Simply Junior

Along with your business plan, your small business marketing plans is only of the most important long-term plans you’ll make for your small business. Some small business owners choose to ignore that advice, instead preferring to fly by the seat of their pants, so to speak, to “wing it.” While some of those small business owners are successful, they’re not nearly as successful as they could be had they laid out a well-defined small business marketing plan.

Small business marketing strategy step 1: Know your market

The first step in developing a successful small business marketing strategy is to make sure that you have a really solid handle on your target market. Ask yourself: Who are my customers? Once you’ve identified who they are, ask yourself: What are my customers’ problems? What are their dreams and aspirations? The surest way to answer those questions, of course, is to ask your customers themselves. Even if you can’t afford to hire a small business marketing firm that will conduct focus group tests for you, you can do your own simple survey by hitting the streets and talking to those people you plan to sell to (and make contacts at the same time!). You’d be surprised how powerful that simple task is yet how few businesses do it.

Small business marketing strategy step 2: Know yourself

The second step in developing your small business marketing strategy is to get to know yourself (your business), once you’ve gotten to know your customers. Ask yourself: What does my business do? How is my business different than my competitors’? How does my business help solve my customers’ problems or help them achieve their dreams? Answering these questions will help you to define your unique selling proposition – those aspects that set you apart from your competitors.

That unique selling proposition should become your brand – your business’s identity. Your brand is what will pervade all of your marketing materials and what your customers will use to identify you. The importance of diligently developing your brand as part of a successful small business marketing strategy can’t be overstated.

Small business marketing strategy step 3: Analyze your competitors’ small business marketing strategies

Once you’ve developed your brand – that unique identity that tells your customers who you are and how you’re different – you can begin thinking about how you’re going to actually market your business. First, look at your competitors’ small business marketing strategies. Are there obvious gaps that you could fill (and thereby stand out among the competition)? For example, if you see that none of your competitors have websites, you could stand out with a small business marketing strategy online.

Wherever you market your business, it must be where your customers are. For example, small business marketing online will be a waste if none of your potential customers use the Internet. Likewise, you may think that writing a monthly column in your local newspaper would be a great way to advertise your services and establish yourself as an expert; but if none of your potential customers read that paper, that small business marketing strategy will fail.

At this point, your small business marketing strategy will not only be defined by where your customers are and what your competitors are doing, but it will also depend on your small business marketing budget. A full-page spread in a national magazine may be the best way to reach your target audience, but if you can’t afford to shell out tens of thousands of dollars, it’s not the small business marketing strategy for you.

Wherever your small business marketing plan takes you, the careful development of your small business marketing strategy – by knowing your market, knowing your business, and analyzing your competitors’ strategies – will be a critical determinant of your long-term business success.

The IRS is at it again. The stealthy and highly aggressive agency has added two new 1099 tax forms for businesses, requiring extra caution and countless more hours in reporting and preparing your tax returns. This means all business, no matter how small, will be affected. Whether big or small, it is essential to be aware of these new tax extensions NOW- or you could find yourself in BIG trouble when filing your tax return next year.

Additionally, we can expect the number of IRS audits to continue to rise for small-business owners in 2010. About 25% to 30% of my tax relief clients are small businesses with tax problems – so I know how important it is to avoid IRS penalties, IRS audits or other tax problems that could be detrimental to your business.

Neil deMause revealed in his CNNMoney.com article “Stealth IRS changes mean millions of new tax forms” these two new tax extensions:

1) 1099-K – an extension to the 1099 form, which requires businesses to report non-wage income (dividends, earned interest, contract work). The 1099-K addresses “hard -to-track” payment streams used by businesses: credit cards. From 2011, businesses making over 200 payment transactions per year (and totaling over $20,000) through credit or debit cards have to fill out the 1099-K, documenting the year’s transactions and send this to their clients and the IRS.  This will have little effect on companies currently reporting all credit card transactions to the IRS, though if you are not currently in the practice of doing so, it’ll be worth it to anticipate this for the near future.

2) 1099-Misc – used by companies use to record payments to individual service providers and freelance workers, has been massively expanded to include, from 2012, all annual business payments and purchases over $600. While previously payments to corporations and purchases of goods have been excluded, now all businesses need to obtain the taxpayer ID number of firm or individual you are paying. This form will now be a tracking mechanism used for any and all business transactions.

What This Means For Your Business: Swimming in Paperwork and Receipts!

The simple truth is that these extensions to tax legislation are quite the burden. There is a high probability you may get lost in the paperwork and tracking of receipts.  A small business currently spends 3 – 5 hours a year on average filing 1099 forms. A survey conducted by Pennsylvania-based SMC Business Councils, shows that filing these two 1099 extensions for services purchased from corporations only would cause a standard small business at least 200 filings per year and an additional cost of $6,000 in preparing yearly tax returns. This estimate excludes the requirement for filing 1099s for purchases of goods – this would cause a staggering increase.

How did this tax provision blizzard come upon us? This new legislation has been in the works since 2007 when a tax-gap study was conducted. This ‘tax gap’ between businesses and individuals costs the government about $300 billion per year in lost revenue. The study showed that adding additional 1099 tax extension forms could produce $345 billion per year in federal tax revenue and this is where the health reform bill comes into play. These two extension requirements are part of the health reform bill – snuck in the 2,000 page bill, allowing the government to track down unreported income. The goal of this new tax legislation is to catch income that is not currently reported to the IRS.

For more information on these tax extensions,  view draft versions of the 1099-K form and watch a video on “How to avoid a tax audit by the IRS” read the full article on CNNMoney.com.

If your business is under audit or you owe back taxes or IRS penalties – it’s important to get immediate tax relief to protect the future of your business. And you don’t want to go up against the IRS alone without the expert help of a professional tax attorney or Certified Tax Resolution Specialist.

A Recap of What Has Happened: During the earlier part of the decade (2001 – 2006) small businesses found there business environment easily managed. Revenues simply increased by 10% or more every year. Most small business owners are highly skilled in leadership, management, have a sale’s personality and\or a technical skill. These skill sets are a good fit for and can accelerate revenues increases in times which growth occurs.

Small businesses saw a sales increase on the income statement and debt increase on the balance sheet. Generally speaking, small businesses became focused on growth (only revenue growth) and overlooked other accounting metrics. The growth decisions made by small business owners omitted the risks of the overall financial position of the company. A result for small businesses was an expansion of their production capabilities. Companies over expanded their production capabilities through purchasing fixed assets (vehicles, equipment, furniture, etc) through debt obligations. Some businesses made these purchases by being enticed by tax benefits. The tax benefits were paid by debt, which means they received a deduction in the year they made the purchase, but did the cash outflow was over the next several years. This would later come back to haunt small businesses by having cash outflow without an offsetting tax deduction (i.e. paying off debt is not tax deductible).

Small business owners general choose to become a “flow through” entity for taxes (s-corporations and partnership). These entities, generally speaking, do not tax equity distributions (i.e. dividends). The small business owners used the tax regulations to exhaust all capital in their company. This worked efficiently during times when the small business owner could fuel growth through debt. With this no longer the case and small businesses are no longer able to depend on financial institutions for borrowing, small businesses will need to fuel their own growth through their own equity. This means owners will have to sacrifice by leaving monies inside the company (no taking equity distributions).

Overall, from 2002 through 2006 (perhaps even into 2008) being a business owner was fundamentally effortless. Risk was factored out of the equation. Group think began sneaked in. Group think is when no one disagrees or is ostracized for disagreeing. Realists were considered pessimists in the sea of optimists. The realist would be proven the victor, but there would be no celebration.

A Forecast Of & A Solution For The Future: The business environment has changed and will continue to be challenging for several years according to several economists and articles in Barron’s. The business model of the past (easy revenue growth, lots of debt and little equity) no longer matches the current environment. Small businesses have had their revenues cut by up to 30% (if not more) and have had financial institutions not renew and\or call loans. Small businesses will need to reposition their balance sheet to include high current asset balances (especially cash), reduce debts and increase their equity as well as rethink their strategy.

Small business owners need to immediately meet with their board of directors’ and\or advisors (or create a board) to begin to develop a new business model. The new business model will need to help reposition their company’s financial and business position to be able to survive the next several years. Small businesses must become more innovative and efficient so make sure the board participants have the ability to be creative and the environment to speak freely (in order to tell you what you need to hear, not what you want to hear). Speaking of what you may not want to hear, a lot of sacrifice and longer hours may be warranted in the new business model.

Present alternatives help small business owners save a noteworthy amount of money in tax-deferred small business retirement plans. If you’re seeing or running your own business, think big when it comes to saving for retirement. Oftentimes with all the excitement around setting up a company, one tends to forget about retirement plans for them and their employees. Don’t disregard setting up an own retirement plan because fortunately, there are major benefits to small business retirement plans that compensate the time it might take to set one up.

Small business retirement plan does not only allow a business owner to sock away a considerable amount for the future, but it also takes a sizeable tax deduction as well. Small business retirement plans can help fill in any personal savings gaps toward a more financially secured future. What are the benefits of getting small business retirement plans today for business owners? First, they may be able to take a tax deduction just for saving money for the future, secondly, all earnings on their investments grow tax-deferred until withdrawn, and they can include their spouse if they work together and also have a major advantage to offer employees nowadays or when their business gets bigger.

And what about the employees of your small business, are you finding it hard to have savvy employees working for you? The problem might just be on the small business retirement plan presented; it might not be appealing to your employees. So where does one start? Here is a rundown of small business retirement plans option for your employees, based on 2006 rules and requirements, the best plan however, depends on ones needs:

Simplified Employee pension Plan (SEP IRA)

For a handful of employees and looking for a plan that is really low cost and low maintenance, consider this plan. The SEP IRA is funded with tax-deductible employer contributions that cover all eligible employees. Contributions from employees are not allowed. There is no “plan document” and filing annual reports with IRS are not needed. Contributions can differ from year to year, so if your business hits the lean, you are not locked in.

Savings Incentive Match Plan for Employees (SIMPLE IRA)

These retirement plans are good for your employees because they allow employee contributions. They command an employer match, only problem is it will not allow you to sock away much for yourself. Annual contributions for 2006 are generally restricted to $10,000 plus an employer matching contribution. If you have a small business with less than ten people, then these small business retirement plans for your employees is a good way to get started.

There are many other small business retirement plans offered for both the owner and employees that can do a lot of good to the business. Also remember that in addition to small business retirement plans, you can also fully fund an IRA and create catch up contributions if you are fifty years old or older.

The last two years have been extremely challenging and small business owners are looking forward to 2011 with a sense of excitement and optimism. All signs are pointing to an improving economy and consumer confidence is beginning to move in a positive direction. To assist you in preparing for a successful new year, we have put together the following list of ten tasks you should complete between now and the end of the year.

Management and Financial

Pull out the old business plan and review where you are relative to the goals you set at the end of last year: (revenue, profit, number of customers, assets, owners’ equity, debt). To get these numbers you should review your Balance Sheet, your Income Statement and your Cash Flow Statement. Collect all of the receipts especially those in the shoe box or in the glove compartment. Make sure they are inputted into your accounting system. Look at your accounts receivable and call those customers who owe you money and demand payment. Times are tough and everyone is slow paying. Those who ask get moved to the top of the pile. Check leases to make sure you know when they are due to expire and renegotiate them in a timely fashion. Take a physical inventory of your products and compare with the entries in your accounting system and make any necessary adjustments.

Marketing

Understand who your favorite customer is and review your marketing message and make sure that it addresses their needs and is written using the words that they, the customers, use. Tune up your elevator pitch and make sure that all your employees learn it by heart. Check your web site content and make sure it communicates your marketing message. Also check your copyright notice and contact information for correctness. Make sure your Twitter, Facebook and other social media site names/profiles represent your company name. Register your company with Google Local, Yahoo Local and Bing Local. Check to see that you show up on map searches.

Now that you’ve done the above, start your planning for next year. Set the goals and objectives for the next 4 quarters and prepare action plans and designate responsible individuals in your company. Remember, you should be reviewing your business plan continually.