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Entrepreneurs and Businesses



How a Solo 401(k) Can Help You Grow Your Own Wealth

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The Solo 401(k) is perhaps one of the greatest financial tools for investing in your future. It's a self-administered, self-trusteed, self-directed Solo 401(k) that gives you the ultimate in flexibility and possibilities. If you're self-employed this may be a good option for you. Here's why.                      

What is it?

It's a qualified retirement plan for people who run their own business that has no employees. It allows you to invest in anything allowed by law including real estate, mortgage notes, private businesses, precious metals, and more.

  1. The Solo 401(k), if you’re eligible, can be a better vehicle to use for investing in real estate than a traditional IRA (yes, you can use IRAs to invest in real estate too).

  2. The Solo 401(k) can borrow funds to purchase real estate with a non-recourse promissory note. This means the lending institution can use only the property that secures the note as collateral.

  3. You can build a tax-free Roth account inside the Solo 401(k).

  4. You can use the Solo 401(k) to invest in things such as: raw land, pre-construction property, residential property, multi-family units, commercial property, apartment buildings, and condominiums.

  5. You may not use your Solo 401(k) to purchase your primary residence. You also cannot purchase property that will be used by you, the accountholder. But you can invest in income-producing property and grow your wealth.

  6. Your Solo 401(k) can partner with other people’s Solo 401(k) or IRA to co-invest.

  7. When the Solo 401(k) buys real estate, the title must be held in the name of the Solo 401(k).

  8. Rental money from the property that’s been purchased by the Solo 401(k) must go back into the same account.

  9. It’s vital to understand what will constitute a Prohibited Transaction (PT). You can learn more at www.UnlimitedInvesting.com.

  10. You can transfer anything that can be transferred into an IRA into a Solo 401(k) and there are no limitations on transfer amounts.

  11. Yes, you can be employed and still use a Solo 401(k) as long as you are also self-employed in addition to your other employment. Seek advice from your accountant about whether you have business activity that can be considered self-employment earned-income.

  12. Maximum contribution limits for 2009 are as follows: $49,000 per year. For those over the age of 50, you can use the additional “catch up” contribution of up to $5,500 per year. And if your spouse earns income from your company, he/she can also contribute $49,000 per year as a participant—that’s in addition to your contributions. (Sure beats IRA contribution limits of $5,000 or $6,000 for those over age 50!).

  13. You can contribute annually $16,500 (or $22,000 if over age 50) of the $49,000 annual contribution limit to your Roth account (these funds are not taxed when later distributed). Learn more from the IRS Publication 560.

  14. Unlike with an IRA, Unrelated Business Income Tax (UBIT) does not apply to earnings from leveraged real estate investments.

  15. Depending on where you set up your Solo 401(k) you may have limitations. Check out www.Nabers.com. This company offers maximum benefits with its plan documents so that account holders’ available investment choices are not limited.

  16. You are the plan participant and the trustee of the Solo 401(k). However, many retirement account administrators don’t offer this in their plan documents. Make sure you ask questions. This will help keep plan administration fees low as well as ensure that you don’t run into unnecessary restrictions.

  17. Good record keeping is a must. Keep Roth funds in a separate bank or brokerage account. You will need to file a 5500-EZ form that reports the value of your plan assets. Your tax accountant can help with this.

  18. Administrative fees for the Solo 401(k) vary; so shop around.

  19. Make sure you have checkbook control. Having checkbook control helps ensure that you can invest in all legally allowable investments as well as avoid unnecessary transaction fees on things such as foreign investments. Plus, having checkbook control gives you the ability to take action immediately when an investment opportunity comes up. Because 401(k) plans do not require a custodian, an LLC creation is not necessary in order to enjoy checkbook control.

  20. You can borrow up to 50 percent of your account value or $50,000 (whichever is less) from your Solo 401(k) for anything. You’ll pay interest of 1 percent over prime rate, but it all goes to your own retirement account instead of a bank.

Last Updated ( Monday, 21 June 2010 15:54 )
 

Get Media Attention Now

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I have been a journalist for 20+ years. I have found that every good business has a story, but not every entrepreneur behind that good business knows how to sell that story to the media. Consequently, some businesses never get media attention while others seem to be favorite resources.

While blogging, creating YouTube videos, your own Internet radio show, video podcast, and RSS feeds are great ways to gain exposure, being quoted in a traditional news source adds credibility. Becoming the “go-to expert” on a media list can equate to powerful exposure.

Utilizing the media to grow your business is nothing new. All businesses can benefit from the exposure and attention and the media daily turns to companies and entrepreneurs for expert advice.

However, understanding how to gain the media’s interest requires inside knowledge of the industry. That’s exactly what I am going to give you in this blog.

1. Network with reporters. Just as it’s always good to know a great attorney, it’s also good to know a quality reporter. Many reporters have blogs and Web sites. If you post comments and begin feeding them unique and interesting stories, you’ll find that reporters will eagerly welcome your posts, emails, and even calls. Don’t waste their time. Be direct and offer pertinent and timely information.

Remember that reporters typically are responsible for multiple stories in a day so they are very busy. They also get pitched ideas (many bad ones).

What makes a story idea good? It has to have widespread interest coupled with a personal aspect. So don’t just pitch your company and/or product. Instead, offer help first, information that will benefit the public. Then show how the personal element of the story plays a vital part.

For example, if you’re a company that specializes in cleaning out foreclosures, you could grab the media’s attention because the real estate debacle is a hot topic. So, you might pitch the story to the media by saying that your company cleans X foreclosures each week (assuming X is a relatively high number) and that after cleaning foreclosed homes your company has compiled a list of the top 10 items that are frequently found in foreclosed homes. These are things that all buyers need to know about before they consider purchasing a foreclosure.

Now, this assumes that what you find in the foreclosures is interesting and important to buyers. I have interviewed many people who deal with foreclosures from the banks to the real estate agents and typically there are similarities with foreclosed properties. Buyers would be wise to check the properties for these issues before buying.

The point of the above example is to use statistics and tangible information, then to couple it with a hot topic that the media is caught up in.

2. Make it easy to locate the “go-to expert” in your company for an interview. I have called companies for interviews and been told “We’d love to do this story but the only person who can do the interview is our CEO and he won’t be back for a few hours.” What a shame, so I find another “go-to expert” and get my story filed that same day. The other company gets the free publicity because that company had a “go-to expert” ready and willing to speak to the media.

What this entails is educating many people on the subject of how to talk to the media. Make sure, at the very least, that your top tier of management is prepared to do an interview with a reporter.

Also, make sure that your front office knows what to do when the media calls. Savvy companies have media procedure policies in place. The front office doesn’t just send an inquiry from a reporter into a CEOs voice mail box. Instead, the receptionist gets the information from the reporter, locates the appropriate person for the interview, follows up with the reporter via email and/or telephone, which gives the company ample opportunity to get free publicity through the media.

Unfortunately, I can’t count the number of times that successful connection doesn’t happen because the company doesn’t have media procedure policies in place or the receptionist/staff couldn’t be bothered with a call from a reporter (because it’s not viewed as a sales call). How silly! That call could generate extraordinary publicity and future sales.

3. Have real clients and people available that the media can interview. It’s vital to have past clients that you can recommend for the media interview. Sticking with the above example, the Trash-Out companies (as they’re called) should have a list of people (for instance, from the bank that hired the company) that can be referred to the media. If you’re a remodeling company, give actual clients’ names and contact information. Make sure you’ve pre-screened these clients and know that they can do a quality interview. Nothing is more frustrating than getting a lead for an interview from a company and then having the interview be awful because the referred client isn’t articulate or refused the interview.

4. Have a personal touch to the story you are pitching. The media is always looking for the personal story to tell. So, using the example earlier about the company that cleans foreclosed properties, an interesting angle would be if company X found something of value or mystery (such as the skeleton found in an LA foreclosed property). Depending on what the item was, that could make a very intriguing and possibly emotional story for the news media.

5. Think like a reporter before you pitch to a reporter. Here’s the point--not every company has a juicy tale to tell, so that’s where creativity comes into play. You have to think like a reporter before you pitch a story to a reporter. If you’re pitching a story to a TV reporter, think about what video the reporter would use to tell the story. Did you know that some good stories are turned down (or get very little air time) on TV because there just isn’t any compelling video to accompany the story? It’s like saying you’ve got a face for radio! Sometimes the story is better for print or radio.

6. Use statistics in your press release. The media loves to throw statistics into news pieces and the public really likes it too. Think about books and titles, (including this blog’s)--statistics and numbers tend to make something seem more important.

7. Don’t promote your business; instead give helpful/interesting information. Remember, you’ll get exposure if the media does a story. While your company may only get a mention, that’s a huge value. It’s often better to be mentioned in a news story than to buy a commercial or advertisement. Commercials are seen for what they are–advertising–but getting mentioned or interviewed inside a news story helps to create instant credibility. It’s value you can’t buy.

So, when you pitch a story to the media, first find the informative angle and then creatively craft a pitch that positions your company as the “go-to expert” for the interview for that particular story.

8. Talk in sound bites, even for print. Even though today there are much longer stories featured on the Internet, it’s still advisable to get to the point when being interviewed. If you succinctly convey your thoughts when you are being interviewed by a reporter, there is less chance of much of your interview winding up on the editing room floor. (Okay, that’s old school talk from the editing days before computers, but you get my point--hopefully.)

Too many interviewees go on and on in an interview and say the same thing over again in different ways. What the interviewee doesn’t realize is that will all be edited out anyway. It’s likely the reporter will paraphrase your long-winded answer (giving you less print space or air time) in an effort to make the story easier to understand.

Reporters will always ask for more details if they need them.

9. Be natural, not overly rehearsed. Canned speeches sound terrible and so does an overly-coached interviewee. Be relaxed, natural, and talk at a good, easy-to-understand pace. If you have never been interviewed by the media, it’s a good idea to hire a media coach for a few pointers. The coaching helps not only with speaking to the media but also can help you in everyday presentations to clients.

10. Just do it! (to borrow this phrase from Nike). The reason a lot of companies don’t get called by the media is because the media doesn’t know about the company. If you want free publicity from the media, you have to become a “notable resource” to the media.

Get your press releases to the media. Write articles to newspapers. Post comments on reporters’ blogs. Make telephone calls to the assignment desks at television stations. (A lot of companies don’t know that the staff handles the majority of press releases that come into a station. That staff then assigns a reporter to the story).

Build your resource and educational content on your Web site so that you can refer the media to it in the press releases. (This in itself is a tremendous marketing tool. I’ll have more on what makes good content and how you build an educational library on your company’s Web site in a future blog.)

Bottom line? The media can help you grow your business and, as a reporter, I am always happy to receive story pitches from companies that have taken the time to put together an interesting angle. It’s all the better when I call the company and the CEO or spokesperson is articulate, concise, knowledgeable, and is an entertaining interviewee.

Ready to get started with getting media attention? Click here.

Last Updated ( Monday, 21 June 2010 15:59 )
 

New Not Always Better

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Did Tropicana blow it?

 Sometimes new is simply not better. Of course, it's a matter of opinion but if you no longer stand out in the world of products then you're going to lose consumers. 

Recently, Tropicana created a new look for its OJ carton and, well, the new look (to many consumers) looked bland, unrecognizable and generic. The new marketing created such controversy that the company sucked it up and crushed the new look. "Do any of these package-design people actually shop for orange juice," complained one writer of an email message. Thus, the old packaging prevailed. 

It wasn't just that the packaging looked so generic, consumers complained that it made it harder to identify which variety of OJ was in the carton. 

Actually creation and innovation are part of the business of continually marketing products and services. But remember that just because those inside (working for the company) may be tired of a particular look, the consumers might not. And, in fact, the consumers (with any luck) have come to recognize a product's particular packaging and look. It helps them easily identify it and quickly put it in their shopping cart. 

Consumers want reliability. They want products in the same location in stores. They don't want to have to search up and down aisles and have to relocate items every single time they go to the market. They want consistency. 

Moral of the story: if it ain't broken don't fix it. Keep it simple for consumers. And remember, just like in journalism, don't bury the lead.

If you're selling a product, make it easy for consumers to know exactly what they're getting or they might just look elsewhere.

 

Last Updated ( Monday, 21 June 2010 15:56 )
 

Get Connected to Grow Your Business

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We are truly living in a very technologically-advanced world that offers the ability to get connected in so many ways (and without even leaving your home!). Today there are Twitter, Facebook, Linkedin, StumbleUpon, YouTube, digg, del.icio.us, vimeo, and so many more.

Keeping up with the latest and greatest technology such as smart phones and video cameras is difficult enough, but figuring out how to stay up on emerging and developing sites that keep you connected to your friends, colleagues, and the world can be quite a big chore.

Why should you get connected? I view the Internet as the opportunity of a lifetime. Never before have we been able to reach so many people as we can now. Never before have we been able to get so much information from so many sources, albeit not all credible or trustworthy. But the point here is the power that the Internet brings right to your fingertips is what creates the opportunity of a lifetime. We witnessed our new President develop from a “nobody-knew-his-name” to the 44th President of the United States in a very short period—in large part—thanks to the Internet, viral marketing, and social media.

Whether you own your own business or are employed, chances are you are using the Internet. Growing along with it is the smartest way to remain on the cutting edge. So often I hear people say they don’t have time to learn about these new sites and online gadgets. That’s kind of like saying I don’t have time to learn to drive a car. I guess you can still get around on horse, but you’ll eventually find that you’re left in the dust.

The Internet is a tool and an opportunity of a lifetime. It’s a chance to utilize (many free online services) to build your business, connect with friends, create campaigns and market them to make the world a better place, raise money for an important cause, or?

Don’t be intimidated. The problem is that many people who use computers are still intimidated by what it takes to get involved with some of these sites. It can be a bit overwhelming—remembering hundreds of passwords and usernames is certainly a daunting exercise for your brain. Then creating accounts and uploading pictures, biographical information, videos, etc. is definitely time-consuming. It is, however, important. These days the connections you make online can lead to job opportunities and, in this economic crisis where the unemployment rate is skyrocketing, this could be a helpful advantage for job seekers.

Find what you like. Not every site works for everyone. Some love Facebook; others prefer LinkedIn or Plaxo for connecting online with friends or business associates. The key is explore and try. I resisted for quite a while and then realized I could help grow my business through these types of social networking sites. Many entrepreneurs, authors, and businesses upload information to sites such as these and create an amazing marketing network. I’ve asked for help online to draw attention to an article that I wrote by using the “digg it” button at the bottom of my column. But the real beauty is that it’s not a one-way street. I learn a lot from the people online. Some are in my networks but others I’ve never met face-to-face. Still more, I’m following on Twitter (a micro-blog) or reading their blogs, or listening to their podcasts, or their Webinars. Stories, ideas, and business concepts are shared in a virtual idea-producing, anything-goes kind of arena.

Helpful sites to get you started. It bills itself as the best way to discover the things you like on the Web. The site launched several years ago. It directs users toward good content. Using a classification engine and friend recommendations, StumbleUpon helps visitors custom surf the Web. It helps its visitors peruse sites that they will likely find interesting because they have given StumbleUpon information about their hobbies and interests—the site then seeks to appropriately match them with like-minded Web content.

Collaborative opinions about Website quality are rated by a “thumbs up” or “thumbs down” symbol. The site boasts that “This helps you discover great content you probably wouldn’t find using a search engine.” A StumbleUpon Toolbar can be integrated with your browser so that one-click access to StumbleUpon’s recommendations becomes super simple.

Want to learn more? Join me in March for a Tele-Seminar on Take Your Company into the Spotlight. Click here to register for the free class.

Another good article on how social networking can better the world, click here.

Another good read about advertising to social networkers, click here.

Last Updated ( Monday, 21 June 2010 16:01 )
 
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