These days, it seems like there are two types of business owners:
- Those that are closing their business or are about to, and
- Those that are making more money then ever before.
In Category #1: There are a couple of reasons why the business owners are closing down. It could be that they realize it’s taking a lot more work and effort to make the same amount of money that they used to, and it’s just not worth the effort. The old business model, product/service, fulfillment or the whole business needs a major overhaul to bring it up to date in the new economy. And the owners are just tired. They maybe didn’t make as much money as they thought they would, but it’s too much work to keep going. They’re taking their chips and going home, living on less then they ever thought they would.
Or, the business is done. And so are they. It’s just not working and it’s time to cut the losses and try to figure out what’s next in this new economy.
In Category #2: I have a couple of examples of clients who are the very picture of what is happening. One client, with a couple of joint venture partners, made $3 million gross in 6 weeks. Now, I want to stress that was gross, not net, and the profit had to be split amongst a number of partners. Another client went from $40,000 income in 2010 to a projected $440,000 in 2011.
What’s different between Category #1 and Category #2? There are three differences that I see in these business owners:
- They realized one major truth about business in this new economy. Business isn’t coming back. It’s moving forward. They need to move forward too.
- They needed to examine old stereotypes and prejudices about business and about how they market, sell, fulfill and in general, approach business.
- They are prepared to take massive action, put together a good team and then trust the team and their plan.
I’m purposely not telling you what kind of businesses the two successful clients had, because I don’t think it’s about the business models as much as it is about those three distinctions. You could have the best idea in the world, but if you don’t know how to market, sell and fulfill in this market, you’ll be in Category #1 in no time.
There is a new normal. And it’s surprisingly easy, as long as you are ready to let go of those old ideas. I’m not saying you let go of your values. In fact, when you get really focused on what customers want and need (instead of what you want to sell them), learn new business models and let go of things that don’t make you money, you’ll find you get even clearer on your values. That’s because you ONLY do what you feel good about doing.
But you have to first examine those old prejudices and stereotypes. Are you ready to do that?
A little over 3 months ago, my husband Richard and I got serious about a sideline business. I never thought I’d have a business that wasn’t related to me being a CPA. That was one of the things I had to let go of. The new business is built on a Network marketing model. The thing is, it’s possible to make money a dozen different ways. And this model is very different from what you might have heard about network marketing companies. Ideas something you may have to let go of it.
The product is what the market wants right now. I remember hearing from a buddy of mine Rob Fore (big time Internet Marketing) who said successful affiliate marketers don’t try to make the market change. They just look for where the market is going and then get in front of the train. That’s where the money is. So that’s something else to let go of – you need to sell what people want, not what you want to sell them. In a crazy economy like we had 5 years ago, you could get away with a lot of things. But in today’s market, you have to pay attention to fundamentals. Otherwise you’ll be in Category #1 – out of business and out of luck, at least for now.
If you want to know more about what Richard & I are doing, and find out how you could potentially partner with me, drop me a note at Diane at USTaxAid.com.
Think Taxes are Bad Now? Just Wait!
I’ve heard a lot of grumbling about taxes, which only makes sense since I’m a CPA. My standard answer is, “Think they’re bad now? Just wait!”
There are a few federal changes for this next year we need to pay attention to and even more changes in 2013. Here are some highlights:
- 100% Bonus Depreciation reduces to 50%
- Alternative Minimum Tax raises its ugly head again
- The 3.8% Medicare Surtax on passive income kicks in. This includes rent (net), capital gains, interest, dividends, and royalties.
- The top tax bracket moves from 35% to 39.6%. That’s a 13% increase in tax rate (not 4.6% as is sometimes reported in the news)
We’re also seeing a number of states pulling away from federal tax incentives. Just because the federal government comes up with a tax break, don’t assume your state is following suit. Many states did not follow the federal bonus depreciation rules, have severely limited Section 179 deductions and are taxing items that previously were tax exempt (such as unemployment insurance payments).
What can you do about this?
- Good record-keeping is vital. You need to know what your income and expenses are so you can do tax planning in advance.
- Plan for taxes before year end. The more lead time you have in planning, the more you’re going to save.
- Know what states you have nexus in. Nexus means connection. What states do you have a connection with?
- Know the state tax laws for states in which you have nexus.