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We hope you find this arcthve useful. A subscription to The Small Business Advisor Newsletter is free. Subscribe now - it's easy! The Small Business Advisor Newsletter for June, 1997 CONTENTSNotes, tips, etc Money Saving Tips Flyers and Signs Simple Pension Plans Perfect Presentations Build Yourself by Building Others Write Sales Letters that Pull ++++++++++++++++++++++++ NOTES/TIPS/etc Many banks are now providing
"small business" checking accounts. Check with you bank for details. For
example, our local bank is providing an account free of all service charges
with $1,000 minimum average balance and free processing for up to 250
checks per month. ++++++++++++++++++++++++ MONEY SAVING TIPS
Seemingly insignificant items can add up to major savings for your business. Consider the following and watch your bottom line improve: * Negotiate everything including services. You can frequently purchase at a discount by merely asking. Always request a discount if you pay cash or intend to pay within 5-10 days. * Comparison shop for all your needs. If you have been purchasing similar goods from the same vendor for a few months, put your regular order up for bid with the competition ...it is likely you will do better. * Shop by mail order whenever possible. It is frequently economical and convenient. Use a credit card for mail order ...if you have a problem the credit card company will assist you. * Toll free calling can add up to major telephone savings. Numerous vendors and suppliers have 800 numbers which may not be widely advertised. Don't purchase an expensive "800 directory." Either use the toll-free operator (800 555 1212) or better yet, search using the internet (http://www.tollfree.att.net/dir800/) * Barter, it works! This is a great way to help your cash flow. There may be tax consequences so check with your accountant or CPA. * Monitor telephone usage & supplies. Telephones and supplies are often misused and considerable savings are possible by being diligent. * Monitor energy consumption.
Utilize auto-setback thermostats and automatic light switches. Savings
can be dramatic. * Shop for the best telephone service. Rates and services vary considerably between suppliers. Furthermore, rates change frequently. Shop around from time to time and switch if necessary. * Use FAX or E-mail instead of regular mail. You will save the cost of postage, paper, envelope, mailing time and get instant delivery! Send messages in the evenings or weekends for further reduced telephone rates and save even more. Most FAX machines and e-mail systems provide for delayed sending. (This article is an excerpt from "The Small Business Start-Up Guide" by Robert Sullivan. Check it out at http://www.isquare.com/guide.htm ++++++++++++++++++++++++ FLIERS AND SIGNS Finding inexpensive ways to market a small or home-based business can be a real challenge. Advertising in big newspapers or on radio can put you in the poor house in a hurry. For a great many businesses, fliers and small signs make a wonderful (and very cheap) marketing tool. A professional flier can be put together on any word processing program. Include a to-the-point headline emphasizing the benefits of your product or service. Many copy shops now have photocopiers that make very clean copies--almost as good as offset. You can often get 1000 quality fliers for $20 or less. To make small signs, print your message on yellow paper and laminate it to stand up to weather. Be sure to include your phone number big enough to be seen at a distance. Follow community rules when you distribute them. Some people think that fliers
and small signs are too tacky to be effective. That depends entirely on
the kind of business you have. Many small and home-based businesses generate
all their new customers from fliers and signs. (Dr. Kevin Nunley specializes in marketing help for small business. Reach him at DrNunley@aol.com. Ask for a list of his latest special reports on marketing.) ++++++++++++++++++++++++ SIMPLE PENSION PLANS
There's a new type of retirement plan that's available for small businesses if they don't maintain any other retirement plan and have no more than 100 employees - the SIMPLE. That's short for Savings Incentive Match Plan for Employees. A SIMPLE plan can be in the form of an IRA or 401(k) plan. SIMPLE PLAN FEATURES The most important features of SIMPLE plans are as follow: Non-discrimination rules that apply to other retirement plans do not apply to SIMPLE plans. There's no requirement that a minimum number of employees elect to participate. Thus, the plan can be set up and an employer can make contributions even if no employees choose to participate. Self-employed persons can participate in a SIMPLE plan. There are simplified reporting requirements. Contributions must be fully vested immediately. Contributions are mandatory despite fluctuations in profits. Employees may make elective contributions expressed as a percentage of compensation and not as a fixed dollar amount, up to a maximum of $6,000 per year. All employees earning at least $5,000 per year must be eligible to participate in the plan. CONTRIBUTION FORMULA Employees may make elective contributions of up to $6,000 per year. Employers must make matching or fixed contributions (even in years when the business has no profits) in accordance with the following formula: Matching formula. Under the matching formula an employer is required to match an employee's elective contribution on a dollar-for-dollar basis, up to a maximum of 3% of an employee's compensation. The maximum employer contributions under the matching formula is different for SIMPLE-IRAs and SIMPLE-401(k) plans because each type of plan uses different maximum employment compensation amounts to figure the maximum matching amount. For SIMPLE-IRAs maximum employer contribution under the match formula is $6,000 (3% x $200,000 compensation). For SIMPLE-401(k)s maximum employer contribution under the match formula is $3,200 (3% x $160,000 compensation). Loophole. SIMPLE-IRA type plans allow an option to drop contributions to as low as 1% of compensation in up to 2 years in any 5 year period. This option is not available in 401(k) type SIMPLE plans. Fixed contribution formula. In lieu of matching employees' contributions, an employer can choose to make a fixed contribution of 2% of the compensation of each eligible employee (regardless of whether the employees put any of their own money in the plan). Under the fixed contribution formula the maximum compensation per employee is limited to $160,000, thus, limiting an employer's contribution, under both SIMPLE-IRAs and SIMPLE-401(k)s, for an employee to no more than $3,200 per year ($160,000 x 3% = $3,200). TAX TREATMENT OF SIMPLE ACCOUNTS 1. Contributions. Employee and employer contributions to a SIMPLE account are excluded from the employee's income and are not subject to income tax withholding. However, the employee's (but not the employer's) contributions are subject to Social Security tax. The employer's matching (or fixed) contributions are deductible as long as they are contributed to the employee's SIMPLE account by the due date for the employer's tax return. Employer's must deposit the employees' elective contributions to the SIMPLE account within 30 days after the end of the month in which they are deducted from the employees' pay. 2. SIMPLE accounts. SIMPLE accounts themselves, like IRAs, are not subject to tax. All earnings accumulate tax-free. 3. Distributions. Distributions from SIMPLE accounts are taxed in the same manner as distributions from IRAs. They are subject to tax at ordinary income tax rates as received. CAUTION - TAX TRAP. There's a 25% penalty tax, in addition to the regular income tax, if an employee withdraws the money within the first two years of plan participation. Early withdrawals, before age 59 ½, after the two-year period, are subject to a 10% penalty. LOOPHOLE. SIMPLE plan money can be rolled over tax-free to a qualified employer pension plan. ++++++++++++++++++++++++ PERFECT PRESENTATIONS
Face it. You really do have to do that presentation. You know that the success of your business depends upon your ability to pull off a powerful presentation. While that thought may send chills up and down your spine, take comfort from the fact that you are not alone. Fear of speaking in public is way up there on the "list of fears". But, I promise that you can learn to love (well, at least enjoy) doing presentations. I know that I do. And yet once upon a time I was so painfully shy and fearful of speaking in public that school personnel were convinced I had a serious hearing problem. I simply refused to respond when spoken to! Now how in the world did I get from that to where I am now - - someone who truly loves to do presentations? Please allow me to share some of my personal "do's and don'ts" that I guarantee will assist you in looking forward to your next presentation! · Focus on your audience. You've been asked to do the presentation because you are the expert on your business. You know your subject. In fact, you know it better than anyone in the audience. So forget about yourself when you're standing in front of a group, and instead really focus on your audience. Watch their expressions. Are they "getting" what you're telling them? Ask them. Involve them in your presentation. People retain interest at a much higher level when they are actively involved in a discussion. Do not rely on notes. You need to be looking at your audience, not at your notes. It's okay to have a couple of 3 x 5 cards with a few sentences to jog your memory, but, remember you can't look at your audience, and notes at the same time. And it's a good deal more important to make eye contact with your audience. · Be prepared. Be a good "Boy Scout/ Girl Scout". As soon as you hear about the opportunity to present, prepare a rough first draft. Create at least two or three additional drafts until you're comfortable, if not wildly in love, with your presentation. Do not attempt to wing it. Going in without a prepared speech is a sure guarantee that you'll leave out some critical points that you could have made had you been prepared. Once you have a good solid presentation, you'll use it over and over again. So it's well worth the effort to prepare that outstanding presentation. · Arrive early. Give yourself lots of time to scope out the room. Make any necessary adjustments to the equipment you'll be using for the presentation. Stand in back of the room and focus your projector. Arrange your handouts. Be there to meet and greet people. Shake hands. Chat with your audience. Do not go flying into the room at the last moment. You're setting yourself up for a possible disaster. You'll be breathless, uncombed, and probably frazzled. You won't get a chance to meet your audience. And even worse, you might run into presentation equipment that doesn't work! · Rehearse your presentation. Do it in front of a friend and urge him to be truthful regarding the contents as well as delivery of your presentation. Videotape yourself. One of my colleagues was horrified to see herself, on videotape, winking coyly at the audience several times during her very serious talk. Video tape will also capture the hands-in-your-pocket, and other "no-no's". Do not memorize your presentation. If you fall into the trap of memorizing, heaven help you if you're interrupted. Will you have to go all the way back to the beginning of your presentation? I've seen it happen, and it's not a pretty sight! Practice your presentation, videotape it, glance if you must at your 3x5 cards, but do not memorize it. · Check in. Check in with the audience at the start of your presentation. If you're excited to be there, tell them why. If you have trepidation, share your reasons with the audience. I was once exceedingly nervous about doing a presentation for the president of a huge computer corporation. I opened by looking straight at him, and saying, "I'm really nervous being here, and the truth is I'd rather be in Philadelphia!". He burst out laughing, said he understood the reference to W. C. Fields, and acknowledged that he was looking forward to my presentation. Do not open with a joke, unless you're a professional comedian. It's extremely difficult to recover from an opening where a joke has fallen flat. · Dress professionally. Even if you always wear jeans, or even pajamas while you work, you'll want to "dress up" for your presentation. You'll send several messages to your audience when you do - - I cared enough about this presentation to dress up, I'm successful (and we all know that success breeds success), and finally, I'm a serious professional. Do not allow your clothes to "get in the way". Be sure that your audience doesn't spend the first ten minutes of your presentation focused on your Bugs Bunny tie, or wonder why you're wearing lipstick the color of "chopped liver". · Watch the clock.
Time your presentation carefully. If you've been given thirty minutes
to do your presentation, make sure you say everything you need to say
in thirty minutes. Don't plan to talk for twenty minutes, and assume that
you'll get ten minutes worth of questions. Maybe you will, or maybe you
won't and you'll be standing in front of the audience with nothing more
to say. Do not rush through your presentation. Use your mental energy
to think in a calm, controlled, and professional manner. Let your audience
know how to reach you, should they have any additional questions. Hand
out your business cards. Write your name, telephone number, e-mail address
on the white board. (Phyllis Sheerin Ross is a Consultant and writer, with over 20 years experience in project management, training, and business development for Federal Government and commercial organizations. She can be reached at 301-384-0769 or by e-mail at Bronx1@erols.com) ++++++++++++++++++++++++ BUILD YOURSELF BY BUILDING
OTHERS The National Sales Manager strode into the room, which was filled with local sales representatives. He was tall, tanned, in his 50's, and walked with an air of confidence. He had been with the company for a long time. He knew his stuff. He was about to meet most of the employees in this branch for the first time. His objective was to train them and to encourage them to increase the overall sales performance of the division. He did not introduce himself, because of course, they all knew who he was. Or, they should have known. He began by asking a series of questions about length of time each person had been with the company. "Who has been with the company for more than two years? One year? Six months? Less than two months?" The salespeople responded by raising their hands. After he found a rep that had less than two months with the company, he asked the poor guy to explain some intricate aspect of the company's product line. When the new representative said, "I don't know," the National Sales Manager replied, "I can see that I am going to have some fun with you." For the next 30 minutes he directed additional questions back to this new representative, and to other new salespeople. They rarely knew the exact answers to his questions, or the answers that he wanted. This gave him a chance to explain various features of the product line in detail to the assembled group. The experienced reps were seldom asked a question, or involved in the discussion. The Sales Manager did accomplish the objective of conducting a detailed review of the company's product line, but what did the new sales representatives think of the experience? What would you have thought? Immediately after the meeting one new employee was heard to say, "I don't like him." Another new employee replied, "Had he called on me again I was just going to say, 'I don't know, that's why I am here today.'" He had embarrassed the new people in front of the more experienced employees, their mentors, and their peers. Obviously the new employee won't know as much about the company and its product line as the more experienced personnel. Yes, the Sales Manager looked good. He knew all the answers. His performance was dramatic. He brought excitement (and fear of embarrassment) to the room. But he failed to create or enhance feelings of loyalty, respect, and teamwork among the employees, particularly with the new sales reps. Perhaps a better approach would have been to include the seasoned workers in the discussion process, and let them show the newer employees that they knew the answers to the detailed questions. This would have made the long-term employees look good to the new ones, and the same information exchange could have taken place. He could have used the opportunity to build the feelings of self-worth and pride among the employees, rather than destroy or dampen these feelings. Rarely do we enhance our own position by embarrassing others in front of their peers, or by making new people, who we know aren't aware of all of the workings of the company, look foolish in front of others. The Sales Manager could have "looked good" by conducting a great sales meeting, but instead he chose to make himself look good at the expense of others, and in the end his meeting was not as successful as it could have been. We usually can't build ourselves up or make ourselves look good by ridiculing or embarrassing others. A better approach is to build ourselves by building others! (You can develop your own newsletter marketing business (offset printed type) for businesses in your area. Contact John Power at Newsletter Marketing Systems, Inc. for a free response package. Please specify printed or e-mail response preferred. Ph: 602-813-0796 Fax: 602-813-0827. e-mail: cactus2000@aol.com). ++++++++++++++++++++++++ WRITE SALES LETTERS THAT PULL
USE THE MEDIA-marketing help for small biz. Sales letters can be a terrific way to get your message out. Mailed, faxed, emailed, simply hung on doors--you and I get sales letters everyday. My regular mail box is constantly filled with "junk mail." A friend reports several hundred unsolicited email messages each day. Why do so many businesses--both large and small--use sales letters? It's simple. Well-written direct mail works. Here's why. Letters are a very personal form of communication. Even when you know the same letter was sent to thousands of people, it still has some of the feel of a personal note from a friend. People who are good at writing sales letters know this and use it. They do their best to create a personal bond between the letter and the reader. Your sales letter should talk intimately with the reader. Chat informally with short sentences and simple words. Make it easy for the reader to QUICKLY understand your offer. Most people will only give your letter a three-second once-over before deciding to read further or toss the letter into the trash. Make your offer attractive and put it right up front. FIVE SURE-FIRE SALES LETTER FORMULAS One of the great things about direct mail--regular or electronic--is that you get an immediate and measurable response. Sales letters that work bring in a measurable number of return messages, phone calls, return cards, and sales. Over the years, direct marketers have landed on some favorite formulas that always seem to work. Here are five of my favorites. 1. Tell a story. Notice
how many of the email sales letters you get follow this format. One I
get over and over from different people goes "Six months ago my company
was downsized and I found myself out of a job. I expected the worst.
Then I heard about the XXX Company. Now I'm an independent agent
making three times what I did on my old job. And I'll never be downsized
again!" It's hard to resist reading a story, especially if it sounds like
someone who has a situation similar to our own. People love success stories
when they tell us how to get success ourselves. 2. A message from the president. People respect a note from the head of the company. It lends authority to the message and makes the reader feel important. That's a good way to make a sale. This formula can also be used to let the reader in on some inside information, another sales letter favorite. 3. Offer something free. Maybe it's a free or discounted visit to your store or office. A doctor who lives down the street from me built his patient list by sending out several hundred postcards offering "10% off your first visit." The prospect who is interested in your product or service will appreciate more information. Offer it in the form of a free Special Report, brochure, or booklet. (By the way, write me at DrNunley@aol.com or call (801)253-4536 for my free info-packed Special Report on marketing your business!) 4. Ask a question. "Are your days hectic and frustrating?" This is good old-fashioned psychology. When you ask a question, the reader is enticed to answer it. It mentally involves the reader in your sales letter and offer. Some experts say to ask a series of questions, each likely being answered with "yes." The final question has the reader saying "yes" to a sale. 5. Point out a problem that the prospect has. This is the adverting classic. Watch for it in marketing and commercials everywhere. Direct the reader's attention to a problem, then make the problem seem worse. Once you've established the problem as a major impediment in the reader's life, introduce your service or product as the solution. WRITE A HEADLINE TO GRAB ATTENTION Most sales letters begin with
a headline that quickly presents the major points. It can be typed in
all capitals like a newspaper headline: THE NEW WIDGET 2000 WILL SIMPLIFY YOUR LIFE--AND IT'S 40% OFF THIS MONTH ONLY! You can also write the headline in paragraph fashion just above the salutation: The new widget 2000 will simplify
Dear Computer Enthusiast, And that brings us to another point. When you're sending out lots of sales letters, a salutation to the general jobs or interests of your readers works just as well as typing in each reader's name. Instead of "Dear Friend," use "Dear Parent," "Dear Basketball Fan," "Dear Auto Owner." Include a P.S. at the end of your letter. Studies show that most readers skip to the P.S. before they read anything else! The P.S. should briefly restate the main points of your offer. Finally, stress benefits rather than features. How do the features of your service or product improve the customer's life, work, or pocketbook. The benefits of your offer may be obvious to you, but don't leave it up to the reader to figure them out, no matter how obvious they may seem. Stress benefits. Link them to the features your offer. Sales letters can be a wonderfully personal way to introduce people to your product, service, organization, or idea. By using some of the ideas and formulas I've mentioned above, you can produce sizzling sales letters that produce results. (Kevin Nunley is a marketing advisor specializing in mid-sized, small, and home-based business. Reach him at DrNunley@aol.com or at (801)253-4536. Ask for a list of his info-packed Special Reports on all aspects of marketing your business with inexpensive media.) Return to top of page - Back to Home Page - Back to Archive Index |