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Well, it’s actually about how little tax can you pay, because at end of the day, everyone’s gonna make a million dollars in her lifetime… That’s definitely happening. The way that you make more money is by saving the amount of tax payable to be getting strategic about what you buy when you buy… In how you buy it.
Welcome to the prospecting show.
For each week, we talk about tips, tricks and methods for growing an amazing small business pipeline.
I’m your host, Dr. Connor Robertson and on this podcast, you can expect segments on communication, perceive value, opportunity in closing, thank you to everyone who has supported my 100 episodes in 100 days goal going into 2020. encore the show.
Welcome back to the prospect and show. To stay, we are gonna talk about tax breaks in the sale, no, that’s probably a little bit different than what most people are expecting from this podcast, but going along with prospecting, there are some components in the sale that can really help make your prospecting experience and your closing experience a lot better for you and your customer.
So we’re gonna talk a little bit about Section 179, which is a… A routinely new tax set up that has been put into by the Trump administration until 2022. and what that looks like is a combination of a few different things, but the major win for businesses here is that you can depreciate 100% of purchased in the first year, and so a lot of times people confuse accelerated depreciation with Section 179. the accelerated depreciation is, were you just moving that up instead of depreciating something over five years at 20% per year for a total of 100%, you are actually going to accelerate that depreciation up front in Section 179, there’s a little bit of that involved, but it also allows you to make purchases in your business that you otherwise it would not get any deduction from, and allows you to take 100% of it right up front, and so regardless, you have an accountant or a tax plan or what it is when you’re in the sales process with a potential client, it’s super important to talk them about ways that this particular purchase can actually help them, because at the end of the day, it’s gonna help you close the deal, it’s gonna help them buy, and we know that the whole world goes around with sales people, because if you have stuff that needs to be sold and people to buy at the sales person is the first thing, is able to broker that relationship, so that said, it’s super important that people who are selling products, especially capital equipment products, that would qualify for something like accelerated depreciation, Section 179 or some other deduction that they understand the tax rules, so that they can help use that in a pitch, so that would look like something on the lines of the Gemara, we have this great product here is gonna cost 25 000 but here’s the best part, with the new tax law, you’re able to depreciate a 100% of that right now, mean that you’re gonna save yourself all that tax, which otherwise couldn’t have done in your business. Does that sound good to you?
And then he’s gonna say, yes or no, and that’s gonna be a great pivot point for you in your business to be able to help sell more of what you have, so I can merge everybody to go look at Section 179, learn a little bit about depreciation works, you can look at cars, for example, that’s a… I know most people as Benson necessarily sign cars, but if you go there, you’ll… He was called a Residual, and a residual is basically the value of the car that’s left after a lease term, so let’s say you’re leasing a car, you take that car for… I’d say 36 months, 12, 000 miles, which is pretty standard in America, and it’s gonna have a residual that that car has worked when it has 36 000 miles on it, and it’s three years old in a residual on something like a super… For example, is 61 to 65%, which is extremely high.
Other cars like Honda and more exotic cars like rain drivers have really bad depreciation, which means it… After three years, that I’m really not worth a lot.
When you’re doing a sale of somebody, you gotta consider with the average depreciation of your product be so that you can figure out how to sell them around that concept, because at the end of the day, they don’t really care just about… They’re not caring just about how good the product is, they’re carrying about two different things, two or three different things, Number one, gonna make me money in my business, number two, can I save me money in my business? And number three, Does it make my life easier?
So in the case of a car, it’s not making money, it’s not save no money to make sure like easier ’cause walking to work with, so… So that’s why they have that set up in the process of selling something, you gotta have those three things in mind, in one of those biggest things that you can look at and help us as a sales tool is the alert depreciation.
Really as a TA, when people are self-employed or C, If you’re gonna owe more than 100, basically at tenth year, you can to pay quarterly estimated taxes, and what that looks like is they’re taking all of their income, they’re so tracking their expenses, and then they have their just gross income, and with their justice gross income, they’re paying tax in that that’s their 15-3% self-employment tax, then their federal tax, then their state tax, and then they’re local tax.
So because of that, you can help sell a product to somebody and say, Listen, this quarter you made 25, 000, let’s just say Keep it’s 100K, Joe 25000 is court.
If you buy or 20, 5 to a retention in it, the no tax this particular quarter, ’cause you have no income this quarter, so that can help off at some stuff for people who maybe have a little bit of credit card debt, or people who are just a little bit behind on things, you can help encourage them to get across the line by reducing their taxable income on front, which ultimately will allow them to be more financially clear in the future.
So if you’re in the sales process or somebody, you’ve gone through the prospect and to say Why should have by your product, you could say something like Great. There’s a lot of reasons you could buy our product, it depends on what’s most important to you, so what’s most important, and they’re gonna say, Oh well, I want something that’s gonna help me get good results and say, Great, well, our product definitely does that, but here’s what our product also does, it’s also gonna save you a bunch of tax, it’s gonna qualify for Section 179, we’re gonna do all this training for you, and at the end of the day, it’s gonna hold its value super well, so if you don’t love in five years, you can just sell it, I probably above 50% of what it’s worth.
So they’ve taken all that depreciation out up front as opposed to amortize that over five, six, seven, 10 years, and you’re telling them, Listen, you have a way out if you don’t love it after, but that’s the way that I would be positioning a lot of the sales process is when you have a piece of medical capital equipment or even something that’s non-medical, just any piece of capital that’s gonna qualify for a small business and be able to sell to them and say, Listen, this is how it works, you can choose to take advantage of it or or not.
And when we talk about finance and… Well, a lot of people look at all, how much more money can I make?
Well, it’s actually about how little tax and you pay… Because at the end of the day, everyone’s gonna make a million dollars in the lifetime… That’s definitely happening.
The way that you make more money is by saving the amount of tax you pay for, getting strategic about what you buy, when you buy, and how you buy it, so I think that’s super important for people to understand how to get around that system. In the sense of, I’m not necessarily providing finance advice, here are legal advice, I’m just saying that there are set of rules that are out there, and if you’re in the sales process, you might as well find out what rules apply to what you’re selling and who you’re selling to… So you can help be an advisor and go through a consultant of sales approach, instead of looking at it like, I gotta sell this guy something right now, because if I don’t, then you know we’re not gonna make quota, so I think those are… The big concepts that I wanted to cover in this episode, I’m trying to keep these a little shorter, under 10 minutes going forward, so it’s easier and enjoyable, but if anybody has any questions, give me a call back, 315-237-3784, or shooting an email at corner at syntax dot com, that’s a condor at syntax SYN-TAC door. Thanks.
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