Maximize the Potential of Your Business Clients

Without a doubt, establishing and maintaining retirement benefits are important for all of your business owner clients. Fortunately, we practitioners now have greater options than ever before to help our clients. Current customized specialty programs are more efficient, provide greater benefits and are now possible since the passage of the Economic Growth and Tax Relief Reconciliation Act of 2001 followed by the Pension Protection Act. When done correctly, these plans can reduce taxes and provide future benefits. If done incorrectly, they may bring IRS scrutiny, among other problems. To avoid unwanted issues, you may want to consider some of the following plans available to business clients.

Qualified Retirement Plans; Qualified retirement plans are particularly suitable for small business owners who are in high-income tax brackets because they are fully deductible from ordinary income taxes to the business owner. This may also serve as a solution to the looming Alternative Minimum Tax (AMT) issue because they are not a tax-preference item.

Cash Balance Plans; Cash balance plans have been used to reduce the cost of employee benefits and can now be capitalized on to a greater extent since the passing of the Pension Protection Act. Cash balance plans offer employers advantages not available with other qualified plans. For example, small business owners can make large defined benefit-sized contributions with small 401(k)-sized costs for the employees. They can be used when employee cost is too large to make a traditional defined benefit plan appealing to the owner(s). When designed properly, the owner(s) contributions can exceed $100,000 per year and can even exceed their salary. A cash balance plan can be combined with a 401(k). A properly designed cash balance plan can make 90 percent of the contributions and benefits available to the owner(s) and/or preferred participants.

Self-employed Individual and Partnership Plans; Self-employed individuals and partnerships consisting of only owners and their spouses (i.e., no common law, non-owner employees) should consider the Micro (K) ®. For example, a one person S Corporation in which the sole owner has $116,000 of compensation paid on IRS Form W-2 can receive 25 percent of eligible payroll as an employer deductible contribution. Then the owner, as an employee, can defer salary up to $15,000 (2006 limit). Consequently, a W-2 $116,000 salary results in an allowable deductible contribution of $44,000. The calculation for a business entity that is not taxed as a corporation (no W-2 compensation) is not so simple, but the results are somewhat similar. This plan can also make life insurance tax deductible, if desired. Additionally, up to $50,000 can be borrowed from the plan.

Small Business Plans; Many small business clients have used a SEP-IRA or basic profit sharing plan for their retirement needs due to the simplicity and low cost of these designs. However, recent favorable tax law changes have made these designs less effective. Worse yet, if you have any eligible employees, these may be among the most expensive plans to fully fund. A Dash 401(k) is a much better alternative. One of the many benefits is a substantially lower employee cost. Unlike a SEP-IRA, a Dash 401(k) will allow you to borrow up to $50,000 from the plan. This allows a business owner to make the greatest possible contribution without tying up all of his money until retirement. The plan allows life insurance to be deducted, if it is needed. The Dash 401(k) is flexible.

For example, a business owner with a $100,000 W-2 wage has a staff member earning $40,000 in W-2 income while another staff member earns $25,000 in W-2 income. The Dash 401(k) would allow the owner a contribution of $45,000, while the workers’ contributions would be $2,000 and $1,250, respectively. This is a great way to maximize your business clients’ income and retirement security potential.

Additional Plan Options – If your client has a C Corporation and wants to get money out while obtaining a deduction, a §162 executive bonus plan could be considered. With this option money taken out of the corporation is a deduction. The plan can be discriminatory and the money can take the form of a bonus to the owner and/or key executive.

With these or any other type of plans, business owners must be careful when choosing a tax advisor. We are constantly called to help when a business owner runs into trouble. Many investment providers have entered the market with little emphasis on administration. A document may be provided, but no effort is made to monitor the calculation of allowable contributions. In addition, there is no built-in method for dealing with non-owner common law employees who are hired, or are improperly excluded because they are considered part-time or independent contractors. Many plans, especially 401(k) and profit sharing plans, quickly run unfavorably for reasons such as:

• Improperly excluded part-time employees.
• Improperly timed salary deferral elections and deposits
• Incorrectly calculated profit sharing contributions
• Incorrectly calculated loan amounts.
• Improperly managed loan repayment schedules.
• Incorrectly calculated incidental life insurance premiums.
• Improperly timed salary deferral elections and deposits.
• Improperly excluded newly eligible non-owner participants.
• Failure to make top-heavy minimum contributions.

The IRS, Department of Labor, and other regulators have increased enforcement and penalties. Some popular plans currently being sold are considered potentially abusive tax shelters, even putting the accountant at risk for penalties.
Remember, the time to handle potential problems is before they happen.

Give Your Personal Training Business Clients The Boot

I give you full permission to go ahead, and fire some of your personal training business clients. It is ok! Yes, I realize you don’t want to lose money. Yes, it is uncomfortable. However, you can’t afford to keep problem clients on your schedule. Allow me to explain.

If you are a personal trainer actively working in the industry you will eventually have a few “problem clients.” You know, the ones that cancel all the time, change your schedule, pay late, complain, and never give 100%. After training people for over 25 years you are bound to come across some paying fitness business clients that are difficult.

What about your personal trainer income? I know you don’t want to give the money up, but look at what the aggravation is costing you. Perhaps you can find another personal training business client to fill that time.

Your goal as a fitness professional is to only have what I call A, B, and C clients. A majority of your training clients will be C clients. These are the ones that show up a majority of the time, and give adequate effort. The A, and B fitness training clients are the ones that are above average. They are extremely committed, devoted, and enthusiastic in regards to your workout program. They make just about all of their appointments, treat you with respect, and put extreme effort in achieving results.

Your goal should be to either move D, and F personal training business clients up to C customers, or let them go. Remember, your time is valuable, and you should be investing it on those that are committed to success.

So how do you fire, or let a client go? First off, do it with class. Your goal is not to burn bridges. Remember, you are a professional. Here are a couple of ways to release problem fitness training clients:

1. Explain to them that they are not getting enough value because they are not able to commit fully at this time. Therefore, you can no longer take their money.

2. For people who cancel all the time say your lack of consistency is short circuiting your results. Therefore, I am not able to help you achieve your goals. Call me back when your schedule slows down so we can get back to work.

3. Simply tell the personal training business client that you feel they are not getting enough out of your workout sessions, and would recommend training with another trainer. Perhaps they can motivate you in another way.

The bottom line is be polite. Never burn bridges. It is also a good idea to give them warnings, and perhaps a 3 month trial before you decide to terminate your business – fitness trainer clients relationship.

Although it doesn’t happen often, there will be time when you are going to have to rid of a problem clients. It is best to prepare your personal training business now for it to happen.

3 Tips for IT Companies Making the Transition From Home to Business Clients

The owners of many IT companies and Managed Service Providers (MSP’s) start their careers by working as sole technicians, often serving the domestic market – fixing home users PC’s.

I myself found went down this route. For 3 years I provided support to a large number of home users, doing everything from setting up Wireless networks in homes, to fixing printers, to cleaning viruses infested PC’s (again, and again, and again it seemed… ).

But then a revelation takes place. You begin to appreciate that you don’t own a business, you own a job. You also realize that you are selling your time for money, and that if you want to earn a decent income, the low-rates you are charging to home users multiplied by the same amount of hours in each day mean that you’ll never reach your income goals.

And so you make the decision to start focusing your attention on the business market.

Here’s 3 tips for making the transition from working with home users to business clients.

Raise your rates

Home users are typically ultra price sensitive. You might be charging your existing home user clients anything from $60 an hour and lower.

Your instinct, therefore, is to charge something similar to this for business clients. You’ll struggle to believe that you can charge more than that for your services, based on what you currently perceive to be your own value.

This is a trap I’ve seen a lot of IT companies moving from serving the home user to business market fall into.

If you under-price your services, then you’ll cause a lot of potential clients to question why it is you are so cheap often significantly, you will be perceived to be offering good value and the amount of business you will win will increase.

Wait a minute! By charging more, I’ll win more business?

Absolutely. Do some market research and find out how much your competitors charge. Then at least match those prices. Preferably charge more. Then watch as you win more business.

Act Professionally

When dealing with home user clients, especially price conscious home users, it’s not so much who you are but whether you can get the job done – and cheaply.

When dealing with business clients, they want to know they are dealing with somebody trustworthy, legitimate and professional.

You can help to build this professional image and engender trust by taking a few simple steps.

  • Offer a landline telephone number, and not just a cell phone number. A single cell phone number suggests a sole Technician. A landline number is still much more trusted. If you’re worried about missing calls when you are out, employ the services of call answering service or utilize Voice-
  • Have proper business cards printed. While cheap flimsy cards are OK when you’re dealing with home users, if you offer a business a wafer-thin dog-eared business card to any typical business owner – they’ll immediately perceive you to be less than a stellar business owner.
  • Dress the part. Jeans and a polo shirt may have been OK up until now, but if you want to walk into business offices and be taken seriously – it’s time to consider your appearance. Dress for the location. If you’re working in a factory environment, a shirt with your logo on and smart trousers and shoes might be appropriate. If you’re working with a professional services client (such as an accountant or solicitor) then suit, shirt and tie might be more befitting. If in doubt, go with the suit.
  • Invoice promptly. And by promptly, I don’t mean a month later. Invoice the same day as you complete any work. This will ensure you have a better chance of being paid promptly while the work is fresh in the clients mind. Make sure you include your bank details and any other relevant information on the invoice. Ensuring you bill in a timely fashion for the work you’ve done shows you’re a serious business, not a part time hobbyist.

Give up servicing Home Users

Finally, and this is often the toughest step – you’ll need to give up servicing home users sooner rather than later.

This might be hard, especially when you’ve built a loyal portfolio of clients who need your help and who you are earning income from, but trying to juggle home and business users is a very, very tough gig and I’ve yet to find a successful IT company that does it well.

But just because you’re growing, doesn’t mean you need to simply dump your home user clients. Build up a relationship with another Technician in your area who is perhaps at an earlier stage of business evolution than you are. Start to sub-contract home user work across to them and when you’ve built up trust based on good quality work and professionalism – speak to them about handing over your home users.

You might come to an arrangement around referral payments, or you might prefer to simply know your old clients are being well looked after. Either way, you’ve found a good home for your home users.

Then, notify your clients that you’ll no longer be offering services to home users. Express gratitude for their long term support, and give full contact details of who they can contact for their future support requirements. Assure them they are in good hands, and that if they are unsure, they can still call you for advice.

Finally, make sure to let them know that if they want you to visit them in their business or work lives, you’d be happy to do that.

I personally won a lot of business clients based on home users I’d worked with before. If you make it explicitly clear that you’re now working only with businesses, you’ll find plenty of referrals based on your previous good work.


It might feel like a wrench to leave behind an often comfortable lifestyle business servicing home users, but ultimately, if you truly do want to stop owning a job and start owning a business – it’s a necessary step.

Custom Greeting Cards For Business Clients

Custom greeting cards is a great way to build a deeper relationship with your business clients. If you have a business, these cards come in handy as you give them to your clients. When they receive your greeting card, they are more inclined to remember you and might purchase from you again. You build a deeper relationship with your clients that will make them become one of your core customers.

Marketing wise, custom greeting cards with your logo and brand name can help clients remember your business. It really distinguishes your company from the competition (especially if the client uses another competitor’s product or service as well) since these cards show that you care about the client. Those kinds of little things add up.

Since these greeting cards are really important, it is wise that they are custom made to show your sincerity. If you make it very professional and of exceptional quality, it shows how professional your business is. Just by including your hand written signature in the card shows your sincerity.

Remember to send them all kinds of cards during the holidays or their birthday to make them feel all warm inside. These little approaches will build up a long term relationship with your clients. This is a good way to build a long term business, by personally interacting and giving small things to the client along the way.

These little personal touches make all the different. Don’t you feel the joy is whelming inside your heart when you receive custom greeting cards from a person you did business with a few months back? These are the little elements and approaches that help make your business stronger.