Monthly Archives: January 2023

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Third Party Payments and 2022 Taxes

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The Internal Revenue Service announced in December that it will delay by one year implementation of a new policy that will tax funds you receive by way of third-party payment processors. All entities using third-party payers to transfer funds derived from business activity must, at the close of the calendar year, report said payments on the appropriate IRS Form 1099 and send the documents to recipients of the payments, who will then include the amount of funds reported as part of annual income. The annual taxation threshold has been lowered to $600 for all types of 1099 income.

This new IRS policy was originally scheduled to take effect in 2023 and impact 2022 income, however, many who regularly receive funds through Venmo, Apple Pay, Samsung Pay and other peer2peer digital wallets apparently only recently learned that payments received would not only be reported on Form 1099-K but, alarmingly, will be taxed in the same fashion as 1099-NEC income.

Furthermore, because a significant number of personal financial transactions are also conducted on peer2peer platforms, users are concerned about both an unexpected tax bill and its accuracy. Can your electronic payment processor be trusted to recognize the difference between side hustle income and monies you received from friends to reimburse you for laying down your credit card when you all went out for drinks one night? Will the promised line of demarcation between business and personal fund transactions be consistently respected? Inquiring minds want to know.

Before the rule change, peer2peer payment services reported recipient income on Form 1099-K only when payments reached $20,000 and the number of transactions reached 200. If those conditions were met, the1099-K was required to be submitted to the IRS along with the tax return. The new policy has lowered 1099-K taxable income to $600 per year, aligned with 1099-NEC and 1099-MISC reporting income requirements. The number of payment transactions made will be irrelevant.

You’ve figured out by now that the tax law change will significantly increase the number of folks who will face a higher tax bill. Another loophole closes for the little guy! Still, the IRS has decided that the peer2 peer payments tax rule scheduled to expire on December 31, 2022 will instead remain in place until December 31, 2023 and the new ruling will apply to 2023 income.

Regardless of when the new IRS reporting rule takes effect, Freelancers and small business owners are not liking it. There is resentment that the tax change is specifically intended to crack down on suspected tax evasion within this cohort and others who toil in the gig economy, saddling you with more paperwork and headaches. The population that will be most affected often cannot afford to hire a tax attorney to defend themselves against suspected IRS or payment processor inaccuracies.

Venmo, which was bought out by PayPal in 2012, has been trying to prepare its customers for tax changes that could affect them. The company has emphasized that payments not specifically designated as being for goods or services will not be included on the 1099-K and that the company will not list individual transactions.

FYI, Venmo customers will be wise to familiarize yourselves with the differences between its business and personal accounts. Business users may be better off quittng that service, to avoid the additional fees charged, and instead track business transactions manually from the “friends” setting.

Finally, there is an intriguing twist to the story and a possible loophole has been revealed. Payment processor Zelle insists that the new IRS rule doesn’t apply to its bank2bank payment service, since its network doesn’t hold funds. The company is run by Early Warning Services LLC, which is jointly owned by seven banks (Bank of America, Truist, PNC, US Bancorp, JPMorgan Chase, Wells Fargo and Capital One). In fact, Zelle is included on users’ bank dashboards.

While Zelle offers a service similar to Cash App, Google Pay, PayPal and other peer2peer digital payment platforms, it was built as clearXchange, a peer2peer payment service created by and for its member banks. Zelle is an electronic network that manages automated clearinghouse (ACH) transactions.

According to Wendy Walker, chair of the Information Reporting Subgroup of the IRS Advisory Council, “ACH networks are not subject to 1099-K reporting.” She went on to say, in an email, that payments sent through its network “are not subject to this law” and that small business banking customers choose Zelle “because it makes it easier to complete digital payments where they bank, enabling easier bookkeeping and accounting by having the banking data at one source.” Ms. Walker seemed to infer that bank customers see a benefit in having money in their bank accounts that is not held by third parties.

OK. Of course, Congress could extend the law to include Zelle and similar “by banks, for banks” platforms. Stay tuned for updates.

Thanks for reading,

Kim

Image: © The New Yorker June 13, 2022. The End of the Year, Liana Finck, illustrator

Marketing Leave a comment

Outshine the Competition

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Believe it or not, if your business has competitors, you can consider yourself lucky. Think about it—- the presence of competitors means that there are customers who have money and motive to buy what you sell. Competitors bring you another gift in that they encourage you to get better at doing business. Competitive forces of the marketplace push you to deliver the value that customers and prospects demand so that your organization will survive (or fail).

Incidentally, your most formidable competitor is not another Freelancer who offers products or services similar to your own, nor is it a bigger, better known and better-funded entity that comes along to eat your lunch. Your primary compeititor is inertia—doing nothing.

When the customer you expected to sign suddenly tells you, “we’ve decided to hold off and reassess our priorities,” inertia is probably a factor. As we discussed in a post a couple of weeks ago, rounding up the decision-makers can be time-consuming in a hybrid work environment. Add to the mix the headache of budgeting for inflation-impacted costs and a fear of recession and shifting projects to the back-burner can seem so much easier. There goes your contract, unfortunately.

Still, there are time-tested actions known to improve a company’s competitive postion. Let’s take a look at some things you can do.

Competitive intelligence

First up, identify your two or three principle competitors. Visit their websites and social media platforms and study their messages. How do they articulate and promote their products and services to prospects? Make it a point to read blog posts, newsletters and case studies as well. If a competitor gives a talk, make sure you attend and if s/he participates in a webinar and/or podcast, listen in. Figure out what motivates their customers to work with them. What do your competitors say and do that may apply to you?

SWOT Analysis

The Strengths, Weaknesses, Opportunities and Threats strategic planning matrix that dates from the 1960s remains useful in the 21st century. Savvy Freelancers and small business owners know that to maintain your competitive position, it is wise to take every opportunity to portray your company as the best alternative within your product or service category. To achieve that aim, promote the reasons that customers should choose you and continually reinforce those attributes.

Use the SWOT template to catalogue your company’s strengths and weaknesses (internal factors) and anticipate opportunities and/or threats (external factors) that may be on the horizon. Obviously, you want to capitalize on your company’s strengths to position yourself to capture opportunities. You also need to acknowledge and correct as many fixable weaknesses as possible, to minimize or avoid threats.

Focus on expert and dependable delivery of your services and functioning of your products. Don’t expect to be all things to all people. Survey your customers and research your marketplace to stay abreast re: industry developments (or the developments in the industries of your largest customers) and updates in customer priorities to give yourself advance knowledge of both potential business opportunities or threats.

Understand your value

It’s crucial that you clearly understand what your unique selling proposition, your value proposition, to know what motivates customers to do business with you instead of a competitor. What makes your business unique and desirable to a select group? From there, work on promotional actions to take and how to most effectively communicate talking points that resonate with your select target audience.

In other words, learn how to best position yourself against the primary competitors and explain to prospective customers why they should choose you over another entity?

Known in your niche

If you conclude that your marketplace is too competitive for you to combat, or you realize that you don’t have the resources, bandwidth, or inclination to offer a product or service line broad enough to satisfy marketplace demands, establish yourself within a niche. In other words, specialize and pivot into narrow and deep.

Again, check out your principle competitors and note the products and/or services that they offer and what don’t they offer. Are they targeting certain areas? How does that match up with what sells well in your organization? Can you specialize in areas that competitors overlook?

Broadcast your brand

Establish a great first impression. Refer again to your competitors’ websites and social media sites-– how do they present themselves? Does their style seem corporate or does it feel personalized?

In your research, be sure to seek out not only what could be appropriate for your brand but also note what doesn’t seem right. Your goal is to articulate your brand while taking your unique selling proposition into consideration. You want to express what your company stands for. Aim to incorporate the visual identity, tone, persona and language that your customers and prospects gravitate to and identify with.

Bring the good news about your brand to every platform that your customers and prospects encounter and trust. What print publications do (or might) they read and trust? When you have something to announce, send that outlet a press release and follow-up with a call to the editor. What philanthropy (that you support) would you like to publicly associate with your brand and do they hold an annual event that your brand can support with not only your presence but also branded giveaways like notepads or similar items?

Multi channel marketing

The coronavirus shutdown hastened a shift to doing business online that was already taking place since at least 2018. Make sure that your website and social media accounts are earning there keep. Establish a presence on platforms that your current and potential customers trust and follow. Design a solid sales/marketing funnel for online appeals that can beckon to prospective customers who are searching your product or service category.

Hint—-if you haven’t done so already, start a newsletter and announce its launch and post it on your website social media platforms. Cover topics that will be of interest of your customers and remember that content marketing is about educating and winning the confidence of your readers.

Customize the experience

Several large studies have indicated that current and potential customers prefer email and other direct communications to be personalized. Direct subscribers to your newsletter or blog should receive a personally addressed post. Announcements of special offers should incorporate info of prior sales history or inquiries whenever possible.

Furthermore, attach a short customer survey and send it out with your next invoice. Ask how you can improve your company’s products or services to ensure tht customers are satisfied with the results of the solutions they purchase.

Price right

Communicate the value of your products and services and justify the premium—but fair—prices that you charge. It’s usually not possible to know what B2B service competitors charge but avoid offering your services at bargain basement rates, Low prices tend to bring in the wrong kind of clients. You also don’t want to set too high of prices since you’ll be more expensive than the competition with a similar skillet as them. If you’re just starting out, do some price testing. As you establish yourself, you can adjust your rates with future clients.

Thanks for reading,

Kim

Image: Evonne Goolagong, winner of 14 Grand Slam singles and doubles titles, including four consecutive Australian Open singles championships between 1974 and 1977, former Number One female tennis player in the world (1976), inducted into the International Tennis Hall of Fame (1988) and native Wiradjuri Australian.

Marketing , , Leave a comment

Marketing Automation—Give It A Try

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Can you afford to invest $50 or so each month in marketing for your business? Can you afford not to? Marketing is a hugely important business function—how else can your future customers know what you do and know where to find you? You may struggle to keep up with your marketing aspirations—it’s a common problem. Small businesses owners and Freelancers are often too busy to fully implement the marketing campaigns that they devise. Today, let’s talk about how marketing automation can create a great leap forward for your LeadGen strategy and deliver a nice increase to your sales revenue.

The most successful marketers know that automating routine marketing functions will enhance your ability to provide the most effective marketing campaign outreach and as well the best possible buyer’s journey experience for prospective customers. When marketing automation software is in place, all prospect requests for information about your products or services will receive timely follow-up. You, your team and your company will look good as a result —professional, responsive, trustworthy and reliable, all brand enhancing qualities.

As you know, marketing automation is the process of using technology and software to automate your company’s marketing activities across all of your digital channels—website and social media platforms. By using automation, you can target prospective customers easily and efficiently and launch special outreach campaigns by using automated email messaging that is peronalized to reflect the customer’s buying history or interest. BTW, according to a recent survey, 80% of prospects reported that they were more likely to do business with companies that offer a personalized buyer’s journey experience. Data from consulting giant McKinsey revealed that personalized emails sent to prospects can reduce customer acquisition costs by as much as 50 % and increase sales revenues by 5–15 %.

Consider trying these four digital marketing automation strategies. Doing so can potentially free up 10 hours/week of your valuable time and allow you to focus on other aspects of your business. Marketing automation service packages and pricing vary widely, but a basic plan offered by most companies is unlikely to take a big bite from an inflation impacted budget. Plugs, there is reason to be optimistic about adding to top line sales revenue. Spend a little money, make more back.

Build targeted email campaign lists

Despite the obituaries that have been written over the years, email marketing has shown us all that like a cat, it has nine lives. Email marketing automation is very useful for LeadGen, helping to generate sales from prospects in your sales funnel. Marketing is all about providing the right information at the right time in the buyer’s journey. Automating email outreach enables you to send that correct message to the right person at the right time and simultaneously save time and increase efficiency as you communicate with prospects.

Nurture warm leads

Encourage the process of converting prospects into clients by personalization—from correct names to accurate buying history data — and enhance prospect engagement. Help yourself and your team to respond quickly to contact forms that prospects submit when they’d like to schedule a call or meeting with you or someone from your team. Follow-up fast on calls-to-action from prospects who’d like to receive your newsletters or attend a talk that you’ll give. Marketing automation will guarantee that you’ll avoid the embarrassing occurrence of leads that get lost in the shuffle and drop off your radar screen.

Your goal is to move prospective customers through the buyer’s journey, AKA the sales funnel, to become a paying customer, Your marketing automation system can monitor consumer activity and assist you in determining where in the sales funnel your prospects are. You can select the info that your leads will receive and the frequency of emailing at each step of the buyer’s journey to help you execute an effective lead-generating strategy.

Automate social media posting

At the beginning of each month, help yourself and create a calendar by planning 30 days worth of social media content ideas. For example, every week, vary your content by type (i.e., educational, entertaining, inspiring, tips and tricks, behind-the-scenes, etc.). This will help keep your social media audiences engaged and interested in your posts while making it easier for you and your team to create the content.

Furthermore, when filming videos or taking photos for social media accounts, aim to capture a variety of content that can be reused and repurposed for various posts. This will cut down on the content creation time, as you’ll utilize one shoot for multiple pieces of content.

Analyze campaign performance

Measuring the success (or not-so-much) of marketing campaigns is often guess work. Especially for Freelancers, following the rate of client acquisition, that is, the bottom line represented by the clients you bring in or bring back, is what many of you do. More ambitious types, or those responsible for marketing in larger organizations, most likely work with spreadsheets to monitor the performance of marketing initiatives. I’ve done it before and I find spreadsheets to be very time-consuming. Plus, not everyone on the team who should regularly post updates will do that without prompting fom the team leader, which takes time.

The beauty of marketing automation is that when you program the software to perform certain functions, the results will always be accurately reported. Once you’ve categorized your leads and customers according to where they are in the buyer’s journey, you can email targeted content that’s specific to each lead, increasing your marketing and sales effectiveness. Next, the lead tracking function will automatically update the system if that lead becomes a customer or makes an important action that might signal a movement toward becoming a customer, such as downloading a price sheet or requesting a copy of a case study.

Once you customize your system, all you’ll have to do is log in, view the results and evaluate what the information tells you. Appropriate follow-up and other trust-building actions can take place every time. Potential customers do not get lost in the shuffle. You make more money!

See the best marketing automation options for 2023 here: https://www.g2.com/categories/marketing-automation

Thanks for reading,

Kim

Image: © Walter Nurnberg/Getty Images. 1960s computer technology

Sales Leave a comment

Navigating the New Normal Buyer’s Journey

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Aftershocks from the 2020 coronavirus shutdown continue to shake the ground beneath our feet, causing us to re-examine and adjust the way we live and work. Maybe your spouse began to work from home in March 2020 and has negotiated a deal with the higher-ups to work in the office just three days/week. That’s a change you probabaly like. But the hybrid office has disadvantages that present real challenges to the workplace. Getting the job done can be an uphill climb.

In addition to building relationships with team members and other co-workers who were hired after WFH began and nurturing a healthy company culture in an unusual environment, hybrid teams must also create and implement decision-making processes that function in a hybrid office. The logistics of corralling now-you-see-them, now-you-don’t WFH decision-makers and stakeholders whose presence is needed to discuss and either move forward or kill important proposals requires lots more planning and more time.

Long accepted practices that became routine and familiar when leadership teams evaluated strategic business decisions have changed and may continue to change. If decisions involve spending money, you already know that factor will further complicate matters. Unfortunately for Freelancers, the decisions on which your livelihood depends are increasingly more difficult to even schedule for a fair hearing, let alone obtaining an approved.

The WFH revolution is just one change that your current and potential clients are facing. Disappointing economic and political conditions, glaringly demonstrated by the Ukraine-Russia war and big lay-offs at blue chip tech companies like Facebook/Meta, Amazon, Google, Salesforce and Cisco amplify whispers of a coming recession. Inflation has already arrived, shrinking spending power in its wake. Global and national realities incline business owners and leaders to pull back spending and carefully assess the ROI of all big-ticket expenditures.

A recent survey of small businesses found that 57% of owners cut spending as a result of the COVID-19 crisis and they continue to spend cautiously in the current period of economic uncertainty. Those that maintained their spending tended to revise budget allocation, often choosing to fund salary increases (34%), marketing (28%), or operations management (27%).

So what’s the best way for Freelancers and others whose client roster consists mostly of small businesses? Let’s think about devising a buyer’s journey GPS system that will help you succeed in the new normal business climate.

Get used to it

For best results, the attitude adjustment starts now. Your clients are in the midst of a sea change and if you expect to make money over the next few years , you’ll have to change along with them. Pay attention to actions that indicate your clients are changing things and let them know you and your team are willing and able to meet their updated priorities and needs.

You already know that the coronavirus shutdown and WFH phenomenon speeded up the use of online tools, leading your prospects to browse your website and your competitor’s to research potential product and service solutions, hold videoconference meetings with you (and your competitors) to discuss those products and services and when a final decision is made, prospects are comfortable buying the chosen product or service online, as if it were lunch. To provide the best response to the new way of doing business, getting specific aspects of the B2B buying journey right can ensure your organization is well positioned to handle whatever the future holds.

On the same page

If you’re not on the same page with your clients you won’t be able to implement strategies for clients and make sales. Salesforce found that 86% of business executives believe ineffective collaboration and communication are the two major causes of failure in business.

Don’t limit your focus to the tools and systems that facilitate collaboration and communication. Remember the B2B pain points your company exists to resolve.

Streamline and clarify communications

Because the decision-making process has become more complicated in the WFH era, smart Freelancers know that it pays to clarify and simplify all communications connected to the buyers journey. Your B2B customer experience most likely needs re-examining. Meet your prospects where they are and provide them with relevant information that drives the decision-making process.

Incorporate videoconference meetings, telephone calls, emails, SMS (text) communication and, yes, face2face meetings to inform and bond with prospective clients. Keep your company website and social media platforms updated and calls-to-action compelling and obvious. Your goal is to continually encourage customer engagement throughout the new normal B2B buyer’s journey. It is the key to your sustainable success.

Thanks for reading,

Kim

Image: © francescoch/ Getty Images

Business Strategy , , Leave a comment

Social Media for the B2B Freelancer

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As you do your best to navigate through the COVID era, one obvious change has been that life and business are largely conducted on the internet, Step-by-step, especially since Y2K arrived (were you afraid to ride in an elevator on 12/31/1999?), so much of life started moving over to the internet. The coronavirus shutdown of March 2020 acted like a rocket booster and pushed millions of businesses—supermarkets to pharmacies, restaurants to home furnishings stores, classroom instruction from grade school to college level, luxury apparel boutiques to plant stores—to prioritize their online presence. You may have begun to work from home, plunging into video meetings and Slack and other workflow communication tools. This is a permanent inflection point and there can be no going back.

It’s fairly certain that you participated in social media in your personal and/or professional life prior to the COVID era but if you are a Freelancer or other business owner or leader, you recognize that the need for creating a sophisticated social media strategy has been ratcheted up. Officially, your social media presence can no longer be treated as an afterthought. Your chosen platfroms now own a pivotal role in your organization’s sales/marketing funnel, a critical client recruitment tool. Social media is now integral to supporting your brand, often by telling your brand story and building a community of loyal client cheerleaders who enthusiastically sing your praises. Make optimizing sthe use of social media in your organization your first business strategy decision of 2023.

Enhance brand awareness

LinkedIn remains the most popuar platform for those searching for B2B solutions. Complete your regualrly update your profile. When you receive new certificatons, upload them. If becoming (or remaining) a thought leader in your industry is a goal for you, social media provides a path and LinkedIn is considered a trusted source by most. You’ll find this blog post on my LinkedIn profile. If you’ve been a podcast guest or host, post the link, ditto for a webinar.

If you’ll teach a class, deliver a talk, moderate or participate on a panel, post the invitation on your profile. Participate in the still-relevant LinkedIn Groups feature and chat and exchange information with your professional peers. LinkedIn’s new Creator Accelerator Program a 6-week program that shows you engage your audience and grow your target audience. There is an application process involved, Contact the Creator weekly newsletter for more info. Stay up-to-date with your Notifications and receive feedback from followers and those who’ve responded to your content.

Sales/marketing funnel

The benefit of sharing informative content is that you may soon be seen as a trusted surce and expert in your space, making it easier to be seen as a credible resource and not just another salesperson. Social media browsers are known to use their preferred platforms to research products and services. This is a huge opportunity for you to use social media as a platform to add value by sharing informative content. As such, you’ll spend much less effort trying to “convince” target audience members to do business with you once familiarity and trust have been established.

Improve your understanding of what motivates potential buyers in your target audience to turn to social media before posting your content, to ensure that your information aligns with what potential buyers want, and need, to know. In general, a case study or two, your newsletters and your blog posts will answer most questions and demonstrate your organization’s ability to meet client needs.

Leverage the power of client testimonials and give yourself additional credibility by way of a real-time description of the capabilities of your organization. Your approach to delivering the solution, handling of the inevitable obstacles that challenge along the way and your team’s customer service and after-sale support will go a long way in showcasing your venture and building trust.

  • What are aspiring buyers in your category looking for and what do they hope to achieve?
  • What drives potential buyers to use certain keywords, hashtags, or phrases when searching in your category?
  • What products or services are they using now, or previously, to achieve the goal, or attain the solution to resolve the problem now?

Feed your sales/marketing funnel by demonstrating that you and your team can get the job done. Potential buyers will seek for more information and may eventually schedule a video or telephone call to talk things over and get a better sense of you and what it might be like to partner with you and work on the project.

Building community

How does one encourage the engagemet of your customers? Maybe start with a couple of polls and then get a discussion going? Those thriving the most in today’s evolving engagement landscape are able to use their social following and allow users to contribute and interact rather than simply judge and scroll. This can be accomplished in a multitude of ways, including inexpensive swag gift giveaways polls, posting LinkedIn story video or audio testimonials or reviews. If you’re participating in a charity event, video some portion of the proceedings and make that a LinkedIn story, too (you will have already posted it as an event, am I right?)

The key is to execute thoroughly and listen to your community: Simply having a giveaway may create interest, but communicating the rules, perks and actually following through by showing the community how their involvement moves the needle toward something positive is the ideal. This could happen any number of ways, and requires considerable thought from those close to the brand who understand how to best engage its community.

Happy New Year and thanks for joining me,

Kim

Image: Kim Clark. The groom in a wedding party approaches The Park Plaza Hotel in Boston, MA (2019)