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Monthly Archives: December 2014

Dale Hammernik On Saying No and Staying Focused in 2015

Happy New Year, folks! Now that we’re in 2015, the tax planning door has been closed and it’s time to start gathering your documents (well, you can still reduce your tax bill by opening an IRA or contribute to an existing one by April 15th). However, the best thing you can do now to help your 2014 tax bill is to make sure that you have a competent professional by your side as you prepare your 2014 taxes. For business owners especially, with all of the ACA changes coming to fruition, this is definitely not the year to go it alone when it comes to your taxes and books.

And, of course, business calls. And life remains busy. Which is why I’ve been embracing the wonderful art of the “no” … As author Greg McKeown would advise us all: boiling life down to its essentials sometimes means disappointing some people.

But perhaps that is best …

Dale Hammernik On Saying No and Staying Focused in 2015
“Life has no blessing like a prudent friend.” -Euripides

In my observation, this is not unique. Many entrepreneurs struggle with the same problem. It’s hard to say no to good ideas. It’s even harder to say no to great ideas.

But when you neglect to say no, bad things happen. Here are 3 areas which you must be extremely careful to steward right–which means, saying NO.

Your Main Marketing Message
This is something many businesses get wrong. The key to a successful marketing message is to present one clear, concise message that’s easy for prospects to understand. There are so many great benefits to your product or service, but when you don’t say “no” to communicating some of them, the key thing gets lost. The prospect loses and ultimately, you lose.

Nail down ONE great message and then say no to all the great ideas that come.

Your Company Image
This is closely-linked to your marketing message–and, often, can be seen as one and the same. But, for larger businesses, the company image is larger than just their product’s benefits. The “brand” is what I’m referring to here. For smaller companies, this should be less of a concern…but if you have any kind of size, you need to be the one who says “no” to certain things here, too.

To create a lasting brand that is recognizable to prospects and customers, and invokes loyalty, you need to define the brand in clean, simple terms, and then lock it down. If the brand is always shape-shifting, your audience won’t be able to keep up and they’ll give up trying.

Your Core Products or Services
This might be the most important of the three. Whether it’s a product you ship to your customers, or a service that you provide, your product is how you deliver on your marketing message and brand promise. If messaging and branding tend to get disrupted by all the “good” ideas out there, there’s a good chance your product is all over the place as well.

Let’s take the photography industry as an example–but instructive for any business:

A photographer goes into business and defines her particular niche, let’s say black & white baby photography. If she sticks to her guns and focuses on that niche, there’s a good chance she can become an expert in that area and people will come flocking to get baby photos with her.

But, what usually happens is as soon as a slow month passes, she begins to take on work outside of her area of expertise. Someone requests wedding photos and she does it out of desperation. Someone else needs a family portrait. Pretty soon, she’s no longer an expert. She’s an average photographer that has no specialty.

Learn to say no. Your business future will thank you.

Feel very free forward this article to a Waukesha County business associate or client you know who could benefit from our assistance — or simply send them our way? While these particular articles usually relate to business strategy, as you know, we specialize in tax preparation and planning for Waukesha County families and business owners. And we always make room for referrals from trusted sources like you.

Warmly (and until next week),

Dale Hammernik
(414) 545-1890

Hammernik & Associates

Dale Hammernik’s Prayer For The Holidays

The roads were a little lighter this morning.

Many of us are still working, but I know of plenty of folks who have already taken time away from work, starting today.

But no rest for the business owners, right?

Whatever your faith background, it’s hard to ignore the holiday clamor. In my opinion, it’s a shame that a season of reflection and prayer (Christmas, Hanukkah, etc) would become transformed into something so… busy. People are rushing around seeking to create nostalgic moments and experiences — and buying them online — without realizing that in the past they just … happened.

Now look — as a proud business owner, I’ve got no problem with people earning (or spending) money during this season. I just wonder when it’s time to say “enough”?

However, as I’ve mentioned, this week, while everyone else is attempting to slow down, we tax professionals are gearing up. The ACA is creating a whole ‘nother level of complexity for the tax return and I pity the taxpayer who chooses this year (of all years) to “go it alone”.

But still, I thought I would take a break from my usual “business and financial” strategy tips, for the holidays, and pause a moment for reflection with you.

Because as I’ve been meeting with tax clients in getting ready for the season, I’ve discovered that many of you are worried and stressed — about finances, family, personal circumstances, etc. It’s not my job to save the world on your behalf of course, but I do appreciate that I get to be somebody in your world that can encourage you to slow down, take a breather and keep your perspective on what’s really important.

Thanks for your friendship, and for your business in 2014, and (hopefully) in 2015!

This week’s post is to help us all keep perspective, this week…and into next year.

Dale Hammernik’s Prayer For The Holidays
“People travel to wonder at the height of the mountains, at the huge waves of the seas, at the long course of the rivers, at the vast compass of the ocean, at the circular motion of the stars, and yet they pass by themselves without wondering.” -St. Augustine

“God, help us remember that the jerk who cut us off in traffic last night is a single mother who worked nine hours that day and is rushing home to cook dinner, help with homework, do the laundry and spend a few precious moments with her children.

“Help us to remember that the pierced, tattooed, disinterested young man who can’t make change correctly is a worried 19-year-old college student, balancing his apprehension over final exams with his fear of not getting his student loans for next semester.

“Remind us, Lord, that the scary-looking bum, begging for money in the same spot every day (who really ought to get a job!) is a slave to addictions that we can only imagine in our worst nightmares …

“Help us to remember that the old couple walking annoyingly slow through the store aisles and blocking our shopping progress are savoring this moment, knowing that, based on the biopsy report she got back last week, this will be the last year that they go shopping together.

“Father, remind us each day that, of all the gifts you give us, the greatest gift is love. It is not enough to share that love with those we hold dear. Open our hearts not to just those who are close to us, but to all humanity. Let us be slow to judge and quick to forgive, show patience, empathy and love. ”

Amen.

Best to you. May your season be truly bright.

Feel very free forward this article to a Waukesha County business associate or client you know who could benefit from our assistance — or simply send them our way? While these particular articles usually relate to business strategy, as you know, we specialize in tax preparation and planning for Waukesha County families and business owners. And we always make room for referrals from trusted sources like you.

Warmly (and until next week),

Dale Hammernik
(414) 545-1890

Hammernik & Associates

Health Care Tax “Must-Know’s” For Individuals and Businesses

As my team and I have been preparing for this upcoming tax season (which, of course, takes up a significant portion of our time during these holidays), there are a variety of things that are changing for individual tax returns that are due on April 15, 2015.

These are health care tax provisions of the ACA (“Affordable Care Act”), and while most of these relate to individuals, rather than businesses (more about that in a moment), I felt them important to emphasize even to my business owner clients and contacts….

1) Taxpayers will be required to demonstrate that they had health insurance active on January 1, 2014 and have gone no more than three months uninsured in 2014.

2) If taxpayers received a Premium Tax Credit along with their marketplace insurance plan, their income and the size of their household must match up with what was reported during that process. If your income or household size has changed, and you received those credits — PLEASE let a professional help you. (414) 545-1890

3) For businesses: If you have 50 or more FT employees (or a combination of PT/FT equivalent to 50 FT employees) you are required to offer a minimum level of coverage to your staff, or pay a fine.

With all of these things, here’s the bottom line: this is NOT the year to “go it alone” with your tax returns, or with your business’ books. Yes, that is a self-serving statement — and if you don’t use our services, I will be perfectly happy, as long as you are using someone who is good, and who is paying attention as closely as we are.

If you need help or want answers: (414) 545-1890

PLEASE SHARE this information. I don’t need to have the credit, but the information needs to get out there.

(However, I will be addressing more issues related to the ACA and the upcoming tax season in the following weeks and months, so if you are interested in joining my Weekly Notes, you can do so here: http://on.fb.me/1evrfrP )

Speaking of sharing, and getting the word out there … let’s change gears, shall we?

Dale Hammernik On ‘Getting Your Name Out’ — The RIGHT Way
“A business has to be involving, it has to be fun, and it has to exercise your creative instincts.” – Richard Branson

Many small businesses brainlessly ape big corporations with their marketing, by (wrongly) believing that “if these huge companies built their businesses by that kind of marketing, then it surely should work for us.” Build the brand, they say.

The thinking behind that kind of marketing is that you “get your name out there”, and the clients and customers will pour in. “It’s all about word of mouth“, they say.

Well, if you choose to go down this road, far better is real word-of-mouth advertising, and there is a single, basic secret to stimulating a high rate of it. And we can all take a page from the fine folks at Disney….

Word-of-mouth marketing is taught there as “find ways to do what you do so well and so uniquely that your customers cannot resist telling lots of other people about you.” At the Disney Parks, this principle is implemented in the forms of cleanliness and authenticity.

When first-time visitors to Disneyland and Disney World are surveyed and asked what sticks in their mind most about their visit, the overwhelming, number-one answer is the cleanliness of the parks. The number two answer is the authenticity of the environments.

Disney marketing pros understand how this translates into real life. Tom and Sally go back to Peoria and tell their friends, “You can’t believe how clean the parks were.”

Then four more families from Peoria pile into motor homes and bring their family (and their money) to the home of the Mouse.

Because they understand this, the Disney people think of park cleanliness as marketing, not just maintenance. They use this to stimulate referrals.

And any business can also find ways to stimulate referrals, to stimulate word-of-mouth advertising, often by doing things that should be done anyway.

In a retail business, excellence and creativity in the store environment and in customer service are most likely to stimulate referrals. You can identify hundreds of different things to change in the office or store environment, as well as customer communications, which can be directly responsible for developing a very high level of word-of-mouth advertising.

And that will beat “brand-building” every time.

Feel very free forward this article to a Waukesha County business associate or client you know who could benefit from our assistance — or simply send them our way? While these particular articles usually relate to business strategy, as you know, we specialize in tax preparation and planning for Waukesha County families and business owners. And we always make room for referrals from trusted sources like you.

Warmly (and until next week),

Dale Hammernik
(414) 545-1890

Hammernik & Associates

Creating A Family Business Succession Plan That Works

The year-end is a common time for Waukesha County business owners (like you, perhaps) to take stock of where they’re headed in a few years’ time … and what the plan for the business could and should be without them *in* it.

(It’s also a VERY good time for some last-minute tax planning with Dale Hammernik and team! Here’s our number for that: (414) 545-1890)

Well, I have a story today for you. A sequel, if you will, to an old Disney classic …

You see, many years after their wedding, Belle and her Beast of a prince built a widely-successful family business (though it never reached into Waukesha County — I heard all this from a friend 😉 ). They also had two sons — Scurry and Hyde — as well as a daughter named Caroline. Beast (who was as smart as he was handsome), assumed that a simple inexpensive succession plan was all that was needed. So he left the management and control of the family business to his sons, with one third of the profit to his beloved Belle, and the balance in equal shares to his children, Scurry, Hyde, and Caroline.

Sadly, Beast died of Feline Infectious Peritonitis the next year.

Five years later, Scurry and Hyde were collecting piles of gold in salary. Their lavish “business” expenses left only a meager profit to be shared with the others. Belle and Caroline struggled to make ends meet on the leftovers.

You see, the moral to THIS family story is this: Dividing *ownership* of a family business is the easy part. Ensuring equitable provisions for the entire family is what’s most difficult.

Dale Hammernik Describes A Succession Plan That Works
“If you ask what is the single most important key to longevity, I would have to say it is avoiding worry, stress and tension. And if you didn’t ask me, I’d still have to say it.” – George F. Burns

Try out these numbers: Only 34% of family businesses successfully pass to the second generation, and only 13% make it to the third generation. Avoiding these problems in your Waukesha County family business is dependent on taking into account family dynamics and the different roles in the family business.

These family business successions are most successful with wisely integrated planning of three roles: family, business and ownership – each of which have different goals and objectives as well as rules of behavior. Behavior that is appropriate or tolerated at home may be inappropriate in the business environment. And while many families avoid discussions where there is disagreement, encouraging the expression of disagreement is critical in the business realm, especially the “family business” realm.

Family Leadership
For most family businesses, the family role is the most important. The emotional issues of unconditional acceptance and equality are both the friction and the glue in many families. Families are naturally inward-focused, seeking to nurture and develop the next generation. This is how it should be.

However, the challenge here is for the older generation to pass on not simply the acumen of the family’s finances, but the strength of the family’s values. Each generation has to be actively raised to the level of “peer” by the actions and attitudes of the generation before them. Beast’s first mistake was failing to provide that type of mentoring for Scurry and Hyde in advance. (Or maybe it was his choice of names!)

Proven family character must be required for leadership in the family business, and a board of directors with at least two outsiders would help keep family values intact. (Mrs. Potts, Lumiere and Cogsworth would be excellent candidates for Belle & Beast’s Board of Directors.)

Business is Business
It’s best to keep a boundary around the realm of the business. For a business to be successful, it has to be able to able to change quickly. Obviously, it has to generate profits, and therefore must be outwardly focused. As a result, family members can’t be treated equally. If one family member works part time, while another chooses to work full time, plus nights and weekends, the monetary incentive needs to be in proportion to the profit each brings into the business.

If a business is passed from one member of the older generation to a single member of the next generation, many issues can be postponed or ignored. But if the business moves from a single owner to a partnership of siblings (and then to a set of cousins who are shareholders), the business must continue to run like a business–while simultaneously dealing with a possible wicked brew of family tension. You need to plan for: leader selection, the role of non-employees, conflict resolution, and the shared control of different family branches.

Further, those actually running the business must also be trained in the financial responsibility of management, preferably before the change of ownership. There will need to be policies for fair dividend distribution for those not employed. Again, it’s a very good idea to delegate certain outside governance by a carefully selected Board of Directors.

Who’s The Boss?
As soon as a family business is divided into shares, there will be those working “in” the business and those who merely own shares in the business. Plans must be made for buy-outs, professionalized management, mentoring, and family council meetings.

Transfer of ownership is the least complex of these three roles for planning, but it won’t achieve your succession goals without a solid family structure AND a healthy business structure in place.

Family businesses are complex, needing to address multiple roles. Wise planning for the Waukesha County area family business accepts, mentors and integrates others (family role); makes a profit and demonstrates objective professionalism in its decisions (business role); and plans for the inevitable – a successful transfer of ownership to the next generation (ownership role).

With this (perhaps disturbing) story, I’ll leave you until next week. Again, if you are operating a family business, make sure you get this straightened out.

Feel very free forward this article to a Waukesha County business associate or client you know who could benefit from our assistance — or simply send them our way? While these particular articles usually relate to business strategy, as you know, we specialize in tax preparation and planning for Waukesha County families and business owners. And we always make room for referrals from trusted sources like you.

Warmly (and until next week),

Dale Hammernik
(414) 545-1890

Hammernik & Associates

Small Business Owners, Are You Growing Your Business?

How’s business looking, here as we begin the final month of 2014?

Drop me a note, and let me know. I’d love to keep in good touch, and to be a “comrade in arms” for you, as you fight to grow your organization. This last month is a good one to take a look at last-minute moves that can still make a big impact on your tax burdens.

And this week, I’d also like to have the chance to lift your vision about how you conceive of YOUR primary task as a business owner. This is something I’ve picked up along the way which has definitely benefited the growth of our firm.

You see, you have resources that are able to take care of the “details”, while you focus on the marketing and positioning of your business. Because that is, indeed, your primary task as a business OWNER (not to be just a “do-er”).

Read on.

(Oh, and as usual–send your feedback: http://WaukeshaAccounting.com/contact )

Dale Hammernik Asks: How Do You See Your Business?
“Success is the maximum utilization of the ability that you have.” – Zig Ziglar

I’m curious. What drove you to start your own small business? A passion for the product or service you provide? A desire to be your own boss? A chance to dust off some ambition? A drive to stick it to “the man?”

Did you become a small business owner because you enjoy marketing? Probably not. But, if you’re going to continue to grow your business you have to realize this important fact: You are a marketer, not a service or product provider.

Let me quickly show you the difference between a marketer and a service/product provider.

A Service/Product “Provider”:
Has products or services
Talked to prospects
Has customers
Owns a business
Hopes they’ll stay in business

A Marketer:
Sells products/services
Continually talks to a list of prospects
Builds relationships with customers
Grows their business
Is building their business future

So how do you become a marketer? Well, here are a few questions we both should be thinking about…

* Do we know the difference between advertising and marketing?
* Are we building our prospect and customer lists?
* Do our businesses have a marketing “system” in place?

What I’m learning: smart marketing can make the difference between doing “alright”, and skyrocketing your business.

Yes, I’m a tax professional — but you must understand, I’m a business owner too, and these are hard-won lessons.

I want your business (and mine) to grow, and grow FAST — even with this crazy economy.

Feel very free forward this article to a Waukesha County business associate or client you know who could benefit from our assistance — or simply send them our way? While these particular articles usually relate to business strategy, as you know, we specialize in tax preparation and planning for Waukesha County families and business owners. And we always make room for referrals from trusted sources like you.

Warmly (and until next week),

Dale Hammernik
(414) 545-1890

Hammernik & Associates