BALADA: A Tale of Synergies that Built a Family-Driven Company.

Prologue

BALADA Consultores is on the verge of celebrating a century of existence. It has endured wars, crises, economic blockades, both left- and right-leaning governments, technological advances, numerous tax reforms, and our competition as well.

What has made this company, whose assets are made up solely of human capital, so solid? There is not a definitive answer. Our history does not trace back to a single founder, nor their family; rather, it is the account of individuals whose shared years of labor fostered a sense of collaboration transcending their respective professions or social standings joining together as a family to build a company they could be proud of.

Our Beginnings 

The first stitch was made by Mr. José Balada Soler, known as Don Pepe, who in 1936 decided to leave his accounting job at Camisería Barcelona and strike out on his own, establishing his own accounting office. Born to Catalan immigrants who had come to Chile fleeing the aftermath of the First World War, his father, Mr. Jacinto, was a talented pianist. However, his musical talents didn’t bring in enough to support the family, so he turned to his profession as a teacher and his wife’s retailing skills. Mrs. Dolores Soler helped provide for the family during times of scarcity. Interestingly, some of the families that once hired him for piano lessons are still clients of BALADA, now in its third or fourth generation.

This dedicated couple managed to ensure that their three children became professionals. In addition, they inculcated in them the value of independence as a safeguard for economic security and freedom.

That’s how we began, as a source of prosperity for the Balada family and dignified employment for accountants who, during those years in a modest Chile, were often the first in their families to pursue technical studies. Don Pepe possessed the foresight to stay engaged by systematically studying the field of taxation. This allowed us to expand both the quantity and quality of our clients. However, he didn’t accomplish this alone; we were fortunate that others took ownership of the company’s growth. Most of them were women, accountants who recognized in us a firm that valued their professional capabilities. This recognition occurred during an early era when there were limited work opportunities for women. 

Early years and some of the founder’s life (1936-1960)

A few years after Don Pepe started his independent venture, the outbreak of World War II caused income to become elusive, although there was never a shortage of work, as is still the case today. The challenges of that historical moment spurred him to diversify into the realm of transportation. He acquired two “micros” (urban buses), registered them on the “San Pablo” route, and transformed into an entrepreneur. His fleet eventually grew to 50 vehicles, complete with a self-owned workshop and a partner responsible for operations. The business came to an end due to conflicts with the partner, who suffered from delirium tremens.

The accounting firm continued to grow quietly and systematically. Originating from a modest office on San Antonio Street, it soon relocated to Unión Central Street and eventually settled on Nueva York Street, adjacent to the Stock Exchange and the Club de la Unión. In other words, it positioned itself in the prime business district of that era.

The Golden Age (1960-1980)

During those years, computerization did not exist, everything was done manually, and the workdays were long and arduous, to the extent that during the period of balance closures, the team would practically reside in the office for a month. All of this cultivated a sense of dedication that gave BALADA a distinct essence and transformed the team into a family. 

In 1965, when we were one of the leading accounting firms in the country, Don Pepe got married to one of our most loyal and meticulous collaborators, Mrs. María Violeta Valero Garrido, affectionately known as “Señora Violeta.” She stood out for her unwavering tenacity; BALADA was her first and sole place of employment. She began as an apprentice in 1947, got to be in charge of the whole office, and retired when their first of three children was born, in agreement with her husband that she would provide support for the formation of their family.

Her father, Mr. Juan Valero, was a hard-working man, an artist, and a stained-glass designer who alongside his family experienced the harshness of poverty during the period of World War II. When commissions decreased, he sought refuge in his craftsmanship as a glassworker. To sustain themselves, he undertook the task of repairing windows for ambulances, hospitals, and similar entities. Our meticulousness hallmark, professional rigor, and dedication to work, initially contributed by Señora Violeta to the company and later instilled in her children, stands as a significant legacy inherited from Mr. Juan.

In the early 1970s, Don Pepe incorporated his accounting profession with his gift for visionary entrepreneurship, becoming a pioneer in the realm of computing applied to accounting and administrative processes. BALADA engaged engineers, systems analysts, and imported computers and printers, to provide data processing services to its clients. We relocated to three floors of a building at 720 París Street.

Success led him to leave the auditing field to focus on supporting the administrative automatization and economic management of the companies he served, all while maintaining accounting services and tax advising. This expansion led us to employ over 70 professionals, allowing us to provide services to financial institutions, publicly traded companies, and governmental entities. We underwent an exponential growth phase. On this occasion, it was our entrepreneurial spirit combined with the dedication of our collaborators that enabled us to navigate through the political, economic, and social crises of those years—among the most challenging our country has faced—without experiencing deficiencies.

Hard times and the entry of the second generation (1980-2000)

Every tale has its challenging chapters, and ours began in 1982. In response to the rising demand for computational services we were encountering, we decided to import a computer. However, during this process, the economic crisis erupted, resulting in the collapse of a significant portion of the local industry, and the financial system, and a sharp increase in the value of the dollar – the currency to which we were indebted.

To face this difficult situation, we had to reduce the computing area and then absorb the debt from the accounting area, salaries were reduced, and indebtedness began to grow.

We entered the 1990s in a diminished state, facing financial stress. Nevertheless, we managed to maintain a semblance of economic stability. During those years, Don Pepe was approaching 75 years of age, yet he displayed a vitality that defied his years. Unexpectedly to us, he was also concealing the gradual progression of Alzheimer’s disease, which functioned like an insidious bacterium, silently eroding the company’s foundation. This unnoticed struggle resulted in the systematic loss of our primary clients, despite our dedicated efforts to retain them. We were left confused.

In 1992, we received news from one of our longstanding clients – the kind we’ve been serving for generations. They informed us that our leader was exhibiting erratic behavior in meetings and having difficulty maintaining conversations. Doña Ursula Trejo was the one who received this information, affectionately known as ‘Señora Úrsula’, contemporary of  ‘Señora Violeta,’ BALADA was also her sole place of employment. Due to her exceptional skill in interpersonal interactions and managing tax matters, she eventually became a partner in the company. Her unwavering loyalty was matched by her dedication, as she devoted over 50 years of her life to our company. 

At that moment, our financial situation was dire. We owed contributions, salaries, taxes, and worse, we had a significant workload ahead that had already been billed to clients. We had grown accustomed to the financial strain to the point that we hadn’t realized the company was operating without proper leadership. However, the client’s call served as a wake-up call for Señora Úrsula, prompting her to contact Don Pepe’s eldest son, José Ignacio Balada Valero. She urgently requested a meeting to apprise him of the situation. 

José Ignacio had recently earned his degree as a commercial engineer, yet he had been part of the company since the age of 16. In the beginning, he started as an assistant, handling tasks such as serving coffee and distributing mail. During the years of the economic crisis, he took charge of the company’s financial restructuring. He renegotiated debts, modernized services, and upgraded equipment. Eventually, he took a step back to further his education and gain experience in other companies.

Knowing the significance of his father’s health condition, the delicate state of the company’s finances, and understanding that the challenges weren’t a result of business decline but rather stemmed from the leader’s declining capabilities, the family reached an agreement in which they entrusted the potential revitalization of the company to José Ignacio, with the commitment to ensure the necessary resources to meet the founder’s financial needs throughout his lifetime. In exchange, the ownership of the company would be transferred to his benefit.

So, without warning, a change in leadership took place in March 1992. This happened at a time when the company was facing total insolvency and grappling with a debt to clients for work that had been invoiced but was still pending completion. This outstanding work exceeded our financial obligations. The latter had to be settled before April 30 of that year, aligning with the annual closure of all accounts and the submission of tax declarations. 

All that has been described forced the new leader to center their focus on outstanding tasks, instilling motivation in teams of professionals to work from Monday to Sunday, enduring extended daily sessions, owing to a commitment to a struggling company. The culmination of the narrative is that all tax declarations were submitted, with several of them being completed within the bank premises after closing hours, where our work concluded (given the absence of an SII (Chilean Internal Revenue Service) website and online payment options). The familial spirit from the inception persevered; it was all these individuals who made it possible for BALADA to overcome the worst economic, operational, and leadership crisis in its history, without even being certain of the receipt of their salaries.

A new Air 2000-2014

While it might sound like a fantasy, in the year 2000, we paid off the last overdue debt, which provided us with the strength to relocate to an office on Avenida Providencia. This marked the beginning of the market position recovery that we had always held. 

With the turn of the millennium, the modernization of the State began, marked by the advent of sworn declarations, computational cross-referencing by the SII, and tax reforms, each time bringing forth new and increasingly intricate control regulations, coupled with more severe penalties. All of this precipitated a profound shift in our operations, necessitating a reinforcement of legal analysis over the mere accounting aspect. To achieve this, BALADA brought on its first in-house lawyer and fully entered the tax consultancy market.

These years were marked by great prosperity. We expanded our team of professionals, and the era of asset reorganizations flourished. Guided by Mr. Alejandro Dumay Peña, who was the tax manager at CMPC at that time and is now our “Counselor” in tax matters, we ingrained the hallmark of solution-oriented guidance and client empathy. These qualities continue to set us apart in our recommendations for succession and corporate matters.

In 2005, we went to Switzerland to explore the realm of Trust, foundations, and asset structuring, diversifying jurisdictional risk. We ventured into a novel industry in Chile, compelling us to expand our range of services internationally. We welcomed foreign clients into our fold and assumed a leadership role in advising investors who required structures from different jurisdictions for their investments. 

Bachelet’s great Tax Reform marked the years (2014-2018)

Thus, we entered the second decade of the new millennium as a leading tax consultancy, backed by our international experience and a highly specialized team of professionals. We faced the significant tax reform of 2014, along with its two subsequent complementary reforms that came into full effect in 2017. These changes fundamentally shifted the priorities of our services and the demands of our clients. On one hand, the substantial increase in tax rates elevated tax planning to a strategic level in businesses. On the other hand, the reduction in degrees of freedom due to the new anti-avoidance regulations incorporated taxes into the long-term plans of companies. At this juncture, we owe gratitude to the late Mr. Hugo Daudet Proust, whose legal and tax expertise guided us through a period of profound change.

Social Outburst, and the Pandemic, Key to the Change.

The unexpected nature of these events had significant impacts on our services and our way of working. We responded by successfully strengthening our M&A units, corporate legal advisory, accounting services, business management, and particularly the tax area, to maintain our leadership.

As a result, in recent times, we have seen seizing opportunities, responding to new tax reforms, implementing changes in SII criteria, and facing the pandemic and social outburst, among other situations that have impacted us all.
This also motivated an internal process at BALADA, on which we have been working hard, tirelessly, and with priority for almost 10 years, preparing ourselves to face the changing geopolitical, social, and economic structures that are unfolding in this ever-surprising world. We have been activating our entire way of being, reviewing, and complementing it. We modernized and strengthened ourselves, and now we are ready to support and drive a new visionof”Enterprise” and “Entrepreneurs” for our clients—a vision committed to Sustainability, but from a real and tangible perspective, one that aligns with our tradition of love and passion for what we do.