Jason Drohn's Scrapbook

Have Trouble Selling? Start Adding Value.

Wednesday, May 14th, 2008
A row of shopping carts.Image via Wikipedia

How many times have you tried to sell a client on something, only to be turned down based on price?

The other day, I had a meeting with a client who wanted some web design done. Frankly, we turn down a lot of the web work we are approached with, simply because it takes to much time to support. There are far too many people who don’t understand how to use a mouse, let alone know what a WYSIWYG editor can do.

This job was different, though. I have a couple new employees that could learn our system by designing this project, so I wanted it for them. Armed with my estimate, I started walking the client through what all they would receive… But the sale was far from over. They started attacking the price.

All of a sudden, I was hit with a barrage of, “XYZ Company will do it for half that and ABC Company is throwing in two hours of search engine optimization.” Really? Nice for them. But as you see in my estimate – total search engine optimization is included.

This, all of a sudden, shifted the focus on what value I added in my offer. Now, I can start talking to them about the benefits of SEO, what the steps in the process are, etc. I can also sell them on maintenance packages, upgrades, and PPC campaign management.

What this value adder did for me was swing the door wide open so that I could cart my shopping basket full of goodies in and peddle them at my leisure. No more price comparisons. No more bargain shopping. Just pure, selling goodness.

PS. Don’t ever reduce your price. If you think you are in a bind, throw something in that will add value!

Smart Commenting Makes All the Difference

Saturday, May 10th, 2008

If you are a blogger, a niche business owner, or anyone who has a website that is niche related, then you ought to be active on other blogs and social networks in your niche or area of expertise. If your not your missing out.

Becoming active on others’s blogs in your niche is nothing new and certainly not a new idea when it comes to marketing. But being the 718th commenter or leaving comments like, “Great post!”, just don’t cut it.

The first thing you need to be doing to be a smart commenter is start using Google Alerts. This allows you to get updates from across the web on topics you decide on based on keywords; and you can get them as they happen. Using alerts like these allows you to be frequently first in the commenting on sites. And being first gets you noticed.

If you’re missing the point on why commenting is such a big deal, think about the fact that most blogs give you the opportunity to leave a URL when you comment. Your name, when displayed, will then link back to your site.

Smart Commenting

So now you have you a way to get in first on the comments of blogs in your niche. But again, cheesy comments like the aforementioned won’t do you much good. On a highly trafficked blog, you will see probably 500 of these at least. Commenting is your chance to show others’ readers that you are an authority on the topic also.

Therefore, your comments should be commentary on the topic at hand. This can include opinion, fact, reference to information, additional information not touched on in the post, and more. But it should always be topic oriented.

The Results

Many people, for whatever reason, still do not see the benefit of niche related commenting, so I am going to show you!

I put a WordPress blog about three months ago, did some posting to it for the first two months sporadically, had no ping list, and virtually no other marketing or SEO, and then let it sit. I would get maybe 2-5 visits a day (not new visits, total). I did this to get a base line.

Yesterday I began using Google Alerts and commented on every blog post that came into my email, frequently first. This is the only thing I have done differently. Below you can see the results:

commenting

Now I know these results are not great by any means, but all I did was leave 10-15 comments and they weren’t on super, highly trafficked sites. With a little good research, the proper search terms, and hitting the big sites in a niche, just this tactic can have insane results!

The Tax Man Cometh

Thursday, May 8th, 2008
IRS building on Constitution Avenue in Washington, D.C..Image via Wikipedia

If you’ve been an entreprenuer for more than a year, then you know a little bit about how big of a bite taxes can take out of the unprepared business owner. When you have a regular payroll job, the employer takes care of a lot of taxes for you. In addtition, they handle most of the administrative hassles as well. As an employee all you have to do is fill out a W-4 form and then wait for the payroll department to take out whatever the government asks for based on your number of deductions and claimed withholdings. For the small business owner, things are much more complicated.

First, there is no withholding. You have to pay into the government via quarterly payments. Second, what non-business owners don’t realize is that those taxes they see disappear out out of their paycheck each wee are only half the story. For every 7.5% they take in FICA from an employee paycheck, the employer pays another 7.5%. When you are self-employed, you are on the hook for the whole 15%. Add in Medicare, State, and any local taxes and most business owners turning a profit are looking at a 50% tax hit. Luckily, there are some ways to reduce those taxes.

Remember Only YOU Can Prevent Too Much Taxes

I don’t have a cartoon tax bear to help here, but it’s true. Many entrepreneurs rely entirely on their friendly accountant to handle all things tax for them. While this ensures that you are in compliance with the law, it does not minimize your taxes. Too many business owners make the mistake of assuming that tax planning is nothing more than holding on to your receipts all year and then handing them over to an accountant or plugging them into TurboTax. Don’t make this mistake.

It is up to you to understand your taxes and how to help make them lower. You probably already know the basics, things like recording your mileage and saving receipts from taking clients out to lunch. But, there is much, much more you can be doing.

Plan For Taxes Year Round

Seriously, a 50% tax rate is a nightmare. Bust your butt all year long to build a successful revenue stream just to flush half down the drain. It almost makes you want to go back and work for The Man. You need to be playing this game and dodging the bullets year round.

The first thing you want to understand is your tax responsibility when it comes to quarterly payments. When you worked for The Man, it was taken care of by withholding your taxes from your paycheck according to a table matched up with your W-4. For the business owner the rules are a little bit different. Basically, if you underpay over the course of the year, the IRS will ding you with substantial penalties and interest. After all, it’s no secret the government is not very responsible with those tax dollars. They can’t wait until April 15th next year to get more income. Servicing all of that debt and ongoing spending require massive inflows of cash. They get them by requiring people to in pay all year long.

So, how do you know how much you have to pay over the year? The answer is that you have to pay 85% of whatever your total taxes will be for 2008. See a glitch? In order to know your taxes for 2008 you need to know your reviews and expenses for 2008. Don’t get me wrong, I plan ahead, but I’m not magic. (I’d be in a whole other line of business if I was.) Fortunately, there is a second way. If you pay in 100% of the previous year’s taxes then you are considered “safe” no matter how far off you are on this year’s taxes. This can be a big advantage when your business is growing fast. If you paid $10,000 on $100,000 of revenue last year, and things are going so well that you fully expect to clear $500,000 this year, you are still in the clear as long as you pay $10,000 in 2008. Unfortunately, you can’t just wait until the end of the year either. That’s why your accountant makes you pay quarterly. Quarterly is the lowest allowable frequency.

Theoretically, you could pay in each quarter only the taxes you owe on that quarter’s taxable receipts. Of course, in order to do this you also need to determine that quarter’s tax deductions including breaking up any annual deductions into fourths. Obviously, this is a nightmare for you and your accountant, so unless you have the kind of business that only makes money during the end of the year (Christmas ornament shop) don’t even consider going this route. Instead, the “safe” system is to divide the 100% of last year’s taxes by four, and make equal payments each quarter.

Although the amount you are paying is mostly set, that doesn’t mean you should stop tax planning. Saving receipts is good, but taking it another step will ensure a lower tax bill come next year.

Business Only

A mistake many business owners make is to assume that if they “bought it for the business,” then it is deductible. That is usually true, but there is a catch. You want to make sure that your business purchases are used 100% for your business in the year you buy them. There is a special small business deduction that allows you to take a full write-off all at once during the year you buy equipment instead of depreciating it over time which results in a much lower deduction this year. The catch is that it has to be used 100% for the business during the year it is bought. If your daughter uses that laptop for one week during finals, you’ve lost the ability to take that deduction.

I always get asked, “How can they tell?” Truthfully, they can’t but, it has be reasonable for you to both claim and defend the 100% use. So, if you buy a new computer, don’t load games or let your kids do homework on it. Don’t save recipes or balance your checkbook on it either. In fact, take pictures of your kids and spouse using the OTHER computer so that you have proof. Also, do not throw out or donate your old computer until after the end of the tax year so you can claim that it was the “personal use” computer.

The good news is that after that first year (not 12 months, but through December 31) the item only has to remain 50% used by the business in subsequent years. The catch though, is that it must remain at 50% or more use through the full time it usually takes to depreciate. So if that item normally has a 7-year depreciation schedule, then you have to keep it around for 7 years. Don’t give the IRS ammunition by buying a “business” computer and then two years later writing off the same computer as a donation to charity. Make sure you keep the computer in your business premises until the depreciation period is over, even if you have to stick it in a closet. Remember 50% use doesn’t mean you have to use it 50% of the time, it means that out of the use that it does get, 50% or more must be for business. So, if you turn it on to make sure it still works during business hours in your office and then put it back in the closet for the rest of the year it was still 100% used for business if no one else used it.

Mileage

You can deduct more than just driving to and from a client. Driving to the office supply store, taking equipment in to be serviced, attending trainings, and more can all be used as milage deduction. The rule is that you must have a “contemporaneous” record. That means you have to write it down as it happens. Keep a notebook, or buy one of those special mileage records, in your car. Write down the starting and ending mileage of EACH LEG of the trip. That is write the starting and end TO milage and the starting and ending FROM mileage. You can fudge this, but make it as ironclad as possible and there will be no reason to look any further should someone come knocking. I tell my clients to switch pens and ink colors each quarter when they pay their quarterly taxes and once or twice more than that if they think of it. Nothing looks more contemporaneous than writing in several inks and pencil. Your accountant can’t add to this record at the end of the year even if he discovers something, so they probably won’t even bother to say anything. It’s your job to keep the record all year.

Charity

Your business can deduct donations to charity just like you can. It is sometimes possible to deduct services performed for charity. In my writing business at ArcticLlama, I build up ties in the community by doing grant writing and other services for non-profit organizations. In order to have a chance to deduct it, you must keep track of it like a paying job. Set an hourly rate that you are donating (something in the middle of your usual rates is safest), and then keep track of the hours. If you use any materials or resources you usually charge for, include those as well. When the project is finished create an invoice. You don’t need to send it to them, just keep it for your records. Most non-profits will send you a thank you letter. Keep that with the invoice as proof that you provided the services described. Also, make sure you can produce other invoices for paying clients that contain similar charges and rates to back up your deductions. If you never charge anyone else for faxing, don’t try and write off faxing for your charity project.

Research

There are many more opportunities for year-round tax planning. Call your tax advisor now, if you have one. Now that April 15 is past, they have much more time for planning with you. If you don’t use a tax professional, go to the web site of the computer program you use, or look for books that discuss tax planning. If possible, try and get something specific to your type of business. What may be very deductible for one kind of business may be very risky or flat out illegal for another business to claim, so it pays to be specific. Avoid books with silly titles like “Pay No Taxes Ever” or “Super Secret Tax Strategies”. These books are for the unsophisticated person who wants something splashy. You don’t want splashy, you want solid. “Tax Planning for Architects,” sounds more like what you are after.

Follow the year round planning doctrine, and come December or January, your accountant will have a lot more ammunition to fight the tax dragon. You’ll thank me when you pay less next year.

Build Your Business With A Sensational Offer

Wednesday, May 7th, 2008
Domino's Pizza EnterprisesImage via Wikipedia

What’s your offer? Every business has one. What will you give me in return for my hard earned money? What kind of value can I expect?

Over the last few weeks, I have been delving into the books pretty heavily. The two I just finished are The Irresistible Offer and Gravitational Marketing. Truthfully, they should be read back to back.

The reason is simple: They both preach having an offer that a customer can’t turn down. Something so powerful that your have people begging for you to sell to them. Keep in mind, you can’t run scams – you need quality products or services that back up these incredible offers. But in order to entice a customer or a client, you need to make them see the benefit in as little time as possible.

The Sensational Offer

Here’s an example. The quintessential offer, which is often referred to as the best ever, is Domino’s, “30 minutes or your money back!”

This does a number of things. It ensures fast food. It provides value for your money. And best yet, it give you a guarantee.

Now think about this offer – “The best New York Pizza in town!”

Which is the better sales statement? Which can you almost taste before you even pick up the phone?

Don’t Waste Time

One time, a friend was pitching a business idea. It was something he was deeply passionate about (and very well educated in). He had one problem, he had no value proposition. He didn’t have an offer.

As the business was being started, he asked me to sit down with him and go over some of his plans. So I asked, what is it you are going to do? Give me you best elevator pitch.

45 minutes later, he finished his story.

Seriously, who is going to buy from this guy? I want to know what I am buying, what it’s going to do for me, and how much it’s going to cost in 3 seconds or less.

Everything has an Offer

So, where can you use this? What can you affix your sensational offer to?

My answer to you… Everything! You can give away and sell ebooks with this offer. You can use it to drive product or service sales. You can use it to make new friends. In reality, everything is an offer! The quicker you master it, the better off you’ll be…

How To Tell A Story And Win New Business

Monday, May 5th, 2008

A possible design for a jetpack with folding wings.Image via WikipediaPress releases have long been a mainstay in business.  To this day, a simple press release can generate more “actionable” traffic than any other marketing medium.

But so many people do press releases wrong.

They see a big blank sheet of paper and think they need to fill it up with information about their business.  They take the opportunity to write about what their company has been up to and what they believe in – but seriously, who cares?

The media doesn’t care.  Bloggers don’t care.  They care about the next big thing.  They are all scrambling to deliver some new twist on an already noteworthy topic.  That’s how they put food on the table at home.

Take the newest movie release, “Iron Man.”  Do you have a process or a product that can be tied to it?

I know that you’re thinking.  “My company doesn’t build flying space suits or crazy jet packs.”  And my answer is – it doesn’t have to.

I bet your company does do something relevant though.  You might do some of the filming techniques used in the movie.  Or maybe your specialty is the special effects in the blockbuster or the design work for the posters.

To win at press releases you need to tell a story.  You have to tell clients how you are going to solve their problems.  It isn’t 600 words about you and 100 about your solution; it’s 700 words about your solution that tease them in finding out more.

[via MarketingHackz]