Your Single Biggest Mistake As a Sales Person

Biggest sales mistake
Looking to increase sales? Don’t make this sales mistake!

For every action there is an equal and opposite reaction.

Sir Isaac Newton said it best: For every action there is an equal and opposite reaction.

Funny how people will look at the laws of physics and never even wonder if perhaps the same laws might apply to them on a mental level. However, this one most certainly does. The Psychology term is “Reverse Psychology”.

Why reverse psychology? Why “For every action there is an equal and opposite reaction?

Well, look at it this way; Being approached extremely enthusiastically by a sales agent in the store, what is your reaction really? Is it returned enthusiasm?  The answer is a resounding NO!

The sales agent’s overly enthusiastic approach will definitely meet with you cringing and telling the sales agent that you don’t need any help thanks. And that is a big sales mistake.

Let’s look at it another way. If I tell you I have something in my pocket that can explain the complete mystery of why some sales people close almost everyone and some sales people don’t close anyone but I am not going to show it to you.

Sorry, no matter how much you beg, it just is not going to happen.

Now what happens is that you become very curious about what I have in my pocket. See? The equal and opposite reaction to me telling you that you can’t see it is that you very much want to see it.

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Overselling vs. Taking it away

I so often see sales people convincing and persuading and pushing and shoving to get a sale. Sure, sometimes you can succeed using the tactic of completely overwhelming your customer and forcing him into submission.

But that sale is likely going to try cancelling later on and you will have to force the poor prospect into submission again.

Sales people are often despised because of this, and rightfully so. Nobody wants to feel forced into anything!

A good sales agent lets the customer think he bought the product on his own determinism, not because a sales agent forced him to!

Three Possible approaches to the customer on the sales floor.

Approach One: High enthusiasm: “Hello Sir, How can I help you today”.

Seems reasonable. So why is it so frequently met with the customer backing off and muttering “I am just looking thanks”? Or worse, the customer practically running out of the store!

Approach Two: Don’t even talk to the customer. Well, it is an option, but then the customer feels ignored and the boss is none too pleased either.

Approach Three: In a mildly interested tone: “Hi, I see you are looking at the stereo systems. If you need any help, I will be standing over there and so feel free to come ask me. I am kind of the expert in the store on the subject”.

And then walking off a few steps… and then in an almost curious fashion and kind of over your shoulder “By the way, are you looking for yourself or someone else?”

What’s the point here? First, the force of high enthusiasm is like a brick hitting something and the equal and opposite reaction is that something becoming thrown backwards.

A bored approach is not nearly as high energy and so does not create such a force hitting the customer. So while the customer will back off a bit, it is not nearly as much as he would back off if hit with high enthusiasm.

Second, when the sales agent delivers his pitch and then withdraws a bit, it creates the equal and opposite reaction of a reach from the customer. When the agent then asks a mild question, the customer is still on a reach and so is more receptive.

So what is the biggest mistake?

Well, the biggest mistake a sales agent ever makes is over-reaching. Back off, take it slow, don’t be afraid of losing the sale, and let the customer reach instead.

My goal in sales is always to reach at least an 80% close rate. Keep checking back for more articles about how to make that happen and more about sales.

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Bookkeeping Service – Advice for Small Business

So you started a Small Business – What to do about Bookkeeping?

One of the huge advantages of having your own business is tax write-offs. Tracking them is an entirely different story!

Without proper bookkeeping and record keeping, a lot of the expenses of running your own business will never be recorded and instead of deducting those expenses, you will be paying tax on them.

Many startup businesses are not keeping proper records and thus paying far too much in taxes.

Finding a bookkeeper

The average small business begins looking for an accountant and asks the accountant about bookkeeping. Of course, the accountant will offer to do that for you at prices far above what you need to pay. The average hourly rate for a bookkeeper in the USA is between $40-60.00 with some charging as high as $100 an hour.

What is the difference between a bookkeeper, an accountant, a tax preparer and a tax advisor?

Bookkeeper – a person who records the accounts or transactions of a business. A bookkeeper does NOT have a 4 year accounting degree.

Accountant – A person who is skilled recording and summarizing business and financial transactions and analyzing, verifying, and reporting the results. An accountant has a 4 year degree.

Tax Preparer – A person who prepares the tax returns for a business or person. A tax preparer does not necessarily have an accounting or other degree. The IRS attempted to regulate Tax Preparers; however following losses at the lower court and the appellate court which held that IRS did not have the authority to regulate preparers, the IRS dropped the matter. A Tax Preparer is required to have a preparer tax identification number (PTIN).

BookkeepingBookkeeping – Profit and Loss Statement

Tax Advisor – (or tax consultant) is a financial expert specially trained in tax law. Tax advisers use their knowledge of tax legislation to provide advisory and consultancy services to clients, ensuring that they pay their taxes in the most efficient way and benefit from any tax advantages and exemptions.  A tax advisor normally has at least an accounting degree and many have both a legal and an accounting degree. They keep up to date with changing tax laws and explain complicated legislation and its implications to their clients in simple terms.

Depending on your goals, you might use none, one, two, three or all of these professionals.

Most small businesses when they start off should be at least consulting an accountant to get advice about how to save on taxes. Additionally, a small business owner should know that there are a lot more ways to keep your records than the way your accountant may tell you. He wants to do your bookkeeping and your accounting. He also wants to get business just like you do. But having your bookkeeping done by your accountant is not necessarily a good idea.

Available Resources

There are many accounting resources available to a new small business and many accounting packages that will help you keep your books.

The 500 pound gorilla in the resource pool is Quickbooks by Intuit.

If you haven’t looked at Quickbooks, now is a good time.

Proper bookkeeping means properly setting up your books and Quickbooks makes that easy. It also means tracking your expenses and Quickbooks makes that very easy with an App that can be downloaded to your smartphone and used on the go to do many functions your business needs.

Quickbooks will also process your payroll for you and ensure that the proper taxes are paid keeping you out of trouble with the IRS.

Even without an accounting degree or a bookkeeping background, most small business owners can quickly learn Quickbooks, but it helps to have a trained bookkeeper who is experienced with Quickbooks to help you set up everything the right way first and keep track of everything after that is done.

Outsourcing your bookkeeping overseas

Many small businesses have found out that outsourcing their bookkeeping overseas is not only convenient, but saves them a lot of money.

While Tax Advice and Tax preparation is better done in the USA, bookkeeping can be outsourced at prices far below USA prices. Rates in the Philippines are as low as $15 an hour and your books are handled by a trained bookkeeper.

If your bookkeeper is doing their job properly then you will not need to spend more than $100 an hour with an accountant just to have proper records. Overseas bookkeeping companies should be working the same hours that you are and so are readily available. They will also speak excellent English and can be reached by calling an American phone number. You will begin to forget that your bookkeeper is even overseas.

Outsourcing the bookkeeping part overseas saves you money to spend on a better Tax Advisor or accountant giving you tax advice and filing your properly prepared tax return at the end of the year.

At the end of the day, if your books are properly kept and you are getting proper tax advice, then you are most of the way there. Outsourcing your bookkeeping and using solid proven accounting software like Quickbooks will not only save you time and money for bookkeeping and accounting, but save you more money on taxes as well.

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The Case for Outsourcing Overseas.

Business & FinanceObama Campaign Accuses Romney of “Big Bain Lie” on Outsourcing

Is Outsourcing our Jobs Overseas good for the Economy?

If you read the news today, Obama is hammering away at Romney for his role in Outsourcing jobs overseas.

According to President Obama “I want to build manufacturing jobs in this country again. You know, when Governor Romney said we should let Detroit go bankrupt, I said, we’re going to bet on American workers, and the American auto industry, and it’s come surging back”.

Yet at the same time the President is working diligently at opening up free trade with Asian countries. Is all this good or bad for the economy?

Job creation vs. Job loss.

A recent article in the Center for American Progress website by Alex Lach quoted Working America, “Manufacturing employment collapsed from a high of 19.5 million workers in June 1979 to 11.5 workers in December 2009, a drop of 8 million workers over 30 years. Between August 2000 and February 2004, manufacturing jobs were lost for a stunning 43 consecutive months—the longest such stretch since the Great Depression.”

Mr. Lach goes on to claim “Manufacturing plants have also declined sharply in the last decade, shrinking by more than 51,000 plants, or 12.5 percent, between 1998 and 2008. These stable, middle-class jobs have been the driving force of the U.S. economy for decades and theses losses have done considerable damage to communities across the country”

Further, the U.S. Department of Commerce showed that “U.S. multinational corporations, the big brand-name companies that employ a fifth of all American workers… cut their work forces in the U.S. by 2.9 million during the 2000s while increasing employment overseas by 2.4 million.”.

Losing 2.9 million jobs that apparently went overseas could not possibly be good for the country when unemployment rates have been so high, or could it?

Unemployment in the USA

All Americans have heard a lot about persistently high unemployment rates in the USA since the Great Recession. It is interesting to look at a graph of unemployment in the USA since the 1920s until last year. The trend towards higher unemployment is definitely up although nowhere near as high as just before World War II.

Unemployment Rate in the USA

Companies really began outsourcing manufacturing jobs overseas around 1970. Many electronic manufacturing jobs were outsourced to Japan who took advantage of this new ability to manufacture electronics and quickly dominated the field.

Today we outsource those jobs to China who are also quickly becoming adept at copying the technology and have now started several companies that not only compete with American companies but with the electronics giants in Japan as well.

Anytime you send the manufacturing of anything somewhere else, the technology of manufacturing it must, by necessity follow it. Consequently, that technology will become copied and used locally to compete. Competition will result in further potential job losses in that field.

Technology, Job Loss and Unemployment

When America first gained independence, the vast majority of American made their living in the fields. America was a land of farmers and the supporting services that went around farming in the small cities and towns that dotted America’s landscape.

Slowly, as the technology of farming improved with the industrial revolution, there was no need for as many farm hands. A tractor could plow a field far more efficiently than a number of farm hands with an ox could do so.

These displaced workers found their ways into cities looking for employment. America became a manufacturing hub. As manufacturing brought more wealth to America, so farming became less of an industry and America began importing fruits and vegetables from around the world.

But if Americans are anything, they are innovative and entrepreneurial. Large corporations found that they could buy farmlands fairly cheaply and using the latest technology could produce higher yields and lower costs with vast farmlands. Farming came back to some extent, but in a different form. And so Farm production continued to increase.

Average Income in the USA

Much has been said in the press about American incomes not keeping up with inflation. A graph published by Advisor Perspectives based on data from the census bureau shows otherwise. Using inflation adjusted figures, it shows that American incomes have not really risen of fallen to any great degree since 1967. There is a slight uptrend, but nothing to write home about.

Of course the upper middle class and the top 5% incomes have risen quite dramatically, but the average American is earning about the same as he always has.

Yet, does this mean that the average American is suffering as a result?

Manufacturing technology has improved immensely. The cost of luxury goods has fallen however. Back in Henry Ford’s days he boasted that the average man could afford a car with just 2 year’s salary.

Today you can buy a car that is far more technologically advanced for a just a tenth of that price. Having 2 or 3 TVs in the house is normal and our kids all walk around with smart phones. Lives are longer, health care is better. All of these advances, while they have not raised the average salary have improved the average life.

What does it all mean?

When we, as a nation, hang onto work that we could send elsewhere for less, we actually decrease our potential productivity.

If you can go to work and earn $20 an hour and you can find someone to mow your lawn for $10 an hour and you would rather do your work at the office anyway, then why would you mow your lawn?

If you outsourced that job to the neighborhood kid and paid the $10 and worked that hour instead and earned $20, then you are further ahead.

However, if you normally gave that job to your own kid but he charged you $50 an hour and now you decided to give it to the kid across the road because you felt your kid was a bit spoiled, your kid would be upset.

And that is essentially the crux of the matter. That is essentially the critical point. Are you doing your child a favor by paying him more than what his production is really worth? Or would you be better off insisting that your child study harder and learn to produce a product that is worth $50 an hour instead of letting him continue to produce a product that is worth $10 for a $50 price?

When President Obama chastises Romney for outsourcing jobs, he is basically chastising him for not allowing the kid to learn that he has to compete.

Eventually, if we do not compete as a nation, we will fall behind those that are willing to compete. Nowhere is this more obvious than China. Chinese workers have no social services to fall back upon and they have to compete. They typically live frugally, save their money and then start enterprises.

On a recent trip to China I was amazed at the sheer volume of small businesses and small factories. Moms and pops over there had fully embraced competition and entrepreneurship. Most people I spoke to were saving their coins with the goal of starting their own enterprise and today the Chinese that have succeeded are buying up homes and businesses across America.

If America does not go back to that can-do attitude and start competing, we will quickly lose out to the rest of the world.

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Small Business Outsourcing

Make your Small Business Succeed by Effectively Outsourcing

Starting a small business is a time consuming endeavor that requires an enormous amount of multi-tasking and handling of everything from communications, accounting, legal, reception, marketing, sales, etc.

Or does it?

Many small business owners attempt to do everything themselves. Generally that is due to the fact that they just cannot afford to hire an in-house attorney, accountant, receptionist, bookkeeper, lead generator, etc.

Enter the world of outsourcing. Even large multi-national firms outsource huge amounts of work.

In many instances outsourcing is definitely less costly and more efficient than doing it all yourself.

Larger companies have long ago realized that with the advent of the internet, outsourcing can also be done to countries that offer far lower employment costs and operating costs than their home country.

The Philippines, for example, generates about 9% of their GDP from providing outsourced services anywhere from medical back-end work, to legal research, to call center work. And most of those services are provided to Fortune 500 companies looking for any method of cutting costs to boost profits.

Small business already frequently outsources their reception work through a call-answering service, and outsources finance to a local accountant or bookkeeper. But why stop there?

By outsourcing your telephone answering service to a local company, instead of paying $2000 a month for a receptionist, a typical phone answering service charges $1.00 to $1.50 a minute for answering the phone for you. With the average small business not likely to receive more than 300 minutes of receptionist service a month, the savings are enormous.

However, instead of using an in-country answering service, try using an overseas based answering service instead. A Philippines based outsourcing company can provide excellent service at a fraction of the cost of a Stateside service and due to the close ties between the Philippines and the USA, many Filipino speak excellent English and with an American accent! The savings here would be almost 50% of using an American company.

Many Process Outsourcing Companies will offer you answering services but can also do your bookkeeping at a fraction of the cost as well. In fact, all kinds of work can be outsourced to the Philippines including lead generation, bookkeeping, back office administration, etc.

Keeping your costs down when starting or managing a small business is vital to success. Every dollar saved is worth more than a dollar earned as earning money costs money, whereas saving it costs nothing!

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