In Direct Sales: 5 Tips to Save on Your Taxes

As a business owner, at least here in the United States, Ben Franklin reminds us that there is at least one certainty in life: taxes. As a direct seller, you may have opted to build a small "side gig" to earn a little extra operating funds for trips, to give your family a little "more" or just to fund your shoe shopping habit.

Ultimately, though, if you're producing revenue, you've got a business, and Uncle Sam wants his due. Even if you're not profiting from your direct sales business, there may be some taxable situations that will effect you.

Mind you, I'm not a tax professional, but my friend, Scott Lovingood is, and he shared some great tips on his call  for the Small Biz Super Summit this Spring. While the deadline for filing your taxes for 2010 may have passed, now is a great time to consider ways to get your finances in tip top shape this year.

1. Keep good records. Even if you put all your receipts in a shoe box, at the end of the year, you're going to need to refer to them to prepare your taxes. The better records you keep, the easier it is to complete your taxes and defend yourself should an audit occur. One particular area that Direct Sales Pros tend to overlook is mileage. Keep a mileage log so that you can track all the miles you drive to and from your shows. It adds up over the course of a year, but if you don't keep track, you can't claim the deduction! At 50 cents a mile, every two miles you drive is a dollar back in your pocket come tax time!
2. Be aware of special deductions. Certain entities (like an LLC, for example) can alter your taxable benefits. Home based businesses have special deductions. Knowing this can save you thousands on your taxes.
3. Tax rules change all the time. One of the first tasks to outsource may very well be your bookkeeping. Tax pros spend all day every day staying on top of the tax code changes. They can take that responsibility off your plate so you can focus on making money.
4. Run your business as if the IRS were going to audit you at any time. Chances for an audit are small, if you fall within the "norms" the IRS uses to evaluate businesses. However, a business can be randomly selected for an audit at any time. If you're running a real business, keeping business and personal expenses separate is just one way to help the IRS see your business as a going concern. Setting up a business account, having a business phone (that's only used for business) are not only potential deductions, they help the IRS to see that you're serious about growing a real business, not just having an expensive hobby. Hobby income must be reported, but hobby expenses are NOT deductible.
5. Close your books at least quarterly, if not monthly. By balancing your books each month, you have a better look at cash flow projections, income and expenses BEFORE the end of the year. If you have a major influx of income, you might even be required to pay quarterly taxes. If you are not balancing your books each month, you should at least balance them every quarter (most businesses do). You may avoid some of the tax penalties that can occur if you don't pay those taxes on time.

Running a business from home means a lot of potential tax savings - trips to fun locations for your national conference could become deductible on your taxes at year end - but only if you're running a business and keeping good records (other rules may also apply). It is up to you as the business owner to keep track of everything. Start now (if you haven't already) to see success the next time your taxes are due. When in doubt, consult a tax professional to help you get the most out of the tax benefits a home business provides.

© 2010 Lisa Robbin Young.

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Lisa Robbin Young is a certified direct sales marketing coach, teaching direct sellers to grow their business like a real business instead of an expensive hobby. Sign up for her free weekly ezine athttp://www.homepartysolution.com/

Direct Sales Success: Resurrect Your Biz This Spring

I know it sounds like a bad Easter joke (and it probably is), but has your direct sales business been languishing this year?

After a busy holiday season, many consultants often go on hiatus, letting their business suffer in the interim, until the snow melts, the roads dry up, and the grass is green again. If you're one who schleps product from home to car and back, that can be a good reason to slow down. No one likes hauling stuff in the snow, but when business slows down, so does your income.

Few people leave direct sales because of a full calendar. The number one reason I hear is because they can't find bookings, can't close the sales - in short, there's nothing on their calendar!

So as we enter the second quarter of the year, take a moment to examine your goals. With the year 25% of the way behind us, are you 25% of the way towards your goals? For the average consultant (if they even have goals), the answer is not quite. And most of that is due to the fact that they let their business "slip" during the first few months of the year.

Well, now's the time to get crackin' and breathe some life back into your business.

Last week at our Small Biz Super Summit, Lisa Sasevich revealed a great technique to close more business without being salesy or pushy. Lisa is the author of "The Invisible Close" and she gave some great tips about using irresistible offers to encourage your audience to make a decision sooner, rather than later. Just yesterday, Daphne Bousquet shared with us the best strategies to make more money by hosting your own events. Here are just a few ideas you can implement to resurrect your business this spring:

• Make a time-sensitive offer. Most of our companies provide us with a monthly special. That gives your hosts and guests all month to make up their mind. Give them something special for taking action on the day of the show.
• Close the party AT the party. If you hostess coach in advance, you can remind your host that you are closing the show the night of the party. Make sure she has her catalogs, samples, and outside order forms well in advance so that she can get them out and get them back to you the night of her show.
• Host your own event. In your own home, or rent a small conference room. Be your own host. If you're using social media, make it a more informal "tweetup" kind of an event so that more people will come, try your products, etc. Then have a time-sensitive offer for people that book, buy or set up a recruiting appointment with you that night.

Time sensitive offers are just one great strategy to increase sales, bookings and recruit leads. Your company can't possibly offer a new special every day - but you can. It requires a bit of planning and forethought, but if you're running a real business, you need to be planning ahead anyway. 

Breathing life into your business can be as simple as a few tweaks to what you're already doing, or completely revitalizing the art of doing business. Either way, a resurrection will give you the forward momentum you need to have a powerhouse Summer. And as we roll into conference season, it's even more important to be hitting those goals!

You can do it!

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"Time-sensitive offer" is just one of the strategies I taught in my last Direct Sales 101 class, and here's what one of our first graduates had to say:

Well, I promoted to Team Leader, went from $300 in sales in January to $2700 in sales in February and $2000 in sales in March, and have 9 new shows on my calendar.  I want to take the early graduation discount :> 

You are, by far, the best direct sales/life coach I have ever had (and I have had quite a few!).  You have helped me to cut through my fear, my husband is now on board with my "hobby" business (as he called it!) and wants me to go full throttle, and I have been able to do things for my family that I haven't in the past.... I can't wait to see what you have in store for the rest of the year. 

Also, looking forward to the Small Biz Super Summit - what a lineup!

Lara Hall
Independent Passion Parties Consultant
www.LaraBHall.com

Direct Sales 101 will be re-opening soon. Look for more information in upcoming issues of "PartyOn!".

Direct Sales Leadership: Lead to Succeed

We're hot and heavy into the Small Biz Super Summit (formerly the Direct Sales Super Summit) and I'm excited to share the stage tonight with Nicki Keohohou from the Direct Selling Women's Alliance (DSWA). Our conversation looks at the traits that are so necessary to build a successful organization in direct sales. But it's a conversation suited to anyone looking to assume a leadership role in their business.

Whether you're an army of one or a seasoned leader with thousands of people in your organization, in my opinion, there are commonalities that all successful leaders share:

• The ability to engage the emotions of their team. It's not enough to know the "why" that encourages people to join your team in the first place, you also need to understand the "what" that almost FORCES them to stick around. When you engage with your team at this deep emotional level, your entire organization will thrive and achieve more.
• The ability to ask the right questions. Throw out the "yes/no" questions, and spend time digging into the heart of any issue your team faces: recruiting, bookings, sales. "How can I get more bookings on my calendar?" The answer often lies in the very questions your team asks. "Well, what are you presently doing, and what HAVEN'T you tried?"
• Being accountable, but not responsible. As a leader, it's your job to provide tools and resources - to lead a horse to water, so to speak. It's not your responsibility to "make them drink". You can't want their success more than they do.You have to remain committed to helping them, without being attached to the outcome of the effort they invest in their business. You are accountable to your entire team to provide help. THEY are responsible for taking advantage of the help you provide.
• Not having all the answers. Leaders aren't charged with knowing everything - they are charged with knowing enough. Leaders need to know enough to point team members in the right direction. They are to serve as a resource or connecting point and to help empower others on the team to fulfill their areas of expertise and share them with the organization. No one person can know everything, and to expect that of yourself as a leader will only slow you down.

When you explore leadership, what kind of emotions come up for you? Some people feel their stomach tighten at the very thought to leading a team, others will salivate at even the smallest opportunity to be in the spotlight. Neither is the mark of a true leader. Leaders aren't know-it-alls. They know enough to track, train and keep an open mind about new things that they themselves can learn. Leadership isn't about the number of people subordinate to you, but how you serve others on your team.

But Nicki says there are 6 skills that every leader must possess. I'm anxious to learn more tonight and share her thoughts at the Super Summit. If you'd like to hear from Nicki, there's still time.

http://www.smallbizsupersummit.com/

We'd love to have you on the call!