The Reality: Growth Forces Tax Decisions Faster Than Businesses Expect
Growing in the manufacturing and product industries is complex: The sheer amount of capital it takes to scale, from inventory to production space, forces companies to become strategic with tax planning – whether they’re ready or not.
As Cosmos, a growing pet care company, evaluated its next phase of growth, optimizing its tax strategy became an increasingly important consideration. But when their former accounting company delivered the news that the small firm could no longer handle Cosmos’ complex needs, they began to search for a new partner.
“We were growing,” explained Landon Hobson, CEO of Cosmos. “We wanted to make large capital expenditures on equipment to streamline some of our operations and automate them. We knew we had to do it.”
After selecting Anders, tax planning became a foundational part of the company’s growth engine that has resulted in substantial benefits – particularly in expanding the company’s physical footprint and research and development efforts.
One Tax Strategy, Many Moving Parts
Cosmos needed a multi-pronged tax strategy to truly cover every available opportunity. Anders’ full-picture tax planning brought everything into focus. Now partnering with 10 different experts throughout Anders, Cosmos has a team of experts in business tax structure, manufacturing CAPEX timing, credit and incentives, and more.
Dave Finklang, a tax partner at Anders and the firm’s primary contact for Cosmos, didn’t view this complexity as a problem, but instead an opportunity. “There are so many ways that we can come in from a true tax planning standpoint to help growing businesses.”
Anders was also instrumental in leading the company’s ownership, entity design, and individual tax exposure as the family business entered its second round of succession planning. “There’s not a piece of the business that they’re not involved in,” Landon said.
Cosmos’ relationship with Anders was particularly important when building a new facility outside of St. Louis. “We were building this building and there’s owner‑occupied real estate, and then we have the operating company and different ownership groups,” shared Landon. “There are a lot of moving parts in our ownership and operating structure, which is why having an experienced accounting partner is so valuable.”
Tax Credits and Incentives as a Manufacturing Growth Lever
Receiving comprehensive tax planning from Anders enabled Cosmos to improve automation, margin protections, scale, and even speed. Tax credits and incentives have played a huge role in prioritizing where to invest and when.
“As businesses expand plants, add new manufacturing lines, or build new facilities, incentives can leave more cash in the business,” explained Dave.
Landon agreed with the impact of incentives on the company’s growth plans. “Anders helped us understand when would be best to purchase, what the tax advantage would be, and how it impacts our ROI.”
Cosmos also expanded its product line, using Anders’ guidance on the advantages of tax credits for research and development. “A lot of firms don’t know those incentives exist,” Dave said. “Knowing they exist and implementing them is a key specialty area for growing businesses.”
When Business Tax and Family Tax Become the Same Conversation
Like many family-owned businesses, Cosmos didn’t just need an expert in manufacturing tax strategy, they also needed help with individual tax integration, particularly as the second generation of executive leadership was exiting to the board of directors. Landon said they were looking for a long-term plan to transition leadership and ownership to the next generation.
Dave and the Anders team made themselves available to every person in the family to get a real sense of everyone’s needs and concerns. This fostered a true sense of trust in the relationship, allowing each family member to feel truly represented during the process.
Process Matters: Why Succession Tax Planning Can’t Be Rushed
Navigating family dynamics during a succession process isn’t just business – it’s an extremely personal experience. Dave strongly recommends that families work with a team that has the patience to walk each family member through the process, both collaboratively and in one-on-one settings.
“We take the time to literally meet with each person individually to truly learn their passions, their goals and what they would like out of the process for their individual family unit, for the broader family, for the next generation,” he explained.
That approach is one of the things that attracted Cosmos to Anders during the selection process. “They didn’t dictate. It was, ‘Here are a couple ways we can do it.’ Whatever fits best with the family is what we’re going to go with,” Landon said.
Yes, it takes more time to meet with every member of the family. But getting all stakeholders ready and comfortable lays a strong foundation to start discussions around tax and legal documents.
The Outcome: Capacity, Confidence, and Fewer Surprises
Today, Cosmos is in a new era of launching exciting product lines and expanding into international markets.
“The relationship has freed us up to do what we do best,” Landon said. “Our ability to move through the project at a rapid pace was amazing.” While developing new products, the Anders team helped Cosmos identify potential roadblocks and proactively prepare for them.
Over the last nine years, the family business has moved to a new, custom-built facility, grew headcount by 230%, and expanded its growth strategy to include retail shelf space, an online marketplace, and new international markets like Europe and Australia. “We’ve definitely gotten more value out of the relationship with Anders than we put into it,” Landon said.