Five smart secrets for building your new business

Five Smart Secrets for Building Your New Business

Dennis L. Thompson, CPA, CFEwww.dlthompsoncpa.com

206-390-9432

Secret One: What is My USP?

• USP = Unique Selling Proposition

• Why do People Buy?– Increase Satisfaction– Decrease Dissatisfaction

– Why Should They Buy From You?


• By Defining My USP– I Can Then Define My Ideal Customer

• What are Their Concerns?• How can I create value for Them?• How can I deliver my Marketing

Message to Them?• You MUST Embrace Marketing if You

Want to be Self-Employed.


• Should I look for a Niche?– Advantages

• Command a Higher Price• Become an Expert• Take advantage of Word of Mouth

– Disadvantages• Overly Specialized• If your Niche gets a Cold, You get

Pneumonia


• How to Find a Niche– Your Life Experience– Your Interests– What Makes You Unique – Intersection

of Skill Sets– Look for a Niche that is a half inch wide

and a Mile Deep

Secret Two: Always Be Aware of Your TME.• TME = Time, Money & Energy

• Three Scarce Resources That We Have to Develop Our Business.

• What is the Most Effective Combination of TME For Marketing.– Do Not Spend Significant TME on Non

Decision Makers.– Think Twice Before You Try to Save

Money at the Expense of Time & Energy

Secret Three: Profit Is An Opinion, But Cash (Or Lack Thereof) Is Cold Hard Reality.• Most Small Business Fail Because of Cash

Flow Problems.

• Monitor Your “Cash to Cash” Cycle

• Be Aware of the “Grow Until You Blow” School of Management.

• Become Familiar with “Break-Even Analysis”

Secret Three: Profit Is An Opinion, But Cash (Or Lack Thereof) Is Cold Hard Reality.

• Know Your Fixed Costs.

• Manage Your Receivables, Inventory & Payables.

• Book Recommendation: “ Never Run Out of Cash” By Philip Campbell

Secret Four: Become an Intelligent Consumer of Accounting Information

•Besides Being Boring and Hard to Understand, Accounting is Crucial for the Success of Your Business.

•No One is Going to Care More About Your Business Than You – Learn Basic Accounting.

Secret Four: Become an Intelligent Consumer of Accounting Information• Why is Understanding Accounting

Important?– Do you want to know if your business is

successful?– Would you like to get a loan someday?– Do you want to prevent Fraud?– Do you want to sell your business?– Do you want to stay out of trouble with

the Government?

Secret Four: Become an Intelligent Consumer of Accounting Information • Unpleasant Little Secret – QuickBooks Will

Not Teach You Accounting.

• However, Accounting Software Will Help You Make Creative & Complicated Mistakes Much More Efficiently Than You Could Ever Do By Yourself.

Secret Four: Become an Intelligent Consumer of Accounting Information

• You Don’t Need to Become an Accountant, But You Need to be Able to Recognize When Your Financial Statements Don’t Make Sense.

• Recommendation – Take an Accounting Course for Small Business Owners.

Secret Five: Minimize Your Taxes

• Understand That Payroll Taxes and Sales Taxes Are Trust Funds– Significant Penalties if You Spend Trust

Funds.– Best to Segregate Trust Funds in

Separate Bank Accounts – Do Not Commingle with Operating Account.


• Understand The Different Types of Business Entities & How They Impact Your Taxes.

• Recommendation: Become an LLC

• Understand the Differences Between State & Federal Taxes.


• IRS & The Tax Gap– IRS is Telling Congress that there is a

Tax Gap of Around $300 Billion.– Will be Conducting More Schedule C

Audits – Looking for People Who Are Underreporting Income and/or Overstating Expenses.

– Re-engineered Audits


• Steps You Can Take to Protect Yourself in the Event of an IRS Audit.– Have a Separate Business Bank Account

and DO NOT Commingle Personal Funds.– Keep Good Documentation for Expenses.– Be Able to Account for All Your Bank

Deposits- IRS Assumes All Deposits Are Income Unless You Can Prove Otherwise.

Summary

• Being Self Employed Is Not For Everyone.

• You Must Be Good At What You Do AND Effective at Marketing – Not Either Or.

• The Five “Secrets” That I Have Discussed Today Will Help You Increase Your Chances of Success.