Maslins November 2009 Newsletter

4 personality traits & how to sell to them

People's personalities can typically be split into four categories:

Amiable

• Dependable, loyal, and easy going
• Like things that are non-threatening and friendly
• Hate dealing with cold hard facts
• Can be a bit wishy-washy and avoid proper business discussions

How to spot an amiable - they'll ask lots of questions about non-business things. Holidays, pets, the weather, family. They may also appear uncomfortable when you get to (what you see as) "the point" of the conversation.

How to sell to an amiable - they do business with people they like. Send them a Christmas card, ask them about their personal lives (nothing too intrusive!) and they'll be putty in your hands.

Analytical

• Systematic and well organised
• Appreciate facts and figures
• Enjoy completion of detailed tasks
• Can be over cautious and insist on doing things "by the book"

How to spot an analytical - they often appear uncomfortable in groups, though they are fine one to one. When asking questions they will typically ask for figures to back up any sales waffle you are coming out with.

How to sell to an analytical - persuaded to buy based on facts and statistics. They don't want to be your friend so chatty phone calls will annoy them. On the other hand, they are more likely to read lengthy e-mails showing how buying your product/service saves X% of businesses Y hours of their time and £Z in the first year.

Driver

• Huge internal motivation to succeed
• Focused on getting results
• Typically achieve a lot in a short space of time
• Can be considered aggressive

How to spot a driver - they will angrily say things like "Look, will you please just get to the point". They talk quickly and get frustrated by people who don't.

How to sell to a driver - don't waste their time. Whatever you're offering, get to the point quickly. Succinctly explain what your product/service can do for them. They'll make a quick decision so you'll either get an easy sale, or be immediately tell you where to go.

Expressive

• Very outgoing and enthusiastic
• High energy levels
• Creative people, good at coming up with ideas
• Not so good at seeing those ideas through to completion

How to spot an expressive - typically make lots of hand gestures and get excited easily. Say things like "Wow, it's amazing" and use lots of superlatives (everything is "the best" "the fastest" "the most delicious").

How to sell to an expressive - don't bore them with facts. Make sure you're excited about your product/service, because if you are, they will often follow suit. However, they can be the type to seem extremely interested but never actually sign on the dotted line!

As a rule, amiables and drivers are considered opposites so often don't get on (want to chat vs get to the point), and the same for analyticals and expressives (all about facts vs all about feelings).

But...by being aware of the above, if you're able to spot which quadrant your customer is predominantly in (most people will typically show character traits from two quadrants, though often one more dominant), you can tailor your sales pitch to maximise your chance of success!

Tax tip of the month

Is your business structure helping you?

For many small businesses, people consider there to be a simple choice. You either trade as a sole trader (or partnership if several of you) or you set up a Limited Company to trade under. However, there is another significant option.

Sole trader

Sole traders are great, predominantly for their simplicity. You need to register with HMRC which can be done by a simple phone call, and that's it, you're ready to go. Year end filing is kept to a minimum. On top of your tax return you may be required to supply a detailed profit and loss account, but not if your turnover is under £30,000. Not only that, but if you make a loss in the early years after leaving a job, you can generally set that loss off against your previous salary, often leading to a tax rebate.

However, if your annual trading profits start to exceed £20k, it's probably time to look at other options.

Limited Company

Limited Companies can be setup for as little as £25 by an online formation agent, and typically (with a suitable salary/dividend split) leads to lower tax bills than a sole trader. They do have greater filing requirements though, as Companies House come into the picture, and HMRC start to want a bit more detail.

There are also a few situations where the tax treatment of transactions though a Limited Company are not favourable.

Limited Companies and capital gains - Limited Companies suffer badly when chargeable gains are made. As a sole trader, if you sell a business asset at a gain, you (broadly speaking) get the first £10k of any gain tax free, and are taxed at 10% on anything above that. Selling capital assets at a gain through a Limited Company is not so pretty. The company will be subject to tax on the chargeable gain at their marginal rate of tax (21% for small companies, but a large one off gain may put you above this). Even after this tax charge, the cash proceeds are still within the company...what if you want to take them out? Well, you'll probably be hit with an effective 25% tax charge if you're a higher rate taxpayer and draw out as dividends. Although there are many ways to defer chargeable gains, most commonly by investing in another similar asset, this is not always desirable.

Limited Companies and motor vehicles - Limited Companies can also be an unfortunate choice if you like to have a flashy car for business use. As a sole trader, you split your mileage business/personal, and claim that proportion of the total costs of running the car, irrespective of whether it's a Ferrari and entirely unnecessary for your trade. Trading via a Limited Company, you can either reclaim business mileage at 40p/25p (which with 15mpg, insurance class 20 & huge servicing bills won't go very far), or you treat it as a company car. This way the company claims the cost of running the car (subject potentially to disallowances if leased or very low capital allowances if bought), and you get stung with a huge personal tax bill because of the benefit in kind (say £200k @ 35% = £70k...so you're taxed as though you have a £70k higher salary than you actually do!)

Corporate Partnership

This is where the corporate partnership can become useful. In its simplest form, you (Joe Bloggs) setup a Limited Company (Joe Bloggs Ltd) and also an LLP (Joe Bloggs LLP). The LLP needs at least two partners...those two partners are you (Joe Bloggs), and your company (Joe Bloggs Ltd, which is 100% owned by you). With a carefully worded partnership agreement, you can ensure any capital gains of the LLP are distributed to Joe Bloggs, and any trading gains are distributed to Joe Bloggs Ltd. You can also then buy your Ferrari and claim the proportion of total running costs as a business expense.

The administration of this is obviously a little bit more onerous, as although from your point of view you are still a one person business, from a legal point of view there is an LLP (which requires accounts and a tax return), a Limited Company (which requires accounts, a tax return, and an annual return), and you're also a self employed partner.

If you would like to discuss this further then please don't hesitate to contact us.

Local Events

Classical Recital - 7:00pm, Saturday 21st November, Vale Royal Methodist Church, TN1 1BX

Three beautiful ladies perform on flute, harp, and vocals (my wife!). Programme to include music by Faure, Britten, Rubbra, some English folk - some you won't have heard and a few classics! Tickets £6 (£5)

I cannot stress enough the superb value on offer here. All three ladies are professional musicians. The same show at the Trinity Theatre or Assembly Hall would typically cost £15-20 per person. If you'd like to experience a taster of classical music at a bargain price, do come along, you won't be disappointed!

A Christmas Carol - 7:30pm, Friday 27th November, St Barnabas School, TN1 2EY

Don't be fooled by the venue, this is NOT a kids production, it is put on by Strangeface Theatre Company who have an exceptional local reputation. Tickets available from Dave Prodrick on 07966 190 428.