Received: from nobody by stodi.digitalkingdom.org with local (Exim 4.91) (envelope-from ) id 1gpERM-0007NP-I5 for lojban-newreal@lojban.org; Thu, 31 Jan 2019 07:39:44 -0800 Received: from mail-3-191.rch001.net ([52.124.3.191]:32846 helo=mail-1-191.rch001.net) by stodi.digitalkingdom.org with esmtps (TLSv1.2:ECDHE-RSA-AES256-GCM-SHA384:256) (Exim 4.91) (envelope-from ) id 1gpERH-0007LR-AJ for Lojban@lojban.org; Thu, 31 Jan 2019 07:39:43 -0800 From: "Martin Foner" To: "Lojban@lojban.org" Reply-To: Subject: Because You're Serious About Publishing Success... OR You're Not X-BPS1: 6999467 Feedback-ID: 2261185:e3f358ff3e2f409298df36d6dac03a14:marketing:reachmail X-BPS2: 73291 Message-ID: <5c1c9427-d845-4943-b086-806de04e3e63@a.sc02.rmdlvry001.com> List-Unsubscribe: , X-Mailer: RM Mailer (v5.4.937.0) MIME-Version: 1.0 Content-Type: multipart/alternative; boundary="=-BzKEWptIWFreH8ChJt6S0w==" Date: Thu, 31 Jan 2019 09:39:39 -0600 X-Spam-Score: -1.9 (-) X-Spam_score: -1.9 X-Spam_score_int: -18 X-Spam_bar: - This is a multi-part message in MIME format. --=-BzKEWptIWFreH8ChJt6S0w== Content-Type: text/plain; charset=utf-8 Content-Transfer-Encoding: quoted-printable Having trouble viewing this mail? Click here to view it in your browse= r. http://link.rm0004.net/v/R0WNvp8loSnfCQ2q-x31xw2 Make sure that you always get our messages: Add martin@ppgcpublishers.= com to your contacts. Click here to unsubscribe or update your email address. http://link.rm0004.net/subscription/?t=3DR0WNvp8loSnfCQ2q-x31xw2 Martin Foner's Publishing Newsletter Volume 24, Number 3 Because You're Serious About Publishing Success... OR You're Not Hello, Everyone... Well, it's 2019, and my infamous newsletter is back. As always, each new year... some of you will be new to my newsletter. = Therefore, a little re-introduction is in order. May I remind you, the= newsletter is free but worth a great deal more, if I do say so myself= ... and thousands of others have repeated this value to me. My backgro= und, for those who don't know... (and I won't repeat this for another = year) 42+ years in publishing, (25 in ownership/CEO, 17 in private pub= lishing) as well as financial and tax consulting, with approximately $= 60,000,000 in publishing sales of my own companies and assisting in an= other $25,000,000 in sales in client publishing. As the ORIGINAL publi= shing futurist (I know someone else uses this moniker, and may he be b= lessed, but he wasn't THE first publishing futurist), I made a trucklo= ad of predictions about the industry in these almost 25 years of newsl= etters, and humbly, the overwhelming bulk of those predictions have co= me to pass within my predicted time frame. I have opinions. If you don't like them, you are welcome to unsubscrib= e, or you may hit the delete key each issue. Unsubscribing means you w= on't get the benefit of a successful publisher's over 40 years in the = business. Deleting means you can pick and choose. My newsletters are f= illed with valuable advice and insight and many of my readers anxiousl= y await their arrival (I know since I get emails banging the desk as t= o when the next one is coming!). I began in this business when a publisher still had to 'buy type' from= a type house and then wax it onto 'boards' and used 'rubys' for color= pictures. I now deal in digital, interactive, eBook, and all kinds of= mixed up publishing... yet, quite honestly, much of my information an= d advice is still rooted in a few simple concepts: You still have to make money to stay in business. It doesn't matter ho= w whiz bang your products or processes are, if you aren't profitable, = you aren't going to be in business very long, or you will be limping a= long for more years than you care to or should have to. Publishing, as in ink on paper, bound into the form of a book... is no= t dead. For every survey trumpeting its death or imminent demise, I ca= n show you one that contradicts that death sentence and suggests eBook= s are dead. There is nothing wrong with old fashioned selling. You have books, go = out and sell them. People still buy things by handing over money or cr= edit cards for a product or service. Until that fundamental concept ch= anges, you can do some old fashioned business and expect to be profita= ble. And remember, Warren Buffet's adage (paraphrased)... when everyone is = running for the exits, it is likely a great time to enter the building= ... and when everyone is placing bets all over the place... it is like= ly a good time to cash out and sit on the sidelines for a while. With all this in mind, I have decided that this issue should repeat an= article I wrote a few years ago about where to look for profits, or t= o eliminate costs, or reduce taxes... practical, could be useful in an= y industry, but we're talking publishing here. I have updated the cont= ent to January of 2019, and even with some advice for a possible reces= sion in 2020. I will be continuing with this article in future issues by choosing on= e or two of the points and instead of a paragraph, I will create an en= tire article about each point... so you can GET the point. I will also, in a future newsletter, ask the related question: "Since = when do authors believe they are entitled to be the primary partner wi= th publishers in the publishing of their eBooks? That is, what makes t= hem believe they are entitled to MORE of the income stream than the pu= blisher?" As always, if you have questions, comments, don't understand something= , or have a different take on a subject... my direct email is=C2=A0 mf= oner@nplconsult.com mailto:mfoner@nplconsult.com =C2=A0. Feel free to = contact me, as hundreds have done each issue in the past. Keep it clea= n, spare me the bashing, I am here to advise and help, not jam my idea= s down your collective throats. Above all, my recent goal over the las= t five years or so is to work hard to keep the publishing industry rel= evant. I intend to continue. And yes, if you feel you wish to discuss your own situation with me, i= n terms of Strategic Planning, improving your revenues, profitability,= growth, Exit Strategy, or whatever... I am happy to do so, and beyond= , would be happy to be your publishing consultant and guide you to ach= ieving your own Strategic Goals in publishing. Simply email me at=C2=A0= mfoner@nplconsult.com mailto:mfoner@nplconsult.com =C2=A0. I have bee= n located in sunny Southern California now for the last seven years, a= nd if you are close by, we can arrange to meet in person. Ten Places to Look for Hidden Profits... or Hidden Costs to Eliminate.= .. or Taxes You Don't Have to Pay When running a publishing company, or any company for that matter, it = is easy to keep doing, operationally, whatever you have been doing, pr= oviding you aren't going bankrupt from it. Change is difficult... VERY= difficult. We seem to run the rat wheel... as fast as we can day afte= r day...and wind up in exactly the same place we were when we started.= As well, seeing the forest for the trees is yet another tough thing t= o do. If you have always had employees working in your office, it is a= lmost impossible to consider having people working on their own, at ho= me. That said, here are a few revenue enhancers, and a few cost cutters, a= nd even a couple extra tax and ownership ideas... for you to consider. Revenues You are already aware that books headed out of print are prime candida= tes for becoming eBooks... but what about the concept of breaking up a= long reference or multiple author or just plain 'tried to cover too m= uch ground' book, into 'sections', and selling those sections as eBook= s for a portion of the overall price. For example... let's take a 500 = page reference book that covers three general topic areas. As an $89 b= ook, it didn't do very well. As three, 160 page handbooks each coverin= g one topic, and at $19.95 per, as an eBook, you are bound to make som= e sales. Ok, you may not recover your amazing loss on the big book, bu= t who suggested you print the behemoth in the first place? There is nothing illegal or even immoral (though publishers barely con= sider the first and have no idea about the second) about taking a book= about to go out of print and reissuing it once you have figured out w= hat you did wrong the first time. A new cover... maybe new front mater= ial... a decent review and/or endorsement, or three... fine, go for it= all over again as a new title. Ethics suggest you put, in 4 point typ= e on the verso page, a notice that this was originally (title) and is = being reissued. If I had a quarter for every book that didn't remember= to do this... and I found out about two chapters into reading it... When considering a promotion with a discount... consider that you are = competing with Amazon, assuming you sell the title to Amazon, thus, wh= atever price point you decide on, should include FREE shipping. In thi= s way, your customer can go to Amazon and compare apples with apples, = and I strongly recommend you make sure you have the very best red deli= cious in the building. If you are doing a BIG promotion... then I woul= d make sure your pricing is 10% LOWER than Amazon's pricing including = FREE shipping. i.e.=C2=A0=C2=A0$30 book, offered by Amazon for $24. Yo= ur promo price can be anywhere from $21 to $21.50 with FREE shipping. = Just make sure that your promo has a clear ending date for two reasons= ... so Amazon doesn't try to tell you this is your new retail price, a= nd more importantly, because a deadline is a marketing call to action.= You DO remember what a 'call to action' is? Expenses Cost of printing. For God's sake don't buy into that POD concept unles= s that is the level of print runs you always do. I am not as concerned= about the money since these days the pricing can become very competit= ive, but the issue of inconsistent quality and the idea, with some POD= fulfillments, that I will never even see the final product in my own = warehouse to confirm quality... is beyond disturbing. Of course, for s= ome of you, I am speaking Greek... for the rest... just do your number= s as you have always done. How many RFQs should you be sending out on = each decent run? Ask me and why the number likely isn't what you think= or why. Shipping expenses vs shipping revenues. Twice a year your number crunc= her has to go through a formula you create that takes shipping revenue= s and pits them against your shipping costs. If the numbers are roughl= y equal, leave things alone. If the expense side is way over, then mak= e a 10-20% move in the revenue direction. If the revenue side is way o= ver, wait six more months before making a downward move. Why? Remind m= e to explain when you email me. Priority Mail padded envelopes... are likely the best invention since = the (SAN number?) ok, iPad. The Postal Service got this one right. $6.= 80 is way better than any UPS or FedEx Ground service and the delivery= is roughly (now that it is one day slower) the same. There are additi= onal bonuses and benefits available when you use these products. Oh, a= nd it shows your customer you CARE about getting their order to them a= s quickly as possible without using an expensive overnight service. It= says Priority and Express all over the envelope. Thus, YOUR shipping = service is now even MORE competitive than the Big Boy in the room. Rent. The predictions now for the three or four years have been that c= ommercial real estate was going to take a major hit. And they have... = malls are being retrofitted for use as almost anything else, as some s= tand half empty, and others are being torn down. Strip centers are ful= l of temporary type businesses, pop-ups, seasonals, and businesses not= normally found there. Occupancy rates are at pretty low levels, I don= 't know if they are historically low, but I DO know that landlords are= looking to keep GOOD tenants, and that means a 10% reduction in your = next lease. One more thing... there is no hard and fast rule you can't= sign on for a longer or shorter lease than the last one. If you belie= ve you are happy, good rent, good location, and useful to growth, then= sign on for MORE years at the current price. If not, OR, if you don't= get what you want in negotiations, then simply sign for a year, and l= et them know your plan is short term and you are already looking elsew= here. Being polite and=20 silent are useless traits in today's business world. Payroll. I have been down this road before with everyone. Three times = in the last ten years if memory serves. Every job that can be contract= ed out, should be considered, at least. Over the years, I have a virtu= al: social media person; data entry person; researcher on websites per= son; graphic artist; editor; web designer and maintenance person; PR p= erson; marketing person, and Lord knows who else is on the dole (I mea= n, who else is working hard for me). BUT... I only pay each one for th= e project or the amount of time actually spent on my work... the syste= m takes some work initially to keep controls on it, but you send over = a work list that is a week or month's work... lay it out as such... ex= plain the rough amount of money it should cost, and then let your peop= le get the work done. You get invoiced weekly or by the project, and the amount does NOT inc= lude having to pay: Social Security, Medicare, state unemployment, fed= eral unemployment, workmen's comp, in house insurance, any benefits li= ke sick days, vacation days, dreamy dizzy days, or anything else, incl= uding retirement, profit sharing, and other stratospheric perks. If yo= u take a reasonable base rate and add 15-20% to it once the person ask= s about who pays the taxes... you will still be splitting the extra sa= vings. And don't forget, there is no 40 hour week, or even part time 2= 0 hour, find something for this person to do before I scream, scenario= , costing you $20 an hour. You pay for the work you have contracted fo= r at roughly what you expected it to cost you. This concept also keeps= your project budgets tight and in line. The government has a lengthy set of tests to determine if a person is = a subcontractor or a dreaded employee. As long as you can meet these t= ests... this person is a sub contractor. Run afoul and you have troubl= e. Ask your CPA, or if he/she can't explain them in 60 seconds... ask = me. IF you can only take one person in your organization and convert that = person's work to contract work, and you pay that person $16 an hour ba= se, you will save roughly $6,000 a year. If you can convert that full = time person into two 15 hour a week sub contract people... then you sa= ve over $15,000 a year total. Insurance. I am referring mostly to liability and vehicle insurance. T= here is a tiny insanity people have about car insurance and house and = office insurance, which drives me... insane. You will get into a discu= ssion with someone who has just had their car window broken for whatev= er reason. It comes to $700. Their deductible is $250 or even $500. So= , logically, they say "I wouldn't turn this in for anything... they'll= raise my rates." Ok... my mind wonders... at what price point WILL they turn it in? And= I ask. Usually, that price point is substantially north of $1,000. And oddly enough, this person refuses to come off the $250 or $500 ded= uctible and increase it to the $1,000 level where they actually might = use the insurance... and save a few hundred dollars a year for each ca= r, house, office, etc., they insure. If the primary reason you aren't = turning the claim in is NOT the money, but NOT having your rates incre= ased, then use a higher deductible and pocket the difference. I have b= een doing this for a very long time... the savings has been and contin= ues to be substantial. I have what most people view and very high limi= ts on my vehicle damage and equally high limits on my personal propert= y in my home. But there is a method to this madness, and it is simple = mathematics. Glad to explain it. Taxes/Structure I could talk about this subject for a very long time since it used to = be my writing specialty (I wrote six books years back on niche income = tax issues) as well as my other professional specialty...=C2=A0corpora= te and personal financial consulting. Let me just drop two very, very = important issues on you to think about. If you need further clarificat= ion, feel free to contact me and we can go over this material in a qui= ck consult, or we can add your CPA into the discussion. If you have an LLC or a Subchapter S corporation, and have drunk the K= ool Aid of people like the nice people who keep writing articles in pu= blishing magazines... that say there really are only two ways to be in= corporated, LLC and Sub S... here is a shocker... as long as you are L= OSING money in your business, this thinking is ok. But, when you become PROFITABLE, or if you are already profitable, the= n NEITHER of these structures may be the best answer for you. Do notic= e I say may not, as each situation in taxes is different. But, for the= most part, if you are out-earning the $50-$75K base rate for corporat= ion taxes, it is likely you should be at least strongly considering a = C corporation... yes that old dinosaur of corporations. I love C corporations, particularly when you are very profitable. They= are the one vehicle that gives you maximum flexibility in tax plannin= g to minimize your income tax bill. CAVEAT: Under the new 2018/19 tax laws... if you qualify with S pass t= hrough profits of less than $200,000... then yes, being a pass through= S or other format is a good thing (for now, until the other party dec= ides to rescind everything done during this Administration, whose job = is has been to rescind everything done in the previous Administration)= . Why? Because you get a favorable treatment if your profits are under= $200,000. If you DO have any kind of corporation, and its year ends on December = 31 just like your personal tax year... (oh, because your accountant sa= id it would be easier, and everyone does it, and who knows what crap p= eople spew to make THEIR lives easier)... well, if you want some MORE = tax flexibility, then change your year end to the month BEFORE the sta= rt of your busiest season in the year. Read that again. If October is = the start of your Christmas season and that is your busiest, then your= year should end on September 30th. If you have no season, then June 3= 0th=C2=A0is the perfect date. CAVEAT: If you do decide on an S or other pass through vehicle, you wi= ll be limited to a calendar year filing, thus voiding this advice. The Bottom Line: This is complicated territory and should be reviewed = with an ultra competent TAX accountant. A Planning Tax accountant if p= ossible whose job it is to plan ahead and make computations and provid= e recommendations based on a variety of realistic scenarios including = offsetting tax year ends, S pass through reductions, splitting of inco= me between corporation and personal to minimize taxes, and many other = factors. As I said, if you need help with these tax ideas and structures, or an= y of the ideas presented in this issue, contact me at=C2=A0 mfoner@npl= consult.com mailto:mfoner@nplconsult.com . I will go over everything i= n a brief consult or bring your CPA into the discussion and help you b= oth understand why I believe what I do and what it may be able to save= you and your company. *=C2=A0=C2=A0=C2=A0=C2=A0=C2=A0=C2=A0=C2=A0=C2=A0=C2=A0=C2=A0=C2=A0=C2= =A0=C2=A0=C2=A0=C2=A0=C2=A0=C2=A0=C2=A0=C2=A0=C2=A0=C2=A0=C2=A0*=C2=A0= =C2=A0=C2=A0=C2=A0=C2=A0=C2=A0=C2=A0=C2=A0=C2=A0=C2=A0=C2=A0=C2=A0=C2=A0= =C2=A0=C2=A0=C2=A0=C2=A0=C2=A0=C2=A0=C2=A0=C2=A0=C2=A0* Thanks for reading. Copyright Martin Foner, 2019. CAN SPAM Legal Information: There should be an unsubscribe button somewhere at the footer of this = email, but if there is not, simply email me directly at=C2=A0 mfoner@n= plconsult.com mailto:mfoner@nplconsult.com , and I will have you remov= ed from future emailings. If you don't unsubscribe, we will consider you as approving us to cont= inue to send you newsletters and related publishing information. If yo= u do not approve, you need to unsubscribe. NPL Publishing Consultants, a division of Professional Publishers Grou= p Corporation, Post Office Box 1010, Ventura CA 93002. www.nplconsult.com http://link.rm0004.net/go/R0WNvrsubw4sGzPusG9ezA2/ mfoner@nplconsult.com mailto:mfoner@nplconsult.com This email is being sent to Lojban@lojban.org. Use this link to be deleted or to update your email address http://link.rm0004.net/subscription/?t=3DR0WNvp8loSnfCQ2q-x31xw2 This message was sent by NPL PUBLISHING CONSULTANTS, a Division of Pro= fessional Publishers Group Corporation | POST OFFICE BOX 1010 | VENT= URA, CA 93002 --=-BzKEWptIWFreH8ChJt6S0w== Content-Type: text/html; charset=utf-8 Content-Transfer-Encoding: quoted-printable
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Martin Foner’s Publishing Newslett= er

Volume 24, Number 3

Because You’re Serious About Publish= ing Success… OR You’re Not<= /span>

 

Hello, Everyone= …

Well, it’= s 2019, and my infamous newsletter is back.

As always, each= new year… some of you will be new to my newsletter. Therefore,= a little re-introduction is in order. May I remind you, the newslette= r is free but worth a great deal more, if I do say so myself… a= nd thousands of others have repeated this value to me. My background, = for those who don’t know… (and I won’t repeat this = for another year) 42+ years in publishing, (25 in ownership/CEO, 17 in= private publishing) as well as financial and tax consulting, with app= roximately $60,000,000 in publishing sales of my own companies and ass= isting in another $25,000,000 in sales in client publishing. As the OR= IGINAL publishing futurist (I know someone else uses this moniker, and= may he be blessed, but he wasn’t THE first publishing futurist), I made a tr= uckload of predictions=20 about the industry in these almost 25 years of newsletters, and humbly= , the overwhelming bulk of those predictions have come to pass within = my predicted time frame.

I have opinions= . If you don’t like them, you are welcome to unsubscribe, or you= may hit the delete key each issue. Unsubscribing means you won’= t get the benefit of a successful publisher’s over 40 years in t= he business. Deleting means you can pick and choose. My newsletters ar= e filled with valuable advice and insight and many of my readers anxio= usly await their arrival (I know since I get emails banging the desk a= s to when the next one is coming!).

I began in this= business when a publisher still had to ‘buy type’ from a = type house and then wax it onto ‘boards’ and used ‘r= ubys’ for color pictures. I now deal in digital, interactive, eB= ook, and all kinds of mixed up publishing… yet, quite honestly,= much of my information and advice is still rooted in a few simple con= cepts:

You still have= to make money to stay in business. It doesn’t matter how whiz b= ang your products or processes are, if you aren’t profitable, yo= u aren’t going to be in business very long, or you will be limpi= ng along for more years than you care to or should have to.

 =

Publishing, as= in ink on paper, bound into the form of a book… is not dead. F= or every survey trumpeting its death or imminent demise, I can show yo= u one that contradicts that death sentence and suggests eBooks are dea= d.

 =

There is nothi= ng wrong with old fashioned selling. You have books, go out and sell t= hem. People still buy things by handing over money or credit cards for= a product or service. Until that fundamental concept changes, you can= do some old fashioned business and expect to be profitable.

 =

And remember, W= arren Buffet’s adage (paraphrased)… when everyone is runn= ing for the exits, it is likely a great time to enter the building&hel= lip; and when everyone is placing bets all over the place… it i= s likely a good time to cash out and sit on the sidelines for a while.=

With all this i= n mind, I have decided that this issue should repeat an article I wrot= e a few years ago about where to look for profits, or to eliminate cos= ts, or reduce taxes... practical, could be useful in any industry, but= we’re talking publishing here. I have updated the content to Ja= nuary of 2019, and even with some advice for a possible recession in 2= 020.

I will = be continuing with this article in future issues by choosing one or tw= o of the points and instead of a paragraph, I will create an entire ar= ticle about each point… so you can GET the point.

I will also, in= a future newsletter, ask the related question: “Since when do a= uthors believe they are entitled to be the primary partner with publis= hers in the publishing of their eBooks? That is, what makes them belie= ve they are entitled to MORE of the income stream than the publisher?&= rdquo;

As always, if y= ou have questions, comments, don’t understand something, or have= a different take on a subject… my direct email is = = mfoner@nplconsult.com . Feel free= to contact me, as hundreds have done each issue in the past. Keep it = clean, spare me the bashing, I am here to advise and help, not jam my = ideas down your collective throats. Above all, my recent goal over the= last five years or so is to work hard to keep the publishing industry= relevant. I intend to continue.

And yes, if you= feel you wish to discuss your own situation with me, in terms of Stra= tegic Planning, improving your revenues, profitability, growth, Exit S= trategy, or whatever… I am happy to do so, and beyond, would be= happy to be your publishing consultant and guide you to achieving you= r own Strategic Goals in publishing. Simply email me at mf= oner@nplconsult.com . I have been= located in sunny Southern California now for the last seven years, an= d if you are close by, we can arrange to meet in person.

 

Ten Places t= o Look for Hidden Profits… or Hidden Costs to Eliminate…= or Taxes You Don’t Have to Pay

 

When running a = publishing company, or any company for that matter, it is easy to keep= doing, operationally, whatever you have been doing, providing you are= n’t going bankrupt from it. Change is difficult… VERY dif= ficult. We seem to run the rat wheel… as fast as we can day aft= er day…and wind up in exactly the same place we were when we st= arted. As well, seeing the forest for the trees is yet another tough t= hing to do. If you have always had employees working in your office, i= t is almost impossible to consider having people working on their own,= at home.

That said, here= are a few revenue enhancers, and a few cost cutters, and even a coupl= e extra tax and ownership ideas… for you to consider.

 

Revenue= s

You are alread= y aware that books headed out of print are prime candidates for becomi= ng eBooks… but what about the concept of breaking up a long ref= erence or multiple author or just plain ‘tried to cover too much= ground’ book, into ‘sections’, and selling those se= ctions as eBooks for a portion of the overall price. For example&helli= p; let’s take a 500 page reference book that covers three genera= l topic areas. As an $89 book, it didn’t do very well. As three,= 160 page handbooks each covering one topic, and at $19.95 per, as an = eBook, you are bound to make some sales. Ok, you may not recover your = amazing loss on the big book, but who suggested you print the behemoth= in the first place?

 =

There is nothi= ng illegal or even immoral (though publishers barely consider the firs= t and have no idea about the second) about taking a book about to go o= ut of print and reissuing it once you have figured out what you did wr= ong the first time. A new cover… maybe new front material&helli= p; a decent review and/or endorsement, or three… fine, go for i= t all over again as a new title. Ethics suggest you put, in 4 point ty= pe on the verso page, a notice that this was originally (title) and is= being reissued. If I had a quarter for every book that didn’t r= emember to do this… and I found out about two chapters into rea= ding it…

 =

When considerin= g a promotion with a discount… consider that you are competing = with Amazon, assuming you sell the title to Amazon, thus, whatever pri= ce point you decide on, should include FREE shipping. In this way, you= r customer can go to Amazon and compare apples with apples, and I stro= ngly recommend you make sure you have the very best red delicious in t= he building. If you are doing a BIG promotion… then I would mak= e sure your pricing is 10% LOWER than Amazon’s pricing including= FREE shipping. i.e.  $30 book, offered by Amazon for $24. Y= our promo price can be anywhere from $21 to $21.50 with FREE shipping.= Just make sure that your promo has a clear ending date for two reason= s… so Amazon doesn’t try to tell you this is your new ret= ail price, and more=20 importantly, because a deadline is a marketing call to action. You DO = remember what a ‘call to action’ is?

 =

Expense= s

Cost of printi= ng. For God’s sake don’t buy into that POD concept unless = that is the level of print runs you always do. I am not as concerned a= bout the money since these days the pricing can become very competitiv= e, but the issue of inconsistent quality and the idea, with some POD f= ulfillments, that I will never even see the final product in my own wa= rehouse to confirm quality… is beyond disturbing. Of course, fo= r some of you, I am speaking Greek… for the rest… just d= o your numbers as you have always done. How many RFQs should you be se= nding out on each decent run? Ask me and why the number likely isn&rsq= uo;t what you think or why.

 =

Shipping expen= ses vs shipping revenues. Twice a year your number cruncher has to go = through a formula you create that takes shipping revenues and pits the= m against your shipping costs. If the numbers are roughly equal, leave= things alone. If the expense side is way over, then make a 10-20% mov= e in the revenue direction. If the revenue side is way over, wait six = more months before making a downward move. Why? Remind me to explain w= hen you email me. 

 =

Priority Mail = padded envelopes… are likely the best invention since the (SAN = number?) ok, iPad. The Postal Service got this one right. $6.80 is way= better than any UPS or FedEx Ground service and the delivery is rough= ly (now that it is one day slower) the same. There are additional bonu= ses and benefits available when you use these products. Oh, and it sho= ws your customer you CARE about getting their order to them as quickly= as possible without using an expensive overnight service. It says Pri= ority and Express all over the envelope. Thus, YOUR shipping service i= s now even MORE competitive than the Big Boy in the room.

 =

Rent. The pred= ictions now for the three or four years have been that commercial real= estate was going to take a major hit. And they have… malls are= being retrofitted for use as almost anything else, as some stand half= empty, and others are being torn down. Strip centers are full of temp= orary type businesses, pop-ups, seasonals, and businesses not normally= found there. Occupancy rates are at pretty low levels, I don’t = know if they are historically low, but I DO know that landlords are lo= oking to keep GOOD tenants, and that means a 10% reduction in your nex= t lease. One more thing… there is no hard and fast rule you can= ’t sign on for a longer or shorter lease than the last one. If y= ou believe you are happy, good rent, good location, and useful to grow= th, then sign on for=20 MORE years at the current price. If not, OR, if you don’t get wh= at you want in negotiations, then simply sign for a year, and let them= know your plan is short term and you are already looking elsewhere. B= eing polite and silent are useless traits in today’s business wo= rld.

 =

Payroll. I hav= e been down this road before with everyone. Three times in the last te= n years if memory serves. Every job that can be contracted out, should= be considered, at least. Over the years, I have a virtual: social med= ia person; data entry person; researcher on websites person; graphic a= rtist; editor; web designer and maintenance person; PR person; marketi= ng person, and Lord knows who else is on the dole (I mean, who else is= working hard for me). BUT… I only pay each one for the project= or the amount of time actually spent on my work… the system ta= kes some work initially to keep controls on it, but you send over a wo= rk list that is a week or month’s work… lay it out as suc= h… explain the rough amount of money it should cost, and then l= et your people get the=20 work done.

 =

You get invoi= ced weekly or by the project, and the amount does NOT include having t= o pay: Social Security, Medicare, state unemployment, federal unemploy= ment, workmen’s comp, in house insurance, any benefits like sick= days, vacation days, dreamy dizzy days, or anything else, including r= etirement, profit sharing, and other stratospheric perks. If you take = a reasonable base rate and add 15-20% to it once the person asks about= who pays the taxes… you will still be splitting the extra savi= ngs. And don’t forget, there is no 40 hour week, or even part ti= me 20 hour, find something for this person to do before I scream, scen= ario, costing you $20 an hour. You pay for the work you have contracte= d for at roughly what you expected it to cost you. This concept also k= eeps your project budgets tight and in line.

 =

The government has a lengthy set of tests to determine = if a person is a subcontractor or a dreaded employee. As long as you c= an meet these tests… this person is a sub contractor. Run afoul= and you have trouble. Ask your CPA, or if he/she can’t explain = them in 60 seconds… ask me.

 =

IF you can on= ly take one person in your organization and convert that person’= s work to contract work, and you pay that person $16 an hour base, you= will save roughly $6,000 a year. If you can convert that full time pe= rson into two 15 hour a week sub contract people… then you save= over $15,000 a year total.

 =

Insurance. I a= m referring mostly to liability and vehicle insurance. There is a tiny= insanity people have about car insurance and house and office insuran= ce, which drives me… insane. You will get into a discussion wit= h someone who has just had their car window broken for whatever reason= . It comes to $700. Their deductible is $250 or even $500. So, logical= ly, they say “I wouldn’t turn this in for anything…= they’ll raise my rates.”

 =

Ok… my= mind wonders… at what price point WILL they turn it in? And I = ask. Usually, that price point is substantially north of $1,000.

 =

And oddly enou= gh, this person refuses to come off the $250 or $500 deductible and in= crease it to the $1,000 level where they actually might use the insura= nce… and save a few hundred dollars a year for each car, house,= office, etc., they insure. If the primary reason you aren’t tur= ning the claim in is NOT the money, but NOT having your rates increase= d, then use a higher deductible and pocket the difference. I have been= doing this for a very long time… the savings has been and cont= inues to be substantial. I have what most people view and very high li= mits on my vehicle damage and equally high limits on my personal prope= rty in my home. But there is a method to this madness, and it is simpl= e mathematics. Glad to explain it.

 

Taxes/S= tructure

 

I could talk ab= out this subject for a very long time since it used to be my writing s= pecialty (I wrote six books years back on niche income tax issues) as = well as my other professional specialty… corporate and personal finan= cial consulting. Let me just drop two very, very impor= tant issues on you to think about. If you need further clarification, = feel free to contact me and we can go over this material in a quick co= nsult, or we can add your CPA into the discussion.

If you have an = LLC or a Subchapter S corporation, and have drunk the Kool Aid of peop= le like the nice people who keep writing articles in publishing magazi= nes… that say there really are only two ways to be incorporated= , LLC and Sub S… here is a shocker… as long as you are L= OSING money in your business, this thinking is ok.

But, when you b= ecome PROFITABLE, or if you are already profitable, then NEITHER of th= ese structures may be the best answer for you. Do notice I say may not= , as each situation in taxes is different. But, for the most part, if = you are out-earning the $50-$75K base rate for corporation taxes, it i= s likely you should be at least strongly considering a C corporation&h= ellip; yes that old dinosaur of corporations.

I love C corpor= ations, particularly when you are very profitable. They are the one ve= hicle that gives you maximum flexibility in tax planning to minimize y= our income tax bill.

CAVEAT: Under the new 2= 018/19 tax laws… if you qualify with S pass through profits of = less than $200,000… then yes, being a pass through S or other f= ormat is a good thing (for now, until the other party decides to resci= nd everything done during this Administration, whose job is has been t= o rescind everything done in the previous Administration). Why? Becaus= e you get a favorable treatment if your profits are under $200,000.

If you DO have = any kind of corporation, and its year ends on December 31 just like yo= ur personal tax year… (oh, because your accountant said it woul= d be easier, and everyone does it, and who knows what crap people spew= to make THEIR lives easier)… well, if you want some MORE tax f= lexibility, then change your year end to the month BEFORE the start of= your busiest season in the year. Read that again. If October is the s= tart of your Christmas season and that is your busiest, then your year= should end on September 30th. If you have no season, then = June 30th is the perfect date.

CAVEAT: If you do decide on an S or other pass through ve= hicle, you will be limited to a calendar year filing, thus voiding thi= s advice.

The Bottom Line: This is complicated territory and should= be reviewed with an ultra competent TAX accountant. A Planning Tax ac= countant if possible whose job it is to plan ahead and make computatio= ns and provide recommendations based on a variety of realistic scenari= os including offsetting tax year ends, S pass through reductions, spli= tting of income between corporation and personal to minimize taxes, an= d many other factors.

As I said, if y= ou need help with these tax ideas and structures, or any of the ideas = presented in this issue, contact me at mfoner@nplconsult.c= om. I will go over everything in a bri= ef consult or bring your CPA into the discussion and help you both und= erstand why I believe what I do and what it may be able to save you an= d your company.

  &nb= sp;           &= nbsp;           = ;           &nb= sp;          * =            &nbs= p;         *  &= nbsp;           = ;        *

Thanks for read= ing.

© Martin F= oner, 2019.

 

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