Pricing, the Key to Your Business Success

Mar 10, 2018 by

Profits are the key to any business success. Pricing is the one of the major elements to determine your bottom line
profits.

The biggest challenge I see in this economy is the knee-jerk reaction to cut pricing to bring in more sales. That only works if you have a great up sell process or lifetime value of a new customer or client after the initial sale. For example, the well known story with one of Jay Abraham’s clients. He was consulting with a coin dealer and they wanted to increase sales. Jay asked if they bring on a first time new client to collecting coins, on average once they make their first purchase how many times do they come back in the year to make another purchase. The coin dealer, said, “about 8-9 times on average. Once they get started they are hooked!” Jay was incredibly excited.

His strategy was to focus on getting new customers with that incredible back end. Let’s offer each new customer an incredible deal they can not refuse. Let’s offer each new customer for a limited time a 50% equity position in the first coin they purchase. Meaning, you will lose 50% on each new coin, not break even, but lose money! If the coin was worth $100, offer them only $50 to give them a win early on. The business owner thought Jay was crazy of course. But Jay explained the math of having 1,000 new customers and if each one invested 8-9 more times at full price in a given year, what the impact would be, it was staggering.

These may not be the exact numbers, but the business went from about $3 million in sales to about $150,000 million in sales in about 3 years! That is a rare exception to cutting prices, and even losing money on the front end to bring in a new client or customer.

Most small business owner may not have a product like this where the consumer is so passionate and addicted to the product or service.

Let me point out one of the most important components of price:

If you or your staff only can sell by price, and your solution by you or your staff is to offer a discount to convert a new client or customer that means you do not have to develop sales or marketing skills. If your business can not sell by anything else but price, it is doomed to fail eventually (you might be thinking, WalMart® sales by low price only, that is not true, they have great systems advantages and others that you do not see).

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The Series LLC, a Closer Look

Mar 1, 2018 by

There is a lot of discussion about forming a series LLC instead of multiple LLCs to help save on filing costs. A series LLC is a form of a LLC that provides liability protection across multiple “series” each of which is THEORETICALLY protected from liabilities arising from other series or units. Some have described this structure as a master LLC that has separate divisions (another way to look at it). Series LLCs are now permitted in 8 states, Delaware, Illinois, Iowa, Nevada, Oklahoma, Tennessee, Texas and Utah.

Each series or unit also called a sub-LLC will have to create a separate Series Agreement. Each sub-LLC will have its own asset name, bank account and a separate EIN (Federal Tax ID) number. While the Operating Agreement will be amended as series are added or deleted, the Certificate of Formation (also called Articled of Organization) filed with the state does not require amendment.

The Series LLC members must sign an Addendum to the Operating Agreement and then separate accounts must be established and records maintained for the new cell or unit that is added.

Concerns and Issues with a Series LLC

Currently, governing bodies have not resolved the problems surrounding tax and creditor issues related to the Series LLC.

There is some conflict between the Federal Bankruptcy Code and the State Series LLC law. Some current Series LLC owners have expressed concerns about their inability to file one tax return for all of the sub-LLCs. Many attorneys are reviewing the tax laws to determine the best way to resolve tax issues. The resolution will also determine whether or not they will endorse the Series LLC nationwide. However, a pending IRS regulation may solve at least the federal taxation questions related to Series LLC. It is expected to be enacted in the near future.

CAUTION: We do NOT currently recommend the series LLC if you are planning to invest in real estate in California.

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The Joint Venture Success Formula for Massive Lead Generation

Feb 10, 2018 by

Does your business need more high quality leads at the lowest cost? We are not talking about facebook or Google ads, but leveraging other’s people’s resources. There are companies that have invested millions of dollars on their database to bring in clients and if you can add value to help them do even better, convert more leads, renew more clients at no cost to them; you will look like a hero! Yet, I find 95% of business owners skip this powerful form of marketing. Even at NCP when we have new employees and they are calling our database to find out who may now be ready to incorporate, they also spend time calling on joint ventures opportunities, it is required! I would recommend you finally implement this into your marketing calendar on a weekly and monthly basis.

Let’s cover a few basics then get right into your JV success formula for massive lead generation. The host-beneficiary relationship is made up of two components, the host (the one with the list of clients and is having a marketing message being sent through email, website, webinar or teleseminar are most popular. The beneficiary is the one benefiting from the back end to the marketing message being sent to the host’s list. You are asking one simple questions. Where do my clients or customers go before they need my product or service? Write that one down and put it on your computer. It should be in front of you all day! Now when you speak to clients, leads, vendors it will always be in your awareness. You will be asking yourself, does this client, lead, vendor market to my ideal clients or customers and how can I add the most value so they will be excited to want to send a marketing message to their list!

Recap, if you are looking for more leads and clients, it is very simple, you are the beneficiary. The company who will send the marketing message is the host. Do not wait for hosts to call you with beneficiary opportunities. At some point when you are a big star that may happen, but in the meantime, I would recommend you proactively go after it and make this part of your weekly marketing!

Now the important part, how you approach a host. This is what separates the men from the boys or the women from the girls. You must approach this in a way that it sounds like you are only interested in helping the host get better results. The minute it smells like you are looking only to promote your product or service, nothing happens.

 

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Behind on Sales Tax as an Amazon.com FBA Seller?

Feb 3, 2018 by

If you have been selling on Amazon FBA and only collecting and remitting sales tax in your home state or not, all you are behind.

Every Day that Goes by WITHOUT being in Sales Tax Compliance, you are Paying Sales Tax + Interest + Penalties out of YOUR OWN Pocket.

This may be as much as 8% sales tax, 10% interest, and 30% penalties or 10% out of every sale you are losing, that is NOT necessary.

Amazon.com FBA Seller Use SalesTaxSystem.com

In order to Get Back on Track and In Compliance with Sales Tax You MUST Figure Out the Following:

  • Where do you have Sales Tax Nexus (which FBA States)
  • How do you Track When you Inventory Moves Around?
  • Obtain Sales Tax Permits Properly, avoid costly mistakes in states like California, Kentucky, and Washington…
  • How do you pay back sales taxes, interest, and penalties OR not?
  • How do you waive penalties and what will that cost?
  • How do you get professional SALT support if your CPA is not clear?
  • Should you form a new entity first or get sales tax numbers as a sole proprietorship then move forward?
  • What is the start date on your application for sales tax permits?
  • What does this trigger?
  • What estimate sales tax amounts do you use in each state?
  • What is remitting service the best overall?
  • How do you properly update your Amazon Seller Central Account
  • Settings to not Under over OVER collect?
  • How do you handle selling on Multiple Channels and Sales Tax?
  • If you are outside the US what is different with the rules?
  • Why do you need a US bank account to help Remit Sales Tax?
  • What Other Risks may you take on for not doing this correctly?

As you see there is a lot involved to get you on track moving forward.  The best news is that salestaxsystem.com covers all these areas in the membership area so you can then focus on your marketing and sales!

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How to Cut Expenses without Killing Your Business!

Feb 2, 2018 by

The purpose of any business is to develop a profit. There are many factors that will affect your business’s ability to generate a profit. Those include the costs of goods sold on your products, your price point on your product and services, your fixed and variable expenses.

In this economy where the sales funnel is typically wider for most businesses, meaning it will take more calls to make a sale, the knee-jerk reaction is to cut your prices to increases sales revenue to help generate overall more profits. That strategy typically will backfire (unless your up-sell process is strong and you know your numbers like clockwork).

One of the biggest issues is knowing the ratio between cutting your prices a certain percentage (like 10%) and now knowing your corresponding COGS (Cost of Goods Sold) percentage. The key question becomes, how many additional sales will you have to do at full price to make up for the one sale you gave a 10% discount? My good friend Spike Humer, has developed a very good chart that tells you the answer based on the price discount and COGS. For example, if your product or service has a 40%COGS and you cut the price by 10% the company would have to do an additional 15 sales to make up the profit lost on that one sale. This brings in revenue, but unless a strong back end exists this can lead to a fast track to being out of business.

There are a few fundamentals that we recommend you have in place before you start cutting expenses to make the best decisions.

First, you must know your numbers. There are important questions to ask yourself about your numbers. How many leads to you have each day? What is the cost per lead? What is your cost per appointment? Cost per new client? What is lifetime value of each new client?

For example, if you have 10 leads per day and you have to spend a total of $2,000 per month for marketing, and that is divided by 30 sales days (counting weekends ) or 20 sales days if you do not. That comes out to 10 leads per day x 30 sales days= 300 leads. Now take $2,000/300 leads=$6.66 per lead.

If it takes 10 leads to develop 3 appointments, that is $22.00 per appointment. If those three appointments turn into 1 sale that means it is costing you $66.66 per client (which is a low number). For many of you, it may be costing you $25 per lead that you receive. That changes the numbers dramatically.

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