TaxCoach Briefs:    December 17, 2009

Volume 4, Number 51

• Marketing Minute: Fat Man. Red Suit. (Reprise)
• Did You Know: Seminar Kits
• Member Q & A: Certified Tax Coach™
• Member Resource: Member Call-In With Ed & Keith

TaxCoach Briefs archives.

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MARKETING MINUTE (EAL)
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FAT MAN. RED SUIT. (REPRISE)

We published this piece for the first time way back in 1888, during the Great Blizzard of that year that dumped four feet of snow on downtown Cincinnati (or "Porkopolis," as it was still sometimes known). But the lessons are timeless, so we continue to publish it. We hope you enjoy it more than your great-Aunt Edna's fruitcake (which was originally baked in 1888, then gifted and re-gifted endlessly since then).

He's baaaaack . . . . !

Whether you celebrate Christmas, Hanukkah, Kwanzaa, or just sit home like Scrooge, you can't open your eyes or ears without seeing or hearing him. Statistics show that we're exposed to 3,000 advertising messages per day. And this time of year, it seems like all of them feature that familiar fat guy in his familiar red suit.

You probably just think of Santa Claus as a holiday icon. But have you thought about him as a business guru?

Back in 1990, Wess Roberts wrote a bestseller called Leadership Secrets of Attila the Hun. You probably don't want to hold your clients' children hostage to consolidate control over them. And you can't pay your staff in plunder. So in a more festive spirit, I offer "Business Secrets from the North Pole."

1. Target Marketing

   Our marketing philosophy boils down to this: target specific markets, then give them a unique reason for doing business with you and not your competition.

   Santa offers one product: Christmas presents. Specializing lets him own that market. You don't see Santa handing out candy at Halloween, or delivering eggs at Easter.

   And Santa serves one broad, enthusiastic market: children.

   Marketing guru Gary Halbert was famous for telling clients to imagine they were opening a restaurant -- then asking what would best guarantee success. Low prices? Great food? Special sauce?

   Nope, nope, and nope. Try a starving crowd of customers! Markets don't get more "starving" than children on Christmas morning!

   But Santa doesn't stop there. He slices and dices that market, and creates distinct brands for them.

   General Motors has done this for years, marketing Chevys to the working man, Pontiacs to wannabe hotrodders, Cadillacs to high rollers, and Buicks to affluent but more conservative drivers. Santa does the same thing, appearing as himself here in the United States and Canada, Father Christmas in Great Britain, Pere Noel in France, Babbo Natale in Italy, Joulupukki in Finland, and Kaledu Senelis in Lithuania.

   Santa doesn't try to be all things to all people. Neither should you. Pick your markets and serve them well. Your clients may not be as happy as kids on Christmas morning. But they won't leave you for the Santa down the street.

2. Time Management

   Most of us think we work too much. No, let me correct myself. Most of us do work too much. Our All-Stars tell us they typically work 40-60 hours per week -- and want to cut 10 or more of those hours out.

   Santa Claus works one night a year. One night! This cat is leveraged. Forget about hiring associates at $40/hour and billing them out at $100. Santa lets the elves do all the work -- then hops into the sleigh to claim all the credit!

   (Santa's not the only one to figure this out. Willy Wonka does the same thing, importing Oompa-Loompa "guest workers" from the small Pacific island of Loompaland. The Oompa-Loompas make the chocolate, and Willy takes the credit.)

   Creating systems and managing staff aren't easy. But these are crucial to moving from a personal practice that depends entirely on you to a real business that flourishes without you.

3. Exclusivity

   As we discussed, Santa targets a hungry crowd. But he doesn't serve everyone. He brings presents to the good little boys and girls. If you're a rotten little stinker, you get coal in your stocking! (Or, "if you talk to your mother in that tone again, I'm taking back the iPod before Rudolf's nose stops glowing, pal!" -- Keith.)

   We tell you to segment your clients into an "A" group (those who love you, gladly pay your fees, and refer new business), a "B" group (those who can become "A" clients with a little care and feeding), and a "C" group (those you'd just as soon do without). How liberating would it be to give your "C" clients a lump of coal this season?

   I love my 7-year-old, Margaret. She's bright, spirited, and talkative, but she doesn't always listen to her mom and me. Usually that's a problem. But this time of year, we just have to ask her if the elves are watching to get her immediate attention. Santa's positioning works!

   Do your clients think they have to behave for you? Are you managing your relationships with them, or do you let them manage you?

   Several of our All-Stars are considering asking clients to actually apply to do business with them. Can you imagine how that transforms the relationship? We'll bring you more on those efforts as they develop.

I've had more fun than usual writing this week's Marketing Minute. But please don't think I'm not as serious as ever. Santa Claus offers real lessons for you and your practice. And you don't have to be fat or wear a silly suit to use them.

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DID YOU KNOW . . . (KAV)
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SEMINAR KITS

. . . TaxCoach contains Seminar Kits, tailored for specific target markets? Look in the Playbook and you'll find four different Seminar Kits -- each aimed at one of the groups most likely to benefit from tax planning services, including:

• business owners,
• real estate investors,
• portfolio holders, and
• retirees.

We create new kits as needed, to focus on topics of current interest. You'll find these as well as "mini" seminars on special topics in the Playbook, too.

Each kit includes a PowerPoint presentation that boils TaxCoach strategies down to the ten or so most important for that audience, along with related items of interest for them. Of course, you can modify it to suit your practice or your style all you'd like. The kits also contain sample fliers and invitations, feedback forms, speaker's script, and handouts.

You'll also find a Seminar Success Guide, with strategies to promote and conduct a seminar that will make you stand out in that community, as the "go-to" person on the subject of tax planning. Read it from the mind of the Master -- Ed's conducted over 100 seminars in 30 states. The Playbook contains a sample "one sheet," too, for promoting the event.

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MEMBER Q & A (KAV)
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Q: 1. Where can I find out more about the Certified Tax Coach program – where do I go to sign up? 2. If I can’t make the 3 day program, will I be able to study on my own and get certified? How soon would I be able to start? 3. If the courses are available, is there any reason I couldn’t be certified by the first of the year?

A: Great questions! All the information on the CTC™ program and the enrollment form is at www.certifiedtaxcoach.org. The next Academy will be in April, but the online training is available now. It's a 24 hour program, and we'll send you the textbook materials as soon as you enroll, so there's no reason you wouldn't be able to complete the course and get your CTC™ certification in place by the first of the year. A final note: the introductory pricing (20% discount) expires at the end of 2009, so move soon if you've been thinking about it!

Q: Ed, re Certified Tax Coach, I am not a CPA or EA. Are we still eligible to participate in the class and receive the designation.

A: Absolutely. No prior qualifications are required, just a few simple questions on the enrollment form, and the attendance at the CTC Academy or completion of the on-line certification course.

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MEMBER RESOURCE (KAV)
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MEMBER CALL-IN WITH ED AND KEITH

Well, this week no dental emergencies, and no wind storms or power outages. But Ed still had a surgical procedure this morning, yet stand-up guy that he is, he made the call anyway! "Mad props to ma homey," as they say.

It was another good one; as well-attended as ever. Here are some excerpts from the log of the questions raised by callers this week:

• I had a prospect this week that is currently with an accountant (who is an old family friend). I asked her the “wedge” question. She seemed irritated and replied “well, he’s never come to me with a money saving idea, but I’m sure he would if he thought of something!” I carried on with the “second opinion” concept but by that point I knew it was going nowhere. Any suggestions for how I could have handled the situation differently?
• With regard to setting up a C corporation to channel income from an S corporation to benefit from the more liberal fringe benefits of a C corporation—how do you avoid the Personal Service corporation rules?
• Is there an audio file of the teleseminar you had yesterday about MERPS?
  [A: No, it was not recorded, but we will be holding another one soon, and will announce it in the Briefs.]
• My question deals with the payment of wages to a child up to the standard deduction amount and the avoidance of payroll taxes and withholding on the child. Is it possible for an S-corp to do this? Rules of attribution apply?
• When a Schedule C compensates a spouse utilizing the payment of the family's health insurance premiums, does the policy need to be in the "name" of that spouse or can it still be in the "name" of the proprietor spouse?
• I’ve been reading about Dan Kennedy’s strategy of “take away” selling i.e. limiting supply of yourself. How do you find the right balance of maintaining client relationships without giving too much of yourself away?
• With respect to the MERPs, is it possible for the employees to also take advantage of utlizing and HSA savings account since they will be covered by high deductible insurance plan?
• I have a new client, sole proprietor, who will net about $225,000 next year from consulting services. in thinking about setting up an S Corporation, how do you justify paying salary at anything substantially less than what he grossed? If we cut the salary down to minimize his payroll tax, then he loses on not being able to max out his 401k. Is there really any benefit to electing to be an S Corporation? I said to the client that we should review his situation because i thought i could save him some taxes... but in the end, i didn't really save him anything. he is better off just staying as a sole prop. So i guess my real question is... how do i bill for this?
• SCorp paying a kid to pass income tax free to kid. Potential client has kid as a 2% owner for passing wages. Advantage or Disadvantages? No SchC available or Sch E available
• Client is moving a business to a new state (ending business activity in state 1, moving to state 2): for an S-corp is there an easier way to do this than sec 368 tax free reorg with Q-subs? I assume state 1 corp will effectively be dissolved at the state level after state 2 incorporation is complete? Trying to avoid new EIN, etc.
• I have a insurance agent that has a contract with State Farm and will get a 1099 at the end of the year. I want to clear out his net income in the Sch C by issuing a 1099 to his LLC that is taxed as a S-Corp. I want to divide the income between salary and distribution to reduce his SE income tax. Do you see any problem with this?
• What are you recommending for website testimonials and success stories in light of the new FTC rulings?
• Whats your thoughts for giving a referral source $50 cash or credit for tax prep for a new client? I'm thinking of sending out a letter to current clinets asking for referrals and give the cash or credit if I get the new client.

If you're looking for pointers on tax strategies or profiting from TaxCoach too, join us for the next call, on December 23, at 1pm Eastern. Enter a question or just listen in on the repartee. Check the "Contact Us" button within TaxCoach for registration instructions.

Members occasionally ask if we can record and archive these calls. The answer is that we want to keep them as informal and uninhibited as possible. We’ve discussed specific tax-planning clients and cases, for example – but we don’t want to put ourselves on record as offering individual tax advice. We’ve also discussed outside tax software and marketing services (both good and not-so-good), and we don’t want to put ourselves on record with those comments either. Member Call-Ins are intended to be casual discussions among peers – and we don’t want recording them to threaten that chemistry.

Please note that while our elite members (All-Stars, Press Club, and Hall of Fame) can still schedule time directly with Ed as part of their coaching programs, we simply cannot answer marketing and tax-strategy questions via email or unscheduled calls. We'll have call-ins as many Wednesdays as we can, and we'll talk to you then.

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We're happy to answer your questions on TaxCoach content or features. (Save marketing and tax strategy questions for Member Call-Ins.) For best response, email support@taxcoachsoftware.com. If we think the answer will be useful to all of our members, we'll publish it (anonymously) here in the 'Member Q & A' section of TaxCoach Briefs.

Regards,

TaxCoach Briefs Archives...
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