As any successful entrepreneur or professional understands, it’s not only what you know, but who you know that drives your success. Gaining referrals is a logical step for many people who want to move their businesses to the next level. Referrals are often a critical component of most companies’ sales and marketing programs.

Recently, I talked to a new sales professional that played everything by the book. From greeting the prospect with warmth and heart to asking each one for at least three names of individuals he or she thought might be interested in learning about the services she offers. While the prospect she met with did not buy her services, one of the three individuals that prospect gave her did. This Sales 101 tactic paid off handsomely with a one million dollar deal in less than a week.

While we are not here to say you will earn a million dollar deal inside of seven days, it’s important to keep referral basics in mind when you want to add to the bottom line.

Follow the Golden Rule. Do unto others as you would have them do unto you. When it comes to referrals, it is important to reciprocate the gesture, but keep in mind that quality is just as important as quantity. Just as you would not like to waste time with a poor prospect for your business, don’t fall into the trap of referring for referral’s sake. Take your time and learn what a good prospect is and then be diligent about referring those people to your contacts.

Get creative. Each person is motivated by different things. While a “finder’s fee” is motivating for one person, a sincere “thank you” may be just as motivating for another. Think of creative ways to encourage colleagues to refer business to you. From posting a list of referrals in the lobby of your office to printing them in your newsletter, creative ways to encourage referrals are abound. These types of tactics work because they remind others that you welcome referrals and that you reward their actions by publicly thanking them.

Be sincere and appreciative. A handwritten note or a personalized email can be just as sincere as a thoughtful phone call. Sincerity shines through in the smallest of gestures. When thanking others for their referrals, be sure to ask what you can do for them in return. More often than not, the person asks for nothing in return, but generally will not forget that you asked.

Ask and ye shall receive. Sometimes people have no idea you are looking for more business. As crazy as this sounds, it is true. Most business owners who actively ask for referrals, receive them. One way to keep referrals front and center is to put a referral plea on the back of your business card. Another way is to thank people for referrals by printing it on your letters. A simple statement such as, “We appreciate your referrals” is all it takes to convey your message.

Deliver value. The best time to ask for a referral is when you are delivering value to your client. Ask the client if they are happy with the service or product you have provided, and then follow up by asking if they know two or three people who like them, would appreciate the way you’ve delivered on your service promise.

Make an offer. Some companies send thank you gifts such as wine baskets or company clothing. Others offer free services, free product or other extended services for referrals. Do what fits your company and referral sources best.

Referrals are one of the easiest ways to tap into your loyal customer base. Put your creative thinking cap on to garner the referrals you deserve!

Ever since the May 2003 tax legislation hit the airwaves, it seems that most business owners have been obsessed about whether or not to buy a heavy vehicle (to take advantage of the full tax break, the vehicle must weigh more than 6,000 pounds). With the new tax laws, it is more important than ever to plan to take advantage of tax breaks. Some of the changes in the law bear a Cinderella-like quality in that they revert back to previous limits.

Here, we cover some of the more general time guidelines on tax planning issues, but there are many more to consider, so be sure to call your accounting advisor to discuss your plan of action. Use this list to begin implementing tax-saving strategies that will contribute to minimizing your tax bill.

•	Put appropriate retirement vehicles in place. For sole proprietors, a fairly new retirement vehicle called a sole 401(k) offers a place to build a nest egg while also offering a soft place to land should you need to borrow against the funds. Different than a Simplified Employee Pension, the sole 401(k) allows owners to divert much more than a SEP. There are distinct limitations on who qualifies for a sole 401(k), but for those who qualify, this can be a beneficial way to save for retirement.
•	Selecting the best entity for your business. Create your multiple-member LLC or corporation prior to the beginning of your business's tax year in order to take advantage of your selected form of business organization for the entire tax year. If you wish for your business corporation to be taxed as an S corporation, make that election anytime during the tax year prior to the year the S election is to begin, or by the 15th day of the third month of the tax year to which the election is to apply. Note: There are extension rules, but they are not automatic, so make your election on time!
•	Put capital equipment into service for maximum tax savings. In order for capital equipment to be eligible as a tax deduction (either using depreciation and/or Section 179 tax laws), you must purchase and place the equipment into service in your business prior to the end of the tax year. So, to take advantage of saving on your 2004 taxes, purchase equipment by December 31, 2004.
•	Put your kids to work. Many business owners realize they can pay their children to work for the business, but many try to pay their kids a lump sum at tax year end. The best way to hire children is to hire and pay them throughout the year, as money is earned. Pay your children when they perform legitimate work in your business. If you planned on giving them money anyway, this is a great way to give them wages that are tax-deductible to your business, tax-free to them (up to the $4,750 standard deduction), and you still get to claim your children as dependents on your personal income tax return.
•	Take advantage of funding options for retirement plans. In some instances, you can gain another nine months to fund your prior year’s retirement plan. For instance, if you want to put $8,000 in a SEP, you have until the individual tax return filing deadline to fund this. That means you could designate the $8,000 for the prior year’s tax return and not pay the $8,000 until October 15 of the current year, which is the same time you would file your individual tax return. This does not mean that you can avoid paying Uncle Sam on April 15 if you have a tax liability. Keep in mind that if you have a tax refund due, you will not receive it until you file your tax return.
•	Make required business estimated tax payments on time. Despite minimizing your overall tax burden, you still need to ensure that you make quarterly estimated tax payments on time. It doesn’t make sense to spend time saving money only to pay more in the form of penalties.

In addition to business tax planning, company owners also have a myriad of individual tax breaks to consider as well. If you aren’t sure where to start for 2004, call us today and we will put you in touch with a tax planning consultant that can help minimize this year’s tax liability.

Define Your Strategic Objective
Define your vision of the business as it must be in order to achieve your Primary Aim--your vision of what the purpose of your life is. Your business should serve this vision. Your Strategic Objective is a statement of what the business will look like when it's done. It is this vision that will keep you focused

Define the Results You Want
A good economy offers some slack. In a shrinking economy, the fundamental questions don't change, but your intensity of focus must increase. You must have clearly defined results to keep you on track.

Engage in Strategic Work
Getting the results you want through other people is key. Strategic Work is most critical during times of recession because your business must operate at peak efficiency.

Systems, Systems, Systems
Establish and implement systems for every aspect of your business. Especially important in times of recession are systems for comprehensive financial reporting. These will enable you to make wise decisions regarding cash flow, and to avoid reckless spending.

Quantify Everything
You must thoroughly understand the exact, quantified impact every system, process, initiative and innovation will have on your business. How many new clients do you need to cover losses? What can you do to trim variable expenses? Is every product a viable income-producer? Evaluate every aspect of your business in terms of the contribution to the income and value of your company.

Client Acquisition
Make sure you know exactly who your customers are. Find the answers to the following questions too, and act upon that information: What is your product in the eyes of your customers? Are your Client Acquisition (Marketing) methods consistently effective on a daily basis? How can you more efficiently communicate your message to more of your Target Market? Where can you strengthen your follow-through with your aftermarket and referral programs?

Client Fulfillment
Remove or find ways around any barriers preventing your customers from getting what they need. Always keep your promises to your customers in the most cost-effective manner possible.

Leadership
As the owner, your leadership is pivotal. Think about what you can do as the leader of your company to foster and enhance an awareness of your vision in your employees. Consider well-structured, regularly-scheduled company meetings as a means for creating a stable and cohesive work environment.

Seek the Truth
Diligently dig down to the truth about your business. Now more than ever, you must think with clarity and purpose, and make the necessary adjustments to survive--even thrive--in a challenging business environment.

Listen, Learn, and Innovate Whenever Possible
Keep your eyes and ears open. You never know where the next great idea is going to come from. It is important that you don't let the bleak economic environment prevent you from innovating. Innovation may very well be more crucial now than ever before!

Michael Gerber is chairman and founder of E-Myth Worldwide. He reminds you that the opportunity is to go to work ON your life not IN it, and in the process to experience the sweet, radiant, extraordinary joy of the fully-lived moment. His Web site is www.emyth.com.