business, but you can never know enough. Age does not imply wisdom. So, when you go out on your own, seek all the help you can get in terms of understanding the accounting side and legal side of the business.

Follow Remiger Design on Twitter @RemigerDesign

Pictured: Vern Remiger. | Photo courtesy of Remiger Design.

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