7 Ways to generate new business referrals for your creative agency

August 29th, 2014

In my last post, I promised to tell you of 5 ways you can generate referrals for your creative agency. Ok, I got carried away and I’ve written 7!!

If you haven’t read part 1 yet, you can do so by clicking here

1. Use Linked In – Linked In is such a powerful tool for generating referrals.
• Your profile should tell the world who your ideal client is
• Contribute to discussions in the groups where your prospects hang out, even if the discussion isn’t directly related to what you do. When someone posts “Who can recommend an agency to help us with XYZ”, you’ll be the first name everyone thinks of
• Use your existing connections to get referred to new ones. You can see who your existing connections are connected to, why not ask them to introduce you?

2. Use your email signature – How about including the words “Our agency continues to grow by working with great businesses like yourself. If you know anyone who would appreciate the same level of support you receive, please get them to call us” in your email signature

3. Say thank you to clients for placing their trust in you – and use similar wording to the idea above to ask for a referral. How about thanking them by throwing a party or event, or by inviting them out for dinner or paintballing!

4. Use Client surveys – You can check your clients are happy and ask for a referral at the same time

5. Introduce referral schemes – use them to reward referrers, but be creative!! Does the old £100 a referral really inspire people to refer?

6. Communicate your ideal client profile to everyone at every opportunity – and I mean everyone! – Your clients, your team, your friends and your agency partners. Does your accountant know who your ideal client is? Don’t have an ideal client profile? E mail me for the template we use to help clients create one

7. Ask – Yes the final point is as simple as that. But don’t ask in a “salesy” way, just ask properly and professionally after every completed project where the client says they are happy. How about linking the asking to who they know on LinkedIn? “I’m delighted that you’re happy and I see you know XYZ do you think they would benefit in the same way as you?” (feel free to choose better words!!)

So there you have it. 7 Ideas that you can put into place straight away to increase the amount of referrals you generate.

Of course, to make these ideas really powerful, you have to apply them consistently. So why not create a system so that each idea is regularly implemented, without you having to think about it

What other referral systems do you have in place?

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Generating new business for your creative agency using the power of referrals (part 1)

August 11th, 2014

Every time I ask a Creative Agency owner what their greatest source of new business is, the unanimous answer is always “referrals” or “word of mouth”.

Generating a constant stream of good word of mouth introductions is a vital part of growing your creative agency.  Let’s look at the maths…..

Imagine you had just two customers.  If, in January they each referred 2 prospects to you and 50% turned into customers, then at the end of the month you’d have 4 customers.

If you repeated the same process each month, by the end of the year you’d have a staggering 8,192 customers.  What a result!!

In reality, we know that’ll never happen.  Customers won’t refer as often and won’t refer the volume either.  But, take just 1% of that result and a lot of agencies will have fulfilled their new business targets for the year!

If the results from generating referrals are so good, then why do very few agencies have strategies to encourage and develop referrals?

The answer may lie in one of three places:

Asking for referrals seems to conjure up images of selling double glazing or something similar where a salesman pushes you a piece of paper and asks you to “write down 3 names…”.  Of course, we’re not in that type of environment.  We are professional people, helping professional customers.

The agency is so busy “doing the work” that it doesn’t create the time or opportunity to discuss referrals with potential referrers.

The agency doesn’t know how to start the referral conversation with referrers.

Before tackling any of these issues, I’d suggest that you spend some time defining your ideal customer.  The type of customer that you’d like referring to.  That’ll make it much easier to structure the conversation and help your potential referrers find opportunities to refer you.

Once that’s done you can start looking at creating your referral strategies.  In part 2 of this article, we’ll take a look at 5 ideas to generate referrals for your agency without sounding like the salesman.

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Could this help you to increase your sales growth by 3109%?

May 2nd, 2014

Did you know that research suggests that 73% of business buyers say ‘No’ at least five times to any salesperson before eventually saying ‘Yes’? And did you also know that the same researchers discovered that a staggering 92% of salespeople give up and move on to another target before they get to the fifth ‘No’?

 In other words, while 92% of impatient salespeople rush from company to company chasing the 27% of sales where the buying decisions are made quickly, the other 8% of salespeople (i.e. the patient ones) are the only ones who stand any chance of winning the other 73% of sales!

 Look at the maths and you’ll discover something that could give your business all the new customers and sales you can cope with!

 I know that sounds unbelievable, but just do the maths for yourself. Because when you do you’ll discover that, on average, patient companies (i.e. the ones with patient salesmen who persevere beyond the fifth ‘No’), will win a massive 3109% more customers than their impatient counterparts.

 Putting it another way, for every new sale the impatient salesperson wins, the patient salesperson wins 31!

 Of course, every single person who sells anything in your business may already be part of that very elite band – the 8% who are already very patient.

 But can you be really sure?

 With up to 31 times as many sales as your rivals at stake, it’s probably worth making sure, 100% sure, isn’t it?

 Making sure that your people are patient and persistent. And making sure that your systems support them in that role by making it easy for them to be patient – and impossible to give up too soon.  At Accountancy Extra we have a sales pipeline tracking tool that we offer to customers.  If you’d like a copy, please drop me an email

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Directors pay – the new way to pay yourself in 2014/2015

April 3rd, 2014

From April 2014 there’s a new way to pay Directors from their Limited Companies. But, it’s not as simple as it used to be!

The introduction of the £2,000 employment allowance has resulted in there being more than one optimal way of getting paid from your company.

Let me explain.

Previously, we have always recommended a salary level just below the threshold for paying employees and employers National insurance (£641 a month in 2013/2014). However, qualifying companies can now reclaim up to £2,000 of employers NI (not employees), so the employers NI stops being an issue. The employees portion of NI will still be payable.

Here are the options…….

 Option 1

The company director can take a salary of £10,000 a year (£833 a month) and pay no personal tax. They would however incur employees NI of £245.28. This would be payable to HMRC. Company directors would need to remember to pay this over to HMRC on time, or risk a penalty.

This option is suitable for those who:

 Have no other sources of income

 Can guarantee that they won’t withdraw more than £38,474 from their company in the year

 Don’t employ anyone

 Happy to remember to pay an additional bill from HMRC and are comfortable with any cash flow issues that may arise.

Option 2

This option keeps the salary payment below the NI thresholds so no NI payments become due. The total monthly salary that can be withdrawn is £663 per month (£7,956 a year). This option is suitable for those who:

 May have another source of income (rental properties, second job etc.)

 May exceed total drawings from the company of £38,474 in the year

 Have employees or may start to employ during the year

 Don’t want to have to remember to pay extra bills to HMRC.

Whichever option is chosen, the maximum amount that can be withdrawn from the company in the year is £38,474 without incurring additional tax charges.

So, if you chose option 1 then you could withdraw £28,678 in dividends before paying tax

If you chose option 2, you could withdraw £30,518 in dividends before paying any tax.

We’ve worked through the numbers and for those who meet all the criteria, option 1 saves £163.52 in tax over the full year (which is £408.80 in Corporation tax less £245.28 Employees NI).

Our recommendation & approach

None of us know exactly what the future will bring.

That being the case, we’d recommend taking a salary of £663 a month, until February next year. If you then meet all the qualifying criteria for option 1, you can pay yourself a bonus of £2,044 in March to utilise the £163.52 tax benefit. Please be aware that HMRC will expect NI payment of £245.28 before the 19th April.

 

 

 

 

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2014 Budget – what it means for you

March 19th, 2014

The Chancellor has just delivered his latest budget. The news was delivered in the context that George Osborne does not believe faster growth alone will balance the books, which means that it looks like austerity will continue until 2018/2019 (when the budget deficit has been reduced to nil)
The budget has highlighted some significant changes for savers and some encouragement for business investment. Here are the highlights from a small business perspective:

  • With effect from 6th April a new £2000 employment allowance comes into force. This means that all employers won’t pay the first £2,000 of employers NIC previously due. This is great news for all employers
  • The main rate of corporation tax will be reduced to 21% and then down to 20% next year (for companies making profits of more than £300,000). The smaller company rate of corporation tax stays the same at 20%
  • The annual investment allowance has been doubled to £500,000 extended to end of 2015. This means you can spend up to £0.5m on new capital equipment for your business each year and get full tax relief immediately. Sounds great as a headline, but I wonder exactly how many small companies this will really help?
  • If you are a loss making company investing in research and development, there’s some good news on R&D tax credits which have been increased to 14%
  • If you are a sole trader, your Class 2 NIC’s are to be collected via self assessment tax returns, rather than the current direct debit system. Could be a sensible move, but don’t forget you’ll need to save up to pay the bill in one go.
  • The higher rate tax allowance has been increased to 41,860 from 41,450. A small increase, but every little helps!
  • There’s a big change in ISA limits, which have been increased to £15,000. Cash & Shares ISA’s will be combined from July and will be much more flexible. The Junior ISA limit is increased up to £4,000
  • The biggest change for pensioners is that they won’t be forced to buy an annuity with their pension money. They’ll be able to do with it as they please. We’ll need to see the detail on how this pans out, but it’s got to make investing in a pension more attractive now.
  • The 10p tax rate on savings is to be abolished

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A Christmas present from the taxman

December 14th, 2013

Christmas can be an expensive time, right? Wouldn’t it be great if you could get some financial help to pay for it? Well, your business can!! – and that help comes from the taxman

Here are our 3 top tips on getting the taxman to contribute to your Christmas spending.

The Christmas party

HMRC make a generous allowance of £150 per head for you to hold a Christmas party each year. The allowance is inclusive of all expenditure on the event (including VAT). You can also invite partners and if you do, they get a £150 allowance too!!

There are some considerations, in particular:

The allowance is £150 – on the nose. Go just £1 over this and the entire event becomes taxable, not just the excess.  The taxable benefit becomes £151, which means that tax and national insurance must be added on top.  This would make the event very expensive, either for the employer or the employee.

  1. You can spend the £150 on virtually anything you like, but make sure you keep the taxi fares and hotel accommodation within the £150
  2. The £150 also includes VAT, so be aware of including VAT in your budget
  3. The event must be open to all employees, not just a select few (although not all have to attend).  You can also extend the invitation to partners/ spouses and they too can benefit from the £150 allowance
  4. You don’t have to limit yourself to just one function a year.  You may decide to have two events a year at a cost of £75 each.  Be aware though, if the second event costs £76, then the whole £76 becomes a taxable benefit.
  5. Only annual events qualify, so going to the pub on a Friday teatime is out.  HMRCE have been known to pursue tax on an event which, despite it being within the limits, was to celebrate the companys 40th birthday.  Whilst this is an extreme interpretation of the rules, you need to weigh up the risk against the benefit
  6. The HMRCE approach is to aggregate the cost of the event and divide it by the number of attendees, so there’s no need to worry that John in Marketing ordered the fillet steak!  Do make sure, however, that you keep accurate records of the costs of the event, and whatever you do – Don’t forget to close the free bar in time!

Customer Gifts

How about providing your key customers or suppliers with a small gift? HMRC allow you to make tax deductible gifts to customers and suppliers, providing that:

 The cost of the gift is less than £50
 The gift carries an advert for your company
 The gift isn’t food, drink, tobacco or vouchers that can be exchanged for cash.

Some creative thinking on what to give is required as you can’t claim for a bottle of wine!!

Employee Gifts

HMRC make no provision for you to give gifts to your employees. However, they concede that this does happen and will consider the benefit trivial, so long as the value of the item given is small.

So, you can give a turkey, box of chocolates or a bottle of wine without any repercussions. However, don’t make the gift any bigger – HMRC are unlikely to consider a hamper or bottle of expensive wine to be trivial

Finally – don’t forget your turkey is VAT free!!

Enjoy your Christmas

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A question a day

October 1st, 2013

Got a burning question about your VAT?, or your Corporation tax perhaps?

Something troubling you about your accounts, your record keeping or your accountancy software?

Do you have a troublesome issue with a customer or wonder if there’s an easier way to improve your profits?

 

Well now you have the opportunity to find out

For the next 10 days you can ask those important questions.  Then from Monday 14th October, we’ll answer the most popular questions for an entire week – one question a day

 

To ask your question, you can:

I’m looking forward to seeing your questions!!

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Minimum Wage increases from 1st October

September 30th, 2013

If you employ staff at, or around, the minimum wage limits, you need to be aware that the minimum wage increases from 1st October 2013.

 

The new rates are:

21 and over – £6.31 (from £6.19)

18-20 – £5.03 (from £4.98)

Under 18 – £3.72 (from£3.68)

Apprentice – £2.68 (from £2.65)

You can find out more about who is entitled to receive minimum wage by clicking here

 

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Directors – The new way to pay yourselves in 2013

April 4th, 2013

From April 2013, you should pay an increased salary of £641 a month (from £624 last year).  At this level, you will pay no income tax or national insurance.

 You will then also be able to take a dividend of up to £30,382 (net cash) without paying any additional income tax or national insurance (of course, this is dependent upon available company profits)

 This means a director of a limited company can withdraw a total of £38,074 during the 2013/2014 tax year, without having to pay any additional income tax or national insurance.

 Do be careful as this total amount is £902 less than it was in 2012/2013.  That means it could cost you £225 extra in tax if you pay the same amount as in 2012/2013!!

 You should seek our advice if you have other sources of income, such as tax credits or pension income and these additional income streams do impact on the figures above.

 For more information on how this all works, we’ve produced a video which you can watch by clicking here

 

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2013 Budget – What you need to know

March 20th, 2013

This year’s budget was described as one for an “aspiration nation” and he wanted to declare that the country was “Open for Business”.

The top talking points as small business owners are:

  • The main rate of corporation tax will reduce to 20% from 1st April 2014. This brings it in line with the small business rate. Great news if your profits are greater than £300,000, no news at all if they aren’t!!
  • The biggest break is the announcement of a £2,000 reduction in “job tax” from April 2014. This essentially means that small businesses will be able to employ one person at £22,000 or 4 at minimum wage before they’ll have to pay any employers NIC. If you employ someone, or are thinking about it, this is great news!!
  • The personal tax allowance will be increased to £9,440 from 6th April and up to £10,000 from 6th April next year. There’s no announcement as yet on what the changes to the NIC rates will be, so we don’t know just how much good news this is as yet (we’ll let you know when we do)
  •  The introduction of a new childcare scheme, to be phased in from Autumn 2015. The first £6,000 of childcare will be tax free, saving £1,200. However, it will replace the current voucher/ salary sacrifice scheme. There will shortly be Government consultation of exactly how it’ll be implemented.
    An increase in the threshold of employment related loans from £5,000 to £10,000 from April 2014. As long as the loan balance doesn’t increase over £10,000, there’ll be no tax charge on the loan

Other areas of interest were:

  • The introduction of a “help to buy” scheme for people wanting to move up the housing ladder. As long as the house purchase is less than £600,000 (which covers 90% of houses) and you qualify under normal affordability criteria, the government will loan up to 20% of the value of a new home and a mortgage guarantee on your mortgage.
  • Fuel duty increase planned for later this year has been scrapped.
  • Beer duty cut by 1p from Sunday.

As we get more detail on how these changes impact you, we’ll let you know

We’d love to know what you think……..

We’d be really interested in your thoughts about today’s announcements. If you have 2 minutes, please give us your views by clicking here
Click here to take survey
 

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