Music Think Tank posted an article, How Well Do You Know Your Fans? that define different segments of a band’s fan base. As you read the article, substitute the word fan for business client. We all have business clients that appreciate our services on different levels. Levels of dependability, confidence, and of course honesty. Business clients can be classified in similar groups as rock fans. The questions to ask as a business owner is why are some clients more dedicated than others? What did I, as a business owner do that impressed clients to be loyal to me as some are. Lastly, once you have answered these questions, adjust your strategy in business client relationships and procurement. Learn by the mistakes when losing business clients, and duplicate the attributes you possess with those who are your greatest fans.
The article demonstrates how creative types are altering their strategies by leveraging the iPad technology to display ideas of movie characters, locations, and actors. This strategy is very elastice because its limitation is the creative ability of the user. Whether it is college students carrying digital textbooks, doctors carrying patient records, or producers carrying the daily shootings, the strategy has changed. When I first started using a personal computer in the 1980’s, Lotus 123 was the big time saver. You would enter your row of numbers and click total. Nevermind that the red “WAIT” sign would flash twenty times, Lotus 123 was the greatest invention.
But there was a problem. I was constrained in developing my work strategy by Lotus 123’s functionality. All it could do was mathematical functions. But now, we are at crossroads where a disparate list of technologies have come together. The problem of limiting your strategy by the computer’s functionality has shrunk dramatically. Now, instead of the user’s strategy being limited by the equipment, the equipment is limited by the user’s strategy and abilities.
So, what does this mean to every business person and artist? It means that you should not look to technology to execute your strategy, but develop your strategy to execute the equipment’s capability. Do not do things the old way, but imagine a new way of doing things.
So, how do you start? Well, the first way is to step into the shoes of your customers. What are they looking for in a service of product? What should they be looking for, but have ignored it because nobody has offered it in such a way?
One of many theories is the Blue Ocean Strategy. Southwest Airlines sought to offer air transportation at the cost of a car rental. As history shows us, they were able to accomplish this and grab market share.
The next step is to build a strategy with milestones and metrics so you can honestly monitor your execution.
The last step is to alter your tactics in order to accomplish your goal.
Retirement Plan! I can’t even make ends meet. I can’t use bread and butter money to stash away for the future!
Sometimes, that is statement I hear from individuals and business owners. So many just struggle through the daily grind, and don’t think about their retirement. Some small business owners think they have a good plan, i.e., place the entire risk on their business. When they are old enough they will sell the business to finance their retirement. Both of these positions are alarming, and are missing the biggest advantage to a retirement plan: time. When you invest tax deductible money in a retirement plan, it grows tax free over many years. If done correctly, compounding growth can set you up for a nice nest egg when you need it.
Ok, so I got your attention, sort of. But which retirement plan? Well, the AICPA has launched a nice tool to help you decide. Check it out.
I came across a good article discussing the 10 Truths about the Modern Music Business. The remarkable fact about this article was that you don’t have to be in the music industry to appreciate the observations in the article. As I read the article, I substituted “business person” for “artist,” and “customer” for “fan.” In most cases, there was a direct relationship among industries.
Now, I am not saying that every point can relate to other industries, exactly, but let me give you an example. I told a client that when I Go-ogled his industry in the southern California area, his company did not materialize. In fact, I had to insert a very refined search term, and his city, just to find his company’s site. Ironically, his competitors appeared all over my results. His response, “Well, that is not the way my business works. Companies don’t Google to find my type of business.” I asked him, “Then why are you losing market share? Why are you struggling to bring in new business, where the same competitors seem to be growing?”
This article has some good points that businesses can take home like, the use of technology to stay in front of the field, and the need to communicate directly to your target prospect, and not rely on Yellow Pages, or some other platform to do it for you. New thinking is taking hold in the world of Strategic Planning. Will you be a leader and embrace them, or be left behind with only excuses?
The use of S-corporations has been rising in recent years. However, the challenge is to operate them correctly so as to not create a fatal mistake invalidating your S-corp election, or other problems. Here are some areas to be careful
Make sure you give yourself an adequate salary. Many S-corp owners take only draws thinking that they can escape all Social Security and Medicare taxes. The IRS is very keen to this one. There has been some attempts to make all S-corp income subject to self-employment tax. This legislation would eliminate the need for reasonable salaries.
Be careful when you pay back your loans to the S-corporation. If you used those loans as part of your basis to take losses, you may have to recognize income on their repayment.
In order for an S-corporation to have a single class of stock, the economic interests must have the same rights to distributions. If partners are to receive disproportionate distributions, then maybe an LLC is your best choice for a tax vehicle.
When an S-corp shareholder leaves, be sure allocate the activity properly and provide all applicable elections.
If you have an S-corporation, consult your tax advisor when making decisions that may affect its status.
Many business owners who retain such individuals fail to look at all the components. To compute the real cost of a CFO or bookkeeper, a business owner must add their salaries, payroll taxes, worker’s compensation charges, sick leave, vacation leave, training, parking, to name the basics. Then, you may send your CFO or bookkeeper to seminars or outside training. That’s a double-whammy.
But now comes a cost of an internal CFO or bookkeeper that is new to smaller owners, health insurance. Under the new laws, most smaller businesses will be required to provide health insurance. Even with the credits, probably not available to a company for a CFO, the cost will take a chunk out of the bottom line.
Now some businesses need an internal controller, a CFO, or a bookkeeper. They function quickly with inventory shipments and cost analysis. But many companies don’t need both a CFO and bookkeeper because of the advancement of technology and the web.
Many business owners are not familiar with paperless and remote accounting technology. As a firm that provides outside CFO and bookkeeper services, we do. We fill that gap for the business owner, usually at a fraction of the cost of a CFO and bookkeeper.
How do we do it? Our bookkeepers are trained like the staff accountants. They provide the small business owner with the skill set to manage the bookkeeping function while being guided by our accountants who act as outside CFOs. A client does not need the constant skills of a CFO and bookkeeper if they have other employees, like an office manager that fills the day to day functions. As outside CFOs and bookkeepers, we provide a specific skill set that targets the needs of the business owner from bookkeeping to accounting, and tax services to strategic planning. As outside CFOs and bookkeepers, we help manage your business. Our business connections provide a whole host of referrals for such things as insurance, financial planners, pension consultants, etc. Our skill set provide the business owner with much more than an accounting function like a CFO or bookkeeper, we provide a whole business startup and operation specialty.
But we don’t stop there. Within our function of acting as an outside CFO or bookkeeper, we help owners increase their top line by strategic planning. Unlike a CFO or bookkeepers who restrict themselves to historical information, we look to the horizon and strategically help the business owner grow their business. Yes, we provide the usual function of a CFO or bookkeeper in this manner, but how does that help a business owner grow his or her business?
The time has come of age for the external CFO and bookkeeping staff for many companies. The cost of keeping such a staff in house does not make sense for the on-hands business owner who is trying to get to the next level.
The use of S-corporations has been rising in recent years. However, the challenge is to operate them correctly so as to not create a fatal mistake invalidating your S-corp election, or other problems. Here are some areas to be careful