Posts Tagged ‘Empower’
Lessons From a Start-Up Business
Lessons From a Start-Up
Mrs. CPA Superhero and myself started a new venture recently and here are some learns we learned.
Pricing:
First, the emotions involving pricing are tremendous. Even though many told my wife we were not charging enough, including me, she still felt that lowering prices would get more of her product to sell. Many that did not buy her product shared the reason they were not buying was they did not have money to be buying anything. Most of the people that bought the product were impulse buyers. So it was not the price but still my wife thought that lowering the price was related to moving more product. But the facts bore out that was not the case.
Our Market:
Second, we learned what the market was interested in. Many items we thought would sell quickly did not sell at all. Others we were not as excited about moved quickly. So you see, it is not what we think but what the market wants. So we need to accommodate the market.
Third, we learned that what marketing ideas worked and what did not. Specifically our shows in homes did well while shows at businesses did not. We may want to try some shows at fairs next year and see how that goes. Additionally we were surprised that we did so well selling to a retailer when we thought we were retail. It may well turn out that we will be wholesalers (apparently we had wholesale prices). Even now that we are back in Mexico, others are marketing my wife’s jewelry, marking it up from our price.
Lessons Learned:
From the points above you can see that (1) we got started, and (2) actually sold more then we expected, but then (3) we also gathered information that will help us be more successful in the future. There is nothing like getting starting and learning while making money.
Finally, we learned what to do and what not to do so as to make as much money as possible while giving up the least amount of our time. Our shows at businesses not only were not very profitable but they took up too much of our very valuable time. The home shows and selling to a retailer took less time and the time we spent was not prime time for us, time that we could have used in more important pursuits. So we are so excited about the experience and are looking forward to our next trip back to the USA to sell our product purchased here in Mexico. Stay tuned for more lessons learned from a start-up.
Jeff Haywood, CPA
CPA Tax Superhero
972-439-1955
jeff.jhtaxes@gmail.com
This article was written by Jeff Haywood, CPA.
Jeff is a licensed CPA in Texas
He has prepared income tax returns for the public for over 10 years.
He also has an MBA in Finance from Loyola University in Chicago and he has 24 years experience in Corporate Finance and Business Analysis.
I prepare the following types of tax returns:
Personal
Business
Estate/Gift
Trusts
Federal and State Returns
I especially value discussions about you, your business, your dreams and goals.
Click Here to Follow Jeff Haywood, CPA on Twitter
Also, Click Here to Follow My Twitter Account: Taxesforxpats
In addition here are links to a few of my articles about income taxes for expatriates:
Income Tax Returns for Expatriates
US Income Tax Help for Expatriates
Foreign Earned Income Exclusion
Are You Required to Report Foreign Bank and Financial Accounts?
Click Here to Follow My Twitter Account: Taxesforxpats
For a full list of prior posts see the CPA Tax Blog.
Standard Disclaimer:
As always keep in mind that the content provided on this site is general in nature and may or may not apply to your particular case. It is best to check with a tax professional about your circumstances and what is best for you personally. Also, IRS regulations and tax laws are constantly changing and the information on this site is not constantly updated. Again please check with me about your particular circumstances and what will be best in your situation at the given time and law.
Comments:
If you have a comment to share about this post or for me, please email me at jeff.jhtaxes@gmail.com.
Is a Business Plan Required For Your New Business?
Do You Need a Written Business Plan?
Is a business plan required for your new business? The short answer is no, probably not. One may be required by a bank or a potential investor but other than that you probably do not want a written business plan.
How can you say that Mr. CPA Superhero?
It is easy to say. When was the last time you spoke to a successful business person who had a written business plan? Most likely never, because the idea of the written business plan is a product of University Business Schools taught by men wearing sandals. I have never met a successful business person who had a written business plan.
Recently I played golf with a friend who specifically mentioned to me that he has never and will never do business with a person who has or requires of him to have a written business plan. His reasoning is that people who have them or require them, in his experience, have no idea what they are doing. He has had conversations with so called “business plan people” in the past and found them to be too rigid to have any success. He perceived that they were incapable of adapting to change or obstacles and, of course, things change all the time. He noticed that the people who require business plans are business school graduates that have never had any success in business. Meanwhile, my friend has developed a few businesses that have generated over a million dollars in profits for him.
So listen to people who have achieved success in business and save yourself some time and forget the written business plan.
When Things Do Not Go As Planned
So, no you do not need and probably do not want a written business plan. You should, however, have a good concept of what your business is going to be and a strategy to reach your goals. You do not need to waste time putting an elaborate plan in writing. You see, most successful businessmen are men of action not of writing plans. So when you have an idea move forward with it. Now here is the really valuable advice…when things do not turn out as planned or things change then adapt. And things never turn out just as planned and if they do, in time, they change. So one key to success is being able to evaluate your business and adapt to be successful.
If a bank or investor wants a written business plan you may want to look for others ways to get your financing. Again, be creative and make it happen. I’m just saying…that is what I have noticed over many years of doing business with successful and unsuccessful businessmen and women.
The other take away here, is listen to people who have succeeded and never ever listen to those who have not had success and wear sandals while teaching a class.
Jeff Haywood, CPA
CPA Tax Superhero
972-439-1955
jeff.jhtaxes@gmail.com
This article was written by Jeff Haywood, CPA.
Jeff is a licensed CPA in Texas
He has prepared income tax returns for the public for over 10 years.
He also has an MBA in Finance from Loyola University in Chicago and he has 24 years experience in Corporate Finance and Business Analysis.
I prepare the following types of tax returns:
Personal
Business
Estate/Gift
Trusts
Federal and State Returns
I especially value discussions about you, your business, your dreams and goals.
Click Here to Follow Jeff Haywood, CPA on Twitter
Also, Click Here to Follow My Twitter Account: Taxesforxpats
In addition here are links to a few of my articles about income taxes for expatriates:
Income Tax Returns for Expatriates
US Income Tax Help for Expatriates
Foreign Earned Income Exclusion
Are You Required to Report Foreign Bank and Financial Accounts?
Click Here to Follow My Twitter Account: Taxesforxpats
For a full list of prior posts see the CPA Tax Blog.
Standard Disclaimer:
As always keep in mind that the content provided on this site is general in nature and may or may not apply to your particular case. It is best to check with a tax professional about your circumstances and what is best for you personally. Also, IRS regulations and tax laws are constantly changing and the information on this site is not constantly updated. Again please check with me about your particular circumstances and what will be best in your situation at the given time and law.
Comments:
If you have a comment to share about this post or for me, please email me at jeff.jhtaxes@gmail.com.
Do Not Follow The Crowd When Starting a Business
There Is More Than One Way to Get To the Market
Have you heard the expression there is more than one way to get to the market? When you start your business it is essential that you understand that you do not have to do it the same way as someone else and most of the time it is not a good idea to imitate someone else. It is so important that your business works for YOU.
Baseball Examples
There is usually more than one way to operate/market a business. Take baseball teams for example. The Yankees spend big bucks on proven players and they generate a lot of attention and are the most valuable team in baseball. Are they the most successful? That depends on your definition of success.
The other end of the spectrum is the Oakland A’s, of “Moneyball” notoriety. The Oakland A’s follow a different approach out of necessity. They look for undervalued players that have certain characteristics that are key to winning games. The Oakland A’s are successful in their own way. Mainly they make a profit and generally they have a winning team, even if they have not won the World Series in many years.
Then there are the St. Louis Cardinals, who are my favorite team. The Cardinals have employed what appears to be a hybrid of these two ways to build a team. Actually they have transitioned from a variety of the Yankees approach of signing players from other teams to a team that develops talent from within the organization. They are now shying away from paying enormous salaries to older proven players over many years. The Cardinals have great attendance at their games, they are regularly in contention for the World Series and have won several recently. They also have a faithful, devoted, fan base and they have shown they can adapt and evolve.
Questions To Ask Yourself
From the examples above you can see there is more than one way to build a business and achieve success. So what about your business? Ask yourself some questions:
- In what way do you want your business to be successful?
- Does your plan allow you to achieve your lifestyle goals?
- Is your plan consistent with your strengths, your market, and your financial resources?
There are many things to consider when starting a business. Please realize that you do not have to and probably should not copy someone else. By all means realize that being the biggest in terms of generating revenue is not the only way. Keep your eye on your objective. Is it to be famous or to have the most money in your pocket at the end of the day or both? The biggest is seldom the most successful in terms of profit and money in your pocket.
So when you start planning your business these are a few things to consider. Your friendly CPA Superhero has worked with many people that have started businesses and some have succeeded and some have failed. In addition your CPA Superhero has built and is currently building another business. Benefit from these observations and plan a way to the market that you will enjoy and that will produce profits and empower you to achieve your desired success for the business and your lifestyle.
Jeff Haywood, CPA
CPA Tax Superhero
972-439-1955
jeff.jhtaxes@gmail.com
This article was written by Jeff Haywood, CPA.
Jeff is a licensed CPA in Texas
He has prepared income tax returns for the public for over 10 years.
He also has an MBA in Finance from Loyola University in Chicago and he has 24 years experience in Corporate Finance and Business Analysis.
I prepare the following types of tax returns:
Personal
Business
Estate/Gift
Trusts
Federal and State Returns
I especially value discussions about you, your business, your dreams and goals.
Click Here to Follow Jeff Haywood, CPA on Twitter
Also, Click Here to Follow My Twitter Account: Taxesforxpats
In addition here are links to a few of my articles about income taxes for expatriates:
Income Tax Returns for Expatriates
US Income Tax Help for Expatriates
Foreign Earned Income Exclusion
Are You Required to Report Foreign Bank and Financial Accounts?
Click Here to Follow My Twitter Account: Taxesforxpats
For a full list of prior posts see the CPA Tax Blog.
Standard Disclaimer:
As always keep in mind that the content provided on this site is general in nature and may or may not apply to your particular case. It is best to check with a tax professional about your circumstances and what is best for you personally. Also, IRS regulations and tax laws are constantly changing and the information on this site is not constantly updated. Again please check with me about your particular circumstances and what will be best in your situation at the given time and law.
Comments:
If you have a comment to share about this post or for me, please email me at jeff.jhtaxes@gmail.com.
Actually STARTING Your Business is Key to Success…You, Lebron James & Jason Motte
Challenges/Obstacles to Starting a Business
An entrepreneur faces many challenges/obstacles when starting a new business. Many of these challenges take place in your mind. In this post we will look at unmet expectations and your response. The bigger challenge really is dealing with your emotions and not so much the unmet expectations. In the new venture my wife and I undertook, my wife had the expectation, set by someone else, that she needed to have full detailed inventory list before she began. As a CPA Superhero Bean Counter I fully understand the need for an inventory. However, success is contingent on STARTING and sometimes you have to say 1-2-3 go even without a full inventory list. When unmet expectations keep you from starting to sell your product and generating revenue that is a bigger problem than not having an inventory. (excuse me…what did the bean counter just say?)
Do You Need to be Perfect?
The other expectation my wife had was having a perfect display for her product. Expecting perfection is always an emotional killer/obstacle at the start of a business. Expecting to get to perfection eventually is the way to go. The thing is, the sooner you get started and sell product…and learn the better. Yes, you want to plan and prepare but you also have to START to make money.
Jason Motte
Being a baseball fan I liken this to the players and the coaches decisions. When a coach has a relief pitcher that has only one pitch, a fastball, and he is working on a slider the coach does not wait to put him in a game as long as he throws that fastball over 90 mph and with some control and with a little movement on it. What happens with the one pitch pitcher? He has to get into a game to learn how to pitch with his one pitch and learn from mistakes quickly. Typically a coach has several of these not fully developed relief pitchers and he puts them in games and sees who learns, adapts, and succeeds quickly without getting emotionally crippled. It was not the end of the world when Jason Motte struggled for the St. Louis Cardinals nor when others with more potential failed. But then Jason Motte figured out how to win with one pitch and he gained confidence while others could not handle occasionally failing. So you see you do not need to be perfect. You just need to get out there and START and learn and develop into a successful businessman.
Guess what. Not only do even the best baseball players fail, but businessmen fail also. How many restauranteurs fail trying to make the best food and at low prices. Meanwhile McDonald’s and Domino’s succeeded with inferior food at higher prices. They learned how to succeed with what they had and they went for it even though it was not perfect.
My wife learned to start without an inventory and without a perfect display and to charge more than she was comfortable with. What happened? She started selling jewelry and generated some cash. She had many shows with a variety of success and a couple of flops but all in all in the end she sold more then she expected to. In addition, she learned what sells well and quickly and what does not. Now she is equipped with experience and knowledge to do a better job of buying inventory that will move. But none of that would have been possible had she not STARTED.
By the way we now have an inventory list of everything that remains and its cost. It is not perfect but it is close enough and we can move ahead.
You and Lebron James
You can get your business started, just do not expect to be perfect and say 1-2-3 Go. Like Lebron James you will not make all of your shots but you will be a winner.
To talk to an experienced CPA about starting a business and the challenges that go with it, contact me using the information below. See my other posts about success and business entities and taxes for further help.
Jeff Haywood, CPA
CPA Tax Superhero
972-439-1955
jeff.jhtaxes@gmail.com
This article was written by Jeff Haywood, CPA.
Jeff is a licensed CPA in Texas
He has prepared income tax returns for the public for over 10 years.
He also has an MBA in Finance from Loyola University in Chicago and he has 24 years experience in Corporate Finance and Business Analysis.
I prepare the following types of tax returns:
Personal
Business
Estate/Gift
Trusts
Federal and State Returns
I especially value discussions about you, your business, your dreams and goals.
Click Here to Follow Jeff Haywood, CPA on Twitter
Also, Click Here to Follow My Twitter Account: Taxesforxpats
In addition here are links to a few of my articles about income taxes for expatriates:
Income Tax Returns for Expatriates
US Income Tax Help for Expatriates
Foreign Earned Income Exclusion
Are You Required to Report Foreign Bank and Financial Accounts?
Click Here to Follow My Twitter Account: Taxesforxpats
For a full list of prior posts see the CPA Tax Blog.
Standard Disclaimer:
As always keep in mind that the content provided on this site is general in nature and may or may not apply to your particular case. It is best to check with a tax professional about your circumstances and what is best for you personally. Also, IRS regulations and tax laws are constantly changing and the information on this site is not constantly updated. Again please check with me about your particular circumstances and what will be best in your situation at the given time and law.
Comments:
If you have a comment to share about this post or for me, please email me at jeff.jhtaxes@gmail.com.
Two Networking Follow Up Strategies
Follow Up on a One-On-One Meeting
In a previous post I wrote about 2 Steps to Make Networking Work For You. What is the strategy after a one-on-one meeting with a potential contributor to your network? Well depending on the first meeting you may follow up with the person to offer your services or product or that of someone else. So you continue to think about what the person told you and when you have an idea that may help them you contact them to let them know. It may be too that you thought of someone that may benefit from their or one of their contact’s product or service and you want to connect them.
Connecting With a Contact’s Contacts
Finally, you may be interested in meeting one of your contact’s contacts. This is where networking gets very interesting and dynamic. When you find they know someone that is very good at something that interests you or others that you know then you will likely want to get to know that person and start working together. When you do this kind of follow-up and start branching out then your network really grows and your life becomes much more interesting. As your network grows you are more enabled to help others find what they need/are interested in. Another result is a growing network that has knowledge of you and what you have to offer. As I mentioned in the previous post, this growth has the affect of causing your world to get smaller as you get closer to many valuable and interesting people.
This kind of follow-up takes two forms. One is having a contact of a contact call you to meet and talk. The other is when a contact tells you: hey I would like to meet that guy that you know that is “setting the world on fire.” I have in my calendar an event to setup a meeting between a contact and one of my clients. My friend and contact wants to meet my client not because he thinks my client may be a fit for his service but because he feels that it is likely my client knows people that will benefit from his service. Both my friend/contact and my client get what networking is about and in fact have taught me quite a bit about being successful. That meeting will prove to be very dynamic and interesting and so naturally I want to be there for the meeting.
So if you want to “set the world on fire” or want to continue to do so and would like to tap into my network then please contact me. I would love to network with you. By the way, if your CPA is not connecting you with people that “set the world on fire” perhaps you want a new CPA. See my contact information below and use it. Also, don’t keep me a secret. Let others know about me and where to find me.
Jeff Haywood, CPA
CPA Tax Superhero
972-439-1955
jeff.jhtaxes@gmail.com
This article was written by Jeff Haywood, CPA.
Jeff is a licensed CPA in Texas
He has prepared income tax returns for the public for over 10 years.
He also has an MBA in Finance from Loyola University in Chicago and he has 24 years experience in Corporate Finance and Business Analysis.
I prepare the following types of tax returns:
Personal
Business
Estate/Gift
Trusts
Federal and State Returns
I especially value discussions about you, your business, your dreams and goals.
Click Here to Follow Jeff Haywood, CPA on Twitter
Also, Click Here to Follow My Twitter Account: Taxesforxpats
In addition here are links to a few of my articles about income taxes for expatriates:
Income Tax Returns for Expatriates
US Income Tax Help for Expatriates
Foreign Earned Income Exclusion
Are You Required to Report Foreign Bank and Financial Accounts?
Click Here to Follow My Twitter Account: Taxesforxpats
For a full list of prior posts see the CPA Tax Blog.
Standard Disclaimer:
As always keep in mind that the content provided on this site is general in nature and may or may not apply to your particular case. It is best to check with a tax professional about your circumstances and what is best for you personally. Also, IRS regulations and tax laws are constantly changing and the information on this site is not constantly updated. Again please check with me about your particular circumstances and what will be best in your situation at the given time and law.
Comments:
If you have a comment to share about this post or for me, please email me at jeff.jhtaxes@gmail.com.
2 Steps to Make Networking Work For You
Step One:
The Introduction
How do you turn those networking contacts into clients or valuable resources? Here are a two steps to make that happen. First, after meeting someone at a networking function or elsewhere immediately contact them and let them know how pleased you are to have had the opportunity to meet them. Also make sure they have your contact information and start on a meaningful relationship by asking them if they would like to meet for a cup of coffee to explore networking opportunities. You may need to spell out for them that you are interested in finding out more about them, what they do well, who they know and what they do well and you are willing to share the same about yourself.
A side note: It does not have to be over coffee. I often do these meetings with people in other countries via the phone/Skype.
Step Two:
The Meeting
What is the point of this? What are you networking for? Do you need business, ideas, resources, other? What opportunities can the person you met bring to you and your business and how can you help them? When you meet with them find out what they are good at and what they need and what their friends are good at and what they need. That is the definition of networking. It is turning one contact into potentially an unlimited number of useful contacts.
When you meet should you ask them for their business? Maybe but probably not. Remember this is networking. You are developing a network of people that know, trust and value each other. That really takes time to develop. So invest in yourself and others by really networking. I like to set goals such as number of new contacts made and number of one on one meetings. I need to add to those goals the number of follow up contacts as well.
The results have been good but not perfect. While a percentage of people will have a one on one meeting some times it does not yield much. A percentage are “live ones” that get what networking is and will work it. They talk about themselves and who they know. From showing interest in them, whether they are a potential client or not, and actually trying to help them yields dividends. They may not become a client but they likely know someone who would be a good match for your business. Real success in networking is when people start contacting you for referrals for something they or a friend need. Typically I will get an email from someone asking if I know a good attorney or plumbing guy. One of my newest clients met someone that I had met and they referred the new client to me to do help them with their business and do their income tax returns. It is a small world right? Not really, but you can make your world smaller and draw people and business to you by really networking.
Become a Connector:
Who are you? To create a network you have to become “the guy” that makes it happen.
Often you will benefit by sharing with others what it means and how you develop a network. Many people have the mind-set that just exchanging business cards will magically make it happen. Others think it means trading, I refer people to you and you refer people to me. Actually, for you to really be a source that helps people you refer people who you think are a good fit. I am not a good fit for everyone that needs accounting and tax work. That is why you need to get to know each other and what you do well. This even works with your competitors. What you are after is knowledge of people and what they do well so you can connect people who need help with those who are a good fit for them. For further help with this concept read “The Go-Giver”. In “The Go-Giver” you will learn that 50-50 is a losing proposition. Don’t look for a referral in return for one you give. Be “the guy” that helps people with their needs and help people understand what a real network is and how it works.
What will result from really working a network? You will end up with a group of people who help others and look out for each others interests. Of course for that to happen you have be “that guy” for others. Just connect and help others and you will benefit by becoming known as “that guy”, the CONNECTOR. It works.
If you would like to network with me feel free to use my information below to contact me.
Jeff Haywood, CPA
CPA Tax Superhero
972-439-1955
jeff.jhtaxes@gmail.com
This article was written by Jeff Haywood, CPA.
Jeff is a licensed CPA in Texas
He has prepared income tax returns for the public for over 10 years.
He also has an MBA in Finance from Loyola University in Chicago and he has 24 years experience in Corporate Finance and Business Analysis.
I prepare the following types of tax returns:
Personal
Business
Estate/Gift
Trusts
Federal and State Returns
I especially value discussions about you, your business, your dreams and goals.
Click Here to Follow Jeff Haywood, CPA on Twitter
Also, Click Here to Follow My Twitter Account: Taxesforxpats
In addition here are links to a few of my articles about income taxes for expatriates:
Income Tax Returns for Expatriates
US Income Tax Help for Expatriates
Foreign Earned Income Exclusion
Are You Required to Report Foreign Bank and Financial Accounts?
Click Here to Follow My Twitter Account: Taxesforxpats
For a full list of prior posts see the CPA Tax Blog.
Standard Disclaimer:
As always keep in mind that the content provided on this site is general in nature and may or may not apply to your particular case. It is best to check with a tax professional about your circumstances and what is best for you personally. Also, IRS regulations and tax laws are constantly changing and the information on this site is not constantly updated. Again please check with me about your particular circumstances and what will be best in your situation at the given time and law.
Comments:
If you have a comment to share about this post or for me, please email me at jeff.jhtaxes@gmail.com.
How to Succeed in Business: Pricing
How to Succeed in Business: Pricing
Mr. CPA, Tell me what I need to know to be successful in business – make money and stay in business for a long time.
Well, Mr. Client, there are too many subjects for one blog entry to answer your question.
Mr. CPA, Please tell me one important factor I need to know about.
Mr. Client, Let’s start with pricing and your reason for being in business.
Making a profit is very important for you to stay in business. Now you would think this would be obvious but their is a sinister motive that can kill your profit, your business and your quality of life. What is that sinister motive? It is the desire to be the biggest and most popular. The ugly part of this disease is it causes the owners/management to lose site of the real goal. Instead of pursing the most profit (money in your pocket at the end of the day) they pursue being the biggest in their market and it leads to poor pricing decisions and deteriorating margins and ultimately the death of the business and working too hard in the process.
I want to share some thoughts I recall from a seminar I attended years ago. First, is an illustration that highlights the need to focus on profits not size or fame. At the time of that seminar GM had just posted a loss of millions of dollars. The presenter asked us who is the oldest and most profitable automobile company? One hint for you, it was not the biggest which I believe GM was at that time. It was Mercedes Benz. Now ask yourself how does Mercedes Benz market and price its product? Have you been to a sale on Mercedes Benz? GM on the other hand marketed and sold based on sales/discounts. At that time there were no discounters who had been successful for a long time – many years.
Consider that being in business is all about how much money you have in your pocket at the end of the day. The seminar presenter’s young son ran a lemonade business that summer. His son’s net profit was around $30. Your not impressed. Maybe you should be. His son made millions of dollars more than GM that year.
A little while ago I saw an article about the Grateful Dead and their success. You may wonder what success since they were not a band that produced top forty hits. The Grateful Dead was profitable and had a most loyal following for many years. You see you do not need to be the most popular or the biggest in your market (in sales) to be successful. Mercedes Benz does not sell the most cars but they have the most money in their pocket at the end of the day and have been in business longer than any of their competitors. The Grateful Dead were not the most popular band but they were profitable and they stayed in business longer than well over 90% of their market.
So let me see if you understand the concept. If you price your product 20% higher than your competition, Mercedes Benz is much higher than that, how much less in unit sales can you take and make the same profit? As long as you do not lose 20% or more of your customers you make the same or more money and work less. How do you like that formula? You understand if you get that not discounting your price enables you to make the same profit and not work as much. GM and other discounters make more products, work more and harder to make less money. So what do you want to accomplish? Do you want to sell more widgets than anybody else or do you want to be the most profitable and have the most money at the end of the day and a better quality of life?
Years ago I consulted with a lawn care professional about this very subject. He was working too much and not making much money. He was thinking about buying more equipment and adding more employees and discounting his price to attract more clients. Does a lower price accomplish that? I know that is taught in college courses but it is usually taught by a guy wearing sandals. Are you buying that?
OK lets try pizza. You ever buy pizza from Domino’s? Apparently many people do because I see their delivery vehicles every day. Why would you order a pizza from Domino’s? They do offer sales but even when they are on sale their pizzas are not the lowest priced in the market. Their pizza is not even close to being the best quality. So why do you buy their pizza? Because they deliver quickly. Domino’s makes a nice profit but they do not price their product to be the biggest nor are they the most popular. So is pricing your product or service lower than the competition what you want to do? If so you will work too much and not make enough if any money.
I explained to the lawn care professional that he should try on the idea of not adding equipment and employees but rather raise his prices by around 15%. In particular he could identify his clients that are geographically more isolated and raise their prices more to make it more worth his while to drive to their location. If they fire him then his business would become more centralized and require less time. He could lose up to 15% of his clients and work less and make the same money. In all likelihood he would lose a smaller percentage of clients and make more money. In addition good clients value your product or service more if it is not the cheapest in the market. Do you know what stopped him from implementing this strategy? He wanted to have more clients than his competitors more than he wanted to make money and work less. Three years later he still was over worked and not making much money. You see desire to be the biggest will kill your business and your life.
Now here are the “real kickers.” Of your clients, who complain the most and take the most of your time? That is right, the client that wants the biggest discount. Think about your quality of life and how your pricing affects that. Also, what happens when you invest in more equipment and hire more employees because you are going to get more customers when you lower your price? If you were your own competitor what would you do in response? Perhaps you would consider matching the price to keep your own customers? Probably. And then what happens? Everyone makes less money and your customers will complain more, because you are what? Cheap. So your service or product must not be very good.
There is much more to share about pricing but for now I will leave you with something to think about. Perhaps you have heard the expression: “Build a better mousetrap and the world will beat a path to your door”? Wrong. They will only beat down a path to your door if you do not charge enough.
There is more than one way to get to the market. Which way will you choose? What do want to accomplish?
I am happy to share my insight gained from years of experience in my own business and having a prime seat serving many clients over the years to see what works and does not work. I have my own income tax practice and my price is not the lowest and I am not seeking to get the most clients. I have fewer clients who get better service and I make the same or better money in less time. I would be glad to help you as a client if you really want to be successful in making money and having more in your pocket at the end of the day. Call me today using the number below. I am not available 24 hours a day because I value my quality of life but my SOP is to return your call within 24 hours or let you know when I will be available.
Jeff Haywood, CPA
972-439-1955
jeff.jhtaxes@gmail.com
I prepare the following types of tax returns:
Personal
Business
Estates
Trusts
Federal and State Returns
I especially enjoy discussions about you, your business, your dreams and goals.
Click Here to Follow Jeff Haywood, CPA on Twitter
For recent US income tax content see the following links:
Credit for Education Expenses: American Opportunity Credit – Extended Through 2012
How to Prepare Before a Disaster Strikes
IRS: Summer Day Camp Expenses May Qualify for a Tax Credit
IRS Tax Tips for Students Starting a Summer Job
IRS Tax Tips for Deducting Charitable Contributions
Tax Planning Tips
Tax Tips – Tip Income
Stratospheric Success
Are You Ready to Purchase a Home? Factors to Consider.
Foreign Earned Income Exclusion
A Most Valuable Resource for Entrepreneurs
How to Profit From Your CPA
Begin With The End In Mind
If the band you are in starts playing different tunes
Where Is It? Tax Refund
Deadline for 2010 Personal Tax Returns Moved
Now is the time to file those late tax returns for previous years
IRS: 8 Things to Know if You Receive an IRS Notice
IRS: Nine Fact on Filing an Amended Return
IRS: Eight Facts on Penalties
IRS Top Ten: Making Federal Tax Payments
Forming a New Business – Please Consult With Your CPA First
Questions After I Have Filed My Return
For a full list of prior posts see the CPA Tax Blog.
Standard Disclaimer:
As always keep in mind that the content provided on this site is general in nature and may or may not apply to your particular case. It is best to check with a tax professional about your circumstances and what is best for you personally. Also, IRS regulations and tax laws are constantly changing and the information on this site is not constantly updated. Again please check with me about your particular circumstances and what will be best in your situation at the given time and law.
Comments:
If you have a comment to share about this post or for me, please email me at jeff.jhtaxes@gmail.com.
This article was written by Jeff Haywood, CPA.
Jeff is a licensed CPA in both Texas and Illinois.
He has prepared income tax returns for the public for over 10 years.
He also has an MBA in Finance from Loyola University in Chicago and he has 24 years experience in Corporate Finance and Business Analysis.
Tax Planning Tips
Personal/Business Planning and Success:
A successful person knows where they are, where they are going, and what the plan is to get there. My mother had a friend in high school that planned to go into the grocery business. He showed her his plans. He knew how much the store and the land would cost and his plan to get his start up money. He knew all about the profit margins and turnover and how many trucks he would need. He knew exactly where he was and where he wanted to go and how to get there. No doubt things changed along the way but he could plan a new strategy to account for those changes. Planning was a big part of who he was and why he was successful.
Now, where are you? Where are you going? How are you going to get there? We are now half way through 2011 and it is time to make sure you know the answers to all three of those questions. First, where you are typically involves how much have you made so far this year and what type of income it is and what are the tax implications. It could also involve other projects and measuring your progress against your expectations at the start of the year. It could also be what completed in the first half of the year and what is left that you wanted to do. Perhaps you still have not filed your 2010 tax returns. These are important things to consider because procrastinating can cause you undue anxiety and adversely affect your ability to perform whatever you need or want to accomplish.
(Sidenote: Of course if you ask me where I am I will tell you on earth. But that is just the way I am. I actually stole that from a Seinfeld episode but I use it as often as I can.)
Where you are going involves your plans for the rest of the year and on into the future. A key to success is to begin with the end in mind so your actions have a purpose and direction. See my previous post “Begin With The End in Mind.” How you are going to get there is your plan. In the world we live in today you need to be ready to constantly adjust or change your plans as conditions change.
Profiting From Your Relationship With Your CPA:
Measuring where you are and estimating where you will be by year end is an area where your CPA can help you. He can help you anticipate your tax situation and take advantage of opportunities available to you. While many wait until the end of the year, often better decisions are made as you analyze your situation at various time during the year. In addition your CPA, because of his exposure to many other clients, should have some ideas for you that you have not thought of. He is especially useful as you plan to make changes. Often I have seen clients save large sums of money and time by consulting with me prior to executing a plan especially a business plan. Unfortunately I have also seen clients surprised because there was no prior consultation and they were not aware of a tax consequence when they made a decision. I like happy clients so I like to talk to my clients during the year about what is going on and especially before they make big decisions. The end of a quarter is a good time to chat to see what is happening. As I mentioned in a previous post you stand to profit from regular conversations with your CPA.
Especially if you are looking to start a new business should you talk to your CPA to make sure you structure the business and get the financing in a manner that provides you the best tax situation. See my previous post about forming a new business.
Tax Planning:
Tax planning is a means for estimating what your tax consequences will be at year end and making sure you meet IRS’ requirements and pay the least amount possible within their regulations. We will take a look at how much you have made so far this and what type of income it is. Do you have income from a job, a business or from investments or the sale of assets? Then we need to look at what you expect to make the remainder of the year. What we are looking for is the unexpected. Are you making more than you expected? If so what do you need to do? You may need to pay more to the IRS or you may want to take advantage of deductions in the last half of the year to reduce your income for the year. In addition you will want to start considering retirement savings contributions. If you are making less than expected you may be able to reduce what you are paying the IRS to help you with your cash flow situation.
This is also a good time to review your retirement accounts with your financial planner after you receive your June statements. He can help you with your distribution of investment classes and also participate in long term tax planning. What are you going to do when you retire? Where will your income come from to support the life style you desire? How much of that income will be taxable and how much will be yours to spend? Just as you should regularly review your business and your taxes, you should also regularly review your investments and retirement accounts with your goals in mind.
It is always exciting to look at new opportunities. Every day, month, quarter and year presents new opportunities. Call me today to talk about where you are, where you are going, and how to get there.
Jeff Haywood, CPA
972-439-1955
jeff.jhtaxes@gmail.com
I prepare the following types of tax returns:
Personal
Business
Estates
Trusts
Federal and State Returns
I especially enjoy discussions about you, your business, your dreams and goals.
Click Here to Follow Jeff Haywood, CPA on Twitter
For recent US income tax content see the following links:
Tax Tips – Tip Income
Stratospheric Success
Are You Ready to Purchase a Home? Factors to Consider.
Foreign Earned Income Exclusion
A Most Valuable Resource for Entrepreneurs
How to Profit From Your CPA
Begin With The End In Mind
If the band you are in starts playing different tunes
Where Is It? Tax Refund
Deadline for 2010 Personal Tax Returns Moved
Now is the time to file those late tax returns for previous years
IRS: 8 Things to Know if You Receive an IRS Notice
IRS: Nine Fact on Filing an Amended Return
IRS: Eight Facts on Penalties
IRS Top Ten: Making Federal Tax Payments
Forming a New Business – Please Consult With Your CPA First
Questions After I Have Filed My Return
For a full list of prior posts see the CPA Tax Blog.
Standard Disclaimer:
As always keep in mind that the content provided on this site is general in nature and may or may not apply to your particular case. It is best to check with a tax professional about your circumstances and what is best for you personally. Also, IRS regulations and tax laws are constantly changing and the information on this site is not constantly updated. Again please check with me about your particular circumstances and what will be best in your situation at the given time and law.
Comments:
If you have a comment to share about this post or for me, please email me at jeff.jhtaxes@gmail.com.
This article was written by Jeff Haywood, CPA.
Jeff is a licensed CPA in both Texas and Illinois.
He has prepared income tax returns for the public for over 10 years.
He also has an MBA in Finance from Loyola University in Chicago and he has 24 years experience in Corporate Finance and Business Analysis.
“Begin With The End In Mind”
Where are you and where are you going?
We should wonder; am I living life or is life living me? Very clearly this is about control, control of your own life. So we may think: of course I am in control of my life. But if we clearly do not know how we got where we are and where we are going and also how we are going to get there then life is living us and we need to take control of our lives. So let’s take control and keep that control. How do you do that? One secret is to “begin with the end in mind,” Stephen Covey’s second habit in his book The 7 Habits of Highly Effective People. On the Stephen Covey website it says:
“Begin with the End in Mind means to begin each day, task, or project with a clear vision of your desired direction and destination, and then continue by flexing your proactive muscles to make things happen.”
So for the client I met with this morning it meant that we discussed how his different business locations have done and what “end” he wants for the coming period and the need to communicate that with his staff. He is now equipped to communicate the expectation for the coming period and empower his staff with a way to make it happen. We will do this regularly so proactive activities can be undertaken to get to the “end” he wants rather than letting the wind of life dictate his “end.”
Now make sure you understand the “end” is not only the next period but also the next year, the next few years and the rest of his life. One “end in mind” for this client is to spend more time in his favorite location scuba diving and then while he is there he will not be happy unless he has a business to run. He now sees an “end” where he can run his business in the US virtually from his favorite location. How did he develop in his mind this “end?” Well he is open to creating his own life rather than taking what life deals him. Also, he surrounds himself with people that are creative givers.
Empowered to Succeed By Giving of Your True Self
OK, here we go with another book. Well not just another book but the best book on business and life that I have read in the past 30 years, except of course for the Bible. That book is The Go-Giver by Bob Burg and John David Mann. This is truly a liberating book that will help you to see the need to give yourself and success will result. Not the self you have been told to be but who you really are. No more trying to be something you are not because you read in a book or heard at a seminar that you need to be something else to close a deal with a certain technique. After reading this book you will be excited about what you can accomplish by applying what you read.
In order to surround yourself with creative givers you must first be a creative giver yourself. My client is just that and he is open to receiving as well as giving, a principle from The Go-Giver. My client listened to the eBook and created the opportunity for him to be a connector and he thinks his CPA is a connector also. In addition he saw how his CPA, who is far from retirement, realized an “end” by moving to Acapulco. My client was skeptical about how I would be able to work from Acapulco but he has seen over the last year that we still meet regularly and even do so face to face using available technology. We are even planning a software conversion on his wife’s business computer with me assisting from Mexico. Now he is not only OK with his CPA being in Mexico but he brags about it to his connections. Last week I spoke to his financial adviser who was amazed I can do this. In reality he could do it too if he created it as an “end in mind.” But let’s make sure this is clear. It is not just the available technology it is the state of mind that makes living life possible.
If you want a CPA that “begins with the end in mind” and who will be a creative influence in your life then contact me using my contact information below. Let’s work together to make your “end(s)” happen.
Click Here to Follow Jeff Haywood, CPA on Twitter
Jeff Haywood, CPA
972-439-1955
jeff.jhtaxes@gmail.com
I prepare the following types of tax returns:
Personal
Business
Estates
Trusts
Federal and State Returns
Also, I am available for tax planning and discussions about business, retirement planning and life goals.
For recent US income tax content see the following links:
If the band you are in starts playing different tunes
Where Is It? Tax Refund
Deadline for 2010 Personal Tax Returns Moved
Now is the time to file those late tax returns for previous years
IRS: 8 Things to Know if You Receive an IRS Notice
IRS: Nine Fact on Filing an Amended Return
IRS: Eight Facts on Penalties
IRS Top Ten: Making Federal Tax Payments
Forming a New Business – Please Consult With Your CPA First
Questions After I Have Filed My Return
For a full list of prior posts see the CPA Tax Blog.
Standard Disclaimer:
As always keep in mind that the content provided on this site is general in nature and may or may not apply to your particular case. It is best to check with a tax professional about your circumstances and what is best for you personally. Also, IRS regulations and tax laws are constantly changing and the information on this site is not constantly updated. Again please check with me about your particular circumstances and what will be best in your situation at the given time and law.
This article was written by Jeff Haywood, CPA.
Jeff is a licensed CPA in both Texas and Illinois.
He has prepared income tax returns for the public for over 10 years.
He also has an MBA in Finance from Loyola University in Chicago and he has 24 years experience in Corporate Finance and Business Analysis.