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Small Business Optimism Surges

By Tom Irmen

Since the election of 2016, there has been an undeniable surge in small business optimism nationwide. And despite the feelings on the part of many that this upswing in optimism is tied directly to the presidential election, I have no interest in wading into the possible political aspects of this much welcomed rise in sentiment. Besides, we already have a 24/7 news media that will debate this renewed optimism for us.

Regardless of who you voted for in the last election, there’s no denying that this new level of optimism among small business owners has spiked dramatically in recent months. The real question for you to consider is how are you planning to take full advantage of this rising tide?

Here are some facts to consider:
» Small business lending has now increased to pre-recession 2008 levels, signaling an expansion in small business growth.
» A recent Bank of America survey found that 51% of small business owners expect the economy to improve during the next 12 months compared to only 31% last fall.
» ADP has reported a nearly three-fold increase in hiring from the fourth quarter of 2016 by small businesses that employ fewer than 50 employees.
» The National Association of Manufactures has reported that 93% of manufacturing industry executives are optimistic about the future of the economy, up from 56% just a few months ago.

Regardless of all of these positive signs, the great recession has dramatically changed the behavior of many of today’s small business owners, and entrepreneurs are displaying a heightened level of caution. Much of today’s optimism can be directly traced to future expectations that are reliant upon a variety of governmental actions that are anything but certain. But despite this level of uncertainty, the cost of inaction on your part can result in missed opportunities and the erosion of market share.

While risk aversion is more a part of a business owner’s DNA today than it was a decade ago, even the most cautious among us should be encouraged enough by recent developments to take advantage of this long awaited rise in optimism. Consider expanding into a new product or service line or stepping up your existing marketing efforts to successfully differentiate your small business from your competitors, helping existing and would-be customers to understand and appreciate just how they will benefit from doing business with your company.

The cost of action is likely far less than the cost of sitting on the fence.

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The High Cost of Inaction

By Tom Irmen

Perhaps because I’m 67 years old, I think more often about those issues confronting other entrepreneurs my age. Whether those issues involve planning for retirement, health, or end-of-life considerations, most small business owners would be best advised not to postpone examining these very important issues for themselves.

The truth is that far too many business owners have failed to put a comprehensive retirement plan into place. Perhaps they’re anticipating that the potential future sale of their business will provide the resources needed for retirement. But relying on the successful sale of your small business in the future to provide for your retirement is not without risks.

Other business owners may be contemplating a continued stream of income during retirement after turning their business over to their children to manage. But if you lack a succession plan, that son-in-law you can’t stand could end up at the helm of that same company you worked a lifetime to build. Also, in the absence of a succession plan, the divorce of one of your children could result in the dissolution of your company, all which could be detrimental in the future to your retirement.

If you believe that life will become simpler as you grow older, think again. Life has many moving parts, and delaying decisions on important issues that can impact your future will only compound the pressure you’re likely to experience later in life when you are forced to act. Also, inaction can create a level of anxiety that most people might prefer to avoid.

So how can you avoid this doom and gloom scenario? Find a trusted financial planner, one who will work closely with your attorney and accountant, who can help you find the answers to both the questions you have, as well as the answers to questions you might not have even considered. Acting today will provide you with a level of confidence and the peace of mind that has likely been evading you, not to mention greatly enhancing your potential for a successfully and prosperous retirement But your key to success rests on your decision to act today – not tomorrow, next week, next month, or next year.

Imagine a future free from financial stress, where your income is assured and your company is continuing to operate efficiently and profitably while being managed by those individuals you’ve personally selected. Consider, too, that your spouse, children, and grandchildren will be provided for as well, because you chose to act and not to entrust your future to a roll of the dice. What are you waiting for?

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Pricing is More of an Art

Pricing is More of an Art
By Tom Irmen

Few entrepreneurial responsibilities faced by small business owners are more challenging than establishing prices for your company’s products and services. For many entrepreneurs, it’s a shot in the dark. Others may rely on competitive price comparisons within their marketplace, or perhaps your franchise or dealer network provide pricing recommendations. Regardless of how you arrive at your company’s pricing structure, pricing should be regarded as both a short- and long-term strategy designed to be a driver of both sales and high margin profitability.

Here are some important points to keep in mind when establishing your pricing strategy:

  • Being busy does not equate to being profitable.
  • Closing on 100% of your proposals likely means that your prices are far too low.
  • Price gouging will likely only attract additional competitors into your marketplace, which will result in lower overall marketplace prices.
  • Customers typically do not view pricing the same way as entrepreneurs. If the perceived value the customer receives from your products and services far exceeds their actual cost of the product, your price is likely too low.

Pricing is more of an art than a science, and many of us lack the prerequisite skills or experience needed to create a comprehensive pricing strategy. Regardless, the responsibility is yours.
Familiarize yourself not only with your competitors’ pricing but, more importantly, the perceived value they offer customers. Don’t rely entirely on the pricing models provided by a franchise or dealer who may be unfamiliar with your local marketplace. And don’t use pricing as the only tool to secure each and every proposal.

Every interaction with a potential customer provides the perfect opportunity to access your company’s value proposition. Are you viewed merely as a commodity or as a company whose extra services are perceived as extremely valuable, perhaps even indispensable, to a client? It is absolutely imperative that you clearly articulate to every potential customer the real value of the services or products that you offer if you are to succeed. Customers will select the company with the higher actual price, provided that the perceived value they receive is greater.

And one final thing. An estimated 20% to 30% of all customers are low price shoppers. Avoid them. This is the commodity marketplace that will leave you broke.

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Just Plain Vanilla

By Tom Irmen

How do your customers or, more importantly, your potential new customers view your small business? Nothing slows up the line at Baskin Robbins faster than the addition of a new flavor. Customers’ eyes feast on the numerous choices available before selecting that much anticipated flavor that will arouse their taste buds. Meanwhile, over in the corner of the freezer display is poor old vanilla.

If your customers and prospective new customers view your small business as poor old vanilla, you had better be prepared for a plain vanilla response. Perhaps it’s because we, as entrepreneurs, invest so much of our day immersed in our daily activities that we take for granted just how unique our companies are. But at the end of the day, if you’re the only one that knows how unique you truly are, you’re just plain old vanilla to consumers.

I recently visited with one of the owners of a home improvement company. The quality of the work they perform is consistent with the quality offered by their competitors. But they’re unique from their competition many ways:

» They fabricate the product they install.
» Their installation time is much faster.
» They don’t charge for many of the extra services they provide.
» They don’t employ commissioned sales people.

I was sold. Unfortunately, very few people beyond those in attendance at our meeting are aware of how truly unique this small business really is. Plain old vanilla, right? I asked myself, “Just how much has their failure to communicate their unique differentiating characteristics cost them?” I’d say hundreds of thousands of dollars annually.

If your small business is experiencing lackluster performance, you’d be well-advised to ask yourself whether anybody beyond your associates knows just how unique you are. The cost of communicating your uniqueness is far less than the sales opportunities you’re missing.

Are you that delectable rocky road fudge ice cream or that plain old vanilla relegated to the back of the freezer case?

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Avoiding Established Competitive Marketplaces

By Tom Irmen

Many would-be entrepreneurs contemplating the launch of their first small business venture understandably try to target what they believe to be a brand new niche market rather than attempt to penetrate an existing marketplace dominated by established competitors. But don’t be too quick to write off those established markets.

Quick printing franchises dominated the personal and small business printing industry in the ’80s and ’90s. You couldn’t close your eyes and throw a rock without hitting one of these franchise locations.

The new owners of an existing franchise carefully analyzed the competitive landscape that existed in their suburban Chicago location. Here’s what they found:

» Printers assessed additional charges for color printing
» No delivery service was offered, requiring customers to pick up their printing orders
» Printers relied entirely on walk-in business, ignoring the opportunity to identify potential new clients

Based on this information, these resourceful owners began offering a color print schedule that eliminated the customary upcharges, which resulted in an immediate savings for their customers and an increase in sales for their printing franchise.

The owners also invested in a delivery and pickup vehicle that brought them into direct contact with their customers’ decision makers, which helped not only to foster valuable new relationships, but also provided them with the opportunity to introduce these same clients to all of the printer’s services that they might benefit from. Sales skyrocketed.

Finally, the owners made a strategic decision to target mid-sized companies that were being underserved by both small print franchises and larger printing competitors. After just months, these innovative small printing franchise owners began receiving individual print orders that exceeded their earlier combined monthly sales.

The net result? These innovative entrepreneurs became the third fastest growing franchise out of more than two thousand locations nationally in just three years.

There is a distinct advantage to targeting an existing marketplace, even one with multiple, established competitors. That is, customers understand and accept the need for the products or services being offered. Why not offer many of the same products or services already being offered, but where you can differentiate yourself by providing a new twist(s) that will be perceived as offering even greater value to your targeted customers? You may actually discover that it is easier to penetrate an existing competitive marketplace than to create an entirely new one.

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Breaking Out in 2017

By Tom Irmen

Small business success does not result from merely being in business. Not a spectator sport, success in small business requires that you be on the playing field, actively engaged in providing a quality product or service and differentiating your business from those that you compete with.

Small business ownership isn’t for the timid as the last decade has proven. And we must all remain vigilant to not allow ourselves to become so pessimistic about the future that we miss what might become a huge growth opportunity.

Although I have spoken about this very subject many times in the past, I feel that it deserves to be repeated once again. Anecdotal evidence is suggesting that a growing number of small business owners are experiencing recent new sales increases beyond their earlier expectations. I’m not offering any political commentary, so whether this renewed economic optimism is the result of the recent election or not, this economic surge might represent the much anticipated catalyst for a long overdue small business recovery. But to benefit from this renewed economic optimism, it’s imperative that you act.

It’s understandable that entrepreneurs are noticeably cautious after experiencing nearly a decade of anemic economic growth; however, you will have no other choice but to play in the game if you are to win the game. It is more important than ever in this current environment to keep your fingers on the pulse of both your customers and competitors, as well as on the local and national economies. The valuable insights that you will discern can guide you in making the well-thought out decisions necessary to take full advantage of any signs of economic recovery.

Success requires action. Do you have a deliberate and comprehensive plan for your small business for 2017? Flying by the seat of your pants or rolling the dice will not likely produce the results you have been hoping for. One year from now, a small number of success-oriented entrepreneurs will be reflecting back on 2017 and viewing it as their breakout year. This success will not be the result of luck, but rather action.

How you will view your small business success for 2017 just one year from today? Will you get down onto the playing field where success awaits you, or will you choose the comfort of the grandstands?

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Catapult Your Sales Skyward

Catapult Your Sales Skyward
By Tom Irmen

I believe the primary reason for missing the potential to achieve explosive growth in your small business might be your decision to place your customer service levels on the back burner. Entrepreneurs often rely on their websites, social media and online, print, on-air, and mail marketing campaigns to increase sales volume. Yet despite their best efforts to generate additional sales revenue, many of these same companies offer their customers a woefully low customer service experience that only serves to erode even their best sales efforts.

In a 1970s episode of M*A*S*H, a popular TV satire on the Korean War, Major Frank Burns, a not-so-skilled surgeon, focused primarily on his military career, once stated: “This war wouldn’t be so bad if it were not for all of the wounded.”

I’ve witnessed firsthand how many entrepreneurs who, in response to overwhelming customer sales and their inability to maintain acceptable customer service levels, begin viewing their customers as adversaries. A sort of, “My business wouldn’t be so bad if it weren’t for all of the customers” philosophy.

All too often I’ve witnessed small business owners who have succeeded in increasing their sales only to leave a negative wake behind them as their newly found customers are forced to accept their below standard service levels. They’ve promised their customers 100%, delivered 70%, and become angry when the customer brings the difference to their attention.

No business can have enough good press. Every satisfied customer is a reporter on steroids, telling those they influence about the positive experience they’ve had with your company. Conversely, they’re more than certain to pass along their negative experiences as well.

It’s just good common sense to successfully differentiate your small business from the competition by allocating more of your resources into your company’s customer service experience. Your competitor may have the “glitziest” website in town, but your commitment to a superior level of customer care will propel you past their façade if they fail to deliver the quality customer service their customers demand.

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Year-End Tax Planning

Year-End Tax Planning

You can make contributions to 401(k) or 403(b) retirement plans until December 31, 2016, and SEP or Roth IRAs until April 15, 2017. Maximum contributions vary. With a 401(k) plan, you defer up to $17,500 versus Traditional and Roth IRA maximum contributions of $5,500 ($6,500 if you’re age 50 or older).

You have until December 31, 2016, to take an RMD (Required Minimum Distribution) from your retirement plan if you’re over the age of 70½ or you face a hefty 50% penalty. The most common mistake made is the failure to take an RMD for both an IRA and 401(k). You must take a RMD from each plan. Multiple IRA accounts are treated as a single account, so only one RMD is required.

Consider making a charitable contribution of highly appreciated stocks. If you’re over 70½, donate your required RMDs to your favorite charity up to a maximum of $100,000. This could lower your taxable income and may even help shelter your social security income from taxes.

If you realized losses on some stocks during the tax year, you can only deduct $3,000 of that loss. One strategy to consider, Tax Harvesting, is to sell some of the stocks you’ve made money on during the year to offset your stock losses. You could then wait 31 days and buy these same stocks back again. It’s important to wait 31 days, otherwise the transaction is considered a “wash sale” and you would forfeit the tax benefits.

If you have a Traditional IRA, you might want to convert all or part of your IRA to a Roth IRA, providing you don’t increase your taxable income for the year. Converting to a Roth IRA may save you and your loved ones future taxes.

Before you make any changes to any retirement plan, always consult a qualified tax professional. For assistance with all of your financial planning needs, I encourage you to discover just how Financial Partners of TN, LLC can assist you. Chosen by UT Federal Credit Union, Peoples Bank of the South, and UBANK to provide their members with independent financial planning services, Financial Partners can be your financial partner to a brighter financial future.

Financial Partners of TN, LLC
2100 White Avenue
Knoxville, TN 37916

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It’s All About Me

It’s All About Me
By Tom Irmen

Successful entrepreneurs typically have healthy self-esteems, but others border on pure vanity. Self-confidence is a common characteristic shared by successful entrepreneurs, but there are both healthy and unhealthy versions of our personal esteem. I believe that unhealthy self-esteem results when we limit the perspective of our success, when we see only our own contribution, while ignoring the contributions of our associates, customers, and vendors.

A truly successful small business owner functions more like an air traffic controller who coordinates the activities of a variety of team members, both on the ground and in the air. Although the controller is not tasked with the responsibility to actually fly the aircraft, the controller nevertheless provides the much needed direction to safely guide the plane and its passengers from point A to point B. The inability of an entrepreneur to embrace the entire team undermines the team, much to the detriment of everyone involved.

Ronald Reagan once said, “There is no limit to the amount of good you can do if you don’t care who gets the credit.” I love that quotation and believe it should be the core principle of every small business owner pursuing genuine success. But it has to exist in your company’s DNA.

Here’s one place where you can successfully incorporate this winning philosophy into your company’s culture. As your business prospers and you discover it’s necessary to delegate more responsibility and authority to your associates, encourage them to take individual initiative, recognizing that some mistakes will be inevitable, although they are rarely terminal. Remember that your destructive criticism can destroy not only the personal initiative of your associates, but your company’s chance to succeed in the future.

Embrace an “It’s All About Us” attitude, where the entire TEAM takes a collective bow in recognition of the TEAM’S success. You’ll discover the TEAM’S success is far more gratifying than individual success.

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Rev Up Your Charitable Giving & Tax Savings with These Easy Tax Tips

Rev Up Your Charitable Giving & Tax Savings with These Easy Tax Tips
By Yvonne Marsh, CPA, CFP®

This is the time of year when thoughts turn to helping others in need, whether with monetary donations, volunteer time, or charitable legacy planning. While you are making your charitable giving plans, consider these tips to maximize the tax benefit of your good deeds:

» Rather than donating cash to your favorite charity, donate appreciated investments instead. Perhaps you bought stock many years ago that is now worth much more than you paid for it. If you give the stock to the non-profit, and they cash it in, they don’t have to pay the tax on the capital gain.
» If you are taking Required Minimum Distributions (RMDs) from your IRAs, and in turn writing a check to your church or charity, wait a minute! You need to know about the Qualified Charitable Distribution rules where the IRS allows you to donate your RMDs (any portion up to $100,000) directly to your non-profit and not count that RMD as income on your tax return. Who knew the IRS could be so kind? If your financial advisor hasn’t told you about this little gem, you might need to reassess the value your advisor is bringing to the table.
» Perhaps you would like to leave some money to your church or charity in your will. Great idea! However, instead of gifting through your will, designate your non-profit as a beneficiary on your IRA. Why? Because IRA assets are taxable as ordinary income to your heirs but not taxable to your non-profit of choice. Let your heirs inherit your after-tax investments instead.
» Maybe you like the idea of leaving some of your IRA money to your favorite charity but hate to think of short-changing your heirs. One solution is to use a portion of your RMDs and buy permanent life insurance. As a result, you give those taxable assets to your non-profit and give a tax-free death benefit to your heirs. Now everyone is happy! (Except perhaps the IRS.)

Tax planning and charitable giving is not just for the rich. It’s for anyone who wants to choose where their hard-earned money goes – to taxes or to charities. Give our office a call if you would like a complimentary meeting to learn more.

Marsh Professional Group, LLC
1341 Branton Blvd, STE 105
Knoxville, TN 37922

Financial Planning & Investment Advisory Services are offered through Marsh Wealth Management, LLC (“MWM”), an independent investment advisor registered with the state of Tennessee. Yvonne Marsh is an Investment Advisor Representative of MWM in the state of Tennessee. Marsh Professional Group, LLC and MWM are separate legal entities. For a detailed discussion of MWM and their investment advisory fees, see the firm’s Form ADV on file with the SEC at

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