A Bright Entrepreneur’s Brilliant Leap
The smartest entrepreneurs share a lot of traits. But one of the most definitive is their ability to recognize the value — or lack thereof — in a business relationship and, equally important, acting on it.
One relationship that’s worked outstandingly well for Mark Hagerty, founder of Michigan Solar Solutions: the one he’s built with the vendor that, for almost as long as MSS has existed, has supplied the vast majority of parts MSS uses and installs at its customers’ homes and businesses.
One relationship that hasn’t: Until Rehmann, every other third-party accounting firm Hagerty has worked with in the last 17 years. He estimates he’s tried at least four or five.
“We’re not one to jump ship,” he says. “But I’d try talking to them, and by the time we got done, I felt stupider than we started. It was like my IQ went down a few points, and I knew less than when I sat down.”
Brilliant Decisions
Mark Hagerty is a lot of things, but dumb isn’t one of them. He’s a risk-taker, but pragmatic. Forward-thinking, yet data-driven. A pioneer in the state’s renewable energy sector, Hagerty is a gutsy visionary who launched a solar equipment installation business at a time when the Michiganders willing to power their home or business with the sun were few, and the skeptics were many.
As he puts it, “We were marketing to a market that didn’t exist yet.”
Back then, Michigan had barely dipped a toe into renewable energy. That wouldn’t come until 2008 — and then, by reluctant baby steps — with the passage of Public Act 295, which gave electric utilities until 2015 to generate just 10 percent of their electricity from renewable energy sources.
But despite the dragging feet of many in the public, politics, and utility sector, Hagerty didn’t see renewable energy as a “nice-to-have” for cleaner air and water and eventual cost savings. Hagerty saw two things in America’s energy future that motivated him to launch MSS anyway: promise … and bedlam.
“As far as a motivating factor for starting the business,” he says, “it was not as much environmental as it was the instability of our national grid, and it being our Achilles heel against those that want to do us harm.”
For Hagerty, evidence of that instability was overwhelming. Hard to miss was the great Northeast Blackout of 2003, when the tangling of a tree branch and a few transmission lines in Ohio resulted in an epic dayslong cascade of power outages, blacking out the homes and businesses of more than 55 million people across eight states and Ontario, Canada.
Somewhat less obvious to the average Joe but compelling to Hagerty: the growing trends and tailwinds his stock-trading hobby revealed about the renewable energy sector.
“The investing was more of a geek thing,” he says. “Just liking the technology and seeing from my research the solar stocks, the renewable energy storage capacities, every attribute — from national policy to the cost of electricity to the instability of the grid — from every metric, [renewable energy] was poised to skyrocket.”
Today, with climate change and geopolitical events dominating world conversation, and federal and state governments pushing ever harder for clean energy (and even incentivizing it), it’s clear that Hagerty’s decision to launch a renewable energy company was a wise one. Ditto for his decision to change accounting firms last year.
The Path to Enlightenment
In truth, Hagerty didn’t set out to change firms. When he sat down with a Rehmann advisor for the first time in 2021, he simply wanted help reaching a longtime goal: offering his employees a 401K.
But because Rehmann takes a holistic approach to each client experience, Hagerty got much more than the typical transactional experience the average firm can offer: i.e., “You want a 401K plan? Here are your options for a 401K plan.”
Instead, he got a dedicated retirement specialist who comes part and parcel with Rehmann’s Private Client Advisory team, a cross-functional team of additional specialists specifically curated to meet the evolving needs and priorities of each PCA client, whether that client is an individual with assets to manage, has financial planning or estate/trust needs, or is a business owner.
No matter what new objectives or issues arise in the client’s world or the world at large, every PCA client has a host of specialists at the ready and equipped to help; each PCA advisor brings vast experience and a keen understanding of all factors at play within their specialty — i.e., the latest laws, loopholes, risks, compliance requirements, and more.
That nuanced know-how empowers PCA clients to fully understand all of their options — and each option’s impact on their current and future financial situation — so they and their PCA advisors can make the most informed decisions and moves possible. This hands-on multi-specialist approach is key to PCA’s ability to proactively minimize risk, uncover and maximize opportunity, and ensure each PCA client is always on the optimal path forward.
Did Hagerty need every specialist available? Of course not; there are dozens available within the PCA group alone, and several hundred others throughout Rehmann’s 19 offices.
But as the discussion about Hagerty’s hoped-for employee 401K evolved into bigger-picture conversations about his personal and business goals, Hagerty — as is his way — recognized the value of his burgeoning relationship with Rehmann.
So while he continued working with his then-current accounting firm, he also continued his conversations with Rehmann’s PCA team. And the PCA team — as is our way — continued listening … and identifying opportunities Hagerty could consider.
One example: Hagerty’s then-current accounting firm had told him that MSS couldn’t qualify for an ERC credit, “that it wasn’t worth it,” he recalls.
Rehmann’s PCA team called in one of their ERC specialists to take another look.
“And you guys found a way. I never want to tread in a gray area, never. It’s black or it’s white,” Hagerty says. “But there was a little bit more of a deep dive and things that we had to come up with and discuss, but [Rehmann was] able to do it.”
A similar situation happened with cost segregation, a potential tax benefit Hagerty had also asked his then-current accounting firm about.
Again, they had told him it wasn’t a viable option; and again, Rehmann’s PCA team brought Hagerty a specialist who dove deeper. He determined cost segregation was indeed an option, and it greatly benefited MSS’s bottom line.
A Brighter Future
As for the 401K plan that originally started the conversation between Hagerty and PCA, that’s evolved into a much bigger conversation about the future — not only for his employees but also for himself, his family, MSS, and even its customers.
Although Hagerty has no immediate plans to retire, he knows he wants his company to be in the best position possible so that he, not external forces, can choose the optimal timing, price, and buyer — specifically, one that recognizes the value of MSS’s employees, culture, and way of doing business.
“[MSS] has a moral compass that when the customer’s not represented at the table, we still represent them by doing what’s right. Our employees see that, and they realize that’s the same way we treat them when they’re not in the room,” he says.
“We have been lucky in maintaining and gaining people that have a very strong moral compass,” he adds, “and I do not like the idea of selling out to somebody that cannot appreciate that and will maybe part the company out, or completely change the philosophy to where the customer no longer is represented at the table.”
With a clear understanding of Hagerty’s priorities and a multi-specialist evaluation of what options made the most sense, the PCA team and Hagerty recently determined a 401K wasn’t ideal for MSS. Instead, an employee stock ownership plan, or ESOP, would be the optimal path to incentivize and reward MSS’s employees while protecting the culture and business they’ve helped build.
Today, Hagerty is working with his team of specialists to build out that ESOP plan alongside his own retirement plan. He’s also working with a succession plan specialist to determine the steps necessary to enhance the value of his company over the coming years while finding ways to continue investing in the people and relationships that have made it thrive.
Rehmann, which Hagerty officially made his go-to firm for all tax, wealth, accounting, retirement, and business succession matters in 2023, is proud to be one of those valued relationships.
Of his decision to switch from the previous firm, Hagerty says, “You know, they were the typical accounting firm, where this is your guy, he handles everything you need under the umbrella of a larger company. And if you need something that’s not his forte, he researches it and then lets you know.”
Hagerty says he found that structure ineffective.
“One thing I see about Rehmann is that every time something comes up, whether it was the PPP, the ERC, cost segregation for our new building, the ESOP program … they have a specialist on staff that specializes in these individual items, instead of one [general accountant] … sitting up the night before, looking at books, trying to become versed in every little nuance of the trade,” he says. “There’s not been anything [my PCA team] has been asked to do that I have not been impressed by.”
Equally important to Hagerty, there’s nothing he and his PCA team have discussed that he’s struggled to understand.
“If you’re an accountant that’s responsible for everything, and you just spent three hours yesterday researching this, you’re not going to dumb it down. You’re going to try to impress me with your knowledge of this,” he says. “But if you’re a specialist in something, you’re used to trying to relate it to somebody by dumbing it down.
“Talking to [Rehmann’s specialists], they’re used to dumbing [accounting] down to somebody at my level, and I just find that works so much better for me.”
We’d say that that PCA’s approach works out better for any smart entrepreneur, but for this one in particular — the gutsy visionary who saw the value in solar before solar was even a thing and recognized the value of working with us — we like to think it’s proven nothing short of, well … illuminating.
Note: This testimonial reflects the real-life experience and opinions of an actual client. However, these experiences are personal and may not necessarily be representative of all clients. We do not claim, and you should not assume, that all clients will have the same experience. Your individual results may vary. This testimonial has been reviewed before posting and appears verbatim as given by the users. The subject is not being compensated for this testimonial and is not receiving any personal or professional benefits for providing it.