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 9
Portrait by Charles Gupton
Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.
(1812 – 1870)
In This Issue
Two Butterflies and A Bee
I’m passing on to my daughters the love of my favorite holiday. This year my two daughters will be dressing up as butterflies for All Hollow’s Eve. In trying to be a good sport, I asked them what they wanted me to be for Halloween.
It took less than a second for them both to resoundingly reply, “A bumblebee.” I’m not sure how they came up with that, but I think they were coached by their mother. Angel, my wife, knows I look dreadful in yellow and I think she wanted to have some fun at my expense.
Now I’m committed to wearing yellow and black and a pair of wings for a night of begging for candy. A couple of years ago, I dressed up as the Cat in the Hat and my two girls dressed up as Thing 1 and Thing 2. My wife was a real sport and dressed up as a mother of two daughters. In fact she has been really good at using the same costume each year since our first daughter was born.
Maybe this year she will be a little more creative and dress up as a grasshopper. That would be a lot of fun as we could all represent friends from the insect kingdom. I’m not willing to bet on it though, because I suspect she will not dress up. But maybe she will prove me wrong.
Damon’s Big Lesson
Going it alone is a fool’s game. One of the things that has become quite apparent to me over the last year is that I do not have the resources to do everything I need to do to be successful. When I have tried to go it alone, I often end up working many more hours than is healthy. Additionally, I am not always the best person to do each and every thing in my business.
I recently made a list of the activities that I perform in my business. It turns out that I was able to group the tasks of my business into six general areas:
- Client work
- Maintaining client relationships
- Firm management
- Project management
This was a refreshing activity as it simplified my business into just a few activities. The challenge then becomes how to balance these activities.
Now that I’ve defined the basic functions in my business, I am reflecting on the strengths that I have and determining if my strengths are best used to complete the tasks. If I am not the best person for the task, then I have to determine who I will get to do the work and define quality standards for each item.
One of the biggest lessons I learned from my college economics courses was that we live in a world of limited resources. The way to maximize resources is to determine how to best use the limited resources we have.
This month’s book is The Bootstrapper’s Bible by Seth Godin. You can obtain a free e-book download by going to the following link.
Seth Godin defines a bootstrapper as one who is determined to pay for himself or herself every day.
I’ve spent a considerable time as of late researching the causes of the current dismal economy. While there were many causes, I think the primary root is that as a nation, Americans live on more than they earn. This is true in both business and personal lives.
Most people start businesses primarily for two reasons: they want to earn more money and they want more control over their lives.
One of the most important questions a banker will ask when lending money is, “Will this loan be repaid?” Banks cannot afford to have loans go into default. Ask a banker how much it costs a bank when a loan fails. That is the reason why banks tend to be very conservative when it comes to lending money. They need to be guaranteed that the loan they grant to the business will be repaid.
If a business is not able to create enough money to support itself and its owners, then it will eventually fail. Seth Godin demystifies what it means to have a workable business model. In essence, the business model explains how the business will generate a profit for the business.
Throughout the book, Godin offers practical advice and examples of successful bootstrappers. One of the interesting examples was the business plan of Nike. Godin boils Nike’s business plan down to five steps:
1. Hire the world’s best athletes as spokespeople.
2.Buy an enormous amount of advertising.
3.Use the advertising to get every sporting goods store to carry your products.
4.Make your products overseas for very little money.
5.Charge very high prices.
The final chapter details nine vital components of your business that, if followed, will lead to a successful enterprise.
The Marketer’s Mind
I was recently speaking with another business owner about my marketing philosophy. It was at this time that I coined the phrase of non-promotional promotion. While this may sound like an oxymoron, I’ll define what this term means:
Non-promotional promotion – (noun) the act of publicizing one’s business without describing features or benefits of the service or product.
Traditional marketing is built on the foundation of the five P’s of Product, Price, Promotion, People, Place. Many marketers will tell you that it is important to crystallize a marketing message to succinct phrases that give the potential customer a good understanding of why they should buy. While this is important for most businesses, this can be a challenge for businesses that provide professional services.
The challenge that professional services providers have is their work product tends to be an intangible item. Take for example a professional comedian. A good comedian can earn in excess of $5,000 for one hour’s worth of work. I don’t care who you are, that is a good hourly rate. Why are they able to command such a fee? Because they have crafted and honed a routine that causes the audience to laugh six times a minute. It takes many years to become proficient at crafting such a comedic routine.
The first objective of the professional service provider is to gain the trust of the customer. In most professional services, the customer will pay a high fee for the services when the services that are bought solve a problem. The value of a solution to the problem is worth more than the cost of purchasing the services. Hence everyone one wins. The purchaser and the solution provider are both better off because of the work performed.
Probably one of the biggest keys to non-promotional promotion is variety. The biggest sin of marketing is to be boring. One must continually come up with new and interesting messages. Content is king and nowhere is this more important than with non-promotional promotion.
The objective of non-promotional promotion is to gain the trust of current and potential customers. I want to be remembered first when my customers need accounting, tax preparation and tax planning services. In order to do this, I have to get creative in the message I present to my market.
I am smart enough to know that the only thing people look forward to less than talking about taxes is talking to a mortician. Knowing that, I use non-promotional promotion to promote myself and my business.
People that buy my services are looking for someone who is competent, trustworthy and good at solving problems.
Knowing that, I craft my marketing messages so that these qualities become associated with me. I tell stories about what I’m involved in. I share with people my successes and my failures. I try as best as I can to be real and honest about who I am and the work I perform.
November is Now Movember
The ‘Mo’, slang for moustache, and November come together each year for Movember.
This November, I will be changing my appearance and the face of men’s health by growing a moustache. The moustache will by my ribbon, the means by which I raise awareness and funds for cancers that affect men. Much like the commitment to run or walk for charity, my commitment is to grow a moustache for 30 days. Funds raised benefit the Prostate Cancer Foundation and LIVESTRONG.
My motivation for growing a moustache is to dispel the myth that I look handsome with a Mo.
If you would like to join the Movember cause, join my team at www.MovemberRDU.com
Each day of Movember, I will be posting a picture of my mustache growth to my Facebook page. You can follow along by going to my Facebook page.
My goal this year is to raise at least $200 dollars.
You can donate at my Movember page
Beneficiaries of Movember are:
The Prostate Cancer Foundation (www.pcf.org) uses the money raised by Movember to fund research that is accelerating the discovery of better treatments and ultimately a cure for prostate cancer.
LIVESTRONG (WWW.LIVESTRONG.ORG) uses the money raised by Movember to fund important programs to support young adults and their families battling and surviving cancer.
Connext the Black & White Affair
Chris Cimino will be hosting a Black & White Event Benefiting Pretty In Pink Foundation and Striving for More than a Cure.
To find more details go to http://salesproconnect.com/upcoming-events.php
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
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.