Monthly Archives: November 2012

Administrative , , , 2 Comments

2012 Year End Tax Planning

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OK folks,  it’s time to think about what  to do before December 31,  so that you can reduce your tax burden.  If you retain an accountant or a business and tax attorney,  make an appointment to discuss year-end tax planning.  You will have a few of the following issues in mind:

Full deduction vs. Depreciation

Depending on how much money you’re on track to make this year and your ability to reasonably project earnings for next year,  you will either make purchases before December 31,  or wait until after January 1.   Further,  you will either take the full up-front deduction on business equipment,  or depreciate business-related purchases and spread the deductions out over several years,  to soften the tax bite on future earnings.

If you did well financially this year,  you’ll probably take the full deduction on business equipment such as your new computer,  printer,  scanner and/or smart phone this year,  to add more expenses to charge off against gross earnings.   But if subsequent years appear more financially rosy,  then use the depreciation method and spread those deductions forward.

Remember all selling expenses

With the passage of time,  it is easy to allow a few expenses associated with generating revenue to get lost in the shuffle.  Did you attend a professional development conference this year,  or take a course?  Did you buy business books?  Pay to attend networking meetings?  Pay dues to join the chamber of commerce or Rotary club? 

You may deduct these expenses.  Proper labeling and immediate filing of receipts and posting of expenses into QuickBooks,  Excel or even an old-school ledger ensures that you will take all legal deductions in the quarter where they should be documented.  Make it easy for yourself to take advantage of every allowable deduction.  If you have not been on top of this stuff,  start looking for receipts now,  before you get tied up with Chanukkah and Christmas,  and record the transactions,  so you’ll be all set for the January 15 quarterly tax filing.

Retirement plan contribution

Especially if you had a good year,  make the maximum retirement fund contribution.  If you are 50+ years old,  or will celebrate your fiftieth birthday on or before December 31,   you are eligible to make the catch-up contribution of $5, 500.00 maximum.  If revenues generated were not stellar,  try to make the largest retirement fund contribution you can manage  (if you can manage). 

It’s not always possible to set money aside for retirement,  unfortunately.  Making money is often difficult,  slow paying clients ruin cash flow and living  expenses are rising.  It’s been reported that 40%  of the self-employed have no retirement funds available.   Many drew down to stay afloat while re-engineering  professionally,  following a lay-off.  Others used retirement money to launch their business enterprise.   As a result,  the retirement fund deduction is much underutilized,  according to the IRS.

Home office expenses

If your fancy smart phone or land line with bells and whistles are dedicated to business,  then you may fully deduct their purchase and monthly billing charges.  Ditto for your office supplies,  internet connection and other office expenses.  You may also deduct a portion of your heating and electricity expenses  (based on the square footage of your office space as a percentage of your living space).

Create boundaries

The fail-safe way to keep track of business expenses is to open up a separate business checking account and maintain a business-only credit card and thus separate your business and personal spending.  Automatically,  there will be a record of all business expenses.  Most business credit cards will provide a year-end summary of charges,  to help you along  (AmEx does this regardless).

Before the year ends,  get your arms around your business expenses,   allowable deductions and the impact on your tax burden.  As millionaires know,  it’s not just what you make,  but also what you keep.

Thanks for reading,

Kim

Marketing , , 6 Comments

Guerilla Market Guru

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We’ve made it through a very competitive presidential election and we witnessed quite a battle.  The President remains in office because he was the more strategic.  He ran the better campaign,  he had the better ground game,  his get out the vote initiative was superb.  In sum,  President Obama had the better marketing plan.

He didn’t execute as ruthlessly as political strategist Dorie Clark recommends (see the October 30 post),  but he took full advantage of a few key situations,   most notably the well-timed  (for him, anyway)  Hurricane Sandy.  He hopped onto Air Force One,  landed in hard-hit New Jersey (what an entrance!),  reassured numerous devastated and frightened residents and in the process,  managed to have sworn nemesis Governor Chris Christie eating out of his hand,  all with the TV cameras rolling.  New York City mayor Michael Bloomberg,  officially an Independent but really a Republican,  went so far as to endorse the President for re-election.  Talk about fortune smiling.

So the 2012 presidential campaign provides a blueprint for Freelance consultants who are trying to survive and thrive as the economic assault on the middle and working classes continues.  The only possible way to keep your business alive is to survey your unique set of circumstances and leverage all resources to strengthen your position.

One major factor in competing strong in a weak economy is remaining visible.  Longer lapses between assignments,  especially when combined with the insult of smaller projects and fewer billable hours,  are a dynamic that slashes your available money.  Yet one must do all that is possible to preserve the marketing budget,  for that is when we need it more than ever.

When marketing on a limited budget,  be very objective.  Review your marketing strategy and make sure that activities align with current conditions in your business environment.  Contact media outlets that have been just beyond your reach and inquire as to what your budget will support now.  I’m willing to bet that there are deals to be had.  Also,  advertisers can expect to receive some editorial space,  so when you purchase an ad,  expect at some point to be asked to give quotes or even write an article that will showcase your expertise.

Evaluate your core message and verify that it addresses what clients are most interested in when they consider hiring for your service category.  Be aware that client budgets and priorities may have shifted along with the economy.  Examine your website and print collaterals.  Sometimes a client will check you out before calling,  so make sure to communicate a message that will optimize every potential opportunity.

To both improve your reach and save on your marketing budget,   review your social media strategy.  Perhaps this is the time to explore Google + and figure out how it can help you engage clients and prospects,  or at least keep you visible in the best ways.  Google + invites client interaction,  making your marketing a two-way conversation that can enhance your brand by showcasing you as a trusted adviser and authority.

On the traditional media front,  write and distribute press releases to announce your participation in any business-related public event.  Oh yes,  and do make sure that you schedule yourself to speak at conferences whenever possible and conduct workshops and take on teaching opportunities.  Call your local adult learning center,  community college and neighborhood business association to figure out how to get on teaching and speaking calendars.

It is also very important to maintain good relations with current,  or previous clients.  Just last week,  as I finished up with a client meeting,  one of the principals asked if I’d mind if her daughter called me.  The daughter is a dancer with a mid-sized company that needs marketing strategy and PR work.  That meeting itself was the result of up-selling services that expanded billable hours with the client.

Superior service and excellent relationships matter more than ever in a highly competitive business environment.  Christmas and Chanukkah are coming.  Plan to send holiday cards to all clients you’ve worked with in the past five years.

Devise marketing moves to position your consultancy to win as much available business as possible.  Be a fierce competitor not by spending more,  but by being shrewd and recognizing opportunities.   Make every marketing move strategic and create good luck.  Only the strong and the lucky will survive and thrive.

Happy Thanksgiving,

Kim

Sales , , , Leave a comment

That’s My Story and I’m Sticking To It

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When your objective is to bring someone around to your way of thinking,  tell that person a story.   Effective storytelling allows us to communicate with listeners in both an emotional and intellectual way.   As a result,  barriers between people break down as they are brought together in a shared experience that strengthens relationships.  A well-crafted and delivered story allows speaker and listener to understand and therefore trust one another.

Stories are used to build confidence in a person or agenda,  motivate listeners to think a certain way and perhaps do certain things.  Storytelling is the original call to action.  Those of us in business are advised to create good stories,  narratives that can be used to persuade others of our integrity and expertise.

When putting together your story,  think first of its ending.  You can choose where in the arc of your professional development  to begin your story,  but the ending is the most important component.  You must present a strong and memorable take-away anecdote,  lesson,  or triumph that listeners will remember,  believe and act upon.

It is advisable to create a  “portfolio”  of business-themed stories.  Your most basic story is your elevator pitch,  the story that describes what you do,  the goal you help clients achieve and the types of clients you work with.  Another,  more detailed,  story will tell listeners about you and the development of your business.   Other stories in your portfolio illustrate your expertise and professionalism.

The story of how you built your company will tend toward the inspirational.  That story might describe what motivated you to go into business and give a brief behind-the-scenes look at an obstacle you had to overcome on your way to becoming successful.  Don’t be afraid to reveal mistakes made along the way.  Let your listener experience your humanity and authenticity.

To demonstrate your expertise,   tell stories that show how you helped a client make money,  save money,  avoid disaster,  or discover a niche market.  Both types of stories build your credibility and are useful relationship builders and sales tools.

When developing and presenting a story,  be clear about its purpose in your communication strategy.   Know what you would like listeners to believe,  understand or do after you’ve told the tale.  For example,  if you want to convince a prospective client that you offer superior service,   perhaps write a story about how you worked through a holiday weekend,  so that a critical deadline would be met.

When you tell that story,  describe first why the goal of excellent service had to be met,  its importance to the client.  Then spell out the obstacles you overcame to achieve it.   Add a little drama to your story to encourage listeners to identify with the client and picture themselves in his/her shoes.   Remember to keep your story uncomplicated and easy to follow.

When writing your stories,  be mindful that there will be a beginning,  middle and end.  A well-designed story also has a person who must do or confront something;  a place,  where the action will occur; a time frame,  so that listeners can distinguish between “then” and “now”; and a hint of its direction,  to allow listeners to anticipate the outcome.

Be sure to identify and describe the turning point in your story,  the decision you made that made it possible  to achieve the goal.  Take special care not to confuse the turning point with the end of the story,  however.  The turning point triggers the successful outcome that makes the happy ending possible.  The end of the story,  the culmination,  describes how that goal was achieved.  Describing how the goal was achieved paints the picture of the take-away you want to leave listeners with,  namely that you provide superior service every time,  especially when the client needs it most.

Storytelling is a powerful business tool,  one that enriches business conversations and presentations as we communicate with listeners in both an emotional and intellectual fashion.  Stories help us to explain new ideas and concepts,  win support for projects and convince prospects to become clients.  Learn the art of building and relating stories and make clients know why they want to do business with you.

Thanks for reading my story!

Kim

Business Strategy , , , Leave a comment

You Are the President

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Today is Election Day in the US and an 18 month long  (or thereabouts)  presidential campaign will finally draw to a close.  I take voting seriously and view it as both a right and a responsibility.  It is only in the past 50 years or so that true voting rights were extended to the general population.  For 150 years,  only land-owning males of Euro-American descent who were literate in English were eligible to vote.   As a result,  the vast majority of citizens have been unable to vote for most of our history.  Vestiges of restrictive voting laws linger today, unfortunately.  For example,  why isn’t Election Day a paid holiday for all workers,  full-time,  part-time and contract? 

In our last episode,  I left you with a cliff-hanger and promised to take a look at what is most likely the most important part of your Personal Presidential Campaign.  Dear readers,  that would be relationships.  Pay particular attention to whom you know and who knows you.  Business is political and politics is all about relationships.  Identify and affiliate with organizations that will bring you into contact with people you need to know.  That could mean the chamber of commerce,  house of worship,  nonprofit organization board,  or a fitness center.   Figure out where the right people congregate and then evaluate where you will have the best chance of access and acceptance.

Something else you can do: search your VIP’s name and you might discover that he/she will speak at a local conference.  Be there if it’s open to the public and within your budget.  If you’re able to attend,  take notes on the presentation so that you can ask a good question during Q & A.  Your intelligent question will pave the way for a post-talk conversation that will set the stage for relationship-building.

Along the way,  you must also get a handle on what you can offer the VIPs you want to bring into your camp.  Objectively evaluate what it is about you that higher-ups will appreciate.  Maybe you have a skill that nonprofit boards covet  (beside check-writing ability):

  • Are you a silver-tongued salesperson,  who might therefore be an adept fundraiser for the VIP’s favorite charity?
  • Do you possess the  excellent organizational skills that would make you a key player on an event committee?
  • Can you build a website or put together an e-newsletter?

Or maybe you know an influential person or two and you can connect your VIP to someone he/she would like to know?  Whatever it is that you can do,  discern your value-added and work it,  even if it’s helping out with crossword puzzles.

Social media can also play a role in your relationship-building strategy.  If your VIP has a Twitter feed,  definitely sign up to follow and eventually join the tweets and re-tweets.   If LinkedIn is your thing,  resist the temptation to right away ask your VIP to join your network.  Be more subtle and try to find out if you have any connections or groups in common.   If so,  tap your common connections to obtain some useful background info.   Follow group discussions to see if your VIP participates.  If you can intelligently add to discussions in the common groups then do so,  as your VIP could be following and it could be an opportunity to look good.  You can do the same in the general Answer forum.

In closing,  please know that I do not advise you to coldly manipulate those people whom you feel will be useful to your ambitions.  To the contrary.  Relationships must be a two-way street and win-win is the goal.  Take the time to build authentic relationships and provide value to others as you campaign to be the President of your professional life.

Thanks for reading. Cast your vote.

Kim