After Business Planning

Human Resource policies may not seem to impact the financial health of your small business, but without them, you open yourself up to liabilities that could cost you.  As President Obama fills more and more of his positions, the enforcement agencies like the EEOC will be increasing their investigations.  So, it’s really important that small businesses take necessary steps to stay legal.  Not that you should start worrying about employees filing complaints or worse, lawsuits.  But, you know what they say about the ounce of prevention.  Now is the time to look at your employee handbooks and make sure that your company has appropriate policies in place, and that those policies are being enforced.  And it doesn’t have to cost a lot of money to produce your first handbook or update your existing one.  There are professionals other than attorneys who can help you who don’t cost as much.  Check out our HR audit available at www.afterbusinessplanning.com.

Taxpayers with adjusted gross incomes over $100,000 have had to sit on the sidelines when it comes to converting their traditional IRA to a Roth IRA. But a provision from a 2006 tax law goes into effect January 1, 2010, repealing the income limit for converting to a Roth. 

Why would you want to convert? A major attraction of Roth IRAs is that distributions are tax-free, provided you meet the age and holding period rules. And there are no required annual distributions once you reach age 70½. In contrast, you’ll generally pay tax at ordinary income rates on distributions from a traditional IRA.

With a Roth IRA, you can enjoy tax-free growth and distributions whenever you want throughout your retirement years, or you can leave the Roth for heirs to receive tax-free distributions.

When a taxpayer converts a traditional deductible IRA to a Roth IRA, the amount converted is added to taxable income and is taxed at ordinary income rates. There is a special incentive to do a Roth conversion next year.

If you convert in 2010, you can report half of the income on your 2011 tax return and the remaining half on your 2012 tax return. If you choose, you can report all of the conversion income on your 2010 return.

It’s important to weigh the pros and cons of a Roth.

Think about the big things that you have achieved in your business life?  What does it take to be successful?  I have identified 4 things that I think have to happen every time for us to be successful in business:

Know where you are – your accounting records, financial statements, bank accounts and investments, employee and other records – these all tell you a story of where you have been and where you are now.  You need good records that tell you this story on demand.  Keep them up to date throughout the year.  If you know where you are, then are you happy with it or do you wish you were someplace else?  Make sure you work with a good CPA who can help you figure out where you are and get your records in shape for year end planning – before its too late.

Know where you want to be – What goals or targets do you have in mind?  How much money do you need to accumulate to fund your retirement?  How do you plan to exit your business – you will exit it someday – do you have a plan?  Getting from where you are now to where you want to be is what business planning is all about.  You can plan for your future and acheive the results you want.  You just have to know how to do it.   Work with a Business and Financial coach to  learn how.

Learn how to manage your resources – time, people and money are your scarcest resources.  Are you wasting them?  Learn how to manage them efficiently.  Do an HR audit to determine how your people are working out – it’s all about hiring, training, motivating, evaluating, and compensating your team.  Make sure you have the right people for the right reasons at the right time.  Work with a strong team for tax, business, HR and financial support that teaches you how to manage your resources.

Keep Learning – adopt a life-long learning attitude.  Personal and professional growth is essential for achieving new levels in your business.  Your team is only as strong as its leader – make sure you keep learning from the best people and resources you can find.

For more information about how to build a more successful business and financial future – ask for our Business Builder White Paper.

Last Wednesday, I attended a Business Expo in our local tri-county area sponsored by the three local chambers of commerce.  I had not purchased a booth, so I was there as an attendee, which was free.  I brought my own flyers and plenty of business cards, and for an entire afternoon, I had access to contacts at every exhibitor and to the Expo’s attendees.  Free advertising and free networking!

Before I attended, I set some goals.  I wanted to identify and start relationships with any exhibitors who could be customers, partners or referral sources; or vendors who could help my business. I was also looking for sponsors for my upcoming Client Appreciation Dinner.  My goal was to sell my 10 remaining booths for my event, and I was eventually able to sell 7.

The last customer behavioral style we’ll look at is the ‘classic.’  This customer’s focus is getting things done and getting it done right.  So, naturally, when they are considering a purchase, their main goal is making the right decision.  And that decision will be based on facts, careful analysis and logic.  You will recognize them by their matter-of-fact and diplomatic speaking style and by their QUESTIONS.  They will have plenty.

Be prepared to provide lots of information and analysis.  They like to see charts, spreadsheets, scorecards—anything that you can bring to quantify what results.  They buying decision is a process, and this type likes the process just as much as the decision.  Plan on it taking a while.  Plan on multiple visits.  And once you have provided them everything they have asked and you think you are about ready to close, plan on them asking for more.  If you are classic yourself, this won’t be surprising, and you’ll probably enjoy it.  But for others, this may be a little frustrating.  Just remember—they have to be right, so your job is to help them reach their comfort zone.

Continuing our conversation about customers and behavioral style, today I’ll address the style known as ‘steady.’  This customer is also relationship-oriented, like the influencing style, but is more concerned about team.  They focus on getting things done together.  They are not very excitable, they speak quietly and deliberately.  They do not like change, so the good news is that if they become your customer and you satisfy them, they’ll be extremely loyal.  The downside to that is if you are trying to get them to change from a different vendor, it might be difficult.

When you talk with this customer, emphasize partnerships.  Don’t talk too fast, and allow them plenty of time to think about what you are saying before they respond.  Show interest in meeting his or her team.  They are always concerned about how something is going to work.  If they are considering changing to your product or service, come prepared with a plan showing implementation steps.  They want things smooth, steady and with little disruption.

Last week, I talked about interacting with customers and the need to adjust your communication style to their style.  I talked about the dominant style.  Today, I want to talk about the influencing style.  This customer is very expressive and the focus is more on relationships and less on the task.  They love to inspire and to be inspired, so they like to talk a lot and exchange ideas.  They like to feel special.  So, it’s important to find something initially that makes a connection.

When you meet with them, expect to engage in what might seem like idle chit chat. But to this style, it’s not idle—it’s relationship-building.  So if you find yourself talking about their last golf game or the movie they saw over the weekend, that’s OK.  And the conversation might seem to go off track.  If you try to get to the point too quickly, they will feel uncomfortable.  The challenge that you will have is LISTENING.  Then the next challenge you will have is bringing the conversation to action and closure.  Just don’t try to rush things.  Remember, the most important outcome to this style is their relationship with you.

When you are running your own small business, you definitely know the value of doing it all yourself. You may have grown your business up from practically nothing and in many ways, your ability to take care of things yourself might have been an asset in the past. The thing that you need to remember though, is that as your business grows, you are going to need to delegate more and more, especially if you want the growth to be continual! This is where outsourcing comes in and if you are running a small business, this is something that you need to work on.

The first thing that you need to understand is what outsourcing really is. Many people think of outsourcing and flinch because they think about vital work being handed over to services that can’t do it effectively. The truth is that vast and unwise outsourcing has given the process a badly deserved reputation. As a matter of fact, outsourcing is simply finding someone who is willing to provide you with a valuable service.

For instance, consider your web page. It cannot be denied that your web page is something that is very important and in many cases, it will be the first and best way for your customers to interact with you. It is essential that your web page work correctly and effectively. On one hand, you can take coding classes and learn to create the web page that you need. On the other hand, you could pay someone who already has the expertise to create the website that you are after. While just about anyone can throw up a basic web page, it takes a great deal of training to make sure that you get a page that is attractive and functional.

When you are a small business, one thing that you definitely learn is how to allocate resources. You might spend a lot of time figuring out how you are going to be able to get the results that you need and how to best make your budget stretch. What you also need to learn to budget is time! Think about how much your time is worth to your small business when it comes to things like administration and idea generation. At the end of the day, you will find that in many areas, it is definitely worth your time and even a real savings to have trained professionals in place.

One area where you need to seriously think about outsourcing is that of bookkeeping. Bookkeeping will include everything from accounting to payroll and if you want to make sure that the job gets done quickly and effectively, this is where looking into a local CPA can be essential. You will save money, you will save time and you will be able to see a serious spike in your productivity.

For more information on how you can benefit from outsourcing, visit www.DebraSchillCPA.com.

Getting customers and keeping customers is a strategy every business owner must master. I counsel about targeting your market and getting your message out to potential customers, but eventually you get yourself in front of an actual person, and that’s when some of the challenging fun begins. Because the way you communicate your message one on one needs to vary depending on the behavioral style of the person you are talking to.

One customer you will encounter is the one who has a very dominant style. You will know them by their desire to dominate the direction of the conversation. They get to the point of what they want to know from you, and they usually want to know what you can do for them, what results they will see. And they really don’t want to know any more than that. And if you try to get too detailed with them, they start to feel uncomfortable with you. If that’s your own style, working with them is pretty easy. But if that’s not your style, then you need to adjust. Just remember as you are talking with them—get right to the point, answer THEIR questions and don’t be concerned that you didn’t get to give your entire pitch. And once they become your customer, continue to work with them in that same style.

I’ll be blogging about the other 3 styles in my next blogs!

These days you are more aware of frauds and scams trying to rid you of your hard earned money.  Here’s my newsletter to help you protect your business and personal assets. 

http://www.planningtips.com/Planning_Tips.asp?Co_ID=98512&Tip_ID=6830

Check back often for updates.