Our monthly newsletter, Link Newsletter, is full of tips, reminders, and timely advice to help you stay well informed when it comes to your business and personal finances. If you have questions about any of the articles, feel free to email Damon Yudichak at Damon@yudichakcpa.com.
Focused Information for the Small Business Owner
Volume 1, Issue 10
Portrait by Charles Gupton
Energy and persistence conquer all things.
US author, diplomat, inventor, physicist, politician, & printer
(1706 – 1790)
In This Issue
Happy New Year!!
Over the last couple of weeks I have heard a couple people comment, “I’m glad 2009 is over.” I smiled and said, “Yes. Me too!”
2009 for many people was a difficult and challenging year. It was a year of new beginnings and transition for so many people. In fact, “I’m in transition” was the new catch phrase for someone who had recently lost their job.
2009 was year of new beginnings for me as well. I started my CPA firm this year and learned a lot. I remember taking the big step of going out on my own was very scary for me. I think I remember being scared most of January, February and March of this year.
Why was I scared? Mostly because I didn’t know what the future would hold. I was scared I would not get work. I had some self-doubt that I wasn’t good enough. I was scared that I would fail.
Eventually I got over the fear. I believed in myself enough to keep at it. In fact I would probably say the first part of the year I felt like I was stumbling around with my business. But I kept at it.
I am really excited about the New Year. 2009 was my foundational year. I remember thinking at the beginning of the year, if I can just figure out the marketing piece of this business and how to get new clients, then I can really do something with my business.
I am happy to say that I figured out that piece of the puzzle. In 2010, the next piece of the puzzle will be growing the firm and adding staff. I believe I’ve made the business scalable, but the true test will be when the rubber meets the road.
Happy New Year!! May this be the year where you get more out of life that you want.
Damon’s Big Lesson
As a small business owner, I wear many hats. Sometimes the weight of the many hats starts to wear me down. This month I went through an activity were I determined what Yield per Hour is.
Yield per Hour is a calculation where you determine what your ideal annual income, the number of hours you want to work a week and the number of weeks a year you want to work. Once you figure that out, you have the total hours you want to work a year and your targeted income. Now the calculation is easy. In order to get this annual income, you must earn this amount of money each hour.
My Yield per Hour is a lot higher number than I originally thought it would be. My initial thought was: How in the world am I going to make that amount of money every hour? I only have so many hours in the day.
Then I listed the different activities that I perform in my business. Some of these items were networking, creating proposals, meeting with people, doing the actual work, administrative tasks and calling people. Now that I had my list of activities, I wrote next to each item how much it would cost me per hour to hire someone to do those tasks.
One of the most valuable tasks I perform is meeting with people because it leads to new work. Hypothetically, let’s say a new monthly client is worth $6,000 a year to me and it takes me 10 hours to get a new account. After I determine labor costs, my profit $3,000. This means I could earn $300 an hour for bringing in a new account.
If I perform a task that I can pay someone $10 to$20 an hour to perform, it doesn’t cost me $20 per hour. It costs me $280 per hour in lost revenue.
This month’s book is The 22 Immutable Laws of Marketing by Al Ries & Jack Trout. Olalah Njenga, a marketing strategist, recommended this book to me. The book was an easy read and very insightful.
This book is a very appropriate book for small business marketing. Ries & Trout use historical examples to illustrate each of their points.
For instance, the first law is The Law of Leadership – It’s better to be first than it is to be better. The example used for this law is who was the first person to fly the Atlantic Ocean solo? That’s easy it was Charles Lindbergh.
Who was the second person to fly the Atlantic Ocean solo? I didn’t know until I read this book. It turns out the second person to fly the Atlantic solo was Bert Hinkler. It turns out that Hinkler was a better pilot than Charles Lindberg. He flew the Atlantic in less time and consumed less fuel. Yet, nobody remembers him.
What happens if you can’t be first? According to Law Two The Law of the Category – If you can’t be first in a category, set up a new category that you can be first in. Ever heard of Amelia Earhart? What made her famous initially? She was the third person to fly the Atlantic solo. But that’s not why she became famous. She became famous because she was the first woman to fly the Atlantic solo.
I really think this book is valuable for the small business owner because it simplifies the complex subject of marketing. The biggest lesson I got from reading this book was you have to be first in your target market. If you’re currently not first, figure out a way to be first that will get you remembered when your target customer needs your services. If a business is not doing the marketing that will enable them to be first in their target customer’s mind, than a lot of time, money and effort could be wasted.
The Marketer’s Mind
Over the last month, I’ve received at least two to three new referrals a week. What is even more exciting is that the business that is coming out of these referrals is worth more to me than some of the business that I have gotten as a result of directly contacting business owners on my own.
This has been encouraging for me because one of the goals I had hoped to accomplish this year was to build my business based on referrals. I’ve read numerous books on how word of mouth marketing is the best and least expensive way to market your business. Well, that sounds like a great way to build a business but how does one go about doing it?
One thing that has been surprising to me, as I drive around town, is to see how many CPA firms there are. In Raleigh there are over 309 CPA firms. That is a lot of CPA firms. The competition is fierce. A question that I’ve had is what makes me so special to think that I can compete with other CPAs who have been in business longer than me and have bigger marketing budgets than me?
How have I been able to change my business so that people are referring work to me? First of all I focused on talking with people that already know and trust me. I’ve scheduled a lot of meetings with people and gotten to know about their businesses and life.
One of the challenges with meeting with people is balancing sharing who you are and getting to know them. Who talks more? Ultimately, I think it is more important to be genuinely interested in the other person than it is to blab on and on about how great I am. At the same time, it’s important to share one’s personality, family, background, hobbies and interests with other people. That ultimately is what people remember.
One thing that I’ve been very deliberate about is sharing with people the things that are exciting and interesting to me. That is why I have shared stories from the Apollo program and the moon. That is why I did the comedy contest. That is probably the ultimate oxymoron, a comedic accountant.
Earlier this month, I conducted a workshop on accounting for SCORE. In my introduction, I stated that my two greatest accomplishments this year were that I interviewed Dr. Edgar Mitchell, the sixth man to walk on the moon and that I performed my first standup comedy routine before a crowd of over 300 people at Goodnights Comedy Club. What was surprising to me was more people were interested in the comedy than the moon. Go figure.
Cutting College Costs
I am a big believer in the value of obtaining education. I’m very proud of the education that I’ve received. At the same time, getting one or more college degrees is a very expensive endeavor in both time and money. There are thousands of colleges out there and untold numbers of degrees that one can pursue. How does one go about choosing the right college and major?
I’ve teamed up with Ralph Hoggard of Achieve College and Finance and Planning, and The Southeaster Baptist Theological Seminary in Wake Forest to help make this decision simpler for your children. Together we have developed The Cutting College Costs Workshop.
About the Workshop Here is what you will get from attending The Cutting College Costs Workshop:
•Cost cutting methods to help your family save money. (We’ve all been impacted by the economy!)
•The attributes that colleges are seeking. (It’s not what you think.)
•Strategies you can use during the college application process. (The process has radically changed over the years.)
•Tips for choosing a college and a major. (Remember, your son or daughter will attend college for 4+ years and there are thousands of colleges from which to choose.)
•Making the most of the college experience. (According to CNN, the average college student takes 6 years to graduate. Beat the averages.)
•And much more!
When Thursday, January 28, 2010 6:00 PM to 8:30 PM
Where Ledford Center Southeastern Baptist Theological Seminary Wake Forest, 27587
Registration Registration is $35.00
To register on-line with a credit or debit card visit www.CutCollegeCosts.EventBrite.com
For more information or questions, call (919) 809-2220.
Ribbon Cutting – January 13, 2009
Please join me for my Ribbon Cutting on January 13, 2009 at noon at my new office. As you can imagine, opening the doors to an office is an exciting celebration. Next month, I will be celebrating the opening of my office. One of the perks of my membership in the Wake Forest Area Chamber of Commerce is they hold a Ribbon Cutting for new businesses. I’ve been to a number and they are good fun.
There will be some notable dignitaries there. Mayor Vivian Jones the Mayor of Wake Forest told me she would be attending. She normally doesn’t come down to Raleigh for Ribbon Cuttings, but is making this special trip for my ribbon cutting. My lovely wife Angel and my two daughters Norah and Claire will also be there. We’ll have some tasty treats and I may even tell a joke or two. If you are planning on attending, please let me know so I can have plan to have enough refreshments there. Phone me at 919-926-1342 or email me.
Time: January 13, 2010 at noon
Place: 7511 Mourning Dove Road, Suite 104, Raleigh, NC
My name is Damon Yudichak and I am a Certified Public Accountant. My father was an Army officer and we moved around a lot. We finally ended up in Fayetteville, NC. I’ve been a resident of Raleigh since 1999 when I moved here to go to North Carolina State University. I am fascinated with the moon and am still amazed that man has walked on the moon. I also am a big standup comedy fan.
The Orange Star Newsletter is prepared by Damon Yudichak. The Orange Star Newsletter carries no official authority, and its contents should not be acted upon without professional advice.
In accordance with IRS Circular 230, this newsletter is not to be considered a “covered opinion” or other written tax advice and should not be relied upon for IRS audit, tax dispute, or any other purpose.