Your Marketing Plan Is Meaningless Until You Assign A Budget

Oh, how you love to talk about planning—your business plan, financial plan, vacation plan and what I think is most often discussed—your marketing plan.  Congratulations to you if you’ve drawn up an official marketing plan for your venture.  But if you intend to transfer your plan from the page to reality, you must assign it a budget.  Somehow, that practical reality is sometimes glossed over.  Ask a Freelancer or business owner what the company’s annual marketing budget is and you’re likely to be met with a blank stare or incoherent stammering.  That is not the ideal response, my friend! So today, let’s learn how to estimate a reasonable budget for a B2B annual marketing plan.

Laurel Mintz, founder and CEO of Elevate My Brand, a Los Angeles digital marketing agency, has developed what she calls “marketing math,” to help her clients determine what would be  a realistic B2B marketing budget range for their organizations.  According to Ms. Mintz:

New companies in business for one to five years would be wise to allot 12 – 20 % of  gross or projected revenues on marketing activities.

Established companies in business for more than five years are advised to commit 6 – 12 % of gross or projected revenues to marketing activities.

Those figures seemed rather hefty, at least they did to me and maybe you agree.   According to Laurel Mintz,  if a new business generates just $35,000 in after-tax bottom line revenues, she nevertheless feels that the owner should devote $4,200 – $7,000 annually to a marketing budget.  Ouch! I mean, how does one pay the living expenses and taxes and health insurance when in the salad days of a start-up?

Think of it like this—no one said that self-employment, whether Freelance solopreneur or entrepreneur, was going to be either easy or inexpensive.  Just like you set aside money for other vital expenses, marketing deserves a budget, too, because without marketing you could wind up presiding over a stunted venture that never gains traction and never fulfills its potential.

Marketing activities, whether innovative or predictable, give the venture a needed push into target markets.  Marketing promotes the expansion of prospective clients who will flow into the sales funnel, distinguishes the organization from competitors, establishes and promotes the brand, justifies the pricing structure and keeps the enterprise at top of mind and positioned to beckon clients and referrers.

Now for the cold water—there are no guarantees in marketing and the ROI is notoriously tricky to quantify.  But realize that marketing is all about testing and that means (calculated) risk.  If you approve a certain sum of money to devote to the year’s marketing activities, you might achieve all of your marketing campaign goals, or do twice as well, or only half as well as you projected

Risk is real in marketing, but it’s mitigated by your awareness of how your clients have been known to respond to the marketing tactics that you can afford.  Research shows that if you conduct marketing  activities that resonate with your target clients and are within budget, then over time,  the marketing campaigns will enhance the bottom line and your brand.  Treat marketing activities as an investment that will surely pay off and allocate funds each year.

Marketing  campaigns are all about planning, budget and execution.  If meager finances make you feel that the budget formula given here is too risky for your venture, then focus on planning and execution and roll out “sweat equity” campaigns that utilize tactics that cost time instead of dollars, such as content marketing, face to face networking and social media.  Just do it.

Thanks for reading,

Kim

Director and actress Ida Lupino on the set of The Hitch-Hiker (1953)                    Photograph courtesy of RKO Pictures/ Photofest

 

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Your Business, Positioned To Succeed

Since you’ve made the commitment to go into business, as a Freelance Solopreneur who offers B2B or B2C services or an Entrepreneur, who employs a leadership team to operate a complex venture you, the founder and leader, will be expected to position your enterprise for profitability and success.

Strategic planning is the process by which business leaders aim to create sustainable success for their organization and it is the essence of business planning.  Strategic plans typically forecast the upcoming 36 months.  Strategic planning is eventually undertaken by all business leaders who fully grasp their responsibilities.

Freelance Solopreneurs might request that their advisory board members participate in the strategic plan development.  Entrepreneurs can count on their team leaders and they may also invite other staff members to contribute to the process.

Step 1: A SWOT Analysis to reveal where the organization is today

Suggest that the planning team use the classic strategy planning tool, the Strengths, Weaknesses, Opportunities and Threats (SWOT) Analysis matrix.  SWOT asks the planning team to acknowledge and document the current reality of the organization, in preparation for deciding how and when to move forward with plans for growth.

In the SWOT, basic information such as identifying resources that can be considered competitive advantages and factors that are considered minuses, start the process. Note that the Strengths and Weaknesses categories ask the team to acknowledge internal factors, that is, conditions that the organization can influence.  The Opportunities and Threats categories hold external factors that the organization can strive to exploit or avoid as needed, but are unable to control.

Perhaps the most important document for the planning team to examine is the Income (Profit & Loss) Statement.  Over the previous 8 to 12 quarters, have total net sales revenues met the forecast projections? What is the trajectory of (top line) gross sales? The P & L includes categories for each product and service that is sold and reveals the history of sales, gross and net.  That data allows for reasonable projection forecasts to be made for sales revenue performance in the near term and up to three years out.  From the P & L. the team will also acknowledge production or acquisition costs of goods sold for each product and service; all marketing and advertising costs; selling costs; fixed operating expenses; payroll expenses; and taxes, local and federal.

Your accountant will be an excellent resource for financial data analysis (whether or not your team includes a fiscal controller) and will be able to recommend attainable goals that will strengthen the company’s fiscal future, information that is essential to the SWOT process.

Statistics and other Information on market share, current and newly arrived competitors and changes in technology, government regulations, or the priorities and preferences of target markets, which can either help or hurt the plans for long-term growth and success, can be culled from quarterly or annual marketing data and reviewed during the SWOT process.  Quality control, operational processes and customer service protocols should likewise be included in the SWOT Analysis.

Step 2: Use the SWOT results to determine your company’s best growth goals

Once the strategy planning team has a clear picture of the current conditions of the business, the next step is to decide what growth could look like for the organization.  It is strongly recommended that the team research potential growth opportunities for the business, to first understand where expansion can be expected to be sustainable and second, the short and long-term expectations for the proposed expansion.

Plans for operational efficiencies, such as improvements in service delivery, customer service protocols, quality control and inventory management could also be evaluated and strategies for improvements formulated during the SWOT, since these elements can impact business growth and perception of the brand.

Decision-making is a huge part of leadership and the team will demonstrate its prowess here. in Step 2. Your team will have been guided by a comprehensive and candid SWOT Analysis, which allows the team to develop plans and move forward with confidence.

Step 3: Strategies, Action Plans, Monitoring and Review

Once the direction for growth has been determined and the financial and operational upgrades needed to promote that growth have been identified, then a list of growth objectives can be proposed and agreed upon by the planning team.  Once the growth objectives have been officially accepted, then the affiliated strategies and action plans, with time tables and milestones to mark interim demonstrations of success, can be developed, discussed and accepted by the team,

Major planning initiatives benefit from monthly or quarterly review, so that incorrect assumptions and forecasts can be quickly revealed and corrections made.  An internal communications plan designed to keep plan participants and non-participating staff apprised of the strategic plan’s progress supports the motivation to continue to carry out the action plans that drive success on the ground.

Thanks for reading,

Kim

Launch 2017 With Strategic Planning For Your Business

Happy New Year! My wish for all my readers is that 2017 will be filled with good health, good choices and prosperity and a year where you recognize opportunities and successfully move forward to attain what will benefit you.

Part of the process of realizing your goals may involve strategic planning. The process of strategic planning encourages business leadership teams to ask (the right) questions about the value that the business creates and sells at a profit, which is a reflection of its vision and mission.  The goals, objectives, business model and guiding principles (that is, culture and values) are likewise impacted by the organization’s vision and mission. Below are six strategic planning and positioning principles to enhance your planning.

Principle 1:  Sustained profitability

Economic value and the conditions for generating profits are created when clients value your product or service enough to pay more than it costs the business (you) to produce and provide it.  Strategic planning is all about Defining  business goals and objectives and devising strategies and action plans with the thought of ROI, in particular long-term ROI, in mind.  Assuming that profits will be inevitable when sales volume and/or market share are the most accurate measurements of success is not the best way to approach the matter.

Principle 2: Value proposition

First, be certain that what you consider to be the value proposition—that is, the most desirable benefits—matches what clients consider to be the value proposition. Be aware that strategy is not about offering services or products that will be all things to all prospective clients.  Businesses are in need of strategies that allow the venture to compete in a way that allows it to effectively and efficiently deliver what clients consider the value proposition.

Principle 3: Competitive advantage

The unique and desirable benefits that sustain the value proposition must be reflected in and supported by strategy that shapes them into a sustainable competitive advantage.  The successful enterprise will differentiate itself from competitors through the products or services offered, how those are packaged and/or delivered, customer service practices, branding, pricing and so on; those unique features and practices will matter to current and prospective clients.  Still, the company’s business model will likely resemble that of its rivals.

Principle 4: Choices and priorities

Resources are inevitably finite and choices about your products and/or services must be made, in order to define what is necessary and possible and therefore, a priority.  Some  product or service features will not be offered, so that the benefits (priorities) that clients have chosen as highly desirable can be optimized.  These priorities are what sets the business apart from competitors and define the brand.

Principle 5: Flow

Choices and priorities must be baked into the strategies that you and the leadership team devise, to enhance and enable the consistent  delivery of the value proposition. These strategies will be both stand-alone and interdependent, like dominoes.  Choices made to define the target customers that the business will pursue also impact product design and by necessity will impact choices that determine the manufacturing process and its cost.  Choices that determine what will be included in a service will be influenced by the expected target customers and will impact how that service is delivered and priced.  Choices about product positioning and branding will impact where the product is sold and the marketing strategy.

Principle 6: Direction

The late style icon Diana Vreeland, who served as editor-in-chief at both Vogue and Harper’s Bazaar Magazines, once said that “elegance is refusal.” A company must define its unique value proposition and that will eventually cause certain potential choices to be declined, because they are contrary to the brand.  The product or service lines can be altered to satisfy customer demands over time and business models can be adjusted to reflect current or anticipated market conditions.  Nevertheless, the vision and mission must be upheld to maintain brand awareness and trust. Strategic direction will guide that process.

Thanks for reading,

Kim

 

Plans For Your Business

Whatever the health and condition of your Freelance business venture, you will at some point benefit from planning.  Business planning of any type provides a roadmap that will help you to successfully achieve your business goals.  Business planning can be instituted when sales are tanking and you need to find a way to improve billable hours.  Or you may have decided to aim for larger assignments  or roll out new services and need to figure out how to make it happen.

I’ve taught business plan writing for 7 or more years and I’ve also developed a one-day business plan writing workshop. As I see it,  the process of writing a business plan gives the writer (or the team) many opportunities to think things through and  get the magical thinking out of one’s head. The business plan shows us first,  if the dream is potentially viable and second,  how to make the dream a reality.

The plan you write will depend on what you set out to achieve.  If you’re launching a start-up that will involve significant outside investment,  then you’ll need a very detailed plan that focuses on financial projections;  marketing plans that delve into customer acquisition, the competitive landscape, the product or service launch, messaging,  sales distribution; and operational aspects such as manufacturing,  staffing and quality control.  Freelance consultants will mostly focus on marketing, in particular defining the target clients,  client acquisition; providing the right services; appropriate pricing; and the budget to pay for their marketing strategies.

Whether your plan will be used to launch a big venture and attract outside money,  or is a boutique style service provider, include the following elements in your plan.  Even if you’ll be writing what amounts to an extended marketing plan used for a one-person shop,  it will be a good exercise to include these elements, because you’ll be encouraged to think seriously and strategically about your mini-enterprise.

EXECUTIVE SUMMARY

Present the business mission statement. Include as well the date when the business was formed; key management personnel; your unique credentials or experience that make you especially suited to start and successfully run the venture; the business legal structure (LLC, Sole Proprietor, or Corporation); the products and services; one or two key competitive advantages (maybe you have a patent?); sales projections; and the amount of capital needed (if you’re looking for investors).

BUSINESS DESCRIPTION

It’s traditional to present a brief description of your industry and its outlook,  nationally and regionally. give the details of your products and services and competitive advantages. Identify whether your venture is B2B, B2C, or B2G. If you hold a patent,  detail the competitive advantages that it will convey. Have there been any technological advances that will help or hinder your business?  Divulge here.

MARKETING

The category is a big tent that encompasses sales, product or service distribution,  competitors, advertising,  social media, PR,  networking,  branding, customer acquisition and pricing. The plan written for a mall organization will essentially consist of an extended marketing plan, because for Freelance consultants,  success hinges on identifying and reaching clients who will pay as well as pricing the services advantageously.

FINANCING

Whether you’ll self-finance because you’re wealthy enough,  or the venture is small and  not especially demanding of capital investment,  you nevertheless need to know with a reasonable degree of certainty how much you’ll need to spend to carry out the plan ( that could be a new product, or the purchase of something big, or a marketing plan, for example).  If your strategy is to attract investors,  they’ll need to be convinced by your projected sales revenue figures,  because they’ll want to know when they’ll be paid back or know when to expect profits if they are made co-owners of the business.  A break-even analysis, projected income statement, projected cash-flow statement and projected balance sheet are required by those who will need significant money.

OPERATIONS

How will day-to-day business processes function?  Tell it here,  along with providing the organizational chart,  the business location,  the method of producing that which you sell (if you are,  say,  a Freelance book editor or  graphics specialist,  you produce the service yourself),  your sub-contractors (if you are a special events organizer,  who is your usual caterer, florist,  limo service, etc.?) and quality control methods.  This element is about logistics.

for more information on writing a business plan,  visit the Small Business Association website https://www.sba.gov/tools/sba-learning-center/training/how-write-business-plan

Thanks for reading,

Kim

 

 

 

 

 

 

 

 

 

 

2015 Year-End Tax Planning Thoughts

It’s mid-November and time for Freelancers to think about how much money we will hand over to the tax man this year. Tax planning is usually at top of mind as the year ends, but be advised that obsessing over taxes is not always useful. New York City CPA and small business tax specialist Michael Hanley recommends that you take a breath and consider the impact that aggressive tax strategies would have on your financial circumstances.

Hanley cautions small business owners and Freelancers against inflated spending on business expenses just to give themselves a lower tax bill, because tax deductions are not a dollar-for-dollar benefit. Every dollar written off as a deduction yields on average only 30 cents in tax savings (depending on your tax bracket and legal structure of the business). If you have a big-ticket item to buy and you anticipate that this year’s income and next year’s will be about the same, then buy when you can get the best price on the item, be it in this year or next. Your savings could be worth more than the tax deduction.

Hanley also addresses the apparently common tactic of zeroing out one’s business bank account by December 31. Paying for business expenses, adding to your retirement account, or purchasing business equipment or supplies will likely make the zero balance bank account tactic work. Paying yourself a bonus, taking a shareholder distribution if your business is a corporate entity, paying down your credit line at the bank, or paying off business credit cards will not give you legitimate tax deductions.

Professional development education is tax-deductible, so if you’re holding money and there is a potentially useful workshop or symposium offered late in the year, do register and attend. You might also consider throwing a Christmas party for clients, prospective clients, referral sources and selected business colleagues (meaning, no one who might steal a client!). Your Christmas party could turn out to be a networking bonanza that creates billable hours for you in the coming year (and beyond).

Clients and referral sources could come away with more business as well and that will make their relationship with you more valuable to them. If you can grab a big table or a private room in a restaurant that needn’t be fancy, but has a good reputation, then plan your party with Evite, even if a Monday night is all you can reserve.  Allow 7-14 days for the RSVP—last minute invitations can be just fine. Spontaneity has its charms, especially at this time of year.

To make sure that the social swirl and networking will be effective, invite 30 and expect 12 to show. Set out five or six finger foods and arrange for a signature cocktail. If someone asks for beer or wine, let them have it. Your party can run 6:00 PM – 8:00 PM. Most people will have two drinks, the restaurant will tell you how much food to set out. You will probably spend $60/pp, meaning that a table of 12 will cost less than $750.

You might also consider inviting your Linked-In connections to a party. It would be a wonderful way to introduce your colleagues to one another and billable hours could be created as a result. You may want to make this a pizza, salad, beer and wine affair, but so what? It’s a great idea, regardless. If you have 100 connections, plan on 25 showing up.

If it’s too late to host a party this year, the cards and stamps used for the December greetings that you’ll send to clients and referral sources are tax-deductible. If you act now,  there will be time to order specially printed cards for your business (you will still add a personal message).

Thanks for reading,

Kim

Successful People Allow Success to Happen

When you implement your fourth quarter Action Plan, be aware that there are some basic and necessary behaviors that you must adopt to create the conditions for the success of your plan.  It can be oh-so-easy to get pulled off your game by people and circumstances that make demands on your time, adversely impacting your energy levels and ability to focus as they do.

You must learn to be “healthy selfish” and strive to preserve your boundaries. Be prepared for some people to get indignant. You may even be attacked by those who feel the most entitled. It’s uncomfortable, but you’ll come to know who our friends are and are not. Consider the process a character development and leadership lesson.

Those who love and respect us give us space to do our thing. They touch base with us every once in a while. They step in to offer assistance and encouragement when we are in need. They never devolve into controlling and manipulative behavior.

I.    Just say no

If you are not able to take on a certain project or agree to a commitment, then respectfully decline. Perhaps you already have many irons in the fire and your schedule is filled. Perhaps you would rather take it easy for a while, resting and recharging your energy stores.

If a proposal doesn’t feel right, seems unorthodox or unsavory, you are not obligated to participate. Those who have vowed to sweet-talk (or arm-twist) you into this arrangement may become furious. Let them do just that. Then cut them out of your life. The last thing you need in your life are manipulators and bullies.

II.   Define boundaries

Everyone likes to be liked. We feel good when we help others and make them happy. But the price of acceptance does not hinge upon the “right” of others to violate our boundaries.  When you feel pressured or uncomfortable by a certain request, recognize that feeling as a sign that your boundaries are being violated.

Someone is attempting to “cross a line”.  Someone does not know his/her place, or role, in the relationship that the two of you are in, even if that someone is a parent or sibling. No one has a “right” to violate boundaries. Politely, but firmly and resolutely, push back and do not allow yourself to be bullied. If the violator persists, well, now you know who loves and respects you and who doesn’t. It can be a bitter lesson.

III.  Ask for it

What do you want? The sale? The assignment? Your team to work at 110% capacity? If you want it, then ask for it!

You must also be prepared to earn it, to demonstrate that you deserve the reward. If you expect your team to work at 110%, then you must work at least that hard and more. If you want the sale or the contract, then show the client why you deserve it and how hard you’ll work to earn it and then fulfill or exceed all expectations when it is awarded to you.

IV.  Release the negative

Mistakes are made and bad things sometimes happen. You may feel hurt and maybe resentful, too. Maybe you should let yourself wallow in those feelings for a while because after all, you are human.  However, you cannot allow yourself to remain stuck in the quicksand of negative feelings. Take a deep breath and then let it go as you step forward toward your vision of a successful future. You have goals and an action plan to help you reach them. Let that propel you out of the muck of resentment. Success is the best revenge.

V.   Walk, don’t run

OK so you’re on a roll, you have a timetable, you want to get things done. This is a one-page, 90-day action plan you’re working through, you say! Patience may not be considered a virtue and explaining things twice becomes an aggravation. Due diligence can happen some other time?

Stop. Breathe. Look at the big picture. Remember now, an ounce of prevention is worth many pounds of cure. Avoid cutting corners. Do not get slap-dash. Some on your pumped-up, charging team may get a bit frustrated, but make sure that your execution is accurate and that you are moving in the direction that will bring about the desired outcomes. Take the time to get buy-in of key stakeholders. You will be successful if you allow success to happen!

Thanks for reading,

Kim

The WHY of Business Planning

Full disclosure, I’ve taught business plan writing in both a short-form 6 hour workshop and a long-form 18 week class, where each session was 3 hours. Previous to that, I was skeptical of formal business plans. I was under the impression that all business plans had to be 40+ pages in length and that every element of the standard template had to be populated. Now I know better.

In my defense, if you were launching a business that would have a physical location, would hire employees, manufacture products and most of all, require that you ask a bank for money then yes, absolutely, I would have encouraged you to write a business plan. But for those who would operate as a Freelancer who do maybe PR or graphic design, then my feeling was (and still is), that your business planning must center on figuring out how you’ll get clients. A comprehensive marketing plan is the document of choice and that would include a sales and pricing strategy as well.

Business owners have been known to build successful ventures without writing down a single word. Their businesses are typically small and self-financed, maybe with some additional backing from friends and family. Particularly if the operator has already run a business, even one that failed, it is possible to learn valuable lessons to apply to a new venture. Business plans are time-consuming to write. Some will say, just learn by doing. Why not create business strategies on an as-needed basis and test them in combat?

A study of 11,046 companies published in 2010 found that planning resulted in improved business performance of existing companies even more than that of start-ups. It was hypothesized that leaders of existing businesses knew their customers and the business environment more thoroughly than those at start-up companies. Leaders of existing ventures had more information, so there were fewer faulty assumptions born of inexperience.

Another study found that while many businesses can succeed without significant planning, leaders who plan, run businesses that grow 30%  faster and are overall more profitable than those that don’t. The link between business planning and growth was reinforced by yet another study that found that 71% of fast-growing companies, that is, companies that showed a 90% + growth is sales over a 12 month period, were led by a team that planned. Creating marketing and sales strategies, setting sales goals and creating budgets made the difference.  So did defining client needs and the company’s value proposition.

As you may have guessed, a business is less likely to fail if there is a plan in place. A study of 223 companies demonstrated that business planning could not guarantee business success, but rather decreased the occurrence of business failure.

Realize that plans are not etched in stone, but are intended to be guidelines that should be adjusted as necessary.  Identify key metrics and track your company performance to learn if your assumptions stand up to your business environment. If client needs are changing, then observation of your metrics will cause you to respond and pivot and keep your products and services relevant in the marketplace.

A credible start-up business plan, or existing business strategic (long-term) or operating ( one year) plan, need not be long and elaborate. Keeping it lean and focusing on client needs, defining your value proposition and business model, spelling out goals and the strategies that will get you there and identifying metrics that demonstrate either success or the need for adjustments will do your business a world of good.

Start-up entrepreneurs were reported to be 152% more likely to actually start their businesses when they took the time to develop a credible business plan. If you want to make your dream come true, research and write down how you intend to do it.

Determine precisely how you will obtain customers. An operations component will make you consider carefully how you will obtain, produce and deliver the products or services you plan to sell. Devise a marketing and sales strategy before you approach prospects, so that you will know what to say to those who would become customers. Finally, acknowledge the amount of money that will be required to open the doors and keep them open as you build your business by developing a realistic financial plan for your enterprise.

Thanks for reading,

Kim

Cosi Fan Tutte: Uber Achievers

Hello again and welcome back to the list of suggested behaviors and activities that will help you achieve your 2014 wish list.  For the past three years I presented New Year’s Resolutions but this year,  you get to pick what you want to do.  I’m here to help you get what you want!  To do that,  I read up on motivational psychologist and Associate Director of the Motivation Science Center at Columbia University School of Business Heidi Grant Halvorson,  who writes for The Harvard Business Review.  Dr. Grant Halvorson is a highly successful professional,  but unlike many charmed individuals,  it is safe to say that she knows how she became,  and remains,  successful.   Here are the final four elements of her 201 1 e-book,  Nine Things Successful People Do Differently:

VI.   KEEP ON KEEPING ON: Be willing to commit to long-term goals and persevere in the face of difficulty.  Studies show that those who are able to put shoulder to the wheel and push through adversity obtain more education in their lifetime and earn higher grade point averages in school.  To help yourself along,  plan specific actions that when followed will bring you to your goal.  Devise a timeline for your action plan,  monitor the efficacy of strategies and reward yourself when important milestones are reached.

VII.  BUILD WILLPOWER MUSCLES: Our self-control muscle is like any other of our muscles.  When we don’t use it,  it eventually atrophies.  Use it or lose it! Give your willpower muscle a good workout by taking on small challenges that compel you to do something that perhaps you’d rather not,  e.g. taking on a home cleaning and organizing project.  Establish must-start and must-complete dates and then commit to them.   If you find yourself wavering and making excuses to put off the project—don’t!  Flex your willpower muscle and do some heavy lifting.  As you develop inner strength,  also known as self-discipline,  you’ll ready yourself to take on bigger challenges and achieve more life-changing goals.  It’s like training for a marathon by starting with 5K races.

VIII. DON’T TEMPT FATE: No matter how strong your willpower becomes,  it is important to always respect the inevitable fact that human beings have limits.  If you over-reach,  you’ll run out of steam or out of luck.  Avoid taking on more than one major challenge at a time if you can help it.  Do not be over-confident and bite off more than you can chew by setting obviously unattainable goals.  Successful people instinctively know what is in the realm of the possible and refrain from setting themselves up for failure.

IX.  FOCUS ON WHAT YOU WILL DO: …and not on what you will not do.  Research on thought suppression shows that trying to avoid a thought has the opposite effect and makes that thought grow larger in our minds.  The same holds true for behaviors.  By trying not to engage in a bad habit,  like smoking or eating junk food,  the habit becomes strengthened instead of broken.  Instead,  turn your thoughts toward implementing strategies that will bring you to your goal.

I hope that reading Dr. Grant Halvorson’s  Nine Things  helps you to acknowledge what you’ve been doing right all along.   As well,  I hope you’re able to identify the mistakes that have undermined you and that going forward,  you will develop successful strategies that pave the way to your most important goals.  Have a wonderful year.

Thanks for reading,

Kim

Become An Uber Achiever

Happy New Year!  Please accept my sincere best wishes for a happy and successful 2014.  As is customary,  I begin the year with information I consider to be motivational,  since a new year  (along with Spring)  suggests a fresh start.  In my first posts of 2011,  2012 and 2013,  I presented lists of suggested New Year’s Resolutions for you to adopt.  This year,  I invite you to choose the goal of your dreams and I’m pleased to pass along suggestions on how to make it your own.

You may have noticed that many highly successful people do not have a clear sense of how they manage to grab the brass ring time and again.  Often,  uber achievers do not have an awareness of what allows them to succeed or prevents them from failing.  How do certain mere mortals repeatedly gain the favor of the gods?

It is true that we all have a repository of certain attributes,  advantages,  competencies and talents: the natural salesman,  the math whiz,  the influential family.  Some may encounter a wise and powerful mentor along the way,  who guides them onto the right path,  keeps them out of harm’s way or gives them the heads-up about opportunities on the horizon.

Motivational psychologist Heidi Grant Halvorson says in her book  Succeed: How We Can Reach Our Goals  (2011)  that research on achievement suggests that successful people reach their goals not only because of the cards they hold,  but also because of what they do.  Halvorson has spilled the beans on what other behaviors makes the rich different from you and me  (with apologies to those who do not equate success with wealth):

I.    BE SPECIFIC: When setting goals,  be as specific as possible.  Knowing precisely what you want to achieve keeps you motivated until you get there.  Furthermore,  identify and commit to specific actions that must be taken to reach your goal,  actions that leave no room for doubt about what must be done.

II.   CARPE DIEM: Achieving goals means recognizing and acting upon opportunities before they slip through your fingers.  Make sure that you don’t fail to ride a good wave because you didn’t bother to anticipate its possible arrival,  or because you were distracted by competing pursuits and dramas.  Open the door to success by planning to take real steps toward your goals.  Studies show that planning trains our brain to recognize and seize opportunities when they arise,  in that way increasing our chance of success by about 300%.  In other words,  plan to succeed.

III.  MONITOR AND MEASURE: Achieving goals requires regular monitoring of one’s progress.  Know your timeline and milestones and adjust your strategies and actions according to progress made.  Rewarding yourself for interim successes is a good idea.

IV.  REALISTIC OPTIMISM: Thinking positively about the likelihood of achieving your goal is enormously helpful in creating the conditions for success and sustaining motivation.  Nevertheless,  guard against underestimating how difficult it may be to get where you want to go.  Anything worth having is likely to require significant time,  planning,  sacrifice and persistence.  Daughter-in-law of the Prince of Wales,  mother of a future king of England,  Catherine Middleton used to be called “Waity Katy”.   Now she’s known as the Duchess of Cambridge!

V.   GETTING BETTER: Believing that you are able to reach your goal is imperative.  Equally important is believing that you can acquire  the ability to reach your goal.  In other words,  focus on acquiring whatever the building blocks of success may be,  whether that means learning new skills or developing relationships with those who can help move you forward.

I’ll be back next week with a few more building blocks for you to incorporate into your plan for success.  Have a great week.

Thanks for reading,

Kim

Year End Tax Planning 2013

Lo and behold it is the first week of November and time for you to begin your year-end tax planning.  If you have an accountant or bookkeeper,  pick up the phone and make an appointment.   If you perform these functions yourself,  then take action now,  before Thanksgiving and Christmas ambush you.  Your mission is to minimize the tax bill payable in April 2014.

Let’s start with your place of business.  Do you work from home?  Then consider taking the home office deduction.

Next,  take a look at revenue generated in 2013.  If this was a lucrative year,  you are advised to push income into 2014,  especially if you expect next year to be less flush.   Study the matter before you invoice late 4th quarter projects.  Call clients to confirm that it will be OK to invoice in January.  Many are not on a January – December fiscal year,  so deferring payment until January may not be a problem.

If you expect no substantive change in revenue generated from 2013 to 2014,  consider investing in your business and creating additional tax write-offs this year,  rather than next.  Remember also  to make a contribution to your Solo 401K,  IRA or Roth retirement account.  Freelancers who have already celebrated their 50th birthday are eligible to make a maximum $22,000 tax-deferred catch-up contribution to their Solo 401K each year,  on money generated from self-employment only.

Further,  those who’ve had a good year and hold a Solo 401K may deposit up to 25% of their income into the account.  The tax-deductible and tax-deferred income limit is $49,000 for those under 50 years and $54,500 for those aged 50 years and older.  See my post https://freelancetheconsultantsdiary.wordpress.com/2010/11/09/the-self-employed-401k-plan/  for more information.

The Affordable Healthcare Act must now be factored into your year-end tax strategy.  Freelance soloprenuers who qualify for a health insurance subsidy (approximate income maximums of $45,000 for a single person household and $94,000 for a family of four)  need not worry about the subsidy being treated as taxable income.  However,  if your insurer refunds to you a portion of premiums paid,  that refund will be taxable and a 1099 will be sent.

Healthcare Act subsidies function to limit out-of-pocket  monthly insurance premium costs for those who generate revenues below a certain threshold.  The subsidy may be requested as follows:

1. Premium assistance credits, to reduce the monthly cost of health insurance

2. Up-front lump-sum payment

3. Tax credit on Form 1040, to reduce any taxes owed and perhaps create a refund

A statement that documents any subsidy will be issued and there will be an annual reconciliation.  If you underestimated your 2014 income,  you will be required to pay back a portion of your subsidy.  If 2014 income was overestimated,  then a refund will be somehow issued.  Visit the website of either your state or federal health insurance exchange to obtain information about how to estimate your 2014 income.

YOU will be responsible for monitoring your annual income and ensuring that you receive the correct subsidy.  Ben Tallman of Tallman Tax Service in Atlanta recommends that Freelancers monitor revenues and expenses at least quarterly and contact their health exchange and get themselves re-certified in the event of a large increase in income generated,  to reduce the chance of facing a subsidy claw-back at tax time.

Thanks for reading,

Kim