Marketing Today

I have been in business for a long time.  Over the years, marketing has changed quite a bit.  From TV and radio ads to Yellow Page ads, direct mail, variable data direct mail and now the various forms of internet and social media marketing, it has been difficult to stay on top of what works best.

Having spent over 20 years in the printing industry (and not being in the industry any more), I can tell you that print ads just don’t produce like they used to.  Personalized variable data mailings provided a huge leap in response %.  However, they are so common now that most of us just throw them away too, don’t we?  To be honest, I would not recommend spending much, if any, on print marketing other than business cards (apologies to my friends still in the industry).

Where to spend your ad budgets?  It’s all about the web, my friends.  SEO (search engine optimization) is important but don’t blow your entire budget on that.  There are a lot of simple free, or nearly-free, things that you can do for that.  The key is to make sure, if you own a small business, that you are on the 1st search page when a smart phone searches you nearby.  Don’t worry if you aren’t on the 1st page of a search in LA for your Wisconsin business.  They won’t be a customer anytime soon.

Where you really want to focus is on Facebook.  70% of Facebook users log in every day.  Couple that with all the demographic data that Facebook collects (themselves or via business partners) and you can target your marketing very specifically at reasonable prices.  I have just begun to learn about this and the potential is amazing (if a not a bit scary with respect to the data Facebook has on each of us).  I paid for a service to help me do it the right way.  It was under $500 to learn how to do it.  There are email marketing subscriptions that I will need to purchase, but they are not terribly expensive, either.  Time will tell just how effective this will be, but it seems to make good sense to me to skip paying for ink-on-paper and target my “ideal customers” using all that demographic data.  I expect it to minimize my cost per new client.   Once I work out the kinks on my more established business, I will set out to work on my newer business.  It’s going to be interesting.

A New Tax System

OK, I know this blog is about business.  But the issue of income taxes and the behavior our friends at the IRS impacts your business, my business and the business of our personal lives.  So, here are my thoughts…..

One evening recently, I was about to fall asleep when I awoke instantly wide awake with a new federal income tax structure.  As you read this, please bear in mind that it’s a framework.  The details of which I will leave to more talented bean counters than me.

What was rattling around in my head was something that I truly believe can make a huge impact on our government, our freedoms and our economy.   I propose a TRUE flat tax (not a FAIR tax as some are proposing.  I will let you research the differences).  Before you run away screaming, walk along with me for a bit as I summarize the framework.

Individual Income Taxes – We would all pay a certain % of our gross income.  No deductions (why should the g0vernment tell us that home ownership is better than renting, for example.  The renters get screwed).  We could eliminate the individual tax division of the IRS (or whatever it is called) and replace it with a much smaller,  computer-driven group that verifies our income as reported on our 1/2 page tax return.  The only reason for a return, at all, is to pay taxes on our passive income (our employers will withhold and pay taxes on our earned income).  Now, there is a place for debating an income floor for the truly poor.  However, even if someone can only pay $10 because of low income, they should.

This model would keep the rich from sheltering income and have the low income individuals pay at least a little.  Plus, the government would save $billions with the smaller IRS (yes, the current employees would have to look for jobs, but a lot of us have survived that in our lives, including me).

Organization Net Income Taxes – You will note here, that I used the term “organization” instead of “business.”  I will explain in a moment.  Each organization will pay a certain % on the net income of the entity (similar to today).  The difference is that there will be no such thing as a tax-exempt entity.  They have to pay taxes on their NET, too.  Before all the charities have a fit, take a breath and read on.  Charities are supposed to give away their funds (after operating costs), right?  So give it away like you are supposed to.  If your expenses and “giveaways” equal your income (donations), you pay no taxes.  If, as some supposed-charities do, you hoard funds, you pay income taxes on the remaining “net income.”  This includes churches, synagogues and mosques,  too.  As a man of faith, I struggled with this, but I want my church to be missional (which we very much are) and spend on community outreach.  We give offerings to our church to be spent, not kept.  Here is the incentive to do so (in case one is needed)!

This set-up will also obviate the division of the IRS that is causing all the wailing and gnashing of teeth.  There will be no reason for any group to need tax-exempt status, so there won’t be any politically motivated abuse of those applying for it.  How much $$ will that save tax payers?

To monitor this type of entity, the IRS business division would be replaced by the department of organization taxation (or something of that nature).  Admittedly, this division might be larger than  the current similar IRS division because of the broader base.  However, I am hoping that the flat-tax environment will be simpler to enforce and make it no larger, at a minimum.

Naturally, the status quo in congress and all the tax attorneys will scoff (they will need new jobs as a result).  “You can’t do this and we have to be able to deduct that.” ….Open your minds, you fossils!   Will someone likely pay more taxes than they do now?  Of course.   But, we have to make some serious changes in this country.  We are in debt, as a nation, way over our heads and the economy is still fragile.  The tax code seems like the logical place to start (with more restructuring to follow).

What I propose is simpler, which is pretty much always better and cheaper.  It puts the rich and  poor under the same rules (special interests have no footing without deductions), which creates a more cohesive country as opposed to our currently polarized country.     We are the UNITED States of America.  Let’s set up the tax rules to encourage that.

Improve or Die

You’ve either worked for, read about or know someone who worked at a company that made a ton of money for a long time doing the same things they’d always done. Then, all of the sudden, the market/industry changed. Now, efficiency and higher levels of customer service and speed are what it takes to compete. Unfortunately, the company didn’t have some or all of those attributes. This was mostly because they spent years or even decades without any quantum changes in their processes. Now what?

It’s time to get on the process improvement band wagon. You know; the stuff you’ve been reading about for years. It doesn’t matter what set of tools you use. My personal preference is to embrace Lean Enterprise because of its common sense thought process regarding waste elimination. I’ve found that every person in the organization can grasp its concepts. There’s also Six Sigma, TQM and a number of hi-bred programs. Get to learning and get improving. Not doing so will seal the fate of your organization.

More to come on this topic.