Small Business Profit Maximizer!

Marketing Tip of the Week - Don’t forget me, I’m already a customer.

The holidays are coming and, like every other year, my company (my wife) makes thousands of homemade cookies to give to some of our clients. It takes about a week of my wife’s time, but our clients enjoy them and request them every year.

The other day a client asked me, “Why do you do it if it takes so much time and effort?” I answered, “Because that’s why you keep me around!”

But all jokes aside, I know that my clients are not going to fire me if I don’t bring them a cookie tray for Christmas; at least I hope not. But, it keeps me in their thoughts. It is a way for me to show my gratitude and remind them I am there to help them. It’s my holiday marketing!

A lot of business owners tend to neglect their current customers and focus on obtaining new ones. DON’T DO THAT! If you have taken any marketing courses or read any marketing books, your current customers are your goldmine!

The 80/20 Rule basically says that your top 20% of your customers generate 80% of your sales. So, why on earth wouldn’t you pamper them and encourage them to buy more, or even refer more customers like themselves to your company?

I encourage you to develop a way to get your current customers to remember or even refer others to your business. Perhaps a refer-a-friend program, annual gifts, rewards programs, etc. Try to always do something that shows that they are valuable to you and your company.

 

5 Ways to Increase Year-End Profits

 

Are your sales and profits for this year lower than you expected?  There is still time for you to close strong.

Here are five ways to finish this year on a high note.

1. Have a contest.  The ability to win a prize creates excitement among your customers and your staff.  The key is that the prizes should be large enough to create the excitement you want.  Be creative and be sure to publicize it
2.      Hold an employee event.  Often your problem is that your employees are losing their motivation during the long summer months.  Kick off the fourth quarter with a fun internal event or contest.  Consider both a non-business event and a business-related event.
3.      Launch a new campaign.  Business is always out there.  It isn’t a matter of if there are customers, but rather how you will get them.  Launching a new campaign gives your staff new direction and can excite your customer base.
4.     Introduce a new product or service.  A failure to reach your profit and sales goals often indicates a gap in what the market wants and what you are offering.  Brainstorm with your staff and look for ideas with a high return on investment that can be implemented easily.
5.      Jump start your marketing.  Sometimes the problem is that you have become complacent.  Now might be the time to jump start your sales and marketing.  Check out our Sales and Marketing Boot Camp at www.freeisbstrategies.com for a very affordable course designed to rapidly increase your sales.

When Are Commuting Costs Deductible?

Generally, the cost of commuting between a taxpayer’s home and work location is a nondeductible expense.  A recent tax court memo (TC Memo. 2013-240) said this is true no matter how long the drive is.  In that case, an engineer drove more than 150 miles a day to and from his job in the Nevada desert.  The site wasn’t accessible by public transport.  The court ruled that the job wasn’t temporary and so he could not deduct his driving expenses.

Expenses incurred commuting between a taxpayer’s home and work location are allowed if (Revenue Ruling 99-7):

1. The expense is for going between the taxpayer’s home and a temporary work location outside the metropolitan area where the taxpayer lives and normally works.
2. The taxpayer has one or more regular work locations away from home, and the expenses are for going between home and a temporary work location in the same trade or business, regardless of distance.
3. The taxpayer’s home is the taxpayer’s principal place of business, and the expenses are for going between home and another work location in the same trade or business, regardless of whether the work location is regular or temporary, and regardless of the distance.
4. A work location is considered temporary if employment is expected to last and actually does last for one year or less.

Check with your tax advisor if you are commuting to a location out of town or if your home is your main place of business.

What Makes A Good Investment?

Have you ever had a friend suggest a sure fire investment? If you think back, you may recall thinking they were a bit delusional and that the investment was risky at best or a complete non-starter at worst.

The reality is many people have a hard time determining what a good investment is and how to evaluate investment risk and return. This is where financial advisors can come in as resources to help you determine if the reward is worth the risk.

Generally, with any type of investment, there are several factors to consider. These include:

• Long term stability – When the asset, property, company or fund has a history of long-term stability and value, it may be a very good investment. However, past performance is not an accurate predictor of future value in many industries. You have to not only look at the value and stability in the past, but how relevant the asset will be in the future.

• Can you afford it? – Even the best investment is not a good risk if you cannot afford the buy-in. For example, if you have to take out a loan or liquidate your other assets, you have just tied yourself financially to that one investment. Putting all your eggs in one basket is never recommended, especially in today’s economy.

• What is the risk? – The risk is not tied into whether or not you can afford to lose all the money today, but can you afford to not have that money in some other investment? In other words, if all your retirement is tied up in one investment, it isn’t available for emergencies, for other investments, or even for paying off expenses.

• What do you know about the investment? – Many people get emotionally involved in decision making around investments. This may happen because you trust the person making the investment recommendation or perhaps you simply got caught up on the marketing and advertising. Stepping back and completing independent research on the company, stock, fund or other investment is always a wise decision.

Your financial planner can help you avoid jumping into risky investments, and help you to determine a long-term, balanced strategy for growing your personal wealth.

Danger: Ignoring Social Media Can Cost You Business! (Part 2)

(In part 1 I explained why you can no longer ignore social media when marketing your business.  This article outlines how you can easily get up to speed with social media). 

So what should you do about it?  Simple—wake up to the fact that social media is here to stay and ignoring it won’t make it go away.  If you want to survive and prosper, you must embrace social media as the great opportunity it is rather than fear it as a destructive agent of change! 

Many business owners understand both the opportunity and the threat, but have no clue how or where to get started.  Here is the three-step plan that I used: 

First, I educated myself.  I purchased the following books and studied them.  You also should buy them and study them in great detail.

-       Social Boom! by Jeffrey Gitomer

-       Likeable Social Media by Dave Kerpen

-       Content Rules by Ann Handley and C.C. Chapman

-       LinkedIn Marketing an Hour a Day by Viveka von Rosen (Be sure to check out my interview with her in this issue.) 

Second, I studied what my competition and their employees are doing on the Internet and on social media.  What are they doing well that you should emulate and what are they not doing that you could be doing?  Study what companies in other industries are doing that no one in your industry is doing.  Many great ideas were stolen from completely different industries.  For example, the fast food drive-up window was stolen (I mean “borrowed) by someone who was sitting in a drive-up window at a bank!  This “borrowed” idea revolutionized the fast food industry. 

Finally, I set goals and figured out how to measure my results.  This included both strategic and tactical goals. 

My strategic goal is to educate my customers and prospects.  I know that educated customers buy more.  Plus, by providing information that my customers and prospects find useful, I am taking advantage of the psychological principle of reciprocity.  This is where you feel that if someone does you a favor, you “owe” someone a favor in return.  It’s never a bad thing for your prospect to believe they owe you one.  The Bible says it better:  “Give, and it will be given to you (Luke 6:38)”. 

My first tactical goals were to get 20 blog visitors per day and to have 100 LinkedIn connections with at least 10 LinkedIn recommendations.  Sounded crazy, even impossible at the time, since I didn’t know how or where to start.  But we have far exceeded these early goals, and the result is that my CPA firm is growing while many others are struggling during these hard economic times. 

So it’s your choice:  Embrace social media or ignore it at your peril!  I hope you follow my example and be like Nike—JUST DO IT!

Danger: Ignoring Social Media Can Cost You Business! (Part 1)

For over two years my niece (who is also my marketing person) tried to talk me into getting a business Facebook page, a Twitter account, a YouTube account, and a LinkedIn account.  And for over two years I told her to go away and stop bothering me.  I, like many small business owners, couldn’t figure out how wasting my time on these things would increase sales and bring in profits. 

One day she just did it on her own, and the results were almost instantaneous.  You see, I had been blogging to my clients for over a year and was pretty much being ignored.  My blog was being visited by about 2-3 people a day.  I called it doing great work in the dark.  Does it really matter how good your work is if no one sees it?  Almost immediately after she set up these accounts and started linking to my blog articles, the number of visitors increased dramatically. 

And that was enough to convince me that social media was here to stay and that I could no longer ignore it.  In fact, I believe that the rise of social media has fundamentally changed the way every business sells to their customers!  Sounds extreme, but believe me, it’s true. 

In today’s world, before any prospect makes a decision to call you or visit your store, they:

-       Google you.

-       Check out your Facebook page.

-       Find you on LinkedIn, Twitter and YouTube.

-       Read your blog.

-       Read reviews from your happy (and unhappy!) customers. 

And there is absolutely nothing you can do to stop them!  Heck, admit it:  You’re doing the same thing every time you look at making a purchase. 

Jeffrey Gitomer in his book Social Boom! wrote: 

“Today, ALL systems of selling are preceded, and sometimes precluded, by your online reputation.  Before I ever call you, before you ever call me, before you ever meet with me—I already know everything I need to about you.” 

But what he says next should really scare the small business owner who has decided to ignore social media because they think it is just the latest fad: 

“Here are the NEW standards by which you’ll be evaluated, granted appointment time, decided upon, measured, branded, and talked about:

  -Your Google presence and ranking

  -Your online reputation

  -Your business social media presence

  -Your personal website (present or absent)

  -Your blog (present or absent)

  -Your Facebook presence

  -Your LinkedIn connections and recommendations

  -Your Twitter followers and tweets

  -Your YouTube presence” 

Scared yet?  You should be, because the competitor in your market who “gets” social media and learns how to use it effectively will have a huge advantage over you!  They will grow while you decline.  They will get the best customers while you get the customers they don’t want.  They will prosper while you suffer and complain about how bad the economy is. 

(Be sure to check out part 2 tomorrow to see how you can start using social media to increase your sales.)

Control Costs With Zero-Based Budgeting

Budgeting is a tool for dealing with the future.  It helps you turn expectations into reality.  In its simplest form, a budget is a detailed plan for future receipts and expenses.  As the budgeted period progresses, you should compare actual results with your forecasted goals.

 The method of budgeting which I recommend is called zero-based budgeting.  This method makes the assumption that last year’s expenses were zero, and begins the budgeting process from that point.  For example, this budgeting formula assumes that your supplies expense account begins at zero.  You must first determine who consumed what supplies last year, who will be consuming them this year, and how much will be consumed.  In this manner, zero-based budgeting forces you to actively manage your consumption while reviewing your costs. 

The effect of zero-based budgeting is that you will no longer include prior year’s mistakes and overspending in the current year’s budget. 

Few small businesses use zero-based budgeting, despite its many advantages.  Not budgeting is truly the most expensive mistake the small business owner can make.  Sure, zero-based budgeting may take more of the owner’s time, but it can pay big dividends in increasing bottom-line profitability.

Customer Service Problems Happen – Just Deal With Them as They Happen.

The myth most business owners believe: Being a manager and small business owner means solving problems as they happen.

The truth successful business owners learn the hard way! Most problems occur repeatedly due to a deficiency in your operating system or in the training of your employees. And, most problems result in a customer service problem that often leads to a lost customer. So developing a system of tracking problems and solving problems is a key component of improving customer service.

When you are small this is a simple as keeping a log of all mistakes. Weekly or monthly it is important to review this log and look for repeat errors. Now, analyze the root causes of these errors and solve the root problem.

We prepare over 600 returns and at least 99% are completed correctly the first time. But, tax law is a complicated area with frequent changes and keeping errors from happening is a continuous battle. A few years back I noticed that when a client failed to give us a 1099 for retirement income we failed to notice this three times. I put in a procedure so that the reviewer looks specifically for this and worked with all preparers so that they understood the importance of looking at last year’s returns in order to look for items that the client fails to give us. The result: These errors, and many like it, have disappeared during the last two tax seasons.

As a company grows and adds more employees it is no longer possible for the owner to keep track of all the problems and customer service errors that occur in a business. But, solving these problems becomes more vital to keeping customers happy and returning. At this point it is important for the business owner to develop a “customer service ticket” to track these errors.

You should review these employee prepared “customer service tickets” weekly to determine 1) that all customer service problems are resolved promptly and 2) to look for problems that are re-occurring.

Lesson learned:  Problems have root causes and will happen repeatedly if you fail to address these root causes. You need a system to identify customer service problems in order highlight the problems that the manager needs to solve.

Client Question: How Do I Compete Against the Big Established Business in My Niche?

I have had this discussion with three business owners in the last two weeks.  One was launching a web store, one was considering opening a business, and one was struggling to survive.

I too am faced with this.  No American can dodge a commercial from one of the big tax preparation shops from January to April.  To compete, I follow these three rules:

Rule 1:  Never compare apples to apples! Change what you offer your customer in order to meet a need in a way the big competitor can’t or won’t match.

Rule 2:  Never, ever compete on price! The big competitor can charge less because they have the buying power and economies of scale.  Don’t compete with them based on their strength.

Rule 3:  You compete by finding a hot market and a niche!  Dan Kennedy says the #1 thing he would want if he was a restaurant owner is hungry customers.  It’s a great way to say you want to sell to those customers who have a problem they need a solution to and the money to pay you.  The big competitor usually sells to all customers and must treat all customers basically the same.  This gives you the opportunity to find a niche and design a program that solves a problem that the niche has in a way that the big competitor can’t or won’t.

I followed these rules in my tax practice by concentrating on selling tax planning and profit coaching to growing small businesses (following rule 3).  Once I show the business owner how to cut their tax bill and work with them to increase profits, they just automatically have me do their tax return because they trust me.

By not selling the tax return first, I now force the customer to compare apples to oranges.  We both do tax returns but because of my experience and knowledge, the employees of the big tax shops (with their six week training course) can’t match what I offer.  If the growing small business owner wants tax planning and profit coaching, I’m one of their only options.

Study these three rules and consider how you can apply them to your business.  Feel free to call me to set up an appointment where we can talk about your situation.

Until next time, let’s make this our most profitable year ever.

Like any good CPA, I need to add a disclaimer:  Unfortunately, it is impossible to offer comprehensive tax and business advice over the Internet, no matter how well-researched or written.  And remember, I love my readers but having me bookmarked on your computer doesn’t make you a client:  Before relying on any information given on this site, contact a tax professional to discuss your particular situation.

 

What Will Happen If I Didn't File My Return On Time?

Every year I hear this question from people who just missed the tax deadline.  I joke that these are the people who believe that deadlines are only recommendations that really don’t apply to them.  Unfortunately, that is not how the IRS looks at it!

Here are the key points to remember when filing late:

1. If you are getting a refund, then there really is no problem, since penalties and interest only apply to any balance you might owe.  Of course, you should file promptly in order to get your money back.  The IRS will not refund you any money owed if you wait three years from the time the return was due.  That means that you can still file for 2010, 2011 and 2012 and receive a refund.
2. If you owe tax, you may be charged a failure to file penalty of 5 percent of the balance due per month (or part of a month), up to a maximum of 25 percent.  So try to get your tax return filed as soon as possible to avoid this penalty.
3. If you don’t pay your taxes on time, you will also be penalized a failure to pay penalty of 0.5 percent per month (or part of a month) up to a maximum of 25 percent.
4. Filing an extension will not eliminate the failure to pay penalty, only the failure to file penalty.  You will still be charged interest and the failure to pay penalty up to the date you finally pay the tax.
5. If you can show reasonable cause for not filing or paying on time, the IRS may abate the penalties.  You should explore this possibility with your tax preparer.
6. Don’t ignore the problem and hope it will go away.  The IRS, like any large bureaucracy, can often take months or years to send you notices about unfiled and unpaid income taxes.  But they will always catch up to you.  Ignoring the problem only makes the balance owed larger and can lead to the IRS seizing your bank account, paycheck, and assets.

Marketing Tip of the Week – Liven Up the Place!!

El Pasoans are always complaining there is never anything to do, so take that as an opportunity to get people through your doors.  Depending on your business, you can invite speakers, live bands, motivational speakers, dances, art exhibits and any other event that can draw a crowd.

An event like this can create positive brand equity and promote awareness for your business. Think about it, people are going to your business to enjoy themselves and hopefully learn more about your business. Plus, if they are already at your door, they are more likely to buy from you.

Of course promoting this even may cost you a bit, but it’s usually worth it in the end. This can give you an opportunity to write that press release to generate free press! Most bands and artists will volunteer to preform just to get their name out to the public, saving you even more money!

Communities tend to favor companies that give back and a free event is always a way to win their hearts. So if you are having problem getting customers through the door, keep this in mind.

P.S. Don’t forget, while they are there get their contact information to promote to them in the future.

What CPAs Laugh About

Have you heard about the latest crazy tax deductions? How about the cholesterol deduction? The Willie Nelson write-off? The time machine? Or the stripper who bared her assets? These tax tales are part of the fifth installment of Bankrate’s 10 craziest tax deductions. The stories are culled from the files of CPAs across the country, some of whom have understandably requested anonymity.

Keep in mind that falsely claiming deductions, knowingly underreporting income or otherwise playing fast and loose with a client’s federal income tax return is no laughing matter. Stay within the tax-law boundaries. Here are Bankrate’s Top 10:

You should see his energy-drink deduction

Some folks just can’t resist padding on a few extra miles to stretch their business mileage deduction (55 cents per mile for 2009). CPA William Miller of Chanhassen, Minn., has seen some road warriors in his time, but none compare to the client whose theme song could’ve been “On the Road Again.” “He was a traveling salesman, so there was some reasonableness to his taking mileage,” Miller says. “But the deduction he claimed would have required him to be driving continually all year. I did the math and he could have slept for maybe six or seven hours. “To claim those kinds of miles, your name had better be Willie Nelson.”

But it wouldn’t fit in the shoebox

Accountants are accustomed to receiving client tax receipts in rat’s-nest form, stuffed in all manner of shoeboxes, satchels, lunch totes and grocery bags. Bookkeeping can be a messy business after all, and documents frequently get misfiled and misplaced. But CPA Gail Rosen of Martinsville, N.J., couldn’t believe what one client overlooked. “Last year, I called a client to tell them where they stood on their tax return and all of a sudden heard a baby in the background,” she recalls. “I said, ‘Did you forget to tell me something?’ They did. Thank goodness babies cry!” You can bet that Gail now has that exemption ($3,650 in 2009) on account.

The diary of Tax E. Vader

CPA Martin Abo of Voorhees, N.J., can read his clients like a book. The problem is, sometimes it’s fiction.

“We had a contractor who was getting audited by the IRS and they requested that he show required substantiation for significant client development, aka meals and entertainment deductions,” Abo says. “He came back a week later with minimal receipts but did have a very effective diary showing so very much of the needed information—where, when, how much, names, etc.—for us to provide the agent.” “One problem—the diary was one of those any-year diaries that just go from Jan. 1 to Dec. 31, and the small print showed a copyright date one year after the calendar year being examined. Not only that, every page was written in the exact same color ink!” Busted! The contractor was politely told to find someone else to represent him.

The rat race write-off

In past editions of crazy tax deductions, business owners have tried various schemes to claim their dogs as a business expense. Some claimed them as a security expense. One insisted that he had hired his hound as an independent contractor. Another actually claimed his dog as a dependent. A New Jersey CPA can now give equal time to crafty cat lovers: “I looked on the client’s Schedule C for his sole proprietorship and he had an entry for ‘exterminating expense,” the accountant says. “Turns out he took his cat to the vet.”

Now that’s full disclosure!

CPA William Hanna runs a nice, family friendly office in South Bend, Ind. But every so often, a new client arrives to shake things up. “One time, a woman came in who was a self-employed entertainer at one of our local gentleman’s clubs. She was inquiring about deducting the cost of her tattoo,” he says. “Before I even had a chance to respond, the next thing I knew she had turned around and dropped trou and was showing me the tattoo to determine whether or not it was going to be deductible!” Once Hanna recovered, he explained that the tattoo in question was not deductible because it is not unique to her business. “Their work clothes, such as they are, are deductible because they are specific to their business; they aren’t everyday street clothes that you would wear to Kmart or Target. But you could have a tattoo and not be in that business,” Hanna says.

“On the other hand, if she’d used a boa constrictor in her show, she could deduct the cost of it.”

Speaking of unmentionables...

As long as we’re on the topic, an Oklahoma CPA had sent his condolences to a close client who had just lost his wife following a long battle with cancer. “My grief poured out for the family and I respected his great strength,” he said. But as the CPA found out, grief can take some strange turns. “My sympathy and respect vaporized quite quickly when the surviving spouse showed up in my office to get his tax return prepared the next spring,” the CPA says. “His charitable deductions included a list of all the deceased’s bras and panties priced quite liberally.” Not only did the client claim the deductions— the IRS allowed them.

If I’d only had a time machine

Walt Hatter, a Fort Worth, Texas, CPA, had heard some tall tales from taxpayers fishing for ways to write off their hobby. But one client beat them all. “I had a dentist client who came in and said he was in the fishing guide business,” Hatter said. “I said, ‘Are you serious?’ I didn’t believe him. He had to show me that he tried to make money at it.” When the dentist explained that he’d printed business cards, advertised for customers in magazines and devoted two days a week to his new enterprise, Hatter went against his instincts and agreed to allow him to file for a $9,000 loss and depreciate his equipment. Fortunately, the dentist was on the “deduct now, live the dream later” plan. “What’s funny is, this guy actually retired from being a dentist and went into guiding full time. It was a good lesson to me.”

To take an accurate pulse, of course!

Most of us don’t know the technical terms for the gadgets and gizmos in a doctor’s bag, right? So you can understand how Dallas CPA S. Miguel Reyna felt when he was asked to examine the tax return of a physician being audited by the IRS. “After reviewing his list of assets, we asked specifically, ‘What is this “time monitoring system” listed on your books?’” Reyna says. “He stammered a bit, then raised his shirt sleeve to point to his big sparkling Rolex!

Or we could simply deduct your cardiologist...

When you travel for a living, it’s easy to forget a minor detail about the various business lunches and dinners you attend. Then again, some restaurants are more conducive to accurate record-keeping than others, as Dallas CPA Ken Sibley found out. “We had an outside salesman client who ate more than two-thirds of his ‘meals’ at Hooters, but forgot who he entertained and what the business purpose of the meeting was,” he says. Perhaps he was in the control group for a new cholesterol-lowering drug.

Clearly, she was not an Aggie

Forgive Donna Wesling’s city upbringing. The Austin, Texas, CPA admits she wasn’t raised around livestock, which provided this moment of enlightenment when she was an accountant newbie transplanted to farm country. “Back then, there was the Investment Tax Credit (that) allowed for investment in new property,” she says. “One of our clients bought a herd of steers and I took investment credit on them when I prepared the return. “The CPA who reviewed the return called me to his office and told me I could not take the credit on steers. When I asked him why, he responded that you could only take the credit on breeding stock. To which I responded, ‘So?’ “He asked me if I knew what a steer was, and when I said I knew it was some sort of cow, he was too embarrassed to explain the process of how male cattle become steers. “The things they don’t teach you in college!”

 

 

The Tax Strategist, April 2010

Marketing Is Never an Option, It’s a Necessity!

Sometimes marketing is an expense and sometimes it is an investment – depending on if it is working or not. But abandoning your marketing plan when cash is tight should never be an option!

First, let’s understand what marketing is. Marketing is everything you do that creates value in the customers mind so that they are enticed to meet with you. Marketing gives you the chance to sell.

Selling is when you convince the prospect that you can be trusted to deliver what your marketing efforts promised.

Based on these definitions, marketing must happen even if you are totally broke. How else will prospects learn about you, be willing to meet with you, and, most importantly, be excited to meet with you? The following are four things that can be done even if you are cash poor:

1. Create new products and sell them to your current customers.
2. Form strategic partnerships with companies that deal with your prospects. Get creative and remember to make it a win-win for both parties.
3. Create and work a referral program that gets your customer to refer their friends.
4. Learn more by buying Guerilla Marketing by Jay Conrad Levinson and The Referral Engine by John Jantsch. Both of these will provide you with tons of low-cost marketing ideas.

Thank you for your continued support and let's make this year our most profitable year ever!

Failure to Properly Document Business Auto Use Will Cost You Big Time!

Taxpayers must be prepared to substantiate auto deductions with adequate records or sufficient evidence. Failure to do so will cost you thousands of dollars in increased taxes and/or fees to accountants or tax lawyers if you are audited.

Taxpayers should be able to substantiate:

1. The amount of each expenditure for the vehicle, including purchase price, vehicle improvements, lease payments, repair and maintenance, gas and other expenses.
2. The total mileage on each business vehicle and a breakdown of the business, personal and commuting miles.
3. The date of the business use and a brief description of the business purpose for each use and expense.

Records should be maintained in an account book, diary, log, trip sheet or similar record near the time of usage [Brown, TC Summary Opinion 2005-155(2005]. Without a written record of business or investment mileage, a tax auditor will not allow the deduction.

Without a mileage log, the taxpayer will have to convince an appeals officer or the tax court (at substantial increased costs in legal and accounting) through oral testimony and other circumstantial evidence. This can include statements from employers and customers, invoices that required the use of the taxpayer’s car for ordering and delivering and entries in calendar programs.

I prepare hundreds of business returns every year and have spoken to each one of them about these requirements. Still, I can count on one hand the business owners who actually keep a log.

Technology today can be very helpful. Both the I-Phone and the Android have an App that assists in tracking business mileage. Be sure to look for one that exports to a computer file such as Excel in order to keep a hard copy.

You can also use a digital recorder to record the necessary information. Be sure to export the file to your computer. You should also consider having this file transcribed so you can have a hard copy for your file.

Like any good CPA, I need to add a disclaimer: unfortunately, it is impossible to offer comprehensive tax info over the internet, no matter how well researched or written. And remember, I love my readers but having me bookmarked on your computer doesn’t make you a client: before relying on any information given on this site, contact a tax professional to discuss your particular situation.

Don’t Forget To Budget Me In!!

I have a hard time stressing the importance of budgeting money each month on marketing.  A lot of business owners see it as a wasted expense. It’s really not!

I like to use this analogy when it comes to spending money on marketing. It’s like buying a $20 gift certificate for $10 to your favorite restaurant. You spend money to make money. Just because you don’t get an instantaneous response doesn’t mean it won’t pay off.

The trick is to spend your marketing dollars in the right areas. You have to know your customer to have any type of success. If you need help budgeting or getting to know how your customer’s think, call my office at 915-857-8158, to schedule a meeting.

Be Sure Your Advertising is Working for You!

Advertising can have a life of its own if there are not proper systems in place to control it. By neglecting your advertising you can get undesired results. Your goal when managing your advertising is to assure that you are in control of what you are sending out as a message and to make sure you are getting what you paid for.

When it comes to promoting a brand it’s imperative that any advertising is done consistently. So when purchasing advertising consider:

• Are you advertising in the right medium? Make sure the ads will reach the customers you desire.
• Get six months or one year contracts- you can usually negotiate better rates and it forces you to do the advertising consistently. One of the biggest mistakes made by small business owners is giving up to early. It takes patience and consistency to see results.
• Make sure you have control over the message- Work with the advertiser and make sure the quality of the ad is high, after all this will represent your company. The message needs to match your goals and marketing plan in order to work for your company. Don’t just settle! You are paying for this ad and you need to be satisfied that it will work for the company.
• If you have a small budget, or a small staff - start with only one advertising tool. Choose the one that you think will most likely reach your target market. It is better to do one thing right than to do five things badly.
• Don’t invest in any advertising unless you can measure the results. Big companies can waste money doing image advertising. As a small business owner you can’t! You must be able to see a direct relationship between every ad and new sales. If not – change something and try again.

Marketing & Selling Tip of the Week- The Theatre of Selling

Selling can be similar to acting if you think about it.  You might have a script, directions on how to act, and may have to use improvisation on occasion. Role playing with your sales staff is a wonderful way to prepare them for the real world.

This gives you the ability to put your salespeople in different sales scenarios and learn their strengths and weaknesses. Sales techniques can be explored and taught during this time as well. This will also give you the chance to inform them on how you would like them to conduct themselves while they represent your company. This will give you first hand insight into your sales department.

Sales role playing can be a great learning experience all around; so, take it seriously and create your sales scenarios for your next sales meeting!

If you would like help with your sales meeting, please call Wayne at 915-857-8158, to schedule a meeting.

Easy Investment Mistakes

While there are a lot of options to consider for making good investments, there are an equal if not greater number of investments that no one should consider. Often, these investments seem like a "sure thing," but they are anything but over the short or long term.

To avoid common investment errors, always check with your financial planner before buying into anything. In addition, be sure to watch for:

• Lack of specifics – Carefully check any investment prospectus and take the time to understand the numbers. Some investment information is not really much more than hype and potential, so look for specifics and realistic measurements of the type of growth you can expect on your investment.
• Overly risk-adverse – There are different times in life when being highly risk-adverse is important. Generally, the closer you are to retirement, the less risk you should take with investments. However, focusing on very low-risk investments means little return, limiting your ability to generate the returns needed for your long-term financial goals.
• Day trading or penny stocks – Unless you really know the stock market and are prepared to spend time learning market trends and indicators, day trading and penny stocks are poor investments. Relying on "hot tips" off the internet is another big mistake as these are typically not well-researched and are promoted by people with limited knowledge or proven market success.
• Playing the real estate market – This is similar to trading. Unless you really know what you are doing and what the market trends are likely to be for a given location and property type, it is a risk. Television shows about flipping houses don't show you the possible risks involved, particularly if you are gambling with your own retirement money.

Never consider an investment that is recommended by a friend, family member, or a business colleague on face value. Do your research, talk to your financial planner, and evaluate the risk and possible rewards with other options available.

Why Money and New Year's Resolutions Don't Always Mix

Most New Year’s Resolutions fail by the time February and March approach, if not sooner. If you were to ask all of your friends about their New Year's Resolutions, you would probably find that three seem to occur more often than anything else. You may have already guessed what they are, but in case you are wondering, they are most likely centered around losing weight, getting fit, and saving money.

Just like the weight loss and the fitness, people start out in January with the real desire to change their spending habits and to try to put away a set amount of money each month. However, as we also know, for many people, January, February and even March can be months spent trying to pay down holiday purchases on credit cards.

The reasons that New Year's Resolutions often fail when it comes to savings can be broken down for several simple reasons. By recognizing where you are struggling, you can plan to compensate for this and find yourself with money in the bank.

• Bill backlog – With all the credit card bills from the holidays, savings can be "temporarily" put on hold. Unfortunately, this often sets a pattern of simply putting savings off to next month or buying again once credit card balances drop.
• No budget plan – One of the most difficult things about savings is if you aren't conscious of where you are spending your money. By having a budget and tracking your spending, you will be more effective in sticking to it.
• Using debit – People spend more when they use debit cards than if they pay cash. If you aren't comfortable carrying cash, limit the funds in the account linked to your debit card to your monthly or weekly allotment to prevent overspending.
• Save first – Before buying that extra venti latte in the morning, put your savings for the day, week or month, in your bank account. Avoid linking this account to your debit or credit account.
• Be reasonable – If you can only save a hundred dollars a month, don't set yourself up for failure by trying to save five hundred. Be reasonable with savings and, with success, increase your goals.

Finally, it is important to have accountability. Keep a record of what you are depositing into the savings account and continue to stick to your savings plan. Avoid temptations to dip into the account except in the case of some type of true emergency situation.

One Thing All Successful Business Owners Have in Common

Over the last 35+ years I have had the pleasure of working with thousands of business owners.  Less than 1% of these I would classify as highly successful businesses dominating their niches.  Yet all of these business owners had one thing in common:  Every extremely successful business owner has a laser-like focus on taking action.

They understand that successful businesses occur when the owner makes consistent improvements.

They start by making a list of their long-term business goals.  Then they figure out what they have to do this year in order to reach them.  What do they have to do this quarter, this month, this week, and today to reach those annual goals?

Successful business owners know that the secret to massive profits is the combination of good ideas with a laser focus on monthly action.  This is the mantra you must follow.  I believe it is so important that I have made the slogan “Good Ideas + Action = Massive Profits” the motto for our magazine and our coaching programs.

Think of how much better your company would be if you committed to working four hours per week on improving your business.  Do that for 50 weeks this year, and you will have worked 200 hours on improving your business.  How many of your competitors are making this kind of investment?  Worse yet—what if one of your competitors does and you don’t?  How far behind will you be?

But they not only have a focus on taking action, they also schedule time monthly to plan and implement the good ideas that move them toward their goals.  We recommend three steps to our coaching clients:

1. Use our Perfect Monthly Growth Tool (see the article and the form we use in our August 2013 issue).
2. Use a monthly process to plan and analyze their marketing and promotion activities.
3. Use weekly delegation meetings to ensure their employees are working on those items that move the business toward its profit goals.
   

Finally, every successful business owner hires a coach to keep them accountable.  I have a personal coach who is helping us with our online marketing funnel.

An accountability coach helps you:

• Set a realistic timeline to reach your unique goals.
• Flesh out a strategic action plan designed to reach those goals.
• Measure your progress.
• Stay focused!  Business owners who have a focus on growing their business very often get tempted by the newest shiny object.  An accountability coach reminds you why you should finish one thing first before moving on to something else.
• Find encouragement and motivation when you feel like giving up.
• See a fresh perspective based on their experience with multiple companies in different industries.
• Challenge yourself to go beyond what you are comfortable doing on your own.

The end result is usually a massive increase in sales and profits.  Why?  Because the coach pushes you past the places you have sabotaged yourself in the past.