In Today’s video you’ll learn about the new PPP rules issued by the SBA can greatly help sole proprietors, independent contractors and self-employed.
Before the SBA changes many small business owners who didn’t have payroll had to calculate on net income now can use gross sales.
If you already filed under old rules- Tough luck. But if you haven’t can make a big difference.
Example – before one of my clients didn't qualify because their net income was zero after depreciation write-offs. Now we can use gross income of $150K and qualify for $31,250 in PPP loans.
Must use the new forms (2483-C for the first draw and 2483-SD-C for the second draw)
Warning- SBA has announced that they will look closely at loans of $150K or more to make sure you had a real need for the funds.
Forgiveness rules are the normal rules for sole proprietors that I covered in earlier videos.
All of this is very confusing so get help if you think this is something that will help you
The most valuable asset a business has is its existing customers.
But what is a business’ second most valuable asset? Customers by referral! If you want your business to grow and your sales to increase, use your current perfect customers to bring in even more new perfect customers.
In other words, when we use our loyal customers to gain more loyal customers, we create a system that guarantees sales, and our business grows exponentially because of it. Sometimes, however, this is easier said than done.
In my decades of experience, I have become an expert in the art of referrals, and there is a right way and a wrong way to do this. Don’t waste your precious time and money on strategies that won’t help your business grow.
Let’s have a conversation and make sure we prioritize the right customers so this year can be our most profitable one yet!
Do you want to improve your profit and re-engage customers?
Obviously, the answer is yes, but how do we do this while juggling a cacophony of other tasks and obligations as busy entrepreneurs? The best way to grow profits is with the 80/20 rule. This rule states that 80% of your output comes from only 20% of your input. In other words, if we want to grow, we only need to focus on the top 20% of our customers and 80% of our profits will grow.
Especially during the times in our lives in which we have other obligations that take us away from focusing on our business, the 80/20 rule can help.
By focusing on your growing your top customers, you can double or triple your revenue without having to search for new prospects or develop new services.
Don’t get overwhelmed by trying to grow your profits. Just make sure your focus is in the right spot!
It’s been over six weeks since the second stimulus bill has passed, and most people have yet to understand the entire scope of these changes.
As we kick off the 2021 tax season, it’s important to understand the new tax breaks in the second round of stimulus.
Your taxes will look a little different this year, but if you do it right, this means more money in your pocket.
The stimulus bill is designed to offer assistance during these trying times. Let’s have a conversation about these tax breaks so we can take full advantage and get more money in our pockets.
The new law passed in Late December of 2020 created the possibility to get both the PPP loan and the Employee Retention Credit at the same time. It also extended and expanded the credit into 2021.
This can equal a large credit which will reduce your payroll taxes equal to the dollar amount of the credit amount you qualify for. In this video I discuss the rules and how this can mean reducing your payroll taxes substantially. For one of my clients I estimate it can be up to $50,000.
It’s been 312 days since our COVID lockdown began, and the economy has undeniably been affected in the long term.
While this health crisis has ravaged some communities and businesses, you don’t have to let the COVID economy beat you.
If you have been in this industry for as long as I have, you would know there is a way to build a better and smarter business in the COVID economy by prioritizing certain improvements and taking strategic action to increase sales.
Watch this video where I discuss how to beat the COVID economy in order to build a better and smarter business.
Don’t try to endure the COVID economy alone; let’s work together, and come out the other side stronger than ever!
Within the world of sales and marketing, this is the MOST important question you must answer! Out of all of the choices a person has, including doing nothing, you must communicate to your prospects that you are the best option and why that is the case.
In this video I discuss why this so important and why your answer to this question for your prospect must be so compelling that they can't go anywhere else to get the solution to their problem.
Back in March of 2020, the CARES Act was passed in an attempt to provide assistance to workers, families, and communities during such unstable times.
While it has helped millions of Americans so far, it is also incredibly complicated to fully understand.
For example, under this act, small businesses are required to pay for their employees’ sick leave.
Sounds simple enough, but there is much more depth behind this requirement.
If used properly, the CARES Act can truly help you, your employees, and your business. And while few can claim a full understanding of such a complicated policy, I can.
Join me for an exclusive Facebook LIVE event right here in the Facebook group as I walk you through what, as a small business owner, you need to do for your employees, what the benefits of these requirements are, and how the tax credits function.
It can be overwhelming to try to fully understand such a broad and complicated policy but allow me to help you understand everything you need to know so you can benefit from this act, not suffer from it. Join me!
Every business owner has been faced with a customer carrying a competitor’s ad or invoice with a lower price. Your immediate reaction is to match the price.
When you are trying to increase gross profit, the fastest route to putting more cash in your bank account, price matching is a profit-killing error.
I have included an Excel spreadsheet to help you determine how big of a mistake you would be making if you price matched. You use it to determine how much your sales must increase just to achieve the same level of profit without the discount. You do this by locating your profit margin across the top and your planned discount percentage down the side.
Allow me to illustrate. Assume that I have a 40% profit margin (sales minus cost of goods sold) and I am going to discount my product by 10%. The intersection of these two numbers shows that I must increase sales by 33% just to break even. And this assumes that a 33% increase in sales of this product won’t result in any increases in operating expenses—a rather unlikely occurrence.
A better approach is to follow Dan Kennedy’s advice. “See what your competitors are doing and do the opposite.” Raise prices instead.
Every time I say this to my clients, I hear some variation of the following: “I can’t do that! I will lose my shirt!” I too have been (and still sometimes am) guilty of this thinking. Will you lose customers if you raise prices? Of course you will lose customers, but will it hurt you?
The second table attached shows the amount that your sales would need to decline following a price increase before your gross profit is reduced below your current level. At a 40% margin and a 10% increase in price, you could lose 20% of your sales before you experienced a drop in profit. You could literally lose one out of every five customers and still be even!
Knowing this will still be a problem for you if are a business owner who thinks price is the only factor influencing a buyer’s purchases. That type of business owner will clearly reject raising prices. This means that they also reject the concept of value selling. Their standard response is, “That may work for some businesses, but it sure won’t work for me!”
In my experience, there is no business that doesn’t have a way of commanding a premium price on its products or services. They do this by marketing their products and services in such a way that the customer perceives an added value over the lower-cost items offered by the competition. Of course, this is the catch—you must do the hard work of determining what this added value is and communicating it to your customers
If all of your marketing and advertising is based on price, you should be very afraid. You only have a business until a competitor comes along who is willing to sell to your customer at a lower price.
The only way to get out of this pricing trap is to focus your marketing and advertising on other features and benefits. Such as? That will be different for every business, but some common ones are better quality, better service, longer warranties, a comprehensive warranty, more convenient location, 24-hour access, etc. You may already offer all or some of these. But if you don’t focus your advertising and marketing on it, how will the prospects know?
Your job as a business owner (who by definition is a marketer) is to design and market your products and services with a high perceived value and deliver them with service that wows the customer. Price is only important if all other things are equal.
Yes, there are customers who only care about price. Let your competitors compete with Amazon, Walmart, Sam’s Club, Costco, and an ever-growing list of internet sites for those price-is-everything customers. If you want to grow a profitable business, you must build your business on those customers who are willing and able to pay for value.
The key is to first create value and then educate your customers so that they are aware of this higher value they will receive from buying from you, rather than going with the low-cost alternative.
Your business can be profitable and still run out of cash. That is because the cash is hiding everywhere in your business but is not in your bank account. In this video I discuss where to find it and how to get it back into your account.
Though the pandemic continues on, the immediate urgency has died down, and many small business owners like you are now filing the required paperwork to have their PPP loans forgiven.
Unfortunately, the rules for and details of loans like these are always changing and updating, and more likely than not, there have been some changes since you first filed the PPP loan paperwork.
As a business owner, you aren’t in the trenches of tax law or staying up-to-date on all the little nuances of loans like these—which can make the process of applying for forgiveness a very overwhelming one.
I can help clear some of this up for you.
Join me for this important Facebook LIVE right here in the Facebook group as I walk you through some of the recent changes to these PPP loans as well as a few other items like the confusion around retirement benefits, how loan forgiveness will affect your tax return, and much more.
Ultimately, if there is anything you are unclear about, you need to sit down and have a discussion with your CPA. However, this live should help clear some items up for you so you can work on obtaining PPP loan forgiveness with confidence!
These days, there’s more of a risk than ever that a small business will fail.
Between the pandemic impacting how businesses operate day-to-day, changes in the economy as we adjust to this new normal, and myriad other factors, it can seem like it’s impossible for a small business to get off the ground—or even stay afloat.
That’s not the truth. It IS possible for a small business to succeed, even during a year as intense and crazy as 2020 has been. So the question is: HOW does a small business succeed?
A good place to start is by understanding the main reasons why small businesses fail so that you can be aware of and avoid those pitfalls.
A study by CBInsights listed the top 20 reasons startups fail. (Full study at https://www.cbinsights.com/blog/startup-failure-post-mortem) This isn’t the first study about startup failure, but it is different from others in that it provided a much higher level of detail.
Though it focused on startups, I believe its lessons apply to every business that is not growing to the level the owner expects. Here are the study’s top five reasons businesses fail:
No market need was listed by 42%. Almost half the failures were caused because their product didn’t solve a customer problem. This is why we spend so much time in our Sales & Marketing Boot Camps pushing our clients to really discover their customers’ true need
Running out of cash was listed by 29%. A third of the businesses simply ran out of cash. This is why the business owner must become an expert in raising cash, keeping cash, and budgeting. This is also why the business owner must have good accounting records.
Not having the right team was listed by 23%. Too often a small business owner can’t grow a viable business independently and fails to bring in qualified help. Sooner or later this kills the business.
Being outcompeted was listed by 19%. You are often told to ignore the competition and just put out good work. But if they have a solution to the customer’s problem that is much easier to use, or they simply out-market you, they will become the leader in your niche and you will lose.
Pricing/cost issues were listed by 18%. Many businesses have trouble determining what to charge and what pricing model to use. They often build a product or service and say, “This is what I need to charge to make money.” This approach ignores the customer. What is the customer willing and able to pay to solve their problem? Only after you discover this information can you determine if you have a profitable solution (product or service) to offer.
This brings me back to where I mentioned that businesses seem to be either doing very well or simply surviving. If you aren’t doing as well as you think you should be, these five things may be a large part of the problem. Read the full study with the comments and I guarantee you will find ideas and solutions that you can apply to your business.
Increasing sales is important to any profit enhancement plan. But cost cutting cannot be left out. In this video I cover the 3 rules for successfully cutting costs.
Increasing sales is important to any profit enhancement plan. But cost cutting cannot be left out. If you are operating on a 10 percent net profit margin, a $1 cost reduction is equal to a $10 increase in sales.
In order to achieve lower costs, you should perform a cost-cutting audit annually. First, identify your biggest costs and assign them to cost centers. Then use those centers to allocate the remaining costs. Once you categorize your costs and understand their relationship to your business, you can implement cost cutting. All companies attempt to do cost cutting, but they often fail.
Successful cost cutting requires you to follow three simple but painful rules:
Make cost cutting a continuous activity. Most companies have cost-cutting drives at intervals of several years, and generally only during business downturns. In between, only a token effort is made to run economically. You can win big by having all of your managers work on cost cutting every day. Require a written report on their progress on cost reduction every quarter. This not only reduces problems in bad times, but can substantially increase your cash flow during the boom times. This is a much more efficient way to cut costs. Crash programs tend to result in process hang-ups and quality problems because the measures taken are not thought out and are implemented in a hurry. Continuous cost cutting gives you the opportunity to carefully test results and avoid false economies.
Cut the major costs first. It seems obvious to start where the money is. Unfortunately, I have sat through countless meetings where the cost cutting applied to as little as one percent of the total costs. Be creative! Look for ways to cut costs that don’t affect efficiency or reduce your product’s quality.
Cut costs by eliminating, not reducing, activities wherever you can. As you examine each cost and cost center, the first question you should ask is, “Can we get rid of this entirely?” The answer of course will probably be “No!” You can jar your people out of that rut by rephrasing your question like this: “Okay, suppose we were forced to stop doing it. What would we do instead? Would it be cheaper?” Don't even consider your options for reducing the cost of an activity until you have convincing evidence that it is impossible to eliminate it altogether.
In tough times or good times, tracking every dollar your business uses and making sure your cash is spent wisely will lead to more cash in your bank account. Here are some ideas that usually increase business cash flow quickly.
In my forty+ years of working with small businesses, just about every business owner that I have worked with has been surprised by the amount of cash that they are leaving on the table. In tough times or good times, tracking every dollar your business uses and making sure your cash is spent wisely will lead to more cash in your bank account. Making changes early on can be the difference between success and bankruptcy. Here are some ideas that usually increase business cash flow quickly.
Increase sales
Almost every business is ignoring one sales area that is a goldmine—their current customers! If the business owner works on nothing else, they should work on the following systems:
Improve your systems to increase your lead conversion rate. Your goal is to turn more of your customer contacts into sales.
Improve your systems to increase the order size by upselling. Create a list of products and services that go together logically and make sure your staff is trained to offer them to every customer.
Improve your systems to increase repeat sales. Develop incentives for your customers to shop with you more often. Increase your communication with your current customers about new products and services you have that will solve their problems.
Improve your systems for customer referrals. Ask for referrals from your best customers. Pick up The Referral Engine by John Jantsch for great ideas on getting referrals.
Increase your prices
The quickest and easiest way to increase your income is to raise your prices. If you are worried about losing customers, do the math. You will be surprised by how many customers you can lose and still make the same sales amount. And most business owners find that they make even more money with less work.
Speed up your collections
Review your receivables now and every week. Call every customer who is past due as soon as they become late. There is no secret to collecting receivables—the owner just has to stay on top of it constantly! Don’t let someone else’s cash flow problem become your cash flow problem.
Avoid receivables entirely by getting prepayments, larger down payments, or requiring payment at the time of delivery. Additionally, speed up your billing cycle by billing weekly instead of monthly. As a last resort, look into receivable financing.
Control your inventory
Money tied up in your inventory is money that is not in your bank account and money that isn’t working for you. Examine your inventory and identify those items that are not selling quickly. Get rid of these by lowering your sales price until they sell. Remember:
It is better to sell it today at a 10 percent discount than six months from now at your normal price.
If it doesn’t sell at a 10 percent discount, it is better to sell it at a 25 percent discount today than at its normal price a year from now.
If it still doesn’t sell, sell it at cost and reinvest the money into products that are selling for a profit.
If you can’t sell an item at cost, selling it below cost is better than keeping it on the shelf and throwing it away in a couple of years.
Decrease expenses
A ten percent across-the-board cost-cutting approach probably won’t work. Cutting advertising will probably cut sales, too. So the proper method is to review all expenses line by line and look at ways to eliminate or reduce the cost item. If you haven’t bid an item out recently, you are probably spending too much on it.
Control your outgoing cash flow
Ask your customers to supply raw material. Explore just-in-time (JIT) inventory options. As a last option, look into floor plan financing of your inventory.
Your suppliers have a stake in your survival, so they will often work with you if you can show them it is in their best interest. Ask for longer payment terms, even if you have to offer to pay a slightly higher price (of course, keep an eye on your margins and decide if you can pass these costs onto your customers).
There are many other things you can do, but this is a great starting point. Before you pay for anything, just ask yourself, “Can I live without this right now?” If you can—wait! Keep cash in your bank account for as long as you can.
