Monthly Archives: November 2014

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Get Your Arms Around Content Marketing

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Was it two or three years ago that the term  “Content Marketing ” entered the marketing lexicon?  I first addressed the subject in March 2013  https://freelancetheconsultantsdiary.wordpress.com/2013/03/05/content-marketing-is-the-new-ad-copy .  Back in the day,  advertising strategy focused on which publications would reach the most potential customers at a price the business could afford.  Depending on your business,  traditional advertising can still deliver the desired ROI,  but Content Marketing cannot be ignored.  It is the conduit to engaging with customers on a granular level.  Through it,  we are able to reveal our understanding of customer priorities and challenges,  build trust and credibility as a result of that understanding and demonstrate how and when they might benefit from using our products and services  (and in that order,  BTW).

KISSmetrics CEO Neil Patel defines Content Marketing as  “…the way for a business owner to educate your customers and potential customers about your products and services.  The goal is to offer tips,  help and education about anything that can be helpful to a customer.  This kind of information can be shared in the form of a blog, white paper, webinar, video or social post.  The opportunities are endless.”  Michael Brenner,  a Forbes Magazine Top 40 Social Media Marketer and head of strategy at NewsCred,  points out that  “Small businesses don’t have the luxury of massive ad budgets…they need to drive brand awareness and (sales) leads with limited resources.  Content Marketing is a great way for small businesses to do both.

Great.  Now let’s get you started on creating Content that’ll do some good.  First,  define the Content you should create,  i.e. the Content that your customers value,  presented in a way that will make them tune in to your message.  Think carefully and from the customer’s viewpoint about the reasons that they use your product or service: what are they trying to achieve and what information would they appreciate as they strive to examine and resolve that process?  Chatting with customers about their business goals and challenges and getting a better handle on where your products or services fit in will give you some guidance.

Shelly Kramer,  CEO and founder of V3 Integrated Marketing,  insists that you will benefit from applying what you learn from your research to your strategy and,  just as important,  commit it to writing.  “Write down your strategy.  The key is to tie your overall business goals and objectives into your Content Marketing strategy”,  she says.  Kramer is very astute as she reminds Freelancers and business owners to remember the big-picture marketing strategy for the enterprise and incorporate Content Marketing,  including social media,  in that picture.  “Social and Content have to work together in order for you to be successful….you can’t have success with Content without a robust presence in the social media space and….understanding the role that fresh,  relevant Content and social media channels play.  There is great Content being published on corporate blogs on a daily basis that no one ever sees.”

Next,  choose your delivery system.   Do customers visit your website often?  Then maybe posting a white paper once a month or writing a weekly blog will work for you.   Are customers part of your LinkedIn group,  Facebook fan page,  or do they follow your business on Twitter?  Add those icons to your email signature block and your website to make social media connections that alert customers to your Content an easy process.   A monthly newsletter is another great Content Marketing strategy.  It’s the savviest form of email marketing  (include an opt-out feature).

Fresh and relevant are your operative words,  as Kramer notes.  Volume,  value and variety are your other guideposts.  Brenner says “(Volume)….starts with this notion that you need to be present in our always-on,  always connected world.  The second thing is value.  Your Content has to be good.   I always recommend that brands identify what they want to talk about and then make every effort to produce as much valuable Content around those topics as often as possible.  The final tip is about variety.   People (and search engines)  reward those brands that deliver value in multiple ways,  so think about text-based articles,  videos,  SlideShare presentations,  research reports  (white papers) and all the different things we consume across the digital,  social and mobile web.”

How do you measure ROI and recognize success?  Patel offers 3 specific steps:

  • Track Content views
  • Use Google Analytics (free) to track which types of Content drives visits to your website
  • Measure your search traffic

Patel advises “You have to give it time.  Don’t expect great results in 3 months or 6 months,  but you will see traction.  Within the first 3 months you should see more traffic to your site.   Within a year you should start to see good results and an opportunity to monetize traffic on your site.”  Patel concludes  “Good Content Marketing builds trust.  If someone trusts you,  they are more likely to buy your products and services and more likely to tell their friends and family.”

Thanks for reading and Happy Thanksgiving,

Kim

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Open Enrollment: Freelancer’s Health Insurance

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Open enrollment for 2015 Affordable Care Act health insurance began on November 15.  Individuals who earn maximum $46, 680 and families of four (couples with two dependent children) that generate a maximum total income of $95, 400 are potentially eligible for a tax credit that will help defray the cost of insurance premiums. In tax year 2015,  the penalty for not carrying insurance will rise from $95 to $325,  or 2% of household income,  whichever is greater.

Business entities of 50 or fewer employees and located in Delaware,  Illinois,  Missouri,  New Jersey or Ohio can set up a Small Business Health Options Program (SHOP) account by completing an application that determines eligibility and if accepted,  investigate plans and prices and contract with an insurance company.  A 2014 University of Chicago study found that 2013 insurance prices offered through SHOP exchanges in 26 states were on average 7 % lower (about $220) than comparable insurance bought outside of the SHOP exchanges marketplace.

Freelancers and small business owners who did not buy health insurance in 2014 will need information to guide decision-making about the upcoming year.  The Freelancers Union  http://freelancersunion.org,  a New York City-based nonprofit organization that advocates for the interests of self-employed workers,   plans to help its 233,000 members purchase medical and/or dental insurance in all 50 states.

Freelance Union members also have access to retirement plans and disability,  liability and life insurance.  Additionally,  the Union operates two health and wellness centers in New York City,  where members can obtain primary care services at no charge and also participate in classes such as tai chi and yoga.  Membership in the Freelancers Union is free.

I went to the Union website and found that medical insurance is not offered in my state,  but dental coverage is available for $60.77 /month  ($112.32 /married couple and $164.89 /family).  The twice-yearly cleanings are 100% covered as are annual x-rays.  Services such as crowns,  fillings and anesthesia are covered at 80% after a $50 deductible and root canals,  endodontic and periodontal services are covered only after a 12 month waiting period and then at 50 % after the $50 deductible.  The yearly maximum benefit is $1250.

An individual pays about $730 for the year.  I might spend that amount in a year paying out-of-pocket for two cleanings with bi-annual x-rays averaged in.  My gums are not great and I must very soon see a periodontist.  Heaven knows what he will charge but the visits will not be covered,  since only two are allowed in 12 months.  Periodontal work would only be half covered and the maximum annual benefit is only $1250 for a premium that costs $730/year.  In sum,  health insurance is all too often not an advantage,  unfortunately.  Maybe the medical plans are better?  An individual Bronze level plan in New York City will cost $393/month in 2015.

Still,  it appears that Freelancers can benefit in other ways from Union membership (I am not a member).  There are plans over the next five years to open 15 primary care clinics across the country,  including Los Angeles and Austin, TX.  The clinics will not charge co-pays for office visits and will be open to all who purchase health insurance through the Freelancers Union.  There are numerous professional benefits as well.  Maybe I will join before too long.

More good information on health insurance prices is available at the Consumer Reports Health Law Helper,  which walks you through questions to help you understand your options for buying health plans,  with links to marketplace sites   http://healthlawhelper.org.  The American Association of Retired People AARP sponsors the Health Law Answers site,  which provides information for health insurance seekers of any age  http://healthlawanswers.aarp.org/en.  The Kaiser Family Foundation provides the Insurance Marketplace Calculator,  which helps you estimate the cost of health insurance based on your location,  age and income,  along with pricing for various level plans  http://kff.org/interactive/subsidy-calculator/.

Thanks for reading,

Kim

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Year-End Tax Planning: Freelancer Options

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It’s never too early to start a retirement plan and Freelance consultants are encouraged to set aside money whenever possible.  Be advised that contributions to a self-funded retirement plan are guided by your net earnings from self-employment.  If you net $80,000 this year,  then you may contribute 20%  of that amount,  or $16,000,  to a SEP IRA or Solo 401K plan.  If you are age 50 +,  a  “catch-up”  contribution of maximum $5,500  (in 2014)  can raise your total allowed retirement fund contribution  (and tax deduction)  to $21, 500.  The maximum amount that one can contribute in tax year 2014 is $52,000 and $57,500 for those age 50 +.  However,  if you are a high earner and you consult with a savvy tax specialist,  it may be possible to divert lots more tax-deductible dollars to a Solo 401K than is allowed with a SEP IRA.

 

SIMPLE IRA

The Savings Incentive Match Plan for Employees Individual Retirement Account is a type of traditional IRA that is tailored for small business owners and self-employed Freelance consultants.  As with a traditional IRA,  contributions are tax-deductible and savings held in the account are tax-deferred until retirement withdrawals are made  (age 59 1/2 the youngest and age 70 1/2 the oldest).  If you have employees,  they may contribute to the SIMPLE IRA themselves and you the employer are required to make annual contributions as well,  whether or not the employee chooses to contribute.  You may make a 100%  match of the employee’s contribution,  but the maximum is 3% of your  net earnings,  or you may limit your employer contribution to 2%  of your  net earnings.

Any business entity that employs 100 or fewer workers may establish a SIMPLE IRA for employees and the owners,  too.  If you anticipate growth in your business that will likely cause you to hire even one full-time employee,  then consider a SIMPLE IRA,  because adding employees to the plan is relatively easy,  unlike other retirement plans.  The big downsides to SIMPLE IRA are 1).  the $12,000 annual contribution limit is considerably lower than that of SEP IRA and Solo 401K and 2). the  $2,5000  “catch-up contribution”  for Freelancers and business owners who are age 50 + is paltry by comparison as well.

However,  as a business owner or self-employed Freelance consultant,  you are your own employer and you may contribute to your SIMPLE IRA as both employer and employee.  You may add in up to 3% of net earnings,  in this example up to $2,400,  to contribute $14,4000 in 2014 and $2,500 extra if you are age 50 +.  Finally,  if you don’t make much money but you still want to set aside a little something for retirement,  if your net earnings from self-employment are $12,000 or less,  you may contribute 100% of the amount of your net earnings to your SIMPLE IRA.

ROTH 401K

A designated Roth Retirement Account is an individual retirement account that exists under the umbrella of your 401K,  solo or traditional  (if the 401K is set up to allow it).  Unlike SEP and Solo 401K,  Roth 401K contributions are made with after-tax income and when you are ready to access the account,  you will draw down tax-free money.   The 2014 maximum Roth 401K contribution is $5,500  ($6,500 for those age 50 +).

Your selection of a Roth designation within your 401K will depend upon your financial circumstances and you should meet with a reliable financial adviser in advance.  An individual or couple might choose a Roth when there are insufficient deductions to itemize at tax time,  thus negating the tax deduction benefit of the other retirement accounts .  The Roth,  paid with after-tax dollars,  gives account holders the benefit of tax-free income during retirement.   Wealthy Freelance consultants who are concerned about minimizing taxes during retirement may also benefit from the Roth.

You may have both a  (pre-tax)  Solo 401K and an  (after tax)  Roth 401K and it is permissible to use the salary-deferred portion of your Solo 401K to make a Roth 401K contribution.  Profit sharing Solo 401K contributions are not eligible to be made as a Roth 401K contribution,  since they are made pre-tax and are tax deductible and you cannot commingle the two.

While Roth 401K income-deferred contributions are NOT tax-deductible,  withdrawals made after age 59 1/2 are tax-free IF five years have passed since your first contribution to the Roth  (known as the 5 year rule).  One is NOT required to take distributions at least by age 70 1/2 and that feature may be useful for retirement cash flow planning.

Thanks for reading,

Kim

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Year-End Tax Planning: Funding Your Retirement

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Happy November.  The year will soon end and it is time to put together a tax planning strategy while there is still time to plan and execute.  There may be business equipment to purchase,  upgrades to make to your website or a seminar to attend,  but we self-employed workers must also fund our retirement.  Traditionally employed workers must also fund their retirement,  but they get help from their employers.  Freelancers are our own employers and we must step up and do all that we can to stash a few tax-deductible dollars in the cookie jar,  so that we can eat when we’re 75.

Whether you’ll squeeze a few thousand dollars out of modest billable hours or you’re looking for a place to roll the overflow from a lucrative year,  saving for retirement is a superb tax planning strategy.  It is also a superb life planning strategy.  Under no circumstances do we want to be old and broke in America.  If one is single,  that is a real possibility.  This is not Europe and the government will not give us any financial assistance in a time of need,  even though we have been tax paying citizens our entire lives.

The good news is that there are good retirement plan options available to Freelancers with a few thousand dollars to spare and the discipline to save.  Also,  the retirement money can be invested in stocks,  bonds,  mutual funds or even real estate.  You might get lucky and see your investment really grow.  Taxes will not be paid until it’s time to draw down on the account  (age 59 1/2 the youngest and age 70 1/2 the oldest).

SEP IRA

The Simplified Employee Pension Individual Retirement Account is modeled after the IRAs that every employer offers.  They are evidently the easiest type of retirement account to set up and there are minimal IRS reporting requirements involved.  Your job will be to find a brokerage firm that will set up the plan,  process your deposits,  maybe give you some investment advice and not kill you with administration fees.

Contributions are limited to 20% of your net earnings  (before the self-employment tax).  Contributions are capped at $52,000/year for tax year 2014 and the limit will increase every year or two,  to adjust for inflation.  A married couple who run a business together,  or are each Freelancers,  may open a joint account and save an annual maximum of $98,000 tax-deductible retirement dollars in 2014.  One cannot borrow against a SEP IRA.

SOLO 401K

The Individual 401K is modeled after a traditional 401K and once again,  the IRS filing requirements are uncomplicated and your job is to find a brokerage firm that will set up the plan,  process your deposits and not kill you with administration fees.  One may contribute money a little differently to a Solo 401K,  in that you may give yourself a  “salary deferral”  in a good year and stash up to 20% of your net earnings into the Solo 401K,  but the annual maximum contribution remains $52,000 in 2014  (the limit will rise modestly to adjust for inflation).  However,  Freelancers aged 50 +  can take advantage of the  $5,500 (max)  “catch-up contribution”  feature,  which allows those who are able to set aside more retirement dollars to do so and contribute up to $57,500/year in tax-deductible dollars.  Another big advantage of the Solo 401 K is that one may borrow against maximum one-half of the assets  (you must repay the loan with interest, to yourself).  Additionally,  a married couple who run a business together can start a Solo 401K retirement plan for the two and contribute up to $98,000 annually as of 2014 and $10,000 more with the catch-up contribution if both are age 50 +.

Next week,   we’ll look at the SIMPLE IRA and more retirement plan options.

Thanks for reading,

Kim