Some thoughts before the end of the year

Here's a question that you should clip out and tape to your bathroom mirror. It might save you some angst 15 years from now.

The question is, What did you do back when interest rates were at their lowest in 50 years, crime was close to zero, great employees were looking for good jobs, computers made product development and marketing easier than ever, and there was almost no competition for good news about great ideas?

Many people will have to answer that question by saying, "I spent my time waiting, whining, worrying, and wishing." Because that's what seems to be going around these days. Fortunately, though, not everyone will have to confess to having made such a bad choice.

While your company has been waiting for the economy to rebound, Reebok has launched Travel Trainers, a very cool-looking lightweight trainer for travelers. They are selling out in Japan -- from vending machines in airports!

While Detroit's car companies have been whining about gas prices and bad publicity for SUVs (SUVs are among their most profitable products), Honda has been busy building cars that look like SUVs but get twice the gas mileage. The Honda Pilot was so popular, it had a waiting list.
While Africa's economic plight gets a fair amount of worry, a little startup called Kickstart is actually doing something about it. The new income that its products generate accounts for 0.5% of the entire GDP of Kenya. How? It manufactures a $75 device that looks a lot like a StairMaster. But it's not for exercise. Instead, Kickstart sells the machine to subsistence farmers, who use its stair-stepping feature to irrigate their land. People who buy it can move from subsistence farming to selling the additional produce that their land yields -- and triple their annual income in the first year of using the product.

While you've been wishing for the inspiration to start something great, thousands of entrepreneurs have used the prevailing sense of uncertainty to start truly remarkable companies. Lucrative Web businesses, successful tool catalogues, fast-growing PR firms -- all have started on a shoestring, and all have been profitable ahead of schedule.

The Web is dead, right? Well, try telling that to Meetup.com, a new Web site that helps organize meetings anywhere and on any topic. It has 200,000 registered users -- and counting.

Maybe you already have a clipping on your mirror that asks you what you did during the 1990s. What's your biggest regret about that decade? Do you wish that you had started, joined, invested in, or built something? Are you left wishing that you'd at least had the courage to try? In hindsight, the 1990s were the good old days. Yet so many people missed out. Why? Because it's always possible to find a reason to stay put, to skip an opportunity, or to decline an offer. And yet, in retrospect, it's hard to remember why we said no and easy to wish that we had said yes.

The thing is, we still live in a world that's filled with opportunity. In fact, we have more than an opportunity -- we have an obligation. An obligation to spend our time doing great things. To find ideas that matter and to share them. To push ourselves and the people around us to demonstrate gratitude, insight, and inspiration. To take risks and to make the world better by being amazing.

Are these crazy times? You bet they are. But so were the days when we were doing duck-and-cover air-raid drills in school, or going through the scares of Three Mile Island and Love Canal.

There will always be crazy times.

So stop thinking about how crazy the times are, and start thinking about what the crazy times demand. There has never been a worse time for business as usual. Business as usual is sure to fail, sure to disappoint, sure to numb our dreams. That's why there has never been a better time for the new. Your competitors are too afraid to spend money on new productivity tools. Your bankers have no idea where they can safely invest. Your potential employees are desperately looking for something exciting, something they feel passionate about, something they can genuinely engage in and engage with.

You get to make a choice. You can remake that choice every day, in fact. It's never too late to choose optimism, to choose action, to choose excellence. The best thing is that it only takes a moment -- just one second -- to decide.

Before you finish this paragraph, you have the power to change everything that's to come. And you can do that by asking yourself (and your colleagues) the one question that every organisation and every individual needs to ask today: Why not be great?

courtesy of Seth Godin http://www.sethgodin.com/

What the year ahead holds

I think 2008 will be an interesting year for business as a whole. Businesses that differentiate themselves from the masses (read "The Purple Cow" by Seth Godin), sell the benefits to customers, and run a tight ship will have no problem, those that don't will suffer.

My advice to new and old businesses is the following:

1. Understand your pricing policies and review your prices. If inflation is rising isn't it time to change your prices?

2. Understand your costs better, know what is costing you money whilst what is making you money. For every £1 spent by you is it contributing more than £1 to the value of your business?

3. Take time out to spend on growing your business - during these tougher economic times this will be essential to navigate your business during leaner times.

4. Build an internal and external team of friends and advisors to support you with your plans. Teamwork is essential in achieving your aspirations.

5. Fortune favours the brave. You are more likely to succeed by taking calculated risks, developing your skills proactively and taking action rather than waiting to see what happens!

I hate it when my clients pay................. TOO MUCH TAX

Last week I took on a client who had been using the services of a major accountancy practice in Reading for a number of years. The firm in question are a very good practice with one problem - they don't seem to look after their "smaller" clients very well. I can understand how this happens becasue I have worked in larger firms in the past and have seen this myself.

I checked over the latest accounts figures and was horrified at what I saw!

The accountancy fee for one was huge! But the biggest problem for me was the claim for using the home as an office.

Now this particular business is operated exclusively from home and uses two of the rooms in the house. So there is a potential to make a substantial claim in the accounts as there is legislation which allows this. I had one client where we claimed over £6,000 each year for this.

And how much had the "other" accountant claimed? A measly £240! Yes thats right - £240 for a years use of the home as an office.

I made some quick calculations and worked out the claim could be as much as £4,000 each year. Now that equates to around £1,600 in tax for a 40% taxpayer plus national insurance. repeat this every year and it turns into many thousands of pounds of tax paid which isn't necessary!

My point is that it actually feels like I am paying the tax when my clients hand over their hard earned cash to the tax man! You work hard for it - my job is to help you keep hold of it!

A bientot!

Doesn't time fly?

Well here we are again and 18 days have passed since I last posted here. What a sin!
I do have some resonable excuses and I will reel them off.......................

Work - I spent a week in the UK working - always a distraction!

Snow - when I got home we had a great fall of snow so it was time to head into the forest, cut down a christmas tree and drag it home. To go with this we needed copious amounts of vin chaud to help us get in the festive spirit:)

And to top it all how could I leave that lovely snow alone with out having a play? So I have spent two days out on the snowboard and plan another day this week.

So there you are - a list of resonable excuses for not blogging. I think a new years resolution is due.

Anyway - I hope any readers have a great christmas and a happy new year. See you in 2008!

The story of a father and his son...

This is a recent blog by Dave Dee - a guy who works closely with Dan Kennedy who - if you don't know of him is probably the No 1 marketeer in the WORLD!

The story of a father and his son...

My seven year old son, David, has been asking me for quite a while, "Daddy, when can you and I go out by ourselves and do some 'man stuff'?

"Tonight's the night we are going to do just that.I was thinking of taking him to a strip club

(That's a joke, by the way. I actually hate those places.) but decided to go to the Thrashers game with him instead. We are going to make a night of it. I booked a room at a very nice hotel near the arena, so we could stay in downtown Atlanta overnight.

I think I'm more excited than he is about this and he is pretty darn excited!

The point of all of this is I've structured my business so I can do things like this, on the spur of the moment. I've built my business around the lifestyle I wanted. I don't work for my business, my business works for me.

Some people would say I'm lucky to fly first class from Atlanta to California, first-class at least every other week and that I can take time off whenever I want, do do whatever I want. These same people would tell me that I was "lucky" to be able to afford to stay in a nice hotel, go to all the hockey games I want and sit in the best seats. But you know what?

"Luck" does not have a damn thing to do with it.

Sure, I acknowledge that I have some advantages that other people might not have. (By the way, having rich parents is NOT one of my advantages). On the other hand there are people with far greater advantages who have not accomplished squat. Conversely, there are people who had far less advantages than me but are kicking butt.

What's the difference that makes the difference?

Knowing what you want, making a plan for it and then working your ass off to make it happen.

Most people only dream about what they'd like their life to be about but never DO anything about making it a reality.

They are either too lazy or unmotivated to get up off the couch.There are also business owners, who work hard and think that's all they need to do to succeed. Yes, hard work is important BUT many business owners think "hard work" means working "in" the business instead of "on" the business.

For example, the guy who owns a restaurant thinks he's working hard to make his business better if he is spending time in the restaurant instead of getting out of the restaurant to think and plan for the growth of his business. This is where the real work and the highest leveraged payoff is.

Other business owners are too cheap or intellectually lazy to spend the time necessary to invest in themselves by reading books, attending seminars, hiring coaches, etc. They are even MORE lazy when it comes to developing strategy to take their business to the next level.

Yes, I think my business, the information marketing business is the perfect business. But that is because it fits the lifestyle that I want to have. YOU need to decide about how YOU want to live and spend time, energy and money designing your business around that.

Kick butt, make mucho dee-nero!

Dave Dee

With thanks to Dave Dee
http://www.davedee.com/blog/

Get your website noticed

I was listening to a teleconference tonight with Dan Bradbury and Chad Conger. If you don't know who they are check out their websites www.danbradbury.com and www.chadconger.com

Dan is an NLP coach and trainer and has inspired me to push my business forward recently. Chad is a website guru and really knows his stuff. They both have free downloads on their websites so go and take a look. That is if you want more traffic!

the teleconference was all about different ways you can get more traffic to your website and I picked up a few really great tips from it.

Here are a couple: -

• Make a video and post it on youtube.com. that way you can advertise your website too. Make sure your URL is at the bottom of the video.
• Volunteer to write articles for other websites with a reciprocal link back to yours.
• Join forums and get talking! Ask people on the forum to critique your website and give you feedback.

These are just a few ideas but come on - there are loads of ways to drive traffic to your site for FREE!

New VAT rules

You may be aware there are changes to the VAT rules. Here is a brief summary of what section applies to most of my clients. If you want any further clarification please contact me and I will be happy to explain what's going on.

All invoices will be required to be sequentially numbered by law. This is the only aspect of the changes that affects every VAT registered trader, and as many of you already number your invoices, there will be no change.

However, businesses which "restart" their invoicing sequence each financial year will now have to ensure that every single invoice has a unique number, and that number sequences are not repeated. Where businesses use separate sequences for different customers or product types this is acceptable, provided each sequence is identifiable and unique. Using customer prefixes is also fine, provided the sequencing is discernable. Any system under which invoice numbers are duplicated for whatever reason is unacceptable.

What happens if you get rid of unprofitable customers?

One day I was discussing ways of increasing their profit with one of my clients. One of my recommendations to him was to “sack” some of his customers. (Those of you familiar with the 80:20 principle will know why!)

My client couldn't comprehend how anyone could ever talk about "sacking” a customer".But the reason we were talking about it, and the reason why I'm writing about it today, is because I regularly get questions on the subject. Generally the customer facing the bullet falls into one of two camps:

(1) The unreasonable.If you can afford to sack consistently abusive, non-paying, and impossible-to-please customers, do it. But first, make sure you've not passed the buck. Blaming the customer is too easy.

And if you decide you have no option, bear in mind the twin danger that (a) you lose the "customer is always right" mentality amongst your employees and (b) you end up with a vindictive ex-customer rather than an unreasonable customer.

(2) The unprofitable.Some customers might carry a loss. If you have customers that are unprofitable, you need to work out why:

(a) Usually it's a result of charging too low a price "just to make ends meet" in the early days. As I've said before, pricing low is the most catastrophic error small businesses can make.

(b) Sometimes it's because you've taken on customers that are outside your niche or just a bad match for your business or your core skills.

(c) For the big business, the reason many customers end up unprofitable is because sales people are more interested in revenue-based commission than truly profitable customers. That shouldn't be a problem for anyone on this list.

(d) Lastly, perhaps you've used samples, money-back trials,"all you can eat" promotions, or loss-leader products, and have ended up with some customers who cost you more than they spend.

As with sacking unreasonable customers, you face a twin danger if you choose to give your unprofitable customers the heave-ho.

First, and this applies particularly to customers recruited by method (d) above, you may cut off the very hand that delivered your most profitable customers.

For sure, your local curry house may have the odd customer who eats his or her bodyweight in chicken tikka masala on "all you can eat" night. But if you water down the offer with caveats, don't you also lose half of your profitable customers? The cost of your freeloaders is simply a marketing investment that helps you acquire profitable customers.

And second, it's hard to look at the past and say with much certainty which of your customers will be good and bad customers in the future.

If you sack an unprofitable customer, you also burn the investment you made in acquiring that customer, and in the relationship you have with that customer. Even though you may be making a loss on the customer right now, you still have a loyal customer on your books. And in many cases that loyalty can be turned into profitability in the future.

Five ideas for pubs

The BARventure Top 5 Basics - these are aimed at pubs but a lot of these ideas could work for YOUR business too!

Rule 1: The Customer Really Is Always Right.Ok!
I know this isn't really the case. They want the one product you don't sell. The dessert you took off the menu months ago. They haven't booked and want their 'usual table'. Obviously there are many situations where the customer is absolutely, 100%, utterly wrong. However, there is absolutely, 100% utterly no point in telling them so.

You are never going to find a customer who turns around and says "Oh thanks for pointing out how wrong I was. I shall never do that again". In fact all that will happen is that they shall leave and go and find someone who does sell what they want, has the dessert they loved or always manages to find them that 'special' table.

Without customers you have no business - just a shell - so get into the mindset of thinking that they're always right. It's amazing what solutions you can think of if you really want someone's business.

Rule 2: Consistency is Key
Lucky streaks are great; they can provide big windfalls and give you a real buzz. But ask any poker player and they will tell you that they would rather play consistently good odds each hand than land the odd royal flush. This is why the same players keep appearing at the final table of the world series. Not because they are luckier than everyone else but because they play consistently good poker. Looking at the odds, making good judgment calls and then occasionally getting that whopping hand.

So open your doors, provide great service all the time, deliver what you promise and what you advertise. Build up your reputation. The worst thing you can do is lose consistency. You'll end up giving a lovely couple the best time in the world and then they'll re-book and bring their friends and if you don't provide the service you had previously they'll feel embarrassed and let down. All of a sudden you've lost double the customers you made happy. Gain two - lose four, this is non-profitable mathematics! Be consistent. Always.

Rule 3: You get what you pay for. As a customer and as an employer.
Whether you have one person working for you or 50 give them the maximum remuneration you can not the minimum amount you think you can get away with. I can't praise enough the benefits of top quality waiter or waitress that costs you £7 per hour over the student working filling up their time on minimum wage. The return you'll get in upsales, repeat business and simple peace of mind will far out-weigh your additional costs. Its not only wages that count though, what else can you do for your staff? Days away? Employee of the Month awards that offer something more than a bottle of wine - is it really that expensive to pay for a weekend for two in Rome or Paris? Not really - if you shop around about £200.

Support you staff, treat them as well as you can and in return they will support you. They will tell their friends how great it is to work for you and recruitment will get easier. They will turn up for work on time. They will stay on when you need them to. They will feel involved in the business, taking ownership and giving the customer that 'WOW' factor service.Unless you're the only person in your business your staff are your representatives. Treat them like yourself.

Rule 4: Life is Unfair
Yes.Its official. Life is unfair. If it was then Elvis would still be alive and all the impersonators would be dead (I know...I know not my line! I don't know who said it actually so if you do please drop me a line...if it was you - please don't sue!) Not only is life unfair but there is also nothing you can do about it. Sometimes things are going to go wrong and it won’t be anyone's fault, or at least they won't have purposefully made the mistake. You could stamp you're feet, have a fit and throw your toys out of your pram. But life will still be unfair, you will still have the problem and you just be a little bit more stressed. As hard as it is, take a breath, learn from the situation and move in.

This is the second time I've had to write this page because I accidentally deleted it the first time over. I could have got really upset, angry that I had lost all my writing but would it have helped me? Not really. Instead I made a cup of tea sat back down and started re-writing. And you know what, this version is better. I've got a funny little anecdote to add to this rule, this page is better than it was the first time over.

Life isn't fair, but if you're calm and relaxed you'll often find you can turn mistakes and disasters into benefits and profit.

Rule 5: Stop, Look and Listen
Not only a rule that will keep you alive when crossing the road but also a rule that will keep your business alive with fresh ideas. Take a moment to stop taking. Shhh. Listen to that. The world you're in is full of great ideas bumping around in peoples heads. Or in the bar you're sat in, the cinema, the casino, the coffee shop, the supermarket. In fact everywhere you go. On holiday, at your friends house, at a motorway road stop. No matter where you go you'll find ideas that you can use or sparks of ideas that lead to your next big thing.

Listen to your customers and they will tell you what they want Listen closely and they'll even tell you what would make them spend more money. Ask your staff, their ideas might not have the business acumen you're looking for but I bet they give you something to work with. Use the people and places around you and keep your mind open to new ideas



Copyright © BARventure 2007

One way to avoid paying inheritance tax

LOOPHOLE OF THE MONTH

‘Double dipping’or How to pass investment assets down through the generations tax-free.

One of the starkest contrasts in the whole of taxation is between the treatment of predominantly trading businesses on the one hand and all other types of asset on the other, for inheritance-tax (IHT) purposes. While most forms of trading-business assets are 100% relieved from IHT, other assets are liable to tax at a rate of 40%, subject to the £300,000 threshold.

Double dipping is a way of effectively getting 100% relief on pure investment assets, and the best way to illustrate it is with an example.Mrs Widow has just lost her husband, and he has left her all the shares in Trading Limited, which are worth £1 million, and £1 million cash. There’s no tax on his death, of course, because all bequests to a surviving spouse are IHT-exempt. But both Mrs Widow and her son, who is actually running the business of the company and stands to inherit everything, can see that this has done nothing but postpone the problem. On his mother’s subsequent death, her taxable estate will consist of £1 million cash (the shares being 100% relieved) that will, at current rates, give rise to tax of nearly £300,000.

So, having consulted a tax specialist, he goes in for a double dipping scheme as follows.First, the will of the late Mr Widow is varied to leave the shares in the trading company direct to the son.

There is still no IHT even on the varied will because the shares in Trading Limited are 100% relievable.After a decent interval, though, Mrs Widow approaches her son with a view to buying the shares in the company for their full £1 million value.The son makes no capital gain on selling the shares to his mother, because he is treated as having acquired them at their full £1 million value.So the situation now is that Mrs Widow has £1 million worth of the shares in Trading Limited and her son has £1 million cash.

On her subsequent death, assuming nothing has changed, she leaves the shares in Trading Limited back to her son and her estate value is precisely nil, because of 100% relief on the shares.Hence, the same shares have effectively passed down from generation one to generation two twice, picking up business-property relief both times, and the net effect is that the £1 million cash is also passed down tax-free. Mrs Widow doesn’t even need to survive seven years, because the transaction she entered into with her son was at arm’s length and not a gift.Neat, if you know how!

Courtesy of The Schmidt Report

20 Free Marketing Ideas

• 
  If your marketing offends someone it will probably be a success
• Get someone to tell a friend. Hopefully someone will tell another friend and it will become viral
• Collect email addresses from prospects so that you can build a relationship (with permission, of course)
• Everybody makes marketing mistakes, learn from yours
• Give a sample away for free.
• Perform an outrageous publicity stunt
• In some instances it is better to co-operate with a competitor rather than compete
• Create a company blog
• Ask clients for written testimonials
• Study the marketing techniques of your competitors. Do what works for them
• Be seen as an expert in your field by writing Ezine articles
• Write a press release and submit it to newspapers and magazines
• Differentiate your product. Just know that your product also must be good. A different product that is crap is useless
• Give something of value away for free via a contest
• Put your logo and website URL on everything
• Learn from the pros. Read Seth Godins marketing blog. Read Seth's books on http://www.sethgodin.com/
• Don’t just make a promise in your marketing message.
• Deliver on your promise or you will be seen as a liar
• Sponsor a popular local event
• Use the new media
• Follow your gut instincts

Tax investigations - you are at risk!

As you may know the Inland Revenue and HM Customs and Excise have now joined forces. They are now known as HM Revenue & Customs.

This means they have even more power than before and access to each others database of information. I've attached an article from The Times about the bonuses paid to tax inspectors which may interest you.

This also means by their own admission that the number of tax investigations will be increased in the future. The average investigation costs around £3,000 in accountancy fees so we are anxious you should be covered if you were investigated.

Please follow the link below to download an application form for you to sign and send off for tax investigation insurance if you wish to join the scheme. The cover is dated to start 1 November 2007 and will cover you for any Inland Revenue investigation which opens during the year afterwards.

Please send the form with a cheque for £80 to: -

Icon Insurance.Plantation Place.30 Fenchurch Street.London. EC3M 3BD
Please make the cheque out to ICON INSURANCE.

I make no commission from this by the way - I just want you to be protected. And if you read the small print you are supposed to pay the first £250 of each claim but I will do the first £250 of work of any tax investigation for FREE if you sign up to this policy!

Just let me know when you have signed up and posted the form and cheque.

If you do not wish to join this scheme please reply and confirm this for my records.

If you are investigated at a later date we will ask for £1,000 up front as a working deposit and then bill you as the investigation progresses. We also may employ the services of investigation specialists who can charge up to £250 per hour for their time.

Please follow the links below to download the application form and article:-

Click here http://217.145.114.66/TaxSorted/Documents/0TaxSorted/Admin/Proff%20memberships%20and%20subscriptions/ICPA/Tax%20investigation%20insurance%20scheme/Tax%20investigation%20protection%20application%20form.pdf to download the application form.

Click here to read the Times article http://217.145.114.66/TaxSorted/Documents/0TaxSorted/Admin/Proff%20memberships%20and%20subscriptions/ICPA/Tax%20investigation%20insurance%20scheme/The%20Times%20article%20on%20tax%20inspectors%20bonus.pdf Times article on tax inspectors bonus.pdf

Don't wait too long - you could be next!

Business Tax Tip – Here’s a clever (and risky!) idea if you pay a lot of income tax

Invest £50,000 in a “Venture Capital Trust” – assuming you have paid enough tax, you will be able to claim 30% tax relief on the £50K.

Wait five years and make a contribution to your personal pension fund equal to the market value of the VCT investment at the time (let’s say it is still the same, at £50K). You will get tax relief at 40% on this. The fund uses the £50K to buy the VCT investment from you.

Your pension fund now has an investment worth £50K, and the cost to you has been:

Investment in VCT = £50K
Tax relief on VCT = (£15K)
Tax relief on pension = (£20K)
Net cost to you = £15K

FREE cash from the government!

There have been some recent changes relating to tax credits and quite surprisingly you are able to make a claim with an income of up to £60,000!

There are also tax planning opportunities to "manipulate" your income (legally of course!) to make a tax credit claim. And if your income doesn't increase by more than £25,000 the following year the claim still stands based on the previous years claim.

I know of some clients who are claiming around £1,000 each month so why don't you take stock and see if you are eligible to claim. Just contact me shaun@tax-sorted.biz and I will run some calculations for you to see if you can get some free cash from the government.

Most accountants are steering well clear of getting involved with tax credits but I feel it is my duty to help you claim what is rightfully yours.
Go on - what are you waiting for?

Its been too long!

Hello!

I have realised I have been neglecting this blog. I have made a resolution to add something weekly from now on. I see so many people doing the same as myself - starting then stuttering to a halt.

So watch this space and there will be more stuff appearing soon.