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 2, Issue 8
Portrait by Charles Gupton
I don’t know the key to success, but the key to failure is trying to please everybody.
US Comedian and TeleVision Actor
(1937 – )
In This Issue
A New Addition to the Family
September is quite a momentous month for my family. This month it was extra special as we added three new members to our family. My two daughters had their birthdays this month so I really wanted to do something special for them.
They both really love animals so I tried to think of the perfect pet for the girls that I would be willing to take care of. Finally the perfect idea came to mind. I would get them turtles. I wanted to make sure that I had everything in time for the special birthdays. So I went down to my local pet store. To my surprise, there were lots of pets but no turtles.
Finally I said to one of the store employees that I was looking to buy a turtle. To my surprise she replied, “Oh, we don’t sell turtles. It’s illegal to sell turtles in North Carolina. You can however buy them from other states.”
Wow! It’s ILLEGAL to sell turtles in North Carolina! It’s a good thing I didn’t wait until the last minute to get the presents for my daughters. I finally got the turtles. The cost was quite reasonable for the animals themselves.
What I didn’t realize was that everything to keep the turtles healthy ended up costing ten times the cost of the animals. I know, I’m a sucker, but my girls really love having the turtles. They swim around and bask in the light that I bought them. As of now all three turtles are still alive so I am calling myself a successful Turtle Owner.
The best thing about the turtles is their names. Norah named her turtle Kermit the Turtle. Claire named her turtle Birthday Turtle. I ended up naming my turtle Apollo after the famous space program. My wife didn’t want a turtle, because in her words, she already has enough to take care.
Damon’s Big Lesson
This year, I’ve done some things right and some things wrong. One of the biggest mistakes I made this year was not pricing some of my services properly. The result of this was that I realized some of the work I was doing was not profitable. It ended up that it cost me more to do the work than the revenue I was receiving from the work. When I was the only person in my company, this wasn’t as big of an issue because the only thing I was out was time.
Once I made the decision to hire, it became apparent that I was spending more on payroll to get the work done than money I was receiving. Now the jobs I had were costing me more than just my time.
If I look at just the hourly cost to employee someone to work for me, that doesn’t capture all of the cost to complete work. There ends up being a decent amount of overhead in the form of office rent, utilities, software, postage, marketing expenses and everyone’s favorite expense TAXES. It’s very easy to look at total revenue and think isn’t this great how much money I’m making. But once all of the costs are factored in, the real money that comes home to me and my family ends up being less than I initially thought.
Now one would think, “Hey Damon, What is wrong with you? You are a CPA and have all this experience with working with numbers. How come you make this mistake?
Initially, I would respond that the Shoemaker wears no shoes. But this is kind of a cop out. When It comes down to it, I had been doing for myself what I recommend to my clients. I didn’t ensure that I included a reasonable profit margin into my pricing model.
It’s a little bit embarrassing to admit, but I think it is a common problem for professional service companies. Hopefully you can learn from my mistake.
This month’s book is Zero to One Million written by Ryan Allis. Ryan Allis is the CEO and co-founder of iContact an email marketing company. Ryan and Aaron Houghton founded iContact in 2003 in Chapel Hill. From its humble beginnings, the company has grown to its current size of 210 employees, 65,000 customers and $38 million in annual sales.
Last month, iContact announced that they had raised $40 million in venture capital funding. Truly, Ryan and his company have seen great success. What’s even more amazing is this has all been accomplished at a very young age. Ryan is currently 26 years old.
In Ryan’s book Zero to One Million he tells what he did to get his company to $1 million in annual sales. I found it to be a very inspirational book for a number of reasons. Ryan is very open about what drives him to succeed. He gives the foundation for his company’s success and gives great tips on what it takes to succeed.
I’ve had the opportunity to meet with Ryan on a couple of occasions and have always come away very impressed at his business acumen and character. Last week, I had the opportunity to attend the iContact funding party to celebrate the $40 million in venture capital funding. I spoke briefly with Ryan to congratulate him on his success. He gave both of my daughters high fives which for some reason meant a lot to me.
If you want to understand the character and thoughts of someone who knows how to grow a successful business quickly, then read Zero to One Million. It is an inspiring and informative book. A must read for anyone who has a business or is thinking of starting a business.
The Marketer’s Mind
In 100 Days to Abundance, I teach a session about getting off to a fast start. In that session. the case that is made is on how to be the most productive in marketing efforts. There is an sales adage that follows:
“All things being equal, people buy from those they know, like and trust. All things being unequal, people still buy from those they know, like and trust.”
The adage doesn’t say that people buy from experts or that people buy from the company that has the lowest price. People buy from people they know, like and trust.
Then we ask an important question: Where is the most productive place to spend our marketing efforts? With people that can buy from us or from people that are willing to buy from us?
In August 2009 my office was in a spare bedroom above the garage in my house. Now a year later, I am in a nice office space with an employee. I recently looked at my customer base and realized that I have done work for 100 different customers over the last year.
August of last year was a pivotal turning point for my company. It was at that point that I really focused on meeting with people face to face. I had a goal at that point to meet with between five to ten people a week. I did this diligently for three months. At the time it did not seem like a lot was happening, but in December I started to get some referrals from the people I had met earlier that year.
I recently had a discussion with my wife about someone that provides a professional service for me. I told her that what I was planning on telling him is that I expect him to call me once a quarter to touch bases with me and let me know how things are going. I then made the comment, if he would do that with all his customers he would have more business than he could handle.
I paused for a second and said, Wait a second, I’m not doing that. If I did that with each of my customers, I would have more business than I could handle. Why? Because the people that have already bought from me are the people most likely to buy from me again. Additionally they are the people most likely to refer me to people who need my service.
With the addition of my employee Collin, I want to grow my business more. Consequently, I’ve determined that the best way to do that is to call everyone I’ve done work for the last year by the end of October. I’ll let you know how that unfolds.
I Will be Funny Again
Mark your calendars.
I’m at it again.
Tuesday evening on October 19, 2010 I will be performing my next standup comedy routing for the Accountant’s Once Search for the Triangle’s Funniest Accountant contest. The event will be held at Goodnight’s Comedy Club on October 19, 2010.
Last year I had the crowd in stitches when I told them about the amazing trick that my childhood German Shepherd performed.
If you haven’t had the chance to see my routine Click Here
This year I’m even more excited about the routine I will be performing. I’ve done a lot of research and work for my brand new routine and it should turn out to be even better than last year’s routine.
Buy your tickets by clicking Here:
Mark your calendars now.
Date: October 19, 2010
Time: 6 PM
Goodnight’s Comedy Club
861 West Morgan Street
Raleigh, NC 27603-1613
Introduction to QuickBooks
I will be hosting a workshop on QuickBooks
You will learn how to:
Enter invoices and apply payments to invoices
Enter bills and pay bills
Reconcile a bank statement
Generate important financial statements
Training will be provided by Juliet M. Hurley with EverChange, LLC
Date: Thursday October 28, 2010
Time: 10:00 -11:30AM
Place: Team Nimbus Center
3801 Computer Dr. #101
Raleigh, NC 27609
To Register Click Here
For more information, contact me at 919-926-1342 or Juliet Hurley at 919-768-3156.
Space is limited to the first 20 registrants, so make sure you reserve your spot today!
EverChange, LLC is an accounting-consulting firm that specializes in the set-up and training of QuickBooks®. The company is owned and operated by Juliet M. Hurley who is a Certified QuickBooks® User, has over 8 years of public and private accounting experience and three masters degrees: Business Administration, Finance and Accounting.
Damon Yudichak is Certified Public Accountant with Damon K. Yudichak, CPA, P.C. In 2010 he was awarded the 40 under 40 Leadership Award by The Triangle Business Journal. In his free time, Damon is a standup comedian.
Positioning your Business for Success Business Workshop
Thursday, November 4, 2010 at 8.00 am
14111 Capital Blvd
Take your pick from any two of the following sessions:
Health-care for Small Businesses •Scot Finch, Tri-Sure Benefits
What’s going on with healthcare for small businesses?
Exiting Your Business •Brian Ivey, Hartford Life & Steve Schilling, Dogwood Business Brokers & Advisors LLC
Exiting your business is a process that takes time, planning, and a little luck, but is an issue that every business owner will eventually have to face. How can you help ensure successful continuation of your business? With proper planning, your business will survive you.
Managing the Books •Damon Yudichak CPA –
How to read and understand financial statements (balance sheet & profit and loss)
Business Retirement Plans •Nancy Bartoszewski, The Hartford
Why you need a business retirement plan. What type of plan do you need, and how do you implement it?
HR Issues •Lisa Humble, Paychex – Compliance issues for employers
Following the rules when hiring and firing. Understanding your paycheck
Please pre-register because space for each workshop is limited.
7:15- 8:00 Registration and Breakfast
8:15-9:00 Session 1
9:15-10:00 Session 2
This workshop is free, but please call the Wake Forest Area Chamber on (919) 5561519 to register or for more information.
Presented by your local Edward Jones Financial Advisors:
Mike Baer, CFP, AAMS Wake Forest (919) 554-3047
Louis Mullinger, AAMS Wake Forest (919) 562-2970
Jim Staples, AAMS Youngsville (919) 556-7562
Brad Kelly Rolesville (919) 562-9461
Barbara Kingrey, AAMS North Raleigh (919) 841-0892
Elaina Carbone Wake Forest (919) 562-4131
Mike Pfauth North Raleigh – Bedford (919) 792-0316
Beth Megna North Raleigh – Wakefield (919) 554-0166
What’s With the Moon?
I’ve had a couple people ask, What’s with you and the moon? About two years ago, I became fascinated with the Apollo Program. I began to study the program and interview people who helped make the monumental task of landing on the moon a reality.
The moon is a symbol of possibility for me. It is a source of inspiration. I like to be inspired.
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.