Budgeting for Sales Professionals

This article will explain the basic purposes of a budget and why it is crucial to a proper financial plan.

Our society has a very bad problem with limitations, constraints, and boundaries. Especially when it comes to money and spending. This is probably why the word “budget” has such a negative connotation in many people’s minds. This is a shame due to the fact that budgeting focuses on what you can do, instead of what you can’t do.

What is a budget?

To many of us, a budget is eating a cheese sandwich out of a plastic bag, shopping at the dollar store, and never going out to see a movie. If you are in a tough financial position, this might be what you have to go through in your budget, at least until you get back on your feet. However, a budget can be a very powerful and positive financial tool that helps you get what you want out of life.

Budgeting is a process of purposely planning what you spend on so you live within or below your income and save toward important financial goals.

For alot of us, a budget is the perfect way of being direct about the way we spend and save our money. A budgets brings focus to our spending habits that would otherwise be frantic and uncontrolled. The focus allows us to save money instead of buying things we don’t need.

One of the biggest problems alot of people face when it comes to reaching a major financial goal, like saving for a home, is finding the money within their existing income to be able to afford it. The best way to know where your money is currently being spent is by tracking it. This means that for a few weeks, you need to write down all your expenses.

This tracking of spending will reveal exactly where your money is being spent, allowing you to make choices that will affect how much money you end with at the end of the day. One of the most important aspects of budgeting is the amount of clarity it brings to your money, because you will have a very clear picture of how all the money you make is being spent. Making conscious decisions to spend your money is different than reaching the end of the month with no money left in your checking account and no idea where most of it went.

Using a budget:

There are many different reasons why you would use a budget for, these reasons are individual, which means they can only work for you. This also means there are several different ways people can stay on track with their budgets, some can do so in their heads, and some (like me) need to have it in detail and on paper. Here are some of the most common reasons people use a budget:

• Coping with limited financial resources
• Laboring under a heavy debt load
• Working toward a major financial goal
• Wanting to live more simply
• Planning to retire early

There is a common misinterpretation about budgeting, which brings about a sense of being limited to enjoying ourselves. In reality, a budget can help you bring about more enjoyment from the money you earn. Just imagine spending $7 a day for lunch for 50 weeks, you could be taking a nice vacation at the end of the year with that money.

Most commonly though, budgeting is used to get people out of tight situations, which will eventually get them out of debt and allow for more enjoyment out of life. The main purpose of a budget is to bring control, minimize unnecessary spending, and maintain a great standard of living without debt.

Self-Employed Tax Deductions

Sales professionals are rebels, we like doing things our way and be in control of how much money we make. Not alot of people can handle that, especially when it comes the added responsibilities that come along with being self employed. I’m assuming you are reading this because you are self employed, you could be in sales or other occupation, regardless, these tips can help you figure out some really brilliant sales deductions you probably haven’t thought of yet.

Being successful in business requires the savvy knowledge of the tax code and how general finances work, read these tips carefully and think of how they can be applied into your current business expenses:

Your vehicle: Driving a car isn’t cheap, especially when you have to drive from meeting to meeting on a daily basis. This tax deduction is very simply explained, let’s assume you own two vehicles. One is used solely for the purpose of delivering client orders which means 100% of the miles and expenses are used for business, which translates to a 100% deduction on all the expenses. The second vehicle was driven 20,000, 5,000 of those miles were driven to client meetings, which means 25% of all expenses in the second vehicle are tax deductible. If you think about it, you could be saving some serious cash with these deductions!

Working at home: The IRS has become more open to work at home business deductions, you are allowed to deduct any expenses that are related to your business as long as there is a determined area being used regularly for business operations. You can also deduct the miles you drive from home to other business spaces or client meetings, as long as they are business related.

Party anyone? Yup, if you hold an open party or event for promotion of your new product or service, you’re allowed to deduct the entire cost of the event (liquor and food, too). But if you decide to make it an invitation only event, you are only allowed to deduct 50% of the total amount spent. Still, that’s one nobody has ever told you about!

Breakfast, lunch, and dinner! Whenever you pay for the bill at a restaurant or outing, you are required to prove it was business related. A great way to do so is make a copy of the receipt and attach any business cards of the people you had a meal or drink with, it’ll cut down on the amount of time you spend documenting every deduction.

Clean up! You were drinking a delicious cup or red wine and you got some on that fancy suit, the only way to get it out is to pay for those expensive dry cleaners. No problem! As long as the outing was business related, like a conference, you can deduct the money you spent to clean the suit. Just make sure you don’t try to deduct three months’ worth of dirty suits when you come back from a five day business conference.

Put them to work! If you dream of having your child take over your business one day? As long as you give them a real job and are willing to fill out the extra paperwork required for payroll and file it, you can get a break from whatever you pay them because they are taxed much less than a person over 18.

Hire him, too! Yeah you can also hire a spouse and deduct any medical and insurance plans you set up as an employer. You can include your hole family and yourself!

Don’t cheat! Just remember the most important thing about being in business for yourself is the honesty, it has to be on high at all times. And you can sleep well at night knowing you have nothing to hide.

Find a tax expert on this matter if you need advice on creative tax deductions, read a few books and make sure you are taking advantage of all the opportunities to save that hard earned money into a high yield savings account. Sell sell sell!

How To Get Referrals

The average small business loses over 20 percent of it’s customers on a yearly basis because of errors, changes in customers’ buying influence or personnel, customers moving or going out of business, customers being  acquired and local purchasing eliminated, and many other reasons. Getting prospects and new accounts is vital for your paycheck and your business for survival and growth. Many of the sales people and businesses spend thousands of hours every year cold calling and marketing on possible new prospects to get their business.

An often missed asset is the readily available pot of referrals from existing clients that love your product or service. There are countless opportunities to ask for a referral, and those opportunities need recognition. Pay attention to the following circumstances and people below, apply them to your own experiences and dig out those referrals that could be right under your nose:

Becoming an expert: Sales referrals are not your usual prospects, they require a transformation of speech. Which means you are no longer a solicitor, but a direct solution to one of their problems according to the person who referred you to them. It’s incredible how a friend’s word affects your prospect’s listening, then again, this isn’t a new marketing technique. Using the friendly referral to your advantage by becoming the number one source for problem solutions is the key to getting alot of them, therefore making your sales pitch shorter and more effective.

Existing customers: Yes, you have a huge pool of untouched referrals from your active customers. Even if you only have a few customers, they are probably happy with what you are selling or offering, and those make the best advertising campaigns. Every single meeting you hold with those existing customers should include some time to talk about possible referrals and cross-selling between your companies (if B2b). A simple way of getting more referrals is to compensate your current clients with discounts or some cash. Offering a reward for referring new customers will make them even happier!

New customers: A happy new customer was just acquired, they love your product, service, and delivery times. They now have a story to tell about how they were made so happy, so take advantage of it! Show them how dependent you are on their referrals and ask for one! You need to inform your client that your success depends on referrals and the quality of the product you deliver as well. You can say something like “Do you know XYZ company?” Have a list of a few local companies you want to target and ask your new client if they know anyone inside the organization you could get in contact with. Always get authorization to use your client’s name, otherwise you risk losing two new clients and your reputation.

Possible clients: Sometimes we manage to create a good relationship with a prospect that will most likely never buy anything and those are sometimes very effective sources of referrals. The key here is to have a relationship, show them how dedicated you are at serving that market and maybe they’ll help you get into another business. It works both ways, because once they refer you to that other business, they might realize they need your services as well. The point here is to always be closing and asking anyone for referrals.

Employees: The average person knows around 20o people, and most employees know your company and what it does. And who wouldn’t want a nice little bonus for the holidays? Tapping into a 10 employee circle of influence yields approximately 2,000 possible referrals and assuming we close %.5 of those 2,000 people, we are talking about 10 new customers you didn’t’ have before. They key here is to offer employees some incentives, whatever they may be, it needs to inspire action and excitement.

Suppliers: If you buy something from another company, you have a supplier. They, as well as yourself, are interested in acquiring new contacts and making more sales. Therefore it’s a win win situation for the both of you. Because suppliers usually sell raw materials to alot of different companies, they are a fantastic source of referrals. Use them wisely and remember to never stop asking for referrals.

Deliveries: Every single business in the world uses these services, from UPS to FedEx, they all serve your possible customers. Although you can’t ask them to refer you to their clients, you can simply ask the delivery personnel questions about their other accounts. The key here is also the relationship you have with your “regular guy”, start talking to them on a daily basis, ask when their birthday is, create a friendship and win them over.

New hires: Whenever there are new people coming into the organization, as a business owner, you can take advantage of this new circle of influence by asking them to practice on existing clients or customers. Take into consideration the market and how related it is to their new job. It doesn’t matter if it’s a new secretary, ask her to think of people in her life that might use your service and offer her an incentive for every new sale made! It’s essential to remember that every employee is a sales person in your organization.

Networking: Events that bring businesses together are an incredible well of referrals, simply because everyone is there to talk about business and how they can help each other. The key here is to give first, add value to other people networking and they will most likely return the value ten fold. Conversation and sharing is what makes these events so effective, if there aren’t any networking events around, start them! Use craigslist to reach out to businesses and get your name out there!

In conclusion, referrals come along with value. If your product or service ads value to people, referrals are readily available. You just have to ask for them!

How to use Twitter to make more sales

The online universe has been expanding endlessly since it’s creation in the early 70s, and today’s tools have never been used by so many different people. Your prospects are on twitter and facebook, chatting about what they want to buy and love to be sold. A search on twitter.com for “Used Car For Sale” will reveal several hundred people looking to find a great, dependable used car by tweeting to their friends.

Finding your prospects isn’t as hard as you think it is, below you’ll find a simple list of steps to immediately start finding people who want to buy your products or services.

1. Create an account: Twitter has made this a very simple process, I suggest you create an account and start browsing the site.

2. Create a brand: Branding yourself on cyberspace isn’t hard at all, especially with facebook and twitter. Services like TwitterBackgrounds.com and CustomThemes.net make it extremely simple for your prospects to recognize your personal brand.

3. Start talking: Find people that are looking for the things you are selling. If you are selling life insurance, find people who are in their 30s and have a young family. How you ask? Use WeFollow.com to find groups of people who like the things your target market likes, follow them and start talking with them.

4. Find your company: Do you represent a large corporation or company? Use the same search tool we used before to find negative or positive conversations about your company. Address their issues and become the face of your company on the web! You’ll start seeing people contact you instead of a faceless sales person.

5. Continue the conversation: Using the “@” feature on twitter, you can reply and be replied to from anywhere in the world. I suggest you use TweetDeck client to get instant replies from people who want to converse with you.

6. Add Value: As with any other mode of marketing, Twitter readers are always looking for valuable information. Assuming you are following a decent amount of people that fit your target market, you can start finding articles or tips that would be of interest to them and suggest they read them. Using the @UserName when updating your status, they’ll be able to see what you wrote.

As a final word, I’d like to remind my readers that Twitter isn’t  a hands off solution for you to make more sales. Although it simplifies the initial approach to a prospect, Twitter will require alot of work and value in order for it to yield results.

Great luck and don’t forget to follow our twitter page @SalesVeteran for constant updates.

How To Make Sales with Door Hangers

It’s true that in sales you have to use every resource available to you in order to succeed. With the multitude of resources available to you now a days, mostly online, there are older ways that have stood the test of time that are now looked over or forgotten that you should start exploiting. One of these is the door hanger.

Now you may be asking yourself: “What does the door hanger have to offer me that my other outlets don’t?”

Well, there are quite a few things. Beside the obvious fact that you will be instantly set apart from your competition for using this “old fashion” marketing, you can easily reach a large amount of people directly in a certain area. Door hangers can be a great way of getting those customers to notice you because you’re coming to them. A door hanger left at someone’s house sends the message, “I was here personally, and I have something to say directly to YOU. As a customer, you are important to me.” And as an added bonus, they are inexpensive to print and distribute.

If you’ve ever been in a hotel or rented a condo, you’re familiar with those door hangers that say “Do Not Disturb.” If you can imitate the way those door hangers are laid out, you’ll have a successful campaign. Why? Because people will actually read your message, you’ll have a direct impact on your customer. A well designed door hanger is sure to be read by the person who pulls it off the doorknob. As soon as the person picks it up, the message is conveyed! That’s what I like to call direct advertising!

Going back to the “Do Not Disturb” signs, you have to deliver a “call to action.” A request or a direction to do something. For example, if you are trying to bring awareness about the importance of having good tires on your car you could use “Drive Safely.” Or if you run a local pizza franchise you could use “Eat Hot Pizza Tonight.” Imagine the customer coming home from a long day at work to find a door hanger with this headline and a coupon at the bottom. The door hanger will probably result in a sale, or at least the thought of one. Remember, just because they didn’t buy today, it doesn’t mean they won’t buy tomorrow!

The premise here is to deliver your message creatively and personally. Please make sure you invest in a good designer, though, don’t let the printer throw on a design. It’ll be money down the drain.

If you need door hangers printed quickly, I personally recommend Vista Print.

How To Separate Yourself Using Business Cards

One of the cheapest and most effective impact tools you can use to put your name out there is a business card. Marketing your name and business using this tool is probably the easiest thing you’ll do as a sales professional. Every business, from the largest corporation in the world to the local bakery, uses the exact same materials in creating a card. You’ll need to be very creative to break through the clutter, though, you need to distinguish yourself and your business from the rest.

At a minimum, your card should include your name, company, address, phone, email, and website. Some people think it’s necessary to include your tittle or slogan, but it’s not really a must. People will always remember you as the “Sales Associate” which will automatically be turned into “Sales Ahole” when you start calling them. I recommend you leave tittles for your desk.

A rule of thumb is to NEVER cut corners when making your card. Use the best quality paper and have a professional designer make it for you. If you want to be shortsighted, go to your local printer and have them throw on a cheap graphic with some lines. Please, invest a few hundred dollars on a beautiful design, you’ll only need to do it once!

We are lucky enough to have so many choices when it comes to dressing up our business cards, since the goal is to stand out and be memorable or create an impact. One of the things I like to do is using the back of the card, have something there that communicates who YOU are. Conveying yourself to your prospects in a manner which will create friendships should be your number one goal.

What can you include in your business card?

Here are some ideas:

• Include a map of your area to make your business easy to find.
• Write a testimonial of an actual client on the back.
• Feature your employees and their bios, let the prospect get to know your company.
• Add quotes, jokes, or something that might make your client think of you.
• Make them out of metal. Yes, I said metal.

The idea here is to think of your business card as a small billboard. The goal of a billboard is to grab your attention and make an impression, right? So think of your business card in that same context and you’ll be amazed at what you can accomplish.

Once you sit down with a designer (or if you have some design skills) you can gather a few samples of other business cards that made an impact on you. I like to visit the Flickr Business Card Pool, where hundreds of people show off their creative and unique business cards.

Below are some examples of what impressed me. Click to enlarge!

How Much is a Customer Really Worth?

When we think of a customer, we automatically think of a sale being made. That customer whom you’re on the phone with right now could pay your utilities bill! Most of us sales professionals forget that the true value of each customer is higher than just one sale, expand that into many sales over his or her lifetime.

This important fact helps you determine how much you might be willing to spend to acquire a new customer or client. Whether that means three hours of your time or three hundred dollars of your money. And this fact is also important because it forces you to realize how much it costs to lose a customer once you’ve got him or her.

If you haven’t heard of Stew Leonard, he’s the most successful independent grocer of all time. He used this fact frequently to determine how much his customers were worth. He figured that the average customer would shop with him for seven or eight years before moving out of the neighborhood. He averaged that a $250 monthly food budget was appropriate at the time. Which amounts to $3,000 a year in sales, or $21,000 over the course of seven years. His gross margin was about 10%, that means that a customer was worth $2,100 to him (that’s without factoring in the word of mouth.) Once Stew realized that each and every customer was worth more than $2,000, he was a lot more willing to replace a box of rotten strawberries or run an extra ad.

Another company who focuses on the value of a customer is Federal Express (FedEx.) They figured that if a mid-size company sends 30 packages a week (at $25 each), that’s $750 a week, or $18,750. If a customer gets angry over a $25 shipment and switches his business to a competitor, FedEx loses thousands and thousands of dollars. Their technique is to authorize every local supervisor to grant a $100 refund on the spot, no questions asked, for any delayed shipment. Considering each customer is worh $18,750 per year, I’d say $100 is a small price to pay.

So, the next time you’re thinking of how much a client is worth to you, think of this technique. Figure out what your gross margin is, analyze the amount of time you usually keep a customer, calculate an average amount of purchases, and figure it out!

Selling Intangible Products and Services

When it comes to sales, the act of selling, and being called a sales person, it’s hard enough! I know you’re saying to yourself that you know how hard it is to sell an insurance policy, or to sell a piece of software the client will never actually touch in his or her hands. But seriously, what does it take? This article is a skim view on the art of selling intangible items and services. I’ll try to keep it short and sweet so I don’t lose my friends with short attention spans.

The most important thing to remember about intangible items is that the customer will never actually have the product on their hands. Hence the name intangible. Aside from the obvious, the client or customer will never feel the sense of purchase, meaning they won’t get that feeling of gratification you get when you buy a sandwich at your local sub shop.

As a sales person, your job is to make that client/customer get that same feeling. There are alot of ways of getting around to doing that, but the simplest one is to simply paint a picture in their minds. The same way a poet does with their writings, you can do with your words. For example, I was in the process of signing a $35,000 yearly premium life insurance application with a client and his wife. Now, realize that they are about to pay me a $33,000ish commission for telling them how good whole life insurance is and what it’s going to do for their family. Don’t get me wrong, I look nice too. But that’s alot of money, regardless of how rich you are.

Now as a sales person, I had to think of a way of telling my clients that the money being paid is going to be used for their benefit and their benefit only. They don’t care to know I’ll go buy a $2,000 flat screen TV the second they sign those papers. The only thing they want to know is how much value they’ll be getting out of their money. [LESSON] A good lesson I learned when I was younger is that the only way you’ll make money is by adding value, to whomever, add value and you’ll make money. [/LESSON] Value! Value! Value! They understood that the life insurance policy they just paid for is going to protect their family for life, grow faster than the stock market (don’t quote me), they car borrow against it, etc etc etc.

So value, show them value and they will buy. TM SalesVeteran.com =]

Common Mistakes Resulting In Marketing Failure

Being a marketer of any product or service, one must be aware of the common mistakes other sales people have made in their journey to success. Although it might be time consuming to find the right kind of information, becoming a Sales Veteran is not an easy task when you consider the amount of hurdles one must go through.

Below are three simple (and common) mistakes sales people make when they venture into marketing:

1. Lack of commitment/dedication: The number one rule in sales and marketing it to have 100% belief in your product or service. When you try to convince a client or customer that they need you, you must be convinced yourself. As a sales person, you also need to be consistent in the way you promote your product or service. Meaning you must define what your main message is and commit to telling it to a certain amount of people. This is a great reason to have a marketing plan, because it ensures that you have the resources and the knowledge it takes to bring your product or service to market correctly.

2. Lack of a Clear Benefit: Why should I buy your product? Why should I hire you as my accountant, and not her? These questions should be answered prior to meeting your future client or customer. It might be obvious to some readers, but the basic principle of “selling something people want” has to be understood. You must be 100% clear on who your customer is and why they need your new health insurance plan. Often, you see companies look at what they already have and come up with a product that is easy for them to make and sell, when in reality there is no interest from the paying consumer. Customers could care less about your skills or inventory, it’s always about “ME”. What’s in it for me?

3. Poor Positioning: There are times where the market is simply saturated and there are no available positions for a new product or service. Maybe the market is depressed and is going through difficult times. Markets where there are no positions for newcomers are few and far between, the biggest mistake a marketer/salesperson can do is go up against the big dogs in their own backyard. Pay attention as the marketing plan takes you through the positioning segment because you could have the best product and the best positioning, but it won’t help if the leader can sell them for half the price and the same benefits.

4. No Marketing Plan: Why do I need a marketing plan? It’s simple, unlike most other aspects of business and sales (like accounting), marketing involves dealing with unmeasurable risks. It is impossible to know how that ad on the Sunday newspaper will convert into a sale, or how many people will be arriving at your grand opening. Most of the business people I have worked with simply ignore the risk, they blindly invest thousands of dollars into a marketing campaign that is completely uncertain and is based purely on speculation. The vicious circle is investing money in marketing when business is good, cutting back when sales go down. It’s certainly silly!

The infamous Zig Ziglair tells the story of the airplane pilot who takes off on a flight from Dallas to New York, gets blog a little off course, and returns to the airport to start again. If you have ever been in a plane, you know that the majority of the flights have slight deviations in their flight plan, which would mean most would never reach their destinations. Marketing is the most important factor in sales, showing your message to as many people as possible is key, but you must follow a flight plan and be ready to correct it’s course when necessary.