Your #9 analysis on sales is right on. If you know the personality types, I wonder why you had a negative experience. It’s definitely putting the right people in the right position.
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In many good startups and companies there’s two personality types. One of those personality types is the #2 that actually makes the ideas work. There are many good people out there that make extraordinary living being the #1, #2 guy in an organization. Zig Ziglar had alot of very good quotes on if you want to be successful you help those around you be successful. That’s sales 101 right there. You’re not selling your product to a store, you’re helping that store serve it’s customers.
Startups are never going to have money and their only bargaining chip is equity. Look into Mike Myers and Slicing Pie
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Same.
And when one of them pops off, it was extremely important for me to have a fully aware accountant on the team. He’s saved me 100s of thousands of dollars in money I otherwise would’ve had to give the government.
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100%. My best friend / business partner is a CPA. That helps a lot.
As you scale, taxes become very important. Particularly deductions & credits.
For example, if you buy a business vehicle, you generally recognize that cost over several years, following the MACRS schedule. But if the vehicle you buy weighs over 6,000 pounds (most trucks and SUVs), you can depreciate it all in 1 year.
In other words, you can deduct the whole cost from your income for tax purposes, even if you financed it. Do this right, and you can actually make money in year 1 by financing a vehicle purchase. Section 179 deduction.
Another BIG deduction / credit in this business — if you employ people to improve processes, existing products, etc, you can get your payroll taxes on those employees back. If you didn’t know this, you can get them back for the past 3 years.
You can also pass annualized losses forward or backward to offset future or prior income. If prior, you get taxes paid back (Biden is trying to do away with Net Operating Loss / NOL Carrybacks).
If future, you can use those losses to shield against new tax liability. I’m carrying forward ~$120,000 in prior losses to draw down this year’s income.
Another tough aspect as you scale is tracking inventory. My business partner takes care of this, thank god. Making sure you don’t tie up too much money in inventory. Making sure you don’t run out of stock. Making sure you’re not getting stolen from.
Tax laws are vast & complex, so my guy can’t possibly know everything— we still hire outside counsel. But we learn more and more ourselves as we go along.
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Agreed, but I would add 1 more key player…
You have the ‘visionary’ who dreams big and sells all stakeholders on the mission / vision.
You have the ‘operator’ who handles the nitty gritty and makes it happen.
And you have the ‘product expert’ that develops your exceptional products.
What you said about not selling a product to stores but an opportunity is important for pricing products well. Value & sell based on outcomes, or, future states of being.
What you do should create excess value for all stakeholders, but carefully modulate that excess value to make sure you get paid, you don’t give away the farm, you can afford to scale, you can afford to weather storms, etc.
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Often because these people passed my kindness & integrity checks, but I ultimately came to find they didn’t have the knowledge / experience they claimed as I worked with them and got to know them better.
And, they didn’t turn out to be reliable / communicative enough.
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The visionary is the #1 #1 … the #1 #2 can take that and help formalize into something with product market fit and continuing revenue to sustain the next vision. Most visionaries can be scatter brained while brilliant.
Just my experience across different industries and mediums
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I did a lot the same sort of ‘incubation for experience’ thing early on. It’s just so damn hard to get paid.
One thing you can do is sell outcomes. Take a cut of what you improve for them on the revenue / cost savings. This still requires water tight contracts, which are then tough to enforce. You have to have control of the funds so you can take your cut out per the terms of the contract rather than per however the client is feeling, who may turn out to be a douchebag when it comes time to pay you.
Owning the brand / product largely solves this.
Just be careful you’re not talking yourself into under-pricing your products / services.
You’re right, it is very hard to develop something substantially & meaningfully better than the alternatives and charge fair value for it. Focus on figuring out how, because it’s worth it, and be very careful not to fall into the temptation of lowering prices.
The real ones will pay up. We don’t worry about the stores who won’t play ball. Most aren’t ‘real ones’. The real ones get in with us early, make lots of money, and ultimately force all the others to come on with us anyways as they lose customers to the real ones.
Distribution / re-selling is a low value-add component of the supply chain. Brand is everything in a commodity business.
Monetize your services by productizing your services. No custom solutions for small clients. Repeatable, scalable, profitable solutions.
Trademarks largely don’t matter. Registering a trademark just puts it out there officially so others won’t copy it accidentally. You still have protections under common law. Not legal advice.
Yes! Let’s get dinner in Dallas for sure. I’m ‘here’ until end of June, then moving to Asheville for a few months, then ???
I’m still in-and-out of Dallas until end of June. Gone this Friday for the next 8 days. Then gone again Memorial Day weekend.
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EXACTLY.
I largely missed this aspect in my main post.
I tell people all the time that if they know the car you’re selling is worth $10,000 based on Kelley Blue Book, but you’re charging $6,000, they will shy away in fear because they know something must be wrong with it. Surely I am getting scammed.
Price is an important communicator of value. Both under-pricing an over-pricing are a disservice to customers, amongst other stakeholders.
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$70,000 kubota tractor, zero money down, zero % interest, 10 year note, fully deductible the year I bought it.
This one is epic, and covid has made it even better. Despite running my expenses through the roof that year I bought the tractor I still ended up paying like $50k in taxes.
Last years EIDL loan, which doesn’t count as income, but the shit I bought with it for the business all counts as expenses, means the GLGs substantial 2020 “losses” roll back. Not only am I owed money this year, but I get a bunch of that $50k back.
What a fucking mess, I hate the game. But I play it well, and applaud anyone else doing the same
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Yessir!
And to clarify for readers, neither EIDL or PPP count as income. All expenses paid for with the monies can be deducted.
Last year I needed cash and was trying to get my accounting firm to submit NOL carryback paperwork to get my taxes paid in 2017 and 2018 back ( when I was working for the man).
They took FOREVER. By the time they had the paperwork ready to submit, we were cash flowing substantially in 2021.
So I did not submit it. Now I will carry the losses forward instead, shielding a 39% tax instead of ~15%.
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Ask your banker and/or accountant how PPP is forgivable so you don’t pay a portion or all back. It’s your money to begin with. They make it seem like it’s not
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Funny, you nailed it with the bartender part. I always got in trouble for over pouring, lol.
I like to think I work for the customer, and it shows in attention to detail and customer service. I do have the heart to ask for my worth, but generally care more about a job well done than the profit. Therefore, I prefer to have someone else be in charge of charging, especially in the short term. I’m better at showing long term value vs short term upsales type value, if that makes any sense.
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I’m with you 100%! I often don’t even know what to charge for whatever services I provide. Whether it construction, art, or whatever. I more often then not sell myself short because I’m “helping out a friend”. Then it turns into me (for instance) finishing the entire inside of a wood cabin for $300 bucks, and then the “friend” no longer becomes a friend when there’s no work left to be done. In my mind it’s me trying to be a “good person” because of my own issues, but it always ends up in me being bent over with my asshole hurting.
It’s something that I don’t even know how to break away from. A stupid mentality that isn’t/hasn’t done anything except cause me strife. The worst part of everything is that it gives me a fuck the world attitude. Like this place, and everyone here has restored my faith in humanity at a time when I was ready to buy the farm. I know I’m valuable for whatever, I just have a huge issues with making sure that I’m liked (which is my own issue). Because my own issues I end up in a place where I’m all alone because I’m afraid of being taken advantage of yet again. So I feel you…
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Real friends pay full price. Assuming they’re capable, and it’s something they want, not desperately need.
I feel this. We all want to be liked! Maybe more than anything.
I know what I know about sales largely because I was homeschooled grades K through 6, and in high school I felt insecure about my social skills-- I felt ‘behind’.
So I studied & consumed everything I could on the topic. I’m not great at putting what I know to use all the time, but when it’s time to sell, I turn it on 100%.
Anyways, what I know on this topic from study & practice–
Be forward / obvious with others that you like them. It’s really hard for people not to reciprocate.
Consider people you don’t like, or you’re not sure how to feel about… can you think of anyone in those 2 categories who you know genuinely likes you?
It’s hard not to like people who like you.
It’s evident you know this already because I see you putting it in to practice on this forum all the time.
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When I was 13 my step-grandfather gave me Dale Carnegies’ How to Win Friends and Influence People. I could probably use a refresher by re-reading it. I feel like I used to be conversational, and likeable. The shit with the service had me fucked up for a while, and I’m just getting back to a place where I love myself. Like legit love the person I am. It’s just hard to break the cycle of years and years of torturing myself for things that had to be done. So much regret…
Sorry, didn’t mean to derail things if I did. But I guess it is totally a step towards building anything of value. Whether it friendships, relationships, of businesses. It all starts with ourselves, and our beliefs (or whatever). Thanks for your contributions, I appreciate it!
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@COVID-69 Thank you for taking the time to write this up obviously anybody who is looking to grow will immensely benefit from your experience
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Thanks brother! You are the big boss in my game.
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Congrats on your success & we appreciate you sharing your insights!
I’m an operational guy (w/ too many visions) who owns a small software development agency that’s 10yrs old this year. I would love to know a few tools you have in your toolbox… Shit, I love to just shoot the shit w/ you to talk shop honestly. With over 25 years experience in this industry I find I’m more a digital therapist. Every business has universal issues, no matter what industry.
What do you use for your payment gateway w/ your b2b dealers?
Do you use a CMS, which?
Do have a b2b website for your dealers to purchase, track, etc?
What kind of software products do you use for email marketing/sales automation? (i assume you doing some sort of behavioral marketing, lead gen)
How do you handle your social media marketing? What type of frequency do you communicate?
How much do you spend monthly on marketing & is it related to sales/revenue projections?
I could go on. I’ll keep it light 
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