Have you done a PEST check?

Start by setting some time aside for a bit of PEST analysis (yes, it really is called this, although it’s full official name is PESTLE analysis). This stands for a ‘Political, Economic, Social, Technological, Legal and Environmental’ analysis of the factors that may affect your business – not just in the current climate but also in the future.

More positively, it’s about looking for opportunities in those trends that are going to affect your industry and the way you do business.

Let’s have a look at how you can analyze trends that may impact your business.

1. Be objective

Keep an open mind. It’s sometimes hard to step back when your industry or business has operated in a particular way for a long time but there’s no guarantee that’s going to be the way of the future. Be open to the idea that your industry may change considerably. And it may change soon! This is where a ‘Business Diagnostic And Performance Review’ with your RAN ONE accountant could really help by scanning the wider environment as it relates specifically to your industry.

2. Network with people from other industries

Make opportunities to talk to people who run different types of business. Of course it makes sense to attend industry specific networking events, but then your perspective is only from one side. When you talk to people in other industries you’ll gain an insight into how certain trends affect their specific business – and this could shed light on new ways of looking at your own. Talk with your accountant who has clients across many industries. They might be able to share some information about what they see happening.

3. Analyze your data for patterns

Analyze the data you have collected in the course of running your business and look for patterns. With regard to sales for instance, are they seasonal? Does business boom during the school holiday periods? Is there always a rush between 4pm-5pm? This can help you plan the use of your resources more effectively and also target your marketing campaigns based on certain trends.

4. Check what is going on in other regions

Many a great business idea has been gleaned from cross border markets. A quick way to begin is with internet research, but even questioning friends who’ve travelled recently can offer you insights.  But there’s nothing like visiting another state or region and ‘mystery shopping’ at a business that’s considered to be a leader in your field. A side benefit is that you also get to experience their business from the customer viewpoint, useful knowledge when developing ideas for your own customer service.

Straight price cutting in response to competition is a dangerous strategy, one that can ultimately cut your profits to the point where you might as well sell up. Far better to sit down and work out a pricing strategy that reflects the nature of your products and market, AND makes you money!

Covering costs

The first step in developing a pricing strategy is to work out your overheads. It’s really important to identify absolutely everything that costs you money, including rent, wages, utilities, software, and insurance. Don’t forget to include your own salary in this. Also include the cost of servicing capital assets (loan interest and depreciation charges), including any IT equipment and vehicles that you own.

Market research

Once you have identified the costs associated with running your business you can begin to think about how you want to price your product. To get a feel for the market, it’s a great idea to find out what your competitors charge, though it’s inadvisable to base your prices on this alone because they might be offering a different mix of product and associated services, and their overheads are also likely to be somewhat different.

Pricing strategies

Reaction pricing – lowering your price because the person up the road just lowered theirs – is not usually a workable long term solution. A price war means no-one makes money. And if you position yourself as the lowest cost option you run the risk of customers leaving you when another, even lower priced alternative, comes along. Keep in mind that if your customers perceive your price to be too low, it will make them just as suspicious as when they perceive your price to be too high.

Conversely, it’s important not to price yourself out of the market. So instead of just checking what price your competitors are selling at, evaluate the services they offer their customers and whether they market on the basis of any unique core differentiators. Then consider what you can offer. If you feel that what you can do is worth more than what your competitors offer, price your services accordingly. This is called a premium pricing strategy. For it to work, you need to be able to demonstrate your value to your customers in a convincing way and to get the message out among them.

Be prepared to negotiate your prices to win business. Negotiation involves a little planning but is a useful business tool when used properly. To ensure you’re still making money, you need to build in a premium to the initial price quoted and also determine a price floor under which you are not prepared to go.

Another pricing strategy that’s worth considering is straight discount-for-volume. Loss leaders are also an option, as are two-part pricing strategies. Peak pricing (when you charge a premium for made to order products or for work done at the last minute) is another pricing alternative you can look at.

Price increases

Take your time to do some homework on your product offering and selling points when determining your pricing strategy, because, once in place, it’s difficult to change without upsetting customers. If you are planning on raising prices, it’s a good idea to do it incrementally rather than wait for years and then slug clients with a massive price hike.

The best way to start considering pricing is to first step back and get some professional advice on how you can differentiate your product, improve your marketing and deliver great customer service. Then you’ll be able to consider a premium pricing strategy that cashes in on the things that make you different, rather than fighting it out on cost alone.

Sales are the lifeblood of business and many companies get so focused on making sales that they overlook the ability of their customers to repay a credit ‘loan’. To prevent cash flow problems, it’s vital that your company has sound credit policies and procedures to ensure that your customers do pay you when their accounts are due.

Starting out right

Sound credit policies begin with a credit application, a type of agreement that sets the terms for the offer of credit. The terms should cover all possible outcomes, such as an interest charge for late payment or a collection fee to cover expenses incurred in chasing the debt. An effective application will ask the customer for trade credit references and for permission to seek information from these references and credit reporting agencies. If you don’t have one, you will want to select a collection agency that you can call on as a last resort.

Once the completed credit application is received you can follow up by calling the customer’s references to check their credit record with them. For a nominal fee you can also get a credit report that shows negative claims or legal judgments against the customer. If there are warning signs that the customer will have trouble paying, you might want to deny credit or insist on a substantial deposit before supplying goods or services.

You will want to create creditworthiness criteria as part of your credit policy. Should the customer have been in business for a certain number of years before you offer credit? Do they need to be a certain size business? Are they in a risky industry? How late will they have to be before you turn the account over to a collection agency? If you can find the information, some guidelines and ideas can be gathered from how your competitors handle their credit terms.

Make it easy for customers to pay you

The credit application should ask the customer where and to whom the invoice should be sent.  Sometimes payments are delayed because the invoice was sent to the wrong person or wrong location. Give customers as many options as possible to pay, such as by check, bank transfer, credit card and PayPal.

It’s crucial that you send invoices immediately after your product or service has been supplied. Delaying invoicing sends the wrong message to your customers – if you are tardy in invoicing, some might believe they can be tardy in paying you.

Follow up on overdue accounts

If you don’t receive payment by the due date, follow up immediately with a phone call. Make sure the right person has received the invoice and ask why the invoice hasn’t been paid. Ask for a firm commitment date to get your payment and keep in regular contact until the payment has been made. When it comes to collecting outstanding debts, the company that stays in regular contact with its debtors is likely to get paid faster than the ones that don’t.

When a customer fails to respond to repeated requests for payment it is time to call in your collection agency. Most agencies operate on a commission basis and receive a portion of what they collect. They will make phone calls and send demand letters on your behalf. If they aren’t successful, they will then discuss other options such as taking legal action.

By offering credit, your company is in the lending business by default. Establishing and adhering to effective policies and procedures will reduce the risk, stress and cash flow problems that can occur from extending credit.

Video marketing is growing at a fast pace for a number of good reasons:

Research has shown that online video marketing delivers double the conversion rate of other media;

If properly implemented, video content can boost your ranking on search engines and make it easier for potential customers to find you;

People like to learn something about a product or service before they make a buying decision. Video can be a great way for customers to get to know your business and the benefits of your product.

Although videos can be highly successful, haphazardly posting them on the Web doesn’t necessarily deliver results. Knowing the basic techniques of effective video production and promotion strategies will help you succeed with your online video debut. Here are a few tips for achieving success with online video marketing.

Content is king

As with other media, relevant and high quality content is crucial. If people have no reason to view your content, it won’t get watched and won’t get recommended to other viewers. When creating content, you need to ask yourself “What’s interesting to our customers and prospects?” It’s important to remember that you want to deliver value to your viewers, so you need to provide more than just advertisements. If you sell products, your videos might teach customers how to install them correctly or use them more effectively. You can also talk about industry trends and how these affect your customers.

Depending on your market and offerings, you can look at ways to entertain viewers. Blendtec is an example of a highly successful campaign based on entertainment. The company makes very durable blenders and highlights this by blending a range of non-food items, including iPhones and iPods, in its products. Blendtec’s ‘Will It Blend?’ videos went ‘viral’ and have had over 100 million views in three years. The result has been a dramatic increase in the company’s sales. This type of campaign might not suit your business, but it shows the importance of being entertaining and informative in your videos.

It’s not always necessary to create special video content for online marketing. When it’s relevant to your customers and prospects, even a company presentation or speech can be captured on video and used online.

Whatever content you choose to present, good production is important. Video filmed with a low quality camera or using poor lighting and sound equipment will detract from your image. If you don’t have the budget to pay a professional be sure to employ, at the least, a good camera with a tripod, and use appropriate lighting and sound equipment.

Make sure you can be found

The best content is worthless if your potential customers don’t find your videos and recommend them to others. Like all Web-based content you need to optimize the chance of being found by search engines by including relevant keywords about the content of the video. You can start by determining what your prospects are searching for and include these keywords in the file names, titles, tags, URLs and link texts of your videos. And besides posting your videos on your own site, put them on sharing sites such as YouTube where they can be found by a wider audience. This will also help optimize your videos when you include the relevant keyword information.

Recommendations are a large part of successful video marketing, so it’s important that you make it easy for your viewers to come across your videos on YouTube, Facebook, MySpace, Twitter and other social media sites. Tweet news of your videos to reach a larger audience. Other ways to promote your videos are to cross-link them with related videos and link them to your company’s blog posts.

Encourage comments about your online videos to create two-way communication between you and your market. By doing this you will make it possible to answer questions and concerns while gauging opinion about your product.

The rise of the internet has made it easier and more cost-effective to reach existing and potential customers through video. Knowing what to show, how to present it, and making it easy to find are the key steps to successful video marketing.

Date: 2010-08-26 Time: 01:00 – 02:00

It may sound a little simplistic, but there are really only 4 fundamental ways to successfully grow your business-in other words, make it more valuable:

This topic looks at some of the key strategies within each of these 4 ways that you can use to make your business more valueable. It also looks at how they should be used synergistically in order to capture the greatest value and not miss out on opportunities to grow the business.

Register now: https://www2.gotomeeting.com/register/807816731

Time: 1PM-2PM ET Price: No-cost

Dates:

2010-08-26| Click to Register

Date: 2010-08-19 Time: 03:00 – 04:00

The reasons suggested by the study for not enrolling in COBRA included having health insurance through a spouse’s plan or not being able to afford the premiums even with the subsidy. ]]> http://www.thaneycpa.com/2010/07/one-third-of-those-eligible-used-cobra-subsidy/feed/ 0 http://www.thaneycpa.com/2010/07/new-w-2-rule-causes-confusion/ http://www.thaneycpa.com/2010/07/new-w-2-rule-causes-confusion/#comments Mon, 26 Jul 2010 15:51:05 +0000 admin http://www.thaneycpa.com/?p=1334 Starting with W-2s issued for the year 2011, employers will be required to report the value of health insurance premiums provided for each employee.

Reports indicating that these amounts will be taxable to employees are incorrect. Though the value of health coverage provided by employers must be listed separately on the W-2, it will not be added to taxable wages. Congress apparently wanted employees to be aware of how much their employer is spending on their health benefits.

Beware of the following popular scams:

• Work-at-home scams usually require an up-front fee for training, materials, or equipment. Scam artists promise to pay for work, such as stuffing envelopes, processing medical claims, or making toys. Either the work never materializes, or workers are not paid.
• Business opportunity scams also require up-front fees. Con artists sell vending machines, software products, and other equipment that is never delivered or is of such poor quality that it has little or no value.
• Victims of phantom civil service jobs pay for study materials and exams with promises that they’ll land jobs with the Postal Service, airports, or other government agencies. Unfortunately, the jobs never materialize.

To avoid being victimized, consider these suggestions:

• Never pay up-front fees. Legitimate job agencies generally don’t ask for money until after they’ve performed a service.
• Be skeptical of “easy money” ads. If an opportunity sounds too good to be true, it usually is.
• Watch out for ambiguous ads. Legitimate companies provide detailed job descriptions about the positions they are trying to fill.
• Don’t give personal information to strangers. Con artists can use this information to steal your identity and your money.
• Be suspicious of ads with 900 phone numbers. Be aware that 900 numbers are pay-per-call, and the charges will appear on your phone bill.
• Know with whom you’re dealing. Contact the Secretary of State where the business is located. Ask if the business is registered and if complaints have been filed against it.
• Be dubious of postal box numbers. Ask for the business’s physical address, and investigate whether the business is actually located there. The local Chamber of Commerce may be of assistance.

The bottom line: Do your homework before you pay job-related fees.

Here are three general guidelines.

Early withdrawals. You’ll pay regular income tax as well as a 10% penalty on early withdrawals from your traditional IRA unless an exception applies. Early withdrawals are those you take when you’re under age 59½.

Exceptions that let you avoid the penalty include amounts you withdraw to use for the following:

• certain educational or medical expenses

• medical insurance when you’re unemployed

• building, buying or rebuilding your first home

You may also qualify for an exception to the early withdrawal penalty if you’re a military reservist, or when you inherit an IRA, take nontaxable distributions, or roll over eligible amounts within 60 days of the withdrawal.

Required minimum distributions. For 2010, you’re once again required to take distributions from your traditional IRA when you reach age 70½. The penalty for withdrawing less than the required amount is 50% of the shortage.

The required minimum distribution rules also apply when you inherit a traditional or a Roth IRA.

Excess contributions. When you deposit more than the allowable maximum contribution into your IRA, you generally need to withdraw the excess along with any earnings by the due date of your tax return. Otherwise you may owe a 6% penalty, which can be assessed each year for as long as you leave the extra amount in your IRA.

The maximum IRA contribution limit for 2010 is $5,000 (plus an extra $1,000 if you’re over age 50) or your earned income, whichever is less.