Tips for Starting a Business

1. Five Smart Secrets for Building
Your New Business
Dennis L. Thompson, CPA, CFE
www.dlthompsoncpa.com
206-390-9432

2. Secret One: What is My USP?
• USP = Unique Selling Proposition
• Why do People Buy?
– Increase Satisfaction
– Decrease Dissatisfaction
– Why Should They Buy From You?

3. Secret One: What is My USP?
• By Defining My USP
– I Can Then Define My Ideal Customer
• What are Their Concerns?
• How can I create value for Them?
• How can I deliver my Marketing
Message to Them?
• You MUST Embrace Marketing if You
Want to be Self-Employed.

4. Secret One: What is My USP?
• Should I look for a Niche?
– Advantages
• Command a Higher Price
• Become an Expert
• Take advantage of Word of Mouth
– Disadvantages
• Overly Specialized
• If your Niche gets a Cold, You get
Pneumonia

5. Secret One: What is My USP?
• How to Find a Niche
– Your Life Experience
– Your Interests
– What Makes You Unique – Intersection
of Skill Sets
– Look for a Niche that is a half inch wide
and a Mile Deep

6. Secret Two: Always Be Aware of
Your TME.
• TME = Time, Money & Energy
• Three Scarce Resources That We Have to
Develop Our Business.
• What is the Most Effective Combination of
TME For Marketing.
– Do Not Spend Significant TME on Non
Decision Makers.
– Think Twice Before You Try to Save
Money at the Expense of Time & Energy

7. Secret Three: Profit Is An Opinion,
But Cash (Or Lack Thereof) Is Cold
Hard Reality.
• Most Small Business Fail Because of Cash
Flow Problems.
• Monitor Your “Cash to Cash” Cycle
• Be Aware of the “Grow Until You Blow”
School of Management.
• Become Familiar with “Break-Even
Analysis”

8. Secret Three: Profit Is An Opinion,
But Cash (Or Lack Thereof) Is Cold
Hard Reality.
• Know Your Fixed Costs.
• Manage Your Receivables, Inventory &
Payables.
• Book Recommendation: “ Never Run Out of
Cash” By Philip Campbell

9. Secret Four: Become an Intelligent
Consumer of Accounting Information
•Besides Being Boring and Hard to
Understand, Accounting is Crucial for the
Success of Your Business.
•No One is Going to Care More About Your
Business Than You – Learn Basic
Accounting.

10. Secret Four: Become an Intelligent
Consumer of Accounting Information
• Why is Understanding Accounting
Important?
– Do you want to know if your business is
successful?
– Would you like to get a loan someday?
– Do you want to prevent Fraud?
– Do you want to sell your business?
– Do you want to stay out of trouble with
the Government?

11. Secret Four: Become an Intelligent
Consumer of Accounting Information
• Unpleasant Little Secret – QuickBooks Will
Not Teach You Accounting.
• However, Accounting Software Will Help
You Make Creative & Complicated
Mistakes Much More Efficiently Than You
Could Ever Do By Yourself.

12. Secret Four: Become an Intelligent
Consumer of Accounting Information
• You Don’t Need to Become an Accountant,
But You Need to be Able to Recognize
When Your Financial Statements Don’t
Make Sense.
• Recommendation – Take an Accounting
Course for Small Business Owners.

13. Secret Five: Minimize Your Taxes
• Understand That Payroll Taxes and Sales
Taxes Are Trust Funds
– Significant Penalties if You Spend Trust
Funds.
– Best to Segregate Trust Funds in
Separate Bank Accounts – Do Not
Commingle with Operating Account.

14. Secret Five: Minimize Your Taxes
• Understand The Different Types of
Business Entities & How They Impact Your
Taxes.
• Recommendation: Become an LLC
• Understand the Differences Between State
& Federal Taxes.

15. Secret Five: Minimize Your Taxes
• IRS & The Tax Gap
– IRS is Telling Congress that there is a
Tax Gap of Around $300 Billion.
– Will be Conducting More Schedule C
Audits – Looking for People Who Are
Underreporting Income and/or
Overstating Expenses.
– Re-engineered Audits

16. Secret Five: Minimize Your Taxes
• Steps You Can Take to Protect Yourself in
the Event of an IRS Audit.
– Have a Separate Business Bank
Account and DO NOT Commingle
Personal Funds.
– Keep Good Documentation for
Expenses.
– Be Able to Account for All Your Bank
Deposits- IRS Assumes All Deposits Are
Income Unless You Can Prove
Otherwise.

17. Summary
• Being Self Employed Is Not For Everyone.
• You Must Be Good At What You Do AND
Effective at Marketing – Not Either Or.
• The Five “Secrets” That I Have Discussed
Today Will Help You Increase Your
Chances of Success.