From the monthly archives:

September 2009

Starting a Business? Three Things to Include in Your Marketing Plan

by Justin Lukasavige on September 29, 2009

Business marketing plans need not be complicated. In fact, the simpler the better. When you put yours together don’t forget to include these very important details:

  1. Clearly identifiable market
  2. That market is reachable
  3. Price must be affordable to that market

Clearly Identifiable Market
You must be able to identify your market. It can’t be too broad because no one wants to do business with a generalist. Instead, we prefer to do business with a specialist.

One look under plumbers in the yellow pages shows hundreds of choices in big cities. I don’t know about you, but when my pipes burst at 2am I’m going to call the guy that advertises 24 hour emergency service. Wouldn’t you? Don’t be a generalist.

Your Market is Reachable
Can you reach your market? If you can’t reach them with your message you don’t really have a business. There might be a big need for your product or service, but if you can’t reach your market with the message they need to hear, you’re out of luck.

Price must be Affordable to that Market
If you can identify your market and reach them easily, you’re still out of luck if your offering isn’t priced so they can afford it.

My friend Dave Munson at Saddleback Leather makes very expensive leather bags and he doesn’t apologize for it. He knows the market he’s after and he does a great job reaching theml. At $400 for a briefcase he’s not after the price conscious shopper. If he were to go after them he’d need to charge less.

If your business is struggling in the marketing arena take a step back and make sure you’re addressing each of these three areas. It does no good if you’re doing great in two of them only to leave out the third.

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He Taxes Me, He Taxes Me Not Part 2

by Derek Sisterhen on September 24, 2009

We received some good questions after last week’s article, “He Taxes Me, He Taxes Me Not.” This week we’re providing the answers.

Based on the way I’m currently investing, I have some questions about SEP IRAs and Roth IRAs. Can I open a SEP Traditional IRA and contribute to this even if I contribute to a Roth IRA? Is there any benefit to having a SEP Roth IRA (I’m not even sure this can be done)? If I can only invest in one type of IRA annually, which is the best alternative – a Roth or SEP Traditional?

-Kent in Atlanta, GA

Hi Kent,

Wow! These are some great questions! Here are some answers:

You can open a SEP IRA and continue contributing to the Roth IRA. The reason for this is that the business contributes to the SEP IRA while the individual contributes to the Roth IRA. I know that seems a little unique because in a sole proprietorship, the business is the individual, but from an IRS perspective, SEP IRA funds come from the business revenues, not the personal income of the individual.

There is no such thing as a SEP Roth IRA; as a matter of fact, the IRS pretty explicitly states that a SEP IRA cannot be in any way, shape, or form associated with a Roth IRA.

If choosing between investing in a Roth or SEP IRA, depending on your anticipated tax bracket in retirement I typically recommend the Roth IRA first, then supplementing with the SEP IRA. All signs are pointing toward higher income tax brackets in the days ahead. While we don’t know what they’ll look like 20 – 30 years from now, we do know that we can build tax free savings by going the Roth route. From a tax liability management perspective, I would always like to take a lower income tax hit today for tax free savings in the future. The SEP IRA defers the tax liability until you withdraw the funds in retirement.

Thanks for your questions, Kent!

If you’d like to learn more, join the Reader’s Group at LukasCoaching.com!

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He Taxes Me, He Taxes Me Not

by Derek Sisterhen on September 17, 2009

As the economy continues to lumber along in an upward direction, Americans are throwing open the storm shelter doors. Surveys of retirement plan participants show that investors are trading out of conservative investments and back into stock mutual funds.

For many years, conventional wisdom for investing for long-term wealth building held that you should pile every penny possible in traditional IRAs, 401(k)s, and other tax-deferred accounts. The assumption was that when you stopped working, you’d likely slide into a lower tax bracket. When you withdrew your funds from those investment accounts, you’d pay lower taxes on them. Conventional wisdom doesn’t always hold in unconventional times. Enter the Roth IRA.

The Roth IRA is perfect for spreading out the impact of taxes in your retirement years. With a Roth IRA, you pay your taxes upfront on the dollars you contribute. That means you pay today’s income tax rate. When you withdraw the funds in retirement, they’re completely tax free. Tax FREE!

With the tax cuts from the Bush Administration expiring soon and new taxes on the horizon, the Roth IRA may be exactly what your long-term wealth building plan needs. Many financial advisers are currently recommending a minimum of 30% of a person’s retirement portfolio be held in a Roth IRA.

Since there are tax implications for putting money in a Roth IRA, it’s important to know the rules. This year, the maximum contribution amount for individuals under age 50 is $5,000 (if over 50, you get an additional $1,000). Likewise, there are income limitations on Roth IRAs: individuals making more than $120,000 and married couples making over $176,000 aren’t able to contribute. However, in 2010 anyone will be allowed to convert existing retirement dollars to a Roth IRA without limitations.

When planning long-term investment strategies, always start with the goal of making money. From there you can protect those gains from taxes, and the Roth IRA is a great tool to help in that effort.

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Your Order is Delayed and it’s MY Fault

by Justin Lukasavige on September 16, 2009

Share your customer service stories . . .

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My Friday Office

by Justin Lukasavige on September 6, 2009

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Thou Shall Prosper

by Justin Lukasavige on September 4, 2009

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How to Know When to Outsource

September 2, 2009

My friend Bill Davis pointed out this formula to me to know when to outsource instead of doing a task yourself. I’ve included numbers but make up your own.
Yield per hour
Target income ($100,000)
Number of weeks of work per year (40)
Number of hours of work per week (35)
= 1,400 hours per year
$100,000 / 1,400 = [...]

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Resurrecting Your 401(k)

September 2, 2009

Back from the dead, for many 401(k)s are beginning to recover with the recent market uptick. The question remains, though: is my 401(k) really going to make it?
Study after study confirms that investors chase past performance, buying whatever made money for other people. These same investors also chase their own past performance, buying [...]

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