A Question From Your Friendly Expert Small Business Accountant: What Business Are You Actually In?

A Question From Your Friendly Expert Small Business Accountant: What Business Are You Actually In?

November 13, 2012

Here we are after the election, with the status quo being upheld. Billions were spent (probably making some “consultants” do quite well in the process), and we were all very distractedhere in Somerset Area … but not much has changed, even for our tax accounting office. Many are happy about it, an ever-so-slight number less aren’t happy — but to all I will say this:

Over the next four years, what you do will have a larger impact on your income, wealth and happiness than what any president does.

And yes — there will be many things for us to help you navigate, because come 2013, there WILL be some significant changes.

With the election behind us, we can expect some traction on the debt limit negotiations, and further discussion of the “fiscal cliff”. But taxes WILL go up next year … whether it’s directly on your income, or in other more-hidden ways. So, as your favorite Somerset Area tax accountant, my primary quick-and-dirty tax planning maneuver for you is this: take as much income THIS YEAR as possible, and defer tax-deductible expenses until after December 31, whenever possible.

This is usually quite possible for business owners, sales professionals or other independent contractors. (If you want more a more detailed breakdown behind this strategy, don’t miss this:
http://www.forbes.com/sites/robertwood/2012/11/11/should-you-grab-pay-in-2012-or-defer-til-2013/)

Now, speaking of what YOU can control …

A Question From Your Friendly Expert Small Business Accountant: What Business Are You Actually In?

As an example of what I’m talking about, let’s say you run a daycare business right here in Somerset Area.

In fact, not only do you run a daycare business, you run it very well. Your employees are licensed and trained to the highest standards; your facilities are top-notch; you’ve got years of experience and your customers rave about how their kids are happy when they pick them up.

But you’re losing money, because you don’t “get” what I’m about to tell you.

You see, you could be the World’s Greatest DayCare Business (in absolute truth), and still have a poor bottom line.

Why? Because your competition here in the Somerset Area area alone out-markets you, and so they’re making revenue hand-over-fist, and you’re struggling to pay the bills.

(Yes, I understand that the things above–facilities, employees, etc. are indeed part of “marketing”, but I’m making a more specific point).

You see, the mental shift from “doer of the task” (providing day care services) to “promoter of your business” (the marketing of day care services) is vital if you plan on growing your business to the level of your dreams. I would say over 99 percent of the small business owners in America do not make this mental jump from, “I do ‘X’ for a living” to “I market my business for a living.”

Now don’t think I’m being picky here. This is important to get straight NOW, as we get ready to face 2013 and (still) face a down economy.

The business owner “doer” sees the task as their primary role. The “marketing-minded” business owner sees acquiring clients, retaining them and maximizing their total client value as their primary role. (Providing the particular service is seen as one of many other, also very important, but still secondary, tasks in the office.)

I hope you can see the difference.
 (If you are hearing this concept for the first time, let it sink in and think about it for a second. If you don’t have clients coming through your door to do business with you and you’re the best practitioner in the world, you’re still going to starve if you can’t get clients!)

The most important part of your business is “making the sale”. And how you get someone in front of you to sell your services to is MARKETING.

Getting people to call your place of business saying, “I want to do business with you,” and then to show up at your door wanting to give you money in return for a particular service is the most important thing you could master.

So here’s my advice for you right now: If you have not already done so, set a day aside before the end of November to lay out a clear, step-by-step marketing plan for 2013.

This should be in a written plan for how you’re going to attract the clients you want–I.E. “I’ll get 5 new clients from ___ source, and spend $ ___ to do it; I’ll get 10 clients from _____ source, and spend $___ to do it”, etc.

This is how it’s done. A written plan with real goals. Be conservative on your expectations, and you’ll discover this process can be quite systematic. AND you may just “strike gold” and have your conservative projections blown out of the water!