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This Business Building Tool Brought to you by
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April 2010 |
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A Message from Grandy & Associates
Two Tax Tips for 2010
I’ll bet you have asked your accountant the same thing I have. “Isn’t there some way I can reduce my taxes?” I asked my accountant that for the first 15 years I was in business, and his answer was always the same: “Tom, you are doing every that can be done.” Well, after you hear that for 15 years, you naturally assume that you really are doing all you can do. About 5 years ago, a light bulb went on after I met someone who was speaking at teh same event I was. He was a CPA and lawyer.
That individual spoke to contractors for two full hours about increasing deductions, taking money out as dividends and rent and how to maximize your social security benefit. He also talked about the three way people get audited and how to avoid every one of them. During our three-day Basic Business Boot Camp we share enough of his tax tips to literally pay for the class many times over. During this month's article I want to touch on just two of the things he covered. Set Up Multiple Corporations Let’s begin by dreaming a bit. If you could create the perfect benefit package, what would it look like? Let’s start with the basics of health, vision and dental coverage. But, like the guy on TV says, “Don’t stop there!” Why not have the company pay for your children’s college education? Dues at your local country club? Or, just for fun, what about an annual two-week vacation to Hawaii…all expenses paid? Sounds good to me! How about you? I know what you are thinking: “Tom, I can’t do that, I would have to offer it to all my employees.” Guess what? You’re right. If you offer a benefit to one employee within your company, by law you have to offer to all employees of the corporation. You just heard the key phrase -- offer to all employees of the corporation. According to my new best friend, the accountant/lawyer, every contractor should have at least two legally set up corporations. Corporation #1 has all your employees in it. Corporation #2 just has you and your family in it. Again, corporations can have any kind of benefit program they wish as long as the benefits are offered to all employees. Corporation #2, with you and your family in it, can create its own benefit package. How do you do it? It’s really quite simple. After both corporations are legally set up, Corporation #1 hires Corporation #2 to run its company. At the end of each month Corporation #2 invoices Corporation #1 for consulting fees for running their company. Let’s say the invoice is for $15,000. The invoice is sent, the bill is paid and the $15,000 is now in Corporation #2’s account. How’s that for an idea? All the benefits you can dream of just became tax deductible saving you lots of money, depending on the tax bracket you are in. Maximize Your Social Security Benefit I realize there is some concern in this area. The concern being that social security, as we know it, may not even be around when you retire. Yes, that is possible but for today we must assume it will be there. Do you know what the term “maxing out of social security” means? This year every individual will pay social security tax on the first $106,800 earned. The company also has to match the social security taxes for the individual up to the same $106,800. That means if the individual earned $107,800 for the year they, nor the company, would have to pay social security tax on the last $1,000 earned. If an individual exceeds the max, for that year, that is called “maxing out”. Well guess what? The maximum social security benefit amount changes each year. Previous years were significantly lower. Take a look at the chart below for the maximum social security benefit limits for past years.  Just to be clear look at the chart above. You will notice in 1989 the maximum amount you would have to pay social security tax on was $48,000.
Now For The Good Part Our accountant/lawyer shared with the contactors in the room that if they have maxed out eight times in their entire working career they are then eligible for maximum social security benefits. That means if I earned $65,000 in 1995 I maxed out that year. Perhaps I earned $70,000 1998, that means I maxed out that year also. When I have maxed out eight total times in my entire working career I am then eligible for maximum social security benefit. The obvious question is “How much did I earn in past years?” The answer is simple. Each year all of us receive a statement from the government, just prior to our birthday, showing how much total income we earned during every working year. Next time you get your statement compare it to the above chart and see if you have maxed out a total of eight times. If you have, you are eligible for MAXIMUM social security benefit. It will not matter how much more you pay in it will not affect what you take out. You have hit the max! Once you have maxed out eight (8) times, and are then eligible for maximum social security benefits, you now want to take money out of your company as dividends or rent. Why? Because you pay NO social security or Medicare taxes on money taken out of your company in this way. The combination of these two taxes is 7.65%. If your total salary were $100,000 per year then perhaps take out $ 40,000 as dividends. That means you did not have to pay 7.65% on the $40,000. That means you reduced what you paid to Uncle Sam for social security and Medicare by $3,060 ($40,000 x 7.65%). Now give some serious thought to the above two ideas in 2010. They can save you money for years to come. During our three-day Basic Business Boot Camps we cover dozens of tax tips that can save you additional money. Each attendee also receives the accountant/lawyers full two hour presention on CD’s. Check the schedule of dates and locations on our website at www.GrandyAssociates.com.  Tom Grandy
Grandy & Associates
The Circle of Success - One Department Depends on Another
 You sit in your office trying once again to figure out how to grow your business in this slow economy. You have already spent time with each department in your company trying to make each one as efficient as possible and while individually they have gotten better, the company as a whole still seems to be stalled. How do you get things started again? You wonder "Do I just have to wait for the economy to pick up in order for things to get moving again? Individual or Together as a Team? Too often, we focus on getting each area of our company more efficient. We focus on the revenue our techs are bringing in while they are billing, what the average ticket amount is and other key performance indicators like this. We look at how well our dispatcher is routing our service techs throughout their day. We look at the average sale and closing ratios for our Comfort Consultants. But how often do we look at how well one department works with another department and how well one individual or department it setting up the next for success? There really is circle of success in your company. How well are you using yours? Let’s take a clearer look at some of the elements of the Circle.  No Beginning, No EndThe first thing to remember is that the Circle of Success is just that -- a circle. As such, there is no beginning and no end. Instead, you jump into the circle st first contact with customer. It doesn't matter where you jump in as long as you keep moving around the circle. I'll pick a point that doesn't really even begin with a typical "from the office" interaction with the customer. Every Interaction is an Opportunity to Jump In Let’s start with the sale of a new system (although you can start with any contact with the customer). When the sales consultant sells a job, he has the opportunity to set the installation crew up for success. He can get all the details needed for the install crew to do their job properly and make the installation as clean and smooth as possible. He can rave about the quality of the installation crew. As you know, it doesn’t matter what brand products you are installing, if it’s not done properly, your customer won’t be satisfied. He can insure that the jobsite will be cleaned up after they leave and the will be pleased with their work. Installation The installation crew needs to reaffirm the customer in the purchase they just made. They need to let the customer know that they made a great choice. Remember – don’t think like an install technician – think like a customer. They just made a major purchase and there is bound to be some buyer’s remorse setting in about now. Installation techs should let the customer know that they love installing jobs that this salesperson initiated because he or she is always very thorough and provides them with all the information they need to make the install go as smooth as possible. When they are done with the install, they should be letting the customer know that their Quality ABC Plumbing & Heating System is ready to go. Remind the customer that they need to have the system maintained on a regular basis and talk about the maintenance agreement if it wasn’t included with the original sale (it should have been). If it was included, they need to reiterate the benefits that they are already receiving as a result of having this agreement. They can set your service technicians and Precision Tune Up Techs for success. Precision Tune Ups During the precision tune up, your techs need to be once again affirming your customers’ choice of systems. It doesn’t matter if their system is a year old or 10 years old, they should make it a part of every contact with the customer to reaffirm their decision. At the same time, they need to once again remind the customer of the benefits of owning a maintenance agreement and that if there ever is a problem, you companies professionally trained Dispatcher and service technicians will be there to help them out. Set them up for success. Call for Service When the need for demand service arises, your dispatcher has the ability to set the expectations of the customer. “Mrs. Jones, we’ll get that taken care of immediately. Our technician will be collecting at the end of the call today. Will you be paying by cash, check or credit card?" should be part of the normal conversation. This information should be passes along to the technician along with the information about the problem provided by the customer, whether the customer currently has a maintenance agreement with your company, if their agreement is up for renewal and other pertinent information. The conversation between your company and the customer should be one long conversation, not several short ones. The dispatcher can set the technician up for success. Demand Service Call When your technicians get to the customer's home, they need to be ready when they pull into the driveway. They need to have the customers’ information at hand and know the information provided by the service dispatcher (see the previous paragraph). They need to greet the customer with a confident look, clean uniform and an organized appearance. They need to hand the customer two business cards – one for the customer and one for them to pass on to a friend. When performing the diagnostic call, they need to be thorough and ready to make recommendations to the customer to provide them a better system – not just treat the symptom. They can offer and sell add-ons that will make this call much more profitable. They also need to be ready to recommend replacement of the system if that is what makes the most sense for the customer. They don’t need to sell, just educate and inform the customer. If the customer is interested in having someone come out to give them a price on a replacement system, they should call the office from the customers’ home and set the appointment. They can them set the sales consultant up for success – and the circle continues. It’s a culture The path around the circle doesn’t always follow these exact steps. You may jump from the Precision Tune Up directly to the sales lead, or from the dispatcher back to the Precision Tune Up. Whatever the direction is, your employees need to remember that you are all on the same team with the same objective in mind. It is not the service department vs. the installation department vs. sales. This clear focus needs to start at the top. How are you leading your team? This is not something you can talk to them once about and expect everyone to get on the train. Some will get it, some won’t and will need to be told again. Others will start but then revert back to their old ways. Make the Circle of Success the mantra of your company. Instill this culture in your company and you will find that you will be able to jumpstart things even if the economy is not ready to go just yet. If you need help putting together a plan for your company, consider attending one of our three-day Basic Business Boot Camps. Check the schedule of dates and locations on our website. You can also register to attend a FREE live webinar to learn more about the program. Choose from one of the scheduled dates or request a date that works for you. Upcoming scheduled dates are: [Return to top]
SMART Marketing is Just Plain Smart  In a tight economy, we are constantly looking for ways to increase our revenue without spending a lot of money on that elusive beast we call marketing. We spend a lot of money on advertising campaigns, but do we really get the leads from it that we hoped for when we committed to the program? Where should you spend your marketing dollars to get you the most – and the best possible sales leads that will ultimately increase your revenue and your bottom line profitability? SMART Marketing SMART Marketing is one of those catchy acronyms that can really deliver. It stands for Smart Marketing And Retention through Technicians. SMART marketing just makes plane sense. It is centered on and through your service department. When your techs engage in ProfitSMART activities, you win. ProfitSMART activities are those things service technicians perform that is most often latent or immeasurable to your company including generating sales leads, selling and renewing maintenance agreements and gaining or losing customers by your company. Use your service department to deliver your marketing message. It is much more effective and affordable than most traditional advertising, is more focused, and allows you to control the message better than any other method of advertising. Let’s take a closer look. More Focused Any well thought-out marketing program is created to target those customers who need the products and services that you provide. With any other advertising campaign, you are spending money delivering a message to people who will never use or need your service. The radio station or newspaper will not give you a credit back for the dollars you spend to deliver your message to people who don’t need it. This is wasted money. Your technicians are talking to people who have already told you that they need your services. If you have your techs deliver your marketing message, you know with 100% certainty that it is getting to people who have an interest. Change your message – Now! With a SMART plan, you are able to quickly change the message being delivered to your customers. You can meet with your team on Monday and explain the new program. You will get instant feedback after the first few service calls. All other marketing efforts take time to change; time to develop new materials, time to place the ads, time to get your message filtering through to the people who need it hear or see it. Your techs can deliver the message directly to those who need it on the very same business day. There is one more benefit to having your techs deliver the message. There is only so much information you can put in a radio or print ad. If you techs are delivering the message, they can hand the customer a full flyer on your current promotion. Your customers want information – give it to them. Better Close Ratios The close ratios on a service generated lead is much higher than any other advertising generated lead. Consider this:
Don't Go Back - The Compliance Communication Style
 This month we will continue our series on the four communication styles. Everybody can adapt to be something they are not. When that next potential candidate walks in your door for an interview, chances are, they will be adapting to be the person they think you want them to be. It is imperative that you understand the four communications styles and how they will interact with your current employees and your customers. Remember, everyone has a combination of all four styles but one or possibly two will be dominant. These dominant traits will dictate how the person will interact with others. As a review, the four styles are:D – Dominance – How you deal with problems and challenges I – Influencer – How you deal with people and contacts S – Steadiness - How you deal with Pace and Consistency C – Compliance – How you deal with Rules and Procedures set by others  I said it the last few months and will say it again. One style is not better than another. There is no good or bad – there just is. It’s also difficult for some styles to understand why others don’t think the same way they do. For example, people who are high D may not understand why everyone else in the world doesn’t see things the way they do. Everyone should view the world the way they do and, if they don’t, they're missing something. Remember, there is no right or wrong, there just is. This month, we’ll take a closer look at the compliance communication style. Here are some of the traits of the high C. By the Book – “Going by the book” is the first rule of conduct for High C’s. They are very aware of and sensitive to the dangers of mistakes and errors. They prefer a professional, disciplined approach to solving problems. They are often the “quality” people who will write procedures for all that will insure the job gets done correctly and will give you the proper results. Perfectionist – There is a right and a wrong way to do things and we gotta be right! The high C will actually compete with themselves and will strive to find a better way of doing things. Again, there is a right way to do things and a wrong way. High C’s have the desire to be right, which usually means that they will come down on the side which will have the least amount of risk and opportunity for safety. They would prefer to be cautious than brash. If this person has a low I score, they will be even more of a perfectionist. They will analyze and dig into situations to gather all possible facts – sometimes too many. They can suffer from paralysis by analysis – we can’t get things done because we are too busy trying to find the right way to do it. The Proof is in the Pudding – It’s all about the facts. High C’s are very detailed. “In God we trust, all others use data” describes this person very well. This drive for proof and facts can save a company a great deal of money that would have been wasted in wild speculation or shooting from the hip. There is a lot of value in having a High C on your team. A well-blended team needs to have a mixture of all four styles. Too many of one style is not a good thing and will only end up in disharmony. That is why some companies get into trouble with their typical hiring practices. The owner simply hires people just like themselves and as a result, ends up with a team that will not function as smoothly as it should. Here is some of what the High C brings to the table:
Objective Thinkers – Emotion does not play a part in decisions of the High C. It’s all about the facts. As a result, these people live in the real world and can make very wise decisions. I tend to be a high I. As a result, I can get excited about the latest new gadget. If I’m talking to a high C, explaining all the cool things this new gadget can do, their response will likely be “But why do you need that?” I’m thinking this is fun but they are looking at the facts think it’s a waste of time and money. I need High C’s around me because they are my anchor to reality. High Standards – In a book called “The Wisdom of Team,” one characteristic was found on all high performance teams. Every team member was committed to the highest of standards. The High C will likely take part in writing these standards. They have a quality focus and will blow holes in plans that are not well thought out. Their will tend to be skeptical and look at all possibilities before they buy into the plan. Don’t argue with a High C unless you have your ducks in a row. As a collector of data, this person is a walking computer – always analyzing, testing and clarifying. In summary, the High C sets the standards for the team and maintains them. In a work environment that is fast paced and change oriented, the High C keeps us closer to reality with their objective thinking. They questioning, analyzing and clarifying style won’t allow us to get away with sloppy thinking or performance. They are sometimes misunderstood, but they can take ideas that are too lofty and bring them back to a state of realism. When you look at your customer base and employees, can you identify those that are High C’s? Are you a High C? Once you understand how to deal with a High C style, you will find it much easier to get things done and provide happier, more satisfied customers. When working this person, be prepared. They will be and if you try to snow them, they will bury you the facts and they will lose all respect for you. Next month, we’ll shift gears a bit and look at how the various styles work together. Special Offer If you would like to have your employees take an assessment to determine what their style is and receive a 15% discount during the month of April, send me an email today . Assessments take 10 minutes or less to complete, can be done either online or on paper, and will give you the information you need to better communicate with them and allow them to better communicate with each other. Contact me at 877-202-8891 or visit the Hiring Solutions Informational Home for more details on Hiring Solutions Assessments. Professionalism By Phone
By: Sue Rouse
 Description of the Presentation: The first impression, and sometimes the only impression, your customer has of you and your company is through a telephone conversation. Professionalism on the phone can move the prospect forward towards the final sale. Likewise, lack of professionalism can do just the opposite. Proper phone etiquette is very important.  Key Points:Our success in the area of telephone skills, like everything else we do, is often dependent upon understanding the basics and then executing those skills properly, over and over again. Six (6) Points to Consider When on the Phone:
Good Manners:
List of Ten Questions to Answer Honestly (a short test) The Small Business University features a new trade focused audio presentation every month. These programs are designed to provide the trades contractor relevant information that can help their business immediately. Get more information on this program or sign up for a monthly subscription today! |
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| Grandy & Associates, 1020 Halifax Dr. Suite 102, Owensboro, KY 42301 ©2010 Grandy & Associates |
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Your advertising programs will be much more successful if you coordinate them with you SMART marketing program. By keeping you technicians up-to-speed on the programs you have on the street, you will get the double benefit of technician trust (more about his in a minute) and special consumer offerings. 
Think about it. What is the ultimate goal of your marketing programs? Right, to get in front of the customer where you have the opportunity to sell you products and services. Where can you spend your marketing dollars that can get you more face to face time with the customer than you already have with your service technicians? The average service technician is 50% billable. This means that they will spend 1000 hours with your customers. They also have more credibility than anyone else in your company. They have nothing to gain. They are looking at the system form a pure technical standpoint and as a result, their recommendation carries far more weight than any other advertising medium available to you. Their job is not to sell the new system, but to educate and inform the customer about other products and services that you company has to offer. They can simply state to the customer “Your system is working well today but there are much more efficient systems available not that could make you much more comfortable and save you money. Would you like to have someone come out and let you know what it would cost to look at one of those systems?” If the customer agrees, they need to call the office and schedule the appointment for the sales call immediately. 
