Business Adviser No. 10 Rio Grande Valley by CODESM

R I O G R A N D E VA L L E Y E D I T I O N

Issue 10 COMPLIMENTARY COPY

How to Execute Your

VISIONARY IDEAS AND MAKE OTHERS

ADDICTIVE PRODUCTS MAKING SURE YOU HIT HIGH SALES EVERY TIME

Believe In Them

JOSE

ORONA

Talks Business, Life, and Passion

Our Team

Editorâ&#x20AC;&#x2122;s Letter

STAFF

EMPOWERING SMALL BUSINESS

Andrew Yoo Maggie Yoo Oriol Zertuche John Amour

ADVISORY BOARD MEMBERS John Amour David Armstrong Alonzo Cantu Alfonso Cavazos Janet Cavazos Enrique Garza Marco Garza Albert Lopez Dr. Arturo Lopez Shavi Mahtani George Myers Dr. Teofilo Ozuna Carol Schmitt Danny Smith Andrew Yoo Maggie Yoo Jose Orona

CONTACT US In print, online, and in person, nobody connects the people, issues and ideas within valley business owners like Business Adviser.

First let me thank you for your continued support, we hope to establish Business Adviser Magazine as the single most important resource for business owners in the Rio Grande Valley. Our vision is to create a brand that would stand for everything business and support business owners with everything they require outside of their core disciplines. This magazine is the result of an ongoing demand for a reputable, responsible source for business knowledge and advise. The business world can be a scary place, with tough decisions to make and a tough road to success. We plan to ease these situations by providing an online and offline publication that will guide business owners of every level in their ventures. Our team consists of knowledgable entrepreneurs that eat, breathe and live business. With a dedicated panel of industry experts and a hands-on approach to answering business related questions, Business Adviser Magazine helps business owners stay ahead of the competition and empower them into success. Our mission is to inspire the entrepreneurial spirit and foster business growth by providing the resources needed for business owners to prosper. I personally invite you to join Business Adviser Magazine. We are sure that your business will benefit greatly from the exposure generated in this publication, building brand equity and establishing you as an industry authority. Sincerely,

Andrew Yoo, CEO & President andrew@businessadviser.co

In This Issue

6 10 14 15 16 22 24 28 30 32 40 46 50

Automated Tools Can Solve Your Networking Problems

Anyone Can Become an Enterpreneur, But Only a Few Are Born With It

BUSINESS LESSONS YOU CAN LEARN ON A GOLF COURSE

EXTRAORDINARY RESULTS WITH AN AVERAGE TEAM?

Five Simple Steps to Manage Your Business Finances Here’s How You Can Protect Your Invention

Addictive Products Making Sure You Hit High Sales Every Time Why Procrastination Can Be Worse Than You Think

What to Consider While Hiring People with Disabilities

STARTUP FOUNDERS AND TAX PROBLEMS

A Realistic Marketing Budget Can Go A Long Way

How to Execute Your Visionary Ideas and Make Others Believe In Them

WORK SPRINTS - LITTLE CHALLENGES CAN KEEP THEM MOTIVATED

JOSE ORONA TALKS BUSINESS, LIFE AND PASSION

Look Before You Take That Leap into Business Partnership How to Grow Your Business with the 80/20 Rule Not everyone is a candidate for supplemental insurance

Mortgage Tips for 2015

TO STRATEGIZE OR NOT TO STRATEGIZE?

TECHNOLOGY

AUTOMATED TOOLS

CAN SOLVE YOUR NETWORKING PROBLEMS

ant to find a better job or attract more clients? Networking is the key. This age old practice is still relevant today. However, now most people are busy and donâ&#x20AC;&#x2122;t have enough time for networking. If you are among the people who cannot find time to socialize, you have every reason to automate your networking. Technology has made networking easier. You can find many modern tools that would help you network with people. Here are five free tools that will allow you to automate networking.

EMAIL SIGNATURE Your professional email probably already has an email signature provided by your company. You need one for your personal email as well.

Your email signature should at least include your full name, email address, and phone number. You may also include the URL of your website or LinkedIn profile. This will help people find more information about your background. You can create your email signature template within your email provider. If you want more elaborate signatures, you should consider using a custom tool.

SCHEDULING TOOL You want to network, but you will probably have to send several emails to schedule an appointment. This can be quite time consuming. Using an online scheduling program, you can save a lot of time. Using these tools, you can initiate appointments and respond to invitations.

ALERT SYSTEM Natural networking involves reaching out to people when there is some news or a special event. For example, one of your contacts may have received a promotion or changed jobs. By sending them a congratulatory

message, you can foster your relationship with them. Social networks like LinkedIn and Facebook provide updates about professional happenings like promotions and personal events like anniversaries and birthdays. Google Alerts also allows you to follow specific people or companies for breaking news.

SOCIAL MEDIA DASHBOARD Social media dashboards allow you to post to your social profiles. You will be able to schedule shares in advance. This eliminates the need to visit your social networks each time you have to share something with your contacts. You can share your content and other interesting articles in areas related to yours.

CRM SYSTEM A customer relationship management (CRM) system helps you track your contacts information. You have to follow up if you want to reap the benefits of networking. You will have to remember your first meeting with that person, your subsequent meetings with them and follow up actions if any. A good CRM system will allow you to tag your contacts. You will also be able to include comments about that person. An Excel spreadsheet should be enough for most people. More sophisticated tools are also available for advanced users. You can talk to a vendor if you need customized software for your needs.

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INVESTMENTS

STRATEGY

There is nothing wrong with wanting to win, but on many occasions, this obsession with victory can make you commit several mistakes. Don't be afraid to lose while playing.

e’re all humans and we can’t be engrossed in work all the time. Sometimes we’re away for hours on end, and we might miss a few business opportunities in that time. But if those hours are spent on a golf course, you don’t really have to worry about the lack of connectivity – golf offers a great opportunity to build connections and network. Golf is a 4 hour adventure through greens, bunkers, and many other hazards. It is still one of the best ways to nurture and maintain relationships with potential clients. While playing golf with a prospective client, you get an opportunity to see their integrity and mannerism. You also get to know their reaction to success and failure. That said, deals are not normally closed on a golf course. If that is your sole intention, you will probably leave without signing a contract. That might even ruin your relationships with business associates or clients. Golf simply provides a low stress look into the minds of business executives. The sophisticated world of golf provides ample opportunities to network, and it is considered the best communication hub. Golf gives you an opportunity to study how a person behaves in an adversity. Don’t worry about their sporting skills. It is equally important that you do not

Golf gives you an opportunity to study how a person behaves in adversity. take the game or yourself too seriously while playing golf with a potential client. Your goal should be strengthening the business relationship. Here are the top 5 business lessons you can learn from golf.

GIVE A FIRM AND SINCERE HANDSHAKE While shaking hands with someone, grab a firm hold and look the person in the eye. A person’s handshake will tell you a lot about them. Make sure to leave a long lasting impression.

DON’T DWELL ON YOUR PAST VICTORIES You may have achieved several victories on the course, but when you are out there playing another round of golf, you have to be completely ready. Forget about yesterday and deal with the present challenge.

COME PREPARED To achieve success you have to do a lot more than just show up and try for the best. You should begin the preparation weeks in advance. This applies to business as well. Whenever you’re in a business or golf battleground always be prepared.

DON’T BE AFRAID TO LOSE There is nothing wrong with wanting to win, but on many occasions, this obsession with

victory can make you commit several mistakes. Don’t be afraid to lose while playing. In business, too, you should be ready to take chances and fail. This will make your victories sweeter.

MAKE FRIENDS WITH YOUR ENEMY It is possible to build a great relationship with your rival. Just because you are enemies on the course does not mean that you cannot be friends off it. In business, too, don’t regard your competitor as your enemy. Treat them as a challenge that encourages you to work harder. Follow these tips on the golf course and you’ll get to learn a lot from great minds.

LIFESTYLE

ANYONE CAN BECOME AN

ENTREPRENEUR, BUT ONLY A FEW ARE BORN WITH IT An entrepreneur should be able to embrace adversity and use it as an opportunity to grow.

o create something out of nothing you need that entrepreneurship spirit. While it is true that many people want to be entrepreneurs, very few actually possess that drive. Right since our childhood, we have been told to get a good education and secure a great job. Entrepreneurs think somewhat differently. They don’t seek jobs; they want to create them. And they don’t mind working harder and harder to accomplish their goals.

WHO IS AN ENTREPRENEUR? An entrepreneur is a person who starts an organization or a business. S/he develops a business idea, acquires human capital and other resources, and is responsible for the success or failure of the business venture. It seems like fun, and it IS, but it’s also a huge responsibility. When you are an entrepreneur, you’re your own boss and you are responsible for both successes and failures. Most people simply can’t accept this responsibility and hence they choose to work for other people although the payoff will be much better if they work for themselves. On the flip side, this payoff might not be steady, and may take a lot of hard

work in the beginning. There are also people who would like to become entrepreneurs, but don’t know whether they have the right skills and personality traits. Here are ten signs that you’re a born entrepreneur.

YOU ARE FEARLESS

Entrepreneurs see opportunity in adversity. They are the ultimate optimists because they believe that even if something looks risky, they will be able to turn that into their advantage. They will do just about anything to execute their ideas and plans even if that means selling their home.

YOU ARE WILLING TO WORK HARD

YOU BELIEVE IN DOING

If you are a born entrepreneur, you won’t get discouraged when you make a mistake and fail. Entrepreneurs keep trying until they succeed.

You can learn about entrepreneurship from books but that knowledge isn’t complete. There is nothing like the experience of actually launching a business and propelling it to success. Very few people are capable of turning their first business venture into a success. Most of them have to face many failures before they can ultimately taste success. A real entrepreneur isn’t discouraged by setbacks.

YOU INVITE FEEDBACK

As an entrepreneur, you have no one to answer to. You are your own boss. As a result, you should be able to analyze your performance on your

own. You have to ensure that you are doing your best. So, you should be willing to accept feedback from your colleagues, customers, and mentors.

YOU’RE RESOURCEFUL

As an aspiring entrepreneur you will probably not have access to the best resources. That is why you should be able to make the best use of available resources.

YOU’RE GOOD AT HANDLING MONEY

The purpose of running a business is to generate revenue. If you are good at managing money or are always exploring

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LIFESTYLE

ways to increase cash flow, you probably already possess that entrepreneur spirit.

YOU’RE MOTIVATED BY FAILURES AND CHALLENGES

If you always take the easiest way out, you will probably not make a good entrepreneur. An entrepreneur should be able to embrace adversity and use it as an opportunity to learn and grow.

YOU’RE INSECURE (SOMEWHAT)

Most successful entrepreneurs are afraid of failure. They want to succeed at any cost. They are insecure at heart.

It is this fear of failure that keeps them focused on what they need to do to succeed. They use their fear and insecurity as tools to propel them ahead.

YOU FULFILL THE EXISTING NEEDS

In order to be a successful entrepreneur, you should be able to provide people what they need. Your product or service should solve a problem that customers already have.

YOU ARE DIFFERENT

way you work or conduct yourself. This lack of acceptance should drive you to work harder to achieve your goals. Entrepreneurs don’t stop until they reach their destination. And they do things differently.

BOTTOM LINE Entrepreneurship is the only reason behind the great products and services that we enjoy today. Look around. It isn’t hard to see that all that we enjoy and own today are the vision of great entrepreneurs who dared to dream and think differently.

If you are an entrepreneur, people may not always appreciate the

DREAM OF

EXTRAORDINARY RESULTS BUT HAVE AN AVERAGE TEAM? HERE’S HOW YOU CAN FULFILL YOUR DESIRES

A good leader can achieve extraordinary results by bringing ordinary people together. ou need extraordinary results – results that make you an achiever, but everyone in your team isn’t the same. With just average employees, can you really achieve outstanding results? Yes you can. A good leader can achieve extraordinary results by bringing ordinary people together.

Many organizations lack the financial muscle required to hire the best talent. To hire the best people, you will have to pay much more than what your competitors pay. A better and more practical strategy is to employ hardworking people and provide them with the right training and tools. Here is how to achieve stupendous success with a team or hardworking, yet ordinary people.

MANAGEMENT

YOUR EMPLOYEES ARE NOT MACHINES They are unique in many ways and don’t necessarily fit into cute little boxes. If your team consists of several people who look and act similar, it probably means that they were forced into tiny boxes that limit their performance.

KNOW WHAT MOTIVATES YOUR PEOPLE People are motivated by different things. To bring out the best in your employees, you should know what motivates each one of them. Most organizations don’t bother to do this. That is the main reason they fail to achieve great results.

SHOW THEM THE PURPOSE Money is the biggest factor that motivates most people. After all, everybody has to make a living. But money isn’t everything. Your people will work harder and better if you show them the

purpose of their work. The purpose has to be meaningful and substantive and it must reflect the values that represent your organization.

GIVE THEM A VOICE The loudest voices aren’t necessarily the wisest ones. If you want to bring out the best in each one of your employees, you should let them express their views publicly as well as privately. Let them speak at a meeting or post their views on your company website. Let them contribute in whatever way they can.

LET THEM BE THEMSELVES Leaders who lack strength and imagination want their employees to behave like them. They fail to understand that there are several paths to success. Your people don’t have to dress, talk, or work like you.

TREAT YOUR PEOPLE WITH RESPECT Show faith in their capabilities. When the organization trusts their skills, they will feel more confident.

RAISE YOUR EXPECTATIONS When your expectations are high, your team will rise to meet them. On the other hand, if your expectations are low, they will only sink. But don’t raise them to unattainable levels.

BE LOYAL Show loyalty even when the business is going through a bad phase. Don’t assume that loyalty is dead. It isn’t. If you show loyalty to your employees, they will show the same to you. An organization that understands loyalty has an unfair advantage over other organizations that do not understand it.

BE CONSISTENT Don’t set contradictory goals. You can’t seek excellence when your systems are sub-par. An organization that seeks excellence should invest in state-of-the-art tools and systems. If your employees have access to the right tools, they will be able to keep your customers happy.

FINANCE

FIVE SIMPLE STEPS TO MANAGE YOUR BUSINESS FINANCES

hen you launch your business, one of your first priorities must be managing your finances. As a startup owner, you will probably not have enough resources at your disposal. That explains why you should employ sound accounting strategies right from the beginning. Here are five steps that startups should follow to maintain good financial health.

THINK BEFORE ORGANIZING

Many businesses simply start as limited liability companies (LLCs). However, this is not always the best form of organization. Your decision to operate your business as a sole proprietor, C Corporation, S Corporation, or LCC has different tax implications. Also, the liability protection

offered by various organizations is different. If you incorporate, it won’t be possible to become an LLC later. That is why you should have a thorough understanding of the different business structures.

KNOW WHAT YOUR TAX RESPONSIBILITIES ARE

Your tax liabilities depend upon the state where you plan to operate and the kind of business you launch. If you employ people, you will probably also have to pay worker’s compensation. If you don’t pay your taxes because of your ignorance of these responsibilities, you will be subjected to expensive penalties and interest.

KEEP TRACK OF YOUR EXPENSES

The reason that most businesses fail is their inability to con-

trol cash flow. When you fail to keep track of your expenses, you will miss out on invaluable deductions that will save you lots of money on tax bills.

TAKE ADVANTAGE OF TECHNOLOGICAL ADVANCES

Accounting programs like FreshBooks or QuickBooks are quite helpful for organizing your finances. Also, when you use software programs like these, you will not have to do much financial organizing when it is time to submit your tax return. You will also be able to save money on accounting fee if you can give digital documents to your tax preparer. Apps like ProOnGo and XpenseTracker help you organize your receipts, track spending, and log mileage. When technology is readily available, you can’t afford to ignore it.

ENSURE THAT YOUR BOOKKEEPING PRACTICES ARE FLAWLESS

Perhaps the biggest mistake that most startups make is ignoring their finances at the beginning. The processes involved in launching a business can be overwhelming for most entrepreneurs. Some business owners assume that their businesses are too small and hence they do not need to follow formal bookkeeping practices. Whether you run a small startup or an established business organization, good bookkeeping practices will save you from racking up penalties, late fees, interest, and other unnecessary expenses.

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TAXES AND LAW

HERE’S HOW YOU CAN

PROTECT YOUR

INVENTION: INNOVATIVE MINDS NEED PATENTS FOR SAFETY

here are very few people who can actually come up with creative ideas that can be turned into groundbreaking inventions. If you are one of them, what are you waiting for? Turn your idea into a fabulous product or concept and become the next ‘business magnate’. But before you start knocking on the doors of companies, there’s one very important task that you need to accomplish – the task of protecting your idea. There are two ways to turn your idea into an invention – by producing it yourself or by licensing it to another organization/individual. Both the cases require you to prove that this idea exclusively belongs to you. How to do that? By getting it copyrighted. You’ll have to visit the US Patent and Trademark Office and file a patent. Here are a few pointers that’ll help you through this process –

DOCUMENT ‘EM – Jot down everything related to your idea on paper. This includes the basic concepts of the invention, how it’ll work, and how you’ll produce it. Avoid ‘poor man’s patent’ in which the inventor writes down the idea and mails it to himself. Instead, write all the details in an inventor’s journal. Make sure your journal is duly signed by an eyewitness.

WEAR YOUR RESEARCH GLASSES – Before getting your idea copyrighted, research about it thoroughly. Make sure your idea is an original concept. If it already exists, you can’t file a patent for it. You also need to research the market before deciding whether to produce the idea commercially or not. On an average, 90 percent of the inventions fail to make a mark commercially.

Make sure your idea is an original concept. If it already exists, you can't file a patent for it.

A PROTOTYPE BEFORE YOU GO – Inventors make the mistake of fashioning a prototype after they’ve got the patent rights. You need to first make the working model of your invention and then apply for the rights. If you introduce changes in your invention after filing for a patent, you can lose rights for your invention. Make sketches of everything in your journal and create a 3D model with whatever resources you currently have. You can also create an animated (virtual) prototype of your invention.

AND NOW FILE FOR A PATENT – There are two types of patents you can file for – utility patents, which are applicable for processes or machines and then there are design patents which are used for copyrighting ornamental designs. Get your file looked over by a registered patent attorney. If there’s a loophole in your application, a competitor will use that opportunity to copy your invention.

BUSINESSES NEED TO BE PLANNED – Now that you’ve safeguarded the invention, create a solid business plan of how you’ll produce and market the invention. Get your resources in place and start the manufacturing process.

STRATEGY

ADDICTIVE PRODUCTS MAKING SURE YOU HIT HIGH SALES EVERY TIME

ACTION The action phase, which follows the trigger, encourages the user to do something to get a reward.

There was a time when man controlled technology. In the modern times, technology controls man. Imagine a life without technology – no Google, Facebook, smartphone apps, or anything technological. It’s not just difficult, it’s nearly impossible. When we feel lonely, we log into our Facebook account. When we are bored, we watch funny videos on YouTube. Websites like these are so addictive that they have become an integral part of our lives. How do companies create such products?

FOUR ELEMENTS TO CARE ABOUT Successful companies incorporate four key elements into their products or services to hook millions of users. Companies like Google, Facebook, Twitter, and Apple have already mastered this technique. By understanding this technique, next generation startups can also emulate their success. There are basically four steps to creating the hook. These are the trigger, action, reward, and investment. Using these four elements, companies can alter user preferences and form habits.

1 TRIGGER The first of these four steps is the trigger. The trigger is what brings the user close to an action. Addictive products tend to create associations with a familiar routine, a situation or a painful or negative emotion. The user's subconscious urge to satiate that emotion forces them to use the product repeatedly.

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STRATEGY

REWARD Sometimes the user will get the reward, and sometimes they won't. This will encourage them to continue their hunt for more rewards which will increase attention and engagement.

Take for instance, the case of Twitter. The trigger that encourages most people to use Twitter is killing boredom. To kill some time and to get entertained, a user will open the app and start scrolling. They are now in the action phase. The act of scrolling and reading will relieve their boredom a little. This is the reward. Their search for more rewards will encourage

But these are all a little sinister, aren't they? Before the advent of information technology, businesses achieved success by building products that consumers loved and benefitted from. And to create engagement with the consumer, they provided superior after sales service. In a way, this hook system has killed the free consumer choice. It is too mechanical and exploits the vulnerabilities of the consumer. On the flip side, technology has presented numerous opportunities for entrepreneurs. By using these prin-

Before the advent of information technology, businesses achieved success by building products that consumers loved and benefitted from. And to create engagement with the consumer, they provided superior after sales service.

4 INVESTMENT Following the reward phase is the investment step. If a user puts something into the product, they are more likely to return. When a user does all of these things, they will come back again and again.

them to continue reading and scrolling. This creates social interaction. The user enters the investment phase when they follow somebody, reply to a tweet or retweet something. All of these things will encourage the user to come back and use the product again and again. Over a period of time, they will acquire a number of followers who will read a person’s tweets, which will give the user a sense of accomplishment, thus compelling them to stay. That’s the basic principle of Twitter. You join it so that you can kill time, but when you get followers, you get addicted to it. The same pattern will work in the case of offline products as well. However, in this case, the reaction is likely to be slower.

ciples, all entrepreneurs can create products the whole world gets excited about. As for the consumers, well, if they don’t want to be controlled by technology they should understand how these products influence their behavior. This would not be possible if they didn’t know how these products work.

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INVESTMENTS

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INVESTMENTS

LIFESTYLE

WHY PROCRASTINATION CAN BE WORSE THAN YOU THINK We all know that procrastination is not a good thing, but we don’t really care about timeliness as much as we should.

We all know that procrastination is not a good thing, but we don’t really care about timeliness as much as we should. Usually, people who are stuck in the vicious circle of procrastination understand the challenges it brings along. But there are many of us who don’t even realize what’s going wrong and why things are being delayed. Let’s analyze.

WHY PEOPLE PROCRASTINATE Why someone procrastinates depends on that person’s personality, the circumstances they might be facing at the moment, family history, personal goals, values, and even on certain biological factors as well. When you are stuck in the circle of procrastination, you feel you are the only person who is unable to do things the way you want. But we’ve all been in situations like these. So remind yourself that you are not the first one to face these kinds of setbacks, and there’s always a way out – you just have to look for it.

THE CIRCLE OF PROCRASTINATION YOU PLAN A MOVE – You feel energized and eager to execute a plan which you’ve just devised. You feel confident and optimistic that the plan will work. DOUBTS START TO CRAWL-IN – Just when you thought you’ll do it this time, apprehensions start to interfere with your confidence. The initial stage of optimism starts trembling

and you realize that the time is short and there’s a lot to achieve. YOU COULDN’T TAKE AN ACTION – More and more time passes by, but you just can’t decide what to do and even if you know what to do, you are unable to do it. You start to panic and a certain feeling of anger and frustration starts building inside you. LAST HOPE DIES – The deadline is just around the corner. You can still do the job if you fight really hard, but your mind is too occupied, dealing with frustration and disappointment. YOU MAKE PROMISES – As soon as the feeling of frustration and despair dies, you promise yourself that you won’t let it happen again, ever!

DEFEAT THIS HABIT If you want to defeat procrastination, you need to break the cycle. The moment you feel energized and optimistic about an idea, start planning how you’ll execute it. Identify why you procrastinate each time you’ve been given a job, and accordingly find a cure for it. It might take some time, but with patience and strong willpower, you’ll overcome this problem. So the next time you find yourself trapped in the circle, consciously choose to break it as soon as you realize it. With a few successful attempts, you’ll find that you have stopped procrastinating.

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MANAGEMENT

WHAT TO CONSIDER WHILE HIRING PEOPLE WITH

these misconceptions out the windows and treat the applicant with a disability just like any other applicant.

ON THE JOB

DISABILITIES

If the best candidate for the job has a disability, the employer should not hesitate to hire them. And after hiring, the employer should integrate the new employee into the team. Just because an em-

If the best candidate for the job has a disability, the employer should not hesitate to hire them. ployee has a disability, it does not mean that they should be given special treatment. The employer should provide honest feedback. The fact that the employee has a disability should not discourage the employer from discussing their performance honestly. Constructive feedback is essential for the development of all employees.

here are many people who hire people with disabilities, and there are many reasons behind it. If you hire a person with a disability, it makes them feel confident about themselves, but that is not the only reason why you should hire differently abled people. People with disabilities have unique perspectives and skills that businesses find invaluable. They are good at overcoming obstacles. For example, people with developmental problems like autism are meticulous and honest. These are the qualities that many organizations look for in employees. This is a clear indication that giving people with disabilities an opportunity is much more than a conscien-

COMMON MISTAKES tious thing to do; it also makes sound business sense. However, organizations that are keen on hiring differently abled persons still face several challenges. They have to find the best ways to address their unique needs and make them a part of their team.

HANDLING THE INTERVIEW When a candidate with a disability turns up for an interview, the interviewer has to be careful about discussing their physical challenges. They have to be aware of the legal constraints. The interviewer should do their research and familiarize themselves with relevant laws. The Americans With Disabilities Act (ADA) insists that the interviewer should inquire about a disability only

if the applicant has a visible impairment. If the candidate has a visible impairment, the interviewer can ask them about their abilities and any special accommodations they will need to succeed in the workplace. When the interviewer asks the employee if they will need any support, the employer will get to know if they will have to make any modifications. The employee will also appreciate this because knowing that they will be offered the required modifications will help them feel better. The interviewer should also check their preconceptions. When a potential employee walks or speaks slowly, the interviewer may take longer to realize that they are not intellectually impaired. A good hiring manager should throw

The hiring manager will probably only have the best intentions. Still, they can make mistakes while interviewing a candidate with a disability. Sometimes, they unintentionally focus on the disabilities rather than the abilities. This is a mistake. The business should be able to look at the disability as strength and not a weakness. Small businesses can provide the right environment for people with disabilities as they are readily adaptable and more flexible. Big companies may have more resources, but they find it rather difficult to adapt because they are larger and may have difficulty communicating with all of their employees. Regardless of an organization's size, an open mind is key to successful hiring of people with disabilities.

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S P I T N O I T A R SOME PREPA

S R E D N U O F P U T R A T S S M E L B O R P X AND TA

STARTUPS

As a startup owner, you have your hands full. From hiring employees to lining up resources, your to-do list would be ridiculously long. However, just because you are busy with startup tasks, you can't ignore your tax responsibilities. Here are five tax preparation tips. HIRING SUBCONTRACTORS VS. EMPLOYEES Your business needs manpower. But will you hire subcontractors or employees? Subcontractors work from their home or office. Employees, on the other hand, work regular hours specified by the organization and they receive regular checks. Generally speaking, employees are more expensive than subcontractors. You should not mix up the two. If you do and the IRS decides that a particular worker is an employee and not a subcontractor, you will invite hefty penalties.

KEEP PERSONAL ACCOUNTS SEPARATE FROM BUSINESS ACCOUNTS

that it will succeed. However, that is no excuse for running your startup from your personal account. You should open a separate business checking and savings account and ensure that the income and expenses generated by your business come out of it. There should be no personal withdrawals in your business bank statements. If you mix personal and business funds, you will probably find yourself in business tax debts.

ORGANIZE YOUR PAYROLL

fill in a W4 form for federal income tax withholding. Also the employer will have to pay the Medicare and Social Security payments of the employer. You will have to deposit this payment to the IRS. Hefty penalties will be assessed if you make the payments one day late. Unemployment returns have to be paid. States and local governing bodies may also require regular filings and deposits. In addition, you will have to pay W2 and W3 forms with the Social Security Association. If you don't understand these requirements, you should hire an accountant.

TAKE ALLOWABLE DEDUCTIONS For a startup, taking the allowable deduction is very important. The expenses you incur while launching your startup can be used for tax deduction purposes.

CLAIM DEPRECIATION The value of your assets will depreciate over time. The IRS says that tangible items such as machinery, buildings, ve-

hicles, furniture, equipment, and buildings are depreciable. Intangible items like software, patents, and copyrights are also depreciable. Make sure that you claim depreciation on both tangible and intangible items. It is true that new entrepreneurs have quite a few things to do. However, this is no excuse for ignoring tax planning.

There should be no personal withdrawals in your business bank statements. If you mix personal and business funds, you will probably find yourself in business tax debts.

The IRS wants to ensure that you pay your dues. When you hire employees, you will have to deal with scheduled payments and lots of tax forms. Each employee has to

When you launch a business, you can't be 100 percent sure

MARKETING

A REALISTIC MARKETING

BUDGET CAN GO A LONG WAY

arketing is necessary for all industries, but if you donâ&#x20AC;&#x2122;t want to go overboard with your expenses, you need to have a realistic marketing budget. You need a marketing budget to prepare a realistic plan of action which will help you generate more revenue. If you don't have a budget, you may overspend on your marketing costs. There are basically three steps when it comes to creating a marketing budget.

1. ORGANIZE YOUR FINANCIAL DATA The first step is to organize your existing financial information. If you work around estimates, you will find it difficult to prepare a realistic budget. You have to organize your revenue information to know your financial situation. You should find out how

much money your business generates in a month. You should also be aware of the variations in revenue. You have to organize your information on the basis of the reliable revenue. This is the minimum amount your company generates in a month. So, for instance, if your revenue ranges between $8,000 and $10,000, your reliable revenue is $8,000. The next step is to calculate your disposable income. To do this, you only have to subtract expenses from the reliable revenue. Now you have to decide where this money should go. You can't spend the whole of it on marketing. You need to set aside some money for meeting unexpected expenses as well. Decide how much money you can spend on different sectors. If your primary objective is attracting more clients, you can spend more money on

marketing. If you want to hire new employees or set up another office, you will have to spend more of your disposable income on growth.

2. DECIDE HOW YOU WILL SPEND YOUR MARKETING FUNDS Once you have determined how much money you can spend on marketing, you have to decide how you will spend that money. If your marketing budget is modest, you will have to consider online ads, small print ads, and email marketing to attract more clients. If your marketing budget is huge, you will also be able to consider television and radio ads. The size of your budget cannot be the only factor that determines how you will spend the money. You must also consider marketing strategies that increased revenue

in the past. The next step is to identify the marketing channels that will help you reach your target audience. Try to find out which newspapers your targeted audience reads and which websites they visit. You should show your ads on these platforms. Before spending huge amounts of money on a new marketing platform, you should test whether that platform will help you get more clients.

3. ASSESS PERFORMANCE Analyze the performance of your marketing methods. Do they attract new clients and generate more income? If they don't, you need to try other methods. The goal of marketing is to bring in additional revenue. If a particular strategy does not produce the desired results, remove it and try something else.

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MANAGEMENT

How to Execute Your

VISIONARY

IDEAS and Make

Others Believe In Them People do not care what you do. They are only interested in knowing why you do it.

greed, you have a great vision. You are passionate about it, but do you know how to execute it successfully? There has never been any shortage of visionary ideas. The problem is the shortage of visionaries who can actually execute those ideas successfully. You might have a great idea; however, this does not mean that you possess all the skills required to execute it. Many visionaries are not capable of executing the idea themselves but they know how to find the right people who can execute them. Remember that very few people are equipped with the right combination of skills, knowledge, and wisdom to accomplish it all. A leader who has the right vision and the ability to execute it is a rare phenomenon. So if you’re someone who can come up with great ideas but lack the skills to execute them, you should surround

yourself with people who can execute those ideas. Here are some steps to building a launch-pad for your visionary ideas.

LEARN TO COMMUNICATE YOUR IDEAS WELL You have probably come across people who can talk about the importance and viability of their mission for hours on end. Of course, this shows how passionate they are about their ideas. Unfortunately, most of them cannot express their idea convincingly and succinctly. In order to attract investors, partners, great employees, and customers you should be able to express your passion. You should be able to express ‘why’ you want to do it. People do not care what you do. They are only interested in knowing why you do it.

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INVESTMENTS Write down all the reasons that make your vision important. For each one of your reasons, ask ‘why?’ Ask yourself why you care about your vision, why it is important and why others should care about it.

attract investors and afford great employees. To scale successfully, you have to ensure that everyone who is on board believes in your mission.

FIND OTHER BELIEVERS

As your team grows, you might make the mistake of micromanaging them. Instead, you should arm them with the right knowledge, tools and motivation required to get the work done. You should have a clear understanding of the values which support your mission. Don’t forget to bring them into your business and develop a culture which supports your ‘why.’ Even if you have a great platform to execute your vision, you will fail if you do not trust your employees. The lack of trust will prevent your employees from executing your vision for you. This will ultimately prevent or limit your growth.

You don’t necessarily have to execute every detail on your own. You can always find other people who believe in your dreams. Hire someone who possesses the skills that will free you from doing what you should not be doing. If you are on a tight budget, consider hiring freelancers. When you manage to find enough time to work on things that will help generate revenue, you’ll be able to

EQUIP THEM WITH THE RIGHT TOOLS

DON’T TAKE IT PERSONALLY As you seek partnerships, engage with your customers and hire employees, you will have to face many objections and challenges. Since you’re emotionally attached to your vision, you may take these objections personally. This behavior will only alienate others. Instead, learn to anticipate every possible challenge or objection. Respond calmly. Your responses should support your ideas and decisions. This, however, does not mean that you should ignore the ideas, opinions or concerns that others bring to your attention. Many of these may be worth considering. In order to build a great toolbox, you should learn how people of different learning styles and personalities work. Some people may drive you mad but try to understand

There has never been any shortage of visionary ideas. The problem is the shortage of visionaries who can actually execute those ideas successfully. them. Proper communication may help bridge the gap between you and them. An aspiring leader can find plenty of resources to horn their skills. To start with, read the biographies of serious entrepreneurs.

STRATEGY

LOOK BEFORE YOU TAKE THAT LEAP INTO

BUSINESS PARTNERSHIP

When you launch a business, you are full of optimism. You believe that nothing will possibly go wrong and if it does, you and your partner will handle the situation together. However, in real life, the situation is different.

any startups don't have important agreements and documents in place when they start out. During the initial stages, they simply don't feel the need to put important terms in writing. Their enthusiasm deludes them into thinking that such formalities aren't necessary. At this stage, they don't want to spoil the thrill and excitement of getting the new venture off the ground. However, none of these are valid excuses for not having proper documentation in place. If you are serious about your business, you should have important incorporation and basic partnership papers outlining each partner's roles and obligations. You should also have other agreements specific to the kind of business. This will prevent problems down the lane. Companies that have employed lawyers and have proper agreements in place are far more likely to succeed that those that don't have any documentation in place. If you leave room for ambiguity, there will be conflict. Besides specifying the role

of founders, partnership and incorporation papers explain what will possibly happen if there is a change in the core principles or if the company shuts down altogether. Then there are cases when people relocate, or even die. That is why having a buyout clause is a necessity. When an organization fails, it may leave behind valuable assets that need to be distributed or sold among the owners. If you discuss these things beforehand, you will be able to save time, resources, and bitter feelings later. You have to negotiate agreements at the beginning itself. Ideally, this should be done before opening the business. In case you didn't do that, you have to ensure that all agreements are in place before the business takes on debt or accumulates value. When the business gains value, things will begin to get touchier. It is important that you prioritize these agreements early on.

HOW IT WORKS Since businesses and business partnerships are governed at the state level, rules can vary depending upon the area where you operate.

HERE'S THE DEAL When two people launch a company, they are said to enter a general partnership that requires them to share the assets, profits, and liabilities equally, unless they put their signature to another agreement which states otherwise. The simplest business model is sole proprietorship. A general partnership, on the other hand, shares ownership among two or more persons. It doesn't provide any protec-

tion against personal liability. So, if someone wins a lawsuit against the business, the personal assets of the partners may be forfeited. The obligations and tax liabilities usually depend upon the kind of business you have incorporated.

LIMITED PARTNERSHIP In the case of a Limited Partnership, the investors have limited liabilities. A Limited Partnership business

If you are serious about your business, you should have important incorporation and basic partnership papers outlining each partner's roles and obligations. has two kinds of partners: General partners and Limited partners. General partners retain liability and make the decisions. Limited partners contribute most of the money, but their liability is limited. The partners will have to pay tax on their individual share of profits. Most investment companies have this structure.

LIMITED LIABILITY COMPANY (LLC) In the case of a Limited Liability Company, the founders are allowed to form an independent entity that has limited

liability. This will protect their personal assets from forfeiture in the unfortunate event of bankruptcy or a lawsuit. Each owner has to pay taxes on their share of profits. C Corporation: The most common kind of corporate structure, the C Corp allows owners to set up a distinct legal entity which has its own tax obligations and risks. A C Corp can be set up inexpensively. It is particularly helpful for large organizations that seek flexibility in ownership. S Corporation: Much like a C Corp, an S Corp allows the

owners to establish a separate company that has its own liability. However, this structure passes the tax liabilities to each investor. If the business is interested in taking on outside financing, this structure can make it difficult. Depending upon the structure of your company, youâ&#x20AC;&#x2122;ll have to pay taxes and handle the finances. It is possible to customize the agreements for establishing these structures to account for management changes that might arise in the future. Besides these agreements, you

may consider preparing other agreements. For example, a noncompete agreement may prevent a key employee or a founder from leaving the company and working for a competitor. The nondisclosure agreement may help protect individual property. The power of attorney will give the other partner(s) the ability to make business decisions if one of the partners is incapacitated. In the case of an arbitration agreement, the partners agree to send disputes to an independent arbitration panel.

MANAGEMENT

WORK SPRINTS LITTLE CHALLENGES CAN KEEP THEM MOTIVATED If you challenge your employees with long work weeks or late nights, you can expect to encounter some trip-ups. There are, however, some tried and trusted tactics that you can use to make sure that your employees are happy and healthy.

ou can’t quite call them sprints; they are rather like fun runs through the park. They are little work challenges that keep up the motivation – quite like video games. If you challenge your employees with long work weeks or late nights, you can expect to encounter some trip-ups. There are, however, some tried and trusted tactics that you can use to make sure that your employees are healthy and happy. And then they will look forward to your sprints instead of running away from them.

USE SPRINTS SPARINGLY In a bid to make huge profits, some startups work 7 days a week for several months. Unfortunately, after a while, their productivity will decline because of the mental drain. Their morale may also take a beating. Sprints can’t be your long term strategy. They should be short-term. Use them sparingly. If you don’t use them correctly, you won’t be able to take advantage of their strength. Sprinting is fine if you want to redesign your site or system or make big architectural changes, but it’s not fine if you ask them to sprint non-

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stop for a year. That’s just an unattainable goal! Keep it real, keep it short.

PLAN AHEAD You should tell your team what is coming, at least a few weeks in advance. If you are planning a site redesign that will require your employees to work overtime, let them know weeks in advance. This will allow them to prepare for this time. Your employees have their own personal commitments. By informing them weeks or months in advance, you show them that you respect their private lives. After making the announcement, you should ask your employees if they want to request days off during this time, because you won’t be able to give a time-off in the busy season.

MAKE A CALL FOR IDEAS Make a call for great project ideas. Ask your team members to submit their ideas. When you give them an opportunity to contribute to the project and become an indispensable part of it, they

will be more enthusiastic about your sprints. If you are truly generous, don’t hesitate to honor your employees with the ownership of their ideas.

SET A TIMELINE Organize a team meeting and let them know what your expectations are. Tell them that they will be working for a certain number of hours per day for a certain number of days per week to accomplish a certain goal. It is okay to be slightly negotiable. However, if you believe that your employees can achieve this, don’t pay heed to minor objections. Clearly explain what you expect from your team members and specify a timeline. Don’t forget to keep everybody updated.

HAVE FUN WITHOUT LOSING STEAM Do whatever you can to keep your people motivated. Offer snacks with project updates. This is not exactly a revolutionary idea, but your team will readily appreciate the breaks on a long working day. Reward employees with a gift

certificate or something like that for delivering exceptional service. You should also celebrate important milestones. Do whatever you can to share successes on a regular basis.

GIVE WHAT YOU WANT If you expect your employees to give their 150%, you should also be willing to do it. Lead by example. Show them how they can accomplish the goal without upsetting their work/life balance.

DON’T LOSE FOCUS You should know how to deal with distractions. Your goal should be making progress. This might involve cutting a few projects. Be flexible. If an employee can’t make it to the office, allow them to work from home. After finishing the sprint, let your team enjoy their life outside of work.

Lead by example. Show your employees how they can accomplish the goal without upsetting their work/life balance.

COVER STORY

If you are an entrepreneur or business owner trying to figure out how to grow your business, you'll want to read about how Jose and the Texas Nexus Business Group are making their dreams come true.

J JOSE ORONA TALKS BUSINESS, LIFE AND PASSION

ose Luis Orona, founder and President of the Texas Nexus Business Group, sees himself as just an average guy who was fortunate enough to be introduced to a couple of great business opportunities. He chose to take advantage of both, first one, then the other, and those two choices have made a world of difference in his life and the lives of many others. If you are an entrepreneur or business owner trying to figure out how to grow your business, youâ&#x20AC;&#x2122;ll want to read about how Jose and the men and women of the Texas Nexus Business Group are making their dreams come true. They are all ordinary people, but they have extraordinary vision. How did you get started in the insurance industry? Iâ&#x20AC;&#x2122;m sure every young man wants to make his mark in the world, at least his small part of the world; I know I did. So I made a commitment to attend college, and I chose Texas A & M University, to get a degree in engineering. While I was there, I heard about a unique opportunity with the Southwestern Company. They hire college students every summer to sell educational materials door-to-door. I jumped at the opportunity, not having any idea of the impact that decision would have on my future. During the four summers I worked with Southwestern, I worked a mind-blowing number of hours every

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COVER STORY

week, and it helped me develop a strong work ethic, and I learned how to be coachable. The most important thing I learned through my Southwestern experience was how to accept 100% responsibility for my results. I really thrived at Southwestern, becoming a team leader and making a great income every summer to pay for my fall and spring semesters at Texas A & M. After graduation, I actually turned down ALL job offers in engineering, to begin a commission-based career in insurance. Why were you so motivated to join Family Heritage Life Insurance Company of America, over all the other job offers you had as a degreed engineer from a prestigious university? One reason was the company’s unique and amazing products, which pay cash directly to clients in situations like cancer, heart disease, and accidents. I was also influenced by my strong belief in the people who were offering me this incredible opportunity. Firsthand experience with my own brother battling cancer was also a huge catalyst propelling me to choose this career and to commit to making it work no matter what. For the first time, I’d seen how people can lose everything they’ve worked so hard to achieve. I really wanted to raise awareness about the huge difference that being prepared can make. I’d found the area where I could make my mark. Can you tell us a little more about your brother? Francisco Orona was a Marine, super fit, committed to taking care of his body by exercising, eating right, and staying away from things that he knew weren’t going to make him healthier. He was a good Christian with a giving heart; everybody loved him. So when he was diagnosed with brain cancer, my whole family just could not believe it. He was so strong and vibrant, and he fought the cancer with everything he had in him, but he died at the tender age of 23. His death had a huge impact on me, because I saw Francisco as a great role model, and we loved hanging out and spending time together whenever he was home. Eight years later, I still think about him a lot. On a positive note, even though Francisco is gone, he is still making a positive impact. Last year, the family got together to establish a memorial scholarship in his name. This scholarship is a great source of pride for the entire Orona family.

I never ask my team members/business partners to do anything that I myself have not done or am not willing to do. How would you describe your work style? I have a strong belief in my commitment to being a “P.O.P.I.,” a Person Of Positive Influence. I try to always look on the bright side of things, and speak from a positive mindset. I never ask my team members/business partners to do anything that I myself have not done or am not willing to do. I try to follow the example set by the founders and leaders of Family Heritage Life Insurance Company of America, who for at least one week a month, are out in the field working alongside the “people in the trenches,” the sales force. Even our founder/CEO, Howard Lewis, who is in his mid-sixties is out in the field monthly providing invaluable training, and creating lifetime memories for our agents. I’ve learned that being in the field allows me, as the owner of the Texas Nexus Business Group, to keep in touch with what’s going on at the ground level. What advice do you give to your agents? I am a business owner who wants

nothing but the very best for all of my business partners. I try to give them good advice, especially the kind that will help them not just in business, but in life too. • Discover your purpose in life. As we work to fulfill our true purpose in life, we become fulfilled, and we will naturally desire to become the best version of ourselves. • Make a decision. It really is as simple as that. You make a decision to move forward, to achieve, and you don’t have to listen to your emotional self anymore when it tries to make excuses that do nothing but hold you back. • Set your goals, add a deadline and make sure they are high enough so that they scare you at least a little bit. Each goal you set should stretch you a little, or you’ll settle for mediocrity. • Create a plan to meet your goals, and then work it to the best of your ability. You have to break it down into action steps, so you don’t get too overwhelmed. • Surround yourself with people who are on the same mission as you are. Creating accountability with like-minded people is a great way to keep you on track as you move toward your goals. • Stay away from negative people. They will suck the life right out of you. Even if that means limiting your time with certain members of your family, so be it. Life is tough enough without having to deal with that. • Commit to your goals and don’t accept your excuses for not achieving them. A lot of the time, you can turn your excuses around and make them into reasons to do the things you should be doing to achieve success.

COVER STORY

• The most important message I try to get across to my team members/ business partners is to be patient and to understand that building a successful business takes time. I’ve worked with many amazingly talented people, but because they were not able to give themselves the time to move through the process, they were unable to realize their original visions of success. What are some of the tough calls you’ve had to make in building/growing your business? Growing a business always involves sacrifice, and it’s been no different building the Texas Nexus Business Group. In the early days, when Texas Nexus was just one guy in a little one-bedroom apartment, I made the tough decision to travel away from home, away from my wife, for weeks, sometimes months at a time, to work in territories all over South Texas. By traveling to work away from home without distractions, I was able to stay focused on selling and recruiting and then training the people I brought into the business. I’m not saying that I was never tempted to call it a week and head back home, especially during the holidays. But I was committed to making things happen, so I stuck it out. Years later, after the business had grown, and I had become a sales director, one of the toughest things I had to do was ask people to move on. Either this business obviously was not a good fit for them, or

I had to put the needs of the team ahead of the needs of a few. It was tough to do that, but I've never regretted doing what was best for my company. they became a negative influence on the team, despite ongoing coaching to help them develop a more positive mental attitude. I’m sure people may have thought I was crazy to remove commission-based sales agents, because a huge portion of the business is driven by the sales force, but I realized that a negative influence on the sales force is as damaging, if not more so than not having a sales force at all. I had to put the needs of the team ahead of the needs of a few. It was tough to do that, but I’ve never regretted doing what was best for my company. What does the future of Texas Nexus Business Group look like? I’ve heard it said that the best way to predict the future is to create it. We in

Texas Nexus know where we’ve been, and we also know where we are going. Texas Nexus has a goal to hire enough people to have one of the largest organizations within Family Heritage in the state of Texas. We are always looking for sharp people, because Texas Nexus also plans to develop 5 business partners into millionaires (in net worth) through the same process while being a part of Family Heritage. We are implementing a plan to streamline operations in certain areas such as training. In 2015, we will begin developing our people in a newly created training program called Success University, created specifically for our new agents, which will address their specific products and needs. Through Business Adviser Magazine - San Antonio Edition, we plan to give small business owners a boost in their branding, name recognition, and market presence, by offering them advertising in exchange for sharing their expertise with other small business owners. It’s a win-win! What are you most excited about with both Business Adviser and Family Heritage? There is so much to be excited about! We

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COVER STORY

at Texas Nexus have been so amazed at how everything has fallen into place basically from day one when I was spending so much time away from home, looking for people to share the opportunity with. I was just hungry, looking to build my team, meeting people and asking for referrals. I truly had no idea that those relationships would connect me to people who would later be the builders of a multi-million dollar organization. I had no clue how many of our clients were going to benefit from our unique supplemental products! Or how connecting the dots would also lead me to becoming the first franchise owner of Business Adviser and expanding it into the San Antonio market. Family Heritage has recently made some adjustments that are going to have a big impact on our business here in South Texas. The development of Spanish language materials has definitely boosted sales. The investments that are being made into the sales force, and the increase in home office staff members to provide optimal customer service will go a long way to help everyone feel how valuable they are to the company. And for the record, it was the Texas Nexus

Business Group that put Family Heritage on the map in the Rio Grande Valley! So to answer the question, what I am most excited about is that Texas Nexus Business Group and Business Adviser were practically destined to meet, simply because the founders of Business Adviser and the other businesses that they own utilize so many business practices that parallel those of Texas Nexus. Common sense tells me that if Business Adviser helped their businesses grow in South Texas, it will do the same for us here in San Antonio.

Common sense tells me that if Business Adviser helped their businesses grow in South Texas, it will do the same for us here in San Antonio.

What do you plan to bring to the San Antonio market with Business Adviser Magazine? Texas Nexus is ecstatic about bringing Business Adviser Magazine to the San Antonio market! Business Adviser has had a huge impact on the Rio Grande Valley business market, and we want to do the same for San Antonio. Weâ&#x20AC;&#x2122;re so happy to give business owners a vehicle to get their name out there, and to begin establishing themselves as the industry authority or the expert in their field without it costing them an arm and a leg. We are also glad to know that we will be providing our market with education that is valuable at all levels of business, as well as a fresh perspective on the way small businesses are growing in todayâ&#x20AC;&#x2122;s market. Business owners need to understand that they can make certain benefits available to their employees at little or no cost to themselves or their companies. Business Adviser Magazine will help open the door for us to reach out to those business owners. In a word, Business Adviser - San Antonio Edition can accurately be called a great example of synergy at its best.

STRATEGY

How to Grow Your Business

with the 80/20 Rule In 1906, the famous Italian economist Vilfredo Pareto found that 20 percent of the Italian population owned 80 percent of the land in the country.

ctually, the 80/20 distribution is common in other sectors as well. Generally speaking, 80 percent of your sales are generated by 20 percent of your customers. In the same way, 80 percent of your results are produced in 20 percent of your time. The Pareto Principle, which is also called the ‘80/20 Principle’ is a great tool for increasing your profits. For example, if you can find out the specific characteristics of the 20 percent of buyers who generate 80 percent of the sales, you will have no difficulty finding more buyers like them. This will increase your sales. Savvy businesses have been using the 80/20 Rule for sev-

eral years. Recently, author Perry Marshall gave a unique interpretation of this principle in this book ‘80/20 Sales and Marketing.’ Marshall discovered that the 80/20 distribution also exists within the initial 20 and 80 percent. That means the top 20 percent of the initial 20 percent of your customers generate 80 percent of the initial 80 percent of your sales. In other words, the top 4 percent (= 20 percent of 20) of your customers generate 64 percent (80 percent of 80) of your sales. When these numbers are big enough, the Pareto Principle can scale to the third, fourth, or even fifth scale! By finding ways to apply this principle to your business, you can grow your sales exponentially. For example, Marshall’s ‘rack the shotgun’ technique allows businesses to quickly identify potential customers who can be in the top 20 percent. The author explains how businesses can use this principle to get their customers to call them. Using this rule, businesses can also find the best talent. When properly applied, the Pareto Principle can elevate your business to the next level. The key is understanding when and how to use it.

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TAXES & LAW

STRATEGIZE OR NOTTO STRATEGIZE?

The question really is “to tax strategize or not to tax strategize”?

have asked this question to lots of taxpayers/ business owners over the past 20 years, I get many people with a confused look to answer this question. In fact some have not even considered doing something different to reduce their taxes. The comments I get are: “Well if the government said I owe this; then this is how it

is” others say, “I don’t want to be audited.” I too remark back to them, “I don’t want you to get audited as well. However, I do not want you to be penalized for doing nothing to reduce your taxes. Just like managing your money, you have to manage your taxes”. Here is what I have seen in the past years in preparing tax returns for individuals and business owners.

BUSINESS OWNERS First, business owners that practice no tax strategies impact their ability to keep more money in their business. They miss the opportunity to ask the question, what should I do before the yearend to execute tax strategies? The execution for many new clients has not ever been implemented. Nor is there an analysis of their assets or an accountable question of where they stand both, on business and personal. We have developed a model (program) that dynamically integrates an analysis of

‘what if ’ scenario’s between the owner’s business and their personal return. The scenarios are simple ‘what if ’ analysis. If the Business Owner spends more money on increasing assets for the business or acquiring assets for themselves as owners – retirement accounts will reduce their taxes on their personal return. This analysis is very simple; it tells the business owners if they take the deduction, then it shows the reduction on their taxes. More importantly, if they do not take the deduction, their taxes will be higher. Here are some simple case studies to analyze with the results we have accomplished in implementing tax strategies for business owners.

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TAXES & LAW

3. PURCHASE VEHICLE FOR THE BUSINESS?

CASE STUDIES: BUSINESS SCENARIO #1 A services company (aka -Apple Services) with a net profit of $135,000 of which the business owner is LLC with (S) election, so this mean that all of the profit will pass thru to the business owner’s 1040 personal return. As a result, his household income plus his K-1 from his profit of $135,000 yields a tax liability of $75,000 in taxes. So we analyze with the business owner his options prior to end of the year:

1. PURCHASE OF EQUIPMENT FOR THE business- take advantage of Section 179 depreciation? Section 179 provides you the ability to write off a portion of depreciation or the entire amount of depreciation, depending on the type of asset; this reduces the bottom line net profit thus reducing the owner’s taxes.

2. IMPLEMENT 401K OR SEP FOR THE BUSINESS? The contribution into 401k or SEP for your business reduces your bottom line – net profit consequently reducing the owner’s taxes.

Purchasing a company vehicle could take a significant percentage of deduction against your net profit. The section 179 election, provides accelerated depreciation against your net profit resulting in reduction in the business owner’s taxes.

4. PREPAID EXPENSES FOR UPCOMING YEAR? By paying off insurance or upcoming Web Development, purchases, etc… we can increase business expenses therefore increase write-off that will impact the bottom line – net profit thus reduces the owner’s business taxes.

RESULTS: We executed on all the above items for the business owners in October, November and December and reduced their taxes from $75,000 to estimated $30,500. Again, the strategy for the business owner was to pay himself first and then

Uncle Sam. By executing his tax strategy to purchase assets, vehicles, equipment, and invest in retirement plan he reduced his tax liability to the IRS. His 2012 tax year is lot happier than when we show him first his tax liability.

BUSINESS SCENARIO #2 We had a business owner that was a LLC single member company. What this means in plain English is he had legal protection as a company but his taxes were to be reported as sole proprietor on a schedule C. What this means to a CPA, the dreaded self-employment tax of 15.3% that he must pay due to being a single owner LLC. However, what I did next was shocking to the client. I said, “Why are you a single member LLC?” He look confused—“I am not sure why, why do you ask?” “Well if we can get you into a LLC treated as (S) election, then we can by eliminate 15.3% in taxes.” At this time his net profit was $105,000. The self-employment taxes

“Why are you a single member LLC?” He look confused—“I am not sure why, why do you ask?” were $16,065 at this time. We then proceed to tell him that the IRS will forgive him for setting himself wrong when he setup his company. In fact, the tax law is to ask for forgives and be treated as LLC (S) election.

RESULTS This modification resulted in reducing his self-employment taxes to Zero (0). That is right, from $16,065 to $0. What a significant tax saving. We have done many of these over the last 15 years and we see peoples’ lives change from drowning in taxes to swimming tax free. The bottom line is you can save on your taxes with tax strategies being executed on your behalf. If you would like to learn more about tax strategies for business owners, please call 210-490-7100 to attend one of our monthly luncheon at Pericos at Sonterra every 3rd Friday. Guerrero CPA 508 W. Rhapsody San Antonio, TX 78216 Phone: (210) 490-7100 ext. 1016 Fax: (210) 568-4436 Website: http://www.guerrerocpa.com

FINANCE

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INSURANCE

Not everyone is a candidate for SUPPLEMENTAL INSURANCE

Not everyone is a candidate for supplemental insurance. Years of experience have proven, through encounters with thousands of people from all walks of life, that this is fact. 46

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INSURANCE

hat are some of the reasons that people may not have a need for supplemental insurance? Some people have streams of income which continue to flow even without the recipient’s active involvement in creating that flow. One example is people who own hundreds of real estate properties, residential and or commercial, that generate rent and other income month after month regardless of the owner’s continued participation. This is called passive income, and there are myriad ways to generate it. Some people have retired from a first career, are receiving retirement income, and are in a second career, working just to stay active or to fund a hobby like traveling, or to supplement their income. They may be receiving a residual income on top of the retirement income, or they may be receiving annuity payments or installments from an inheritance. In certain lines of work, people continue to receive royalties on intellectual property they created, such as copywriting, books, articles, and patents, every time that income is generated by the use of the intellectual property. Owning stock in growing companies is another form of passive income, and there are thousands of different ways to invest and earn an income. And for a very precious few, there is even income from winning the lottery.

Owning stock in growing companies is another form of passive income, and there are thousands of different ways to invest and earn As a business owner, you may have recognized yourself in one or more of the descriptions you just read. If so, congratulations on creating or building a wall of protection around yourself and your family that, should you be unable to work for a number of months to produce an income, will take up the slack and keep your family clothed, housed, and fed! That’s wise planning, and that kind of thinking is probably a huge factor in the success that you have demonstrated thus far in your business. If this is you, then there are a number of questions you should probably ask yourself: • How many of my employees can say the same, that there would not be a problem if they

were suddenly unable to work for several months because of an illness or accident? • Being a business owner who cares about my employees, in what ways (and at what cost) would I be able to help my employee(s) in that situation? • How many of my employees who are on the disability plan they were offered would still struggle financially during the 30 days before the plan kicked in? • How many of my employees would not be able to meet their financial obligations while receiving only the disability benefits equaling 60 – 70% of their regular paycheck?

all) of these questions was “just a few employees”, those employees deserve a chance to see if supplemental insurance is right for them. That leads us to some of the advantages of making Family Heritage supplemental products available to your employees. There is no cost to you, because it is employee-funded, and since we can enroll your employees without payroll deduction, there are no administrative tasks for you. There is also no minimum number of employees required to get it started at your company, and enrollees will get a refund of premium less claims paid, after the plan has been active for a certain period of time (varies by product and state). Give us a call to get the details on making it available. Your employees will thank you. Jose Orona (210) 823-1744 8000 IH W STE 600 San Antonio, TX 78230

Even if the answer to any (or

INVESTMENTS

MORTGAGE

TIPS FOR 2015 The year 2015 is coming with a lot of changes in the mortgage industry, which is why, you as a buyer, may expect from the lenders to change their guidelines a bit more.

ut before you make an offer, it is best for you to analyze your credit score and financial situation. Here are some helpful mortgage decision making tips that just might come in handy. • FINANCIAL DOCUMENTS: Make sure you have all your financial documents organized and ready. You should have records of your bank statements, tax returns, investment accounts, W-2s, and all other assets. And if there are any doubtful transactions, be ready to explain them to the authorities. • MORTGAGE TYPES: Find out the difference between the various types of mortgage, so you’ll know which one is the best for you in terms of down

payment, rates, and terms. Also, check if you can qualify for any Down Payment Assistance Programs. The State of Texas is currently offering a few options, so talk to the local authorities. • KEEP AN EYE ON YOUR CREDIT: Pay special attention to your credit score. Make sure to get a copy of your credit report – you are entitled to a free report once a year, from all the three agencies (Experian, TransUnion, and Equifax). This way, if you find any mistakes that need to be corrected, you have enough time to increase your score, and this will put you in a better position when it’s time to buy a house. • MY POSITION AS A BUYER: Understand your role, your rights, and your responsibili-

ties. The year 2014 is leaving us with more than a few new rules and regulations from the Consumer Financial Protection Bureau that are worthy of researching and understanding. • HOW MUCH CAN I AFFORD: It is important to know how much you can comfortably afford for a mortgage payment and down payment. For this, it is best to get pre-qualified by a mortgage lender. This will keep your research focus on the homes that are best suited for your family, location, and financial needs. • WHAT TO DO AFTER I FIND “THE HOUSE”: The moment you find The House, make an

Edgar J Hernandez Branch Manager-PRMI RGV NMLS# 226169

offer and try to lock the rate. This will help ensure that you get the loan for the desired amount before the Federal Reserve begins shooting the rates back up. If you have submitted your mortgage application, find a house and lock your rate. The clock is ticking. Make sure to submit all requested documents by your mortgage banker as soon as possible. Also follow up with your mortgage banker at least once a week to ensure the process goes smoothly. Like always, feel free to contact us with any questions and/or concerns about your mortgage needs.

O: 956-616-4926 Fax 1.800.519.7915 www.PRMIUSA.COM