Sunshine Family Monthly News
January 5, 2006 Edition
The content of this monthly newsletter is directed to members doing a Nature’s Sunshine business in The Herbs Place organization. Any benefits or offers in them are directed solely to this group of people.
Happy, Successful and Blessed New Year!
I hope you had a grand season of holidays. We keep it pretty simple around here, but did take a trip down South to see some of our Sunshine Family down there. It’s been over 5 years since we moved from Alabama to Virginia so there were a lot of emotions and excitement. We now have tons of memories to treasure until next time.
With a fresh new year we are getting many requests for information on distributorship. I hope you are as well. Having a business of your own is getting more and more necessary as job security gets less and less. Network marketing is certainly a steady way to build income and business …. that is as long as you are in a company that will be there when you get your group built.
NSP will be 34 years old this year and their international presence is doing even better than the United States, so they are a strong and debt-free company that will be around when you need them.
Sunshine Blessings to Each of You!
Randal and Donna Watkins
New Flyer for You
I did a 8-1/2 x 11 flyer with three products on it: Clean Start, Hoodia and Para-Cleanse. We are including this in a mailing we send out about a week after somebody signs up. We put a welcome letter, a brochure, and this flyer in the envelope. It’s been doing well.
Our son, Benjamin, began doing the same thing not much more than a week ago and has already gotten a reorder after his first mailing.
If you’d like the flyer with your contact/website info on it, just reply to this email and send me what you’d like at the bottom of it. This flyer is made for members since it has member pricing on it.
If you don’t have a toll-free number for people to call to order, give them NSP’s order number so they can place phone orders if they don’t want to order online.
If you’d like a PDF of a sample welcome letter, so you can create one of your own for mailings to your new members, I’d be happy to send that to you also. Just reply and ask.
Did you know that you could be taking home an extra $5,000 each year – with little or no effort? While it almost sounds too good to be true, it’s not! The government offers huge tax breaks to those who have home based businesses – regardless of how well they do.
How is this possible? The tax laws that allow large corporations to write off thousands of dollars in expenses are also available to those with home-based businesses. The only difference between most network marketing businesses and fortune 500 companies in the eyes of the IRS is their size and the fact that network marketers can also deduct many home office and living expenses.
Let’s take a look at some of the seemingly “ordinary” things that can be legally deducted by a network marketing home-based business owner.
Meals and Entertainment
When you discuss business with co-workers and friends at lunch or dinner, your meal is 50 percent tax deductible. For that matter, so are other expenses relating to entertainment focused on building relationships with prospects, retail customers, and downline or upline distributors. Theater and sporting event tickets are 50 percent tax deductible, too.
Car and Fuel
Automobile mileage is deductible between your home-based business office and a meeting where business is discussed. That includes the meals mentioned above, an opportunity meeting, or even golf outings with friends who are prospects! Travel is deductible, whether it’s to an industrial center or an island resort, if the purpose is to hold an opportunity meeting, to discuss business with other travelers, or to attend a seminar. Travel is deductible for a wife or husband whose presence is helpful in closing the sale. You can also deduct wages paid to your children for help in the business, and if those children have no other sources of income, all wages under $4,000 per year are tax-free. It’s a great way to save for college with Uncle Sam’s help!
Computer and Office Equipment
Home computers, fax machines, telephones, office supplies, and office furniture are also fully tax deductible. But there’s more. The IRS’ only requirement is that you legitimately treat your network marketing business as a business, not a hobby. That means regularly working it. What counts as “regularly working” your business? Taking the actions you are telling your downline to take: attending weekly meetings, calling prospects regularly, using the product and telling people about it, presenting the opportunity, and teaching others to do the same. If the people you sponsor actively follow your guidance, they should make money. But even if they don’t, the IRS will recognize their right to home-based business tax breaks (just as it does yours) if they properly document their activities and costs. The only catch is that expenses directly related to your home office (rent, utilities, etc.) cannot be used to generate a tax loss. They can only count against your business profits for that year and carry over to negate profits in future years, should your business take off.
Documentation is a simple process. It merely means saving receipts and writing down in your day planner all business-related activities, business-related expenses and any revenues you earn. Consistent record keeping will prove to the IRS that you are truly running a business and not engaged in a hobby, whether or not it makes money. What do these records look like? They’re simple. Just writing down whom you spoke with about the business, where you went in pursuit of your business, and what you spent in the ordinary course of conducting business, will provide you with the proper documentation and a sea of deductible expenses. For a maximum investment of five minutes a day, the time spent record keeping is worth a minimum of $5,000 in tax savings. That’s a little over $231 per hour of tax savings for the time you spent keeping track of your activities and expenses.
Tax Break Specifics
Which of your ordinary lifestyle expenses are deductible when you are a network-marketing distributor? If you legitimately work your business in any of the following ways, you can write it off. Check out the math:
Lunch with coworkers is deductible. (Hey, they’re prospects!) Four dollars per day times 250 workdays: $1,000. Multiplied by the 50 percent deductible, that equals $500.
Travel expenses for you and your spouse to vacation land, if you hold opportunity meetings (the meetings could be with the friends you are visiting), and if both you and your spouse participate.
Home-office deduction ($150 per month) for use of the spare room in your house, out of which you operate your home-based business. Make sure to meet there sometimes with clients or prospects, to document the meetings, and not to use the office for any other purpose.
Automobile mileage from your home office to your day job or other places where you actively encounter prospects and actively discuss the product. At 30 cents per mile, 20 miles round-trip times 250 days equals $1,500.
Tax-free wages for two kids without other jobs who help in your home-based business. That’s two children times $4,000 per year, paid to accounts for college, weddings, etc.
Health insurance for your family. (This assumes your spouse is an employee of your home-based business who chooses to include you and the kids on the plan.) Premium of $225 per month multiplied by 12 months equals $2,700.
Altogether, that’s $16,000 in tax deductible expenses. If your tax bracket is 35 percent of your income, counting combined federal and state taxes, your deductions would generate a $5,600 cash refund from the IRS.
To deduct the above expenses, you must be actively working your business (i.e. meals and trips mentioned above) and keeping records. Be sure to consult your accountant or tax advisor to learn more about applying these concepts to your business.
Knowing the NSP Answers
How do I add, remove or change a name on my account?
Any changes to the names on an account must be done in writing. A written request with all signatures on the account must be sent to our Home Office.
Attn: CIM Department
PO Box 19005
Provo, UT 84605-9005
Sharing Sunshine Tips – What’s Working for You?
NSP Resource Links
Herb Allure – They have grown in their offerings over the years and provide quality and detailed information on NSP products and health problems.
NSP Advisor – This forum was created to give Nature’s Sunshine Managers and Distributors a place to post and receive answers to personal and clinical questions, share product information and testimonials, and learn about tools that can help them build their NSP business. It provides information about herbs, vitamins, minerals, and supplements, as well as other alternative healing methods.
NSP Forum – A place to search for topics and health problems. Lots of information on there from years of postings. Good resource to keep at hand.
Growing Your Business
Here’s an article for friends, coworkers or family that you may be trying to sponsor into Nature’s Sunshine. It’s a good one to review for yourself also to assure you that you chose a good MLM company to build a business on.
How To Evaluate Any Network Marketing Opportunity
By Sandy Botkin, CPA. Esq.
J. Paul Getty once said he’d rather have 1% of 100 people’s efforts than 100% of his own. This philosophy fits the multitude of new entrepreneurial network marketers-those people who have found themselves looking for either part-time or full-time work, caught in the crossfire of today’s corporate penchant for downsizing. Why work for someone else who can lay you off on a whim? Work for yourself, get others to work with you, and earn more than you even dreamed of is the network marketer’s theme song.
Walk into a hotel lobby, restaurant, or friend’s living room almost any evening of the week, and you will find anywhere from 5 to 100 people listening attentively to enthusiastic speakers explain the benefits of becoming a distributor or representative for the products and services of Amway, Colgate-Palmolive, Free Life, Gillette, Mannatech, NuSkin, New Vision, or KAIRE International, among others-all companies that are part of the new wave of network marketing-friends selling to friends. These companies are joining over 1,500 companies today that have already found network marketing to be one of the most effective ways to get their products distributed quickly.
Because of job insecurity or loss caused by corporate downsizing, many people are looking for part time opportunities that will help them develop useful skills and earn extra income. They want these opportunities without large liabilities or large capital investments. Network marketing is seen as a way of meeting these needs. The Home Based Business Journal reported in its May 1996 issue that home based businesses average an 85% success rate and a less than $1,000 investment. While non-homes based business average an 11% success rate and a $22,000 investment. With virtually no overhead, no employees, and no law suit worries, costs are low. Most network marketing businesses validate these high success rate-low investment possibilities.
Consequently, don’t be surprised when the engineer next door or the corporate manager from across the street calls, offering you a chance to earn some money in your free time. A few days later, you find yourself on your way to your first meeting. You do it as a favor to your friend, and you’re skeptical, of course, but you’re also a bit curious. After all, you saw some natural supplement in your doctor’s waiting room last week and were shocked to find out he was a network marketer. What’s the deal?
In the meeting, you look around, are slightly uncomfortable. You’ve dressed casually and find yourself in a sea of suits. The man on your left is an accountant, the woman on your right a journalist. You begin to dismantle your stereotype of who does network marketing. You find out that, for the most part, the people around you are already making good salaries in full-time jobs, but new feel secure, and they are looking for a safety net.
You listen to the sales presentation, done by one of the company’s top producers; you’re promised the possibility of earning a significant six-figure income if you are persistent. Moreover, you learn about the tremendous tax benefits available to small businesses. Your skepticism begins to diminish as you wonder if network marketing isn’t something you should consider. After all, you hear, more new millionaires are coming of network marketing today than any other sales field.
This is point in the evening when you need to stop and breathe deeply. Before you decide to get caught up in the enthusiasm, which will be contagious, and buy in immediately, take this advice: Let the enthusiasm cool off. Then begin the process of deciding which company to join by finding the answers to the following 10 questions:
1. How stable is the company? Two ways to judge a company’s stability are: first, get a credit report from Dunn and Bradstreet. Second, find out how long the company has been using network marketing. Most companies never survive two years. Therefore, at least two years in the business is a good yardstick in judging a company’s stability.
2. Does the company stand behind the promises it makes about its products? This question is important to ask product companies. Call the company and ask these questions:
• Does the company validate their products’ claims, e.g., does a health food product have clinical trials done by independent laboratories? • What is the company’s refund policy if the customer is not satisfied? How quickly do they refund the money? • What is the company’s buy-back policy on inventory purchased by distributors? Most companies promise to buy back inventory not more than a year old. But sometimes this policy is illusory because of the complex administrative hoops the distributor must jump through and because there is no limit on when the refundable money must be paid back to the distributor.
3. Finally, buy the product and try it. Do you like it?
Does the company want you primarily to (1) sell products/services, (2) recruit people, or (3) both? Most companies want you to recruit people to distribute who in turn will recruit people to distribute who in turn will recruit people to distribute. But if the company is only recruiting people and no one is selling the product/service, you may want to look carefully at the company. Will the distributors use enough product to keep the company afloat?
Further, you may just want to market a product and not manage a whole sales force of downline (the people you get to sign up under you) distributors. If so, find a company that will let you do that. Your commission should be enough to let you make money retailing the product or service without having any downline. This means that the commission paid on retailing should be about the same as the commission paid on recruiting new distributors. Nevertheless, it’s useful to remember that most of those who earn top money in network marketing are the people who are able to get others to overcome the stigma of network marketing – to recruit, train, and finally support people (called their "downline") who are able to get others to recruit, train & support people, etc., etc.
4. Will the products sell? Before you buy too much inventory – a good guideline is don’t buy more than you can sell or use in a month – do some comparative shopping to find out answers to these questions:
• Is the price of the products reasonable? Can customers find just as good a product on the market for less? Usually network marketing companies offer products which are only available through them and which are claimed to be (and may be) better than those offered elsewhere. • If the products are not unique, are they priced competitively? • Are the products so desirable that people will continue using them and recommending them even if they stop being distributors? This is an important question, since most companies have a high attrition rate among distributors. • Will the products sell even if not marketed through network marketing.
5. Does the company really have momentum? Every company will claim that the time to join is now because of the "S" curve, a curve that marks rapid growth times. Momentum is important because growth magnifies efforts. If you join during a growth period caused by either the age of the company, or by introducing a new product, or by getting a new patent, this growth can attract new distributors and more sales. If the company or product is growing at 3% a year, your business growth will mirror the 3%; but if the company or product is growing at 30% a year, then your business growth should also mirror that percent.
6. What kind of sponsor support is offered? We can’t overstate the importance of this answer. Not all sponsors are created equal. The person who takes you to the meeting becomes your sponsor if you sign up under him or her. You are locked into that person for a long time. To avoid this, don’t sign up immediately. You can wait, shop around, and find a sponsor who is known to provide strong support to his people. It is not polite for a sponsor to accept you at a meeting if you have been brought there by another sponsor. You will need to get the person’s card and call them after the meeting. Be careful even if you are signing up only to buy the products at wholesale. You may want to become an active distributor later, and you will be locked into the person you are buying from. To find the right sponsor:
• Attend several meetings in your area. • Introduce yourself to numerous successful sponsors. • Evaluate their reputations. Ask them what they do for their people and how long they have been doing it.
Some sponsors are like robots, signing up everyone but supporting none; others, more responsible, do mass advertising or marketing and pass warm leads along to their downline. One of the major benefits of a network marketing company is that you are in business for yourself, not by yourself: to realize this benefit, you must sign up under the right person.
7. What kind of training and support do they offer? The statement that "The product sells itself" is rarely true. All companies promise training; few deliver the consistent quality that makes training effective. Evaluate the training and the support materials. Look for:
Role playing practice Good scripts Ways sponsors help you to get new leads A variety of quality training tapes
8. How good are the marketing materials? All companies have marketing materials. Some are better than others. The better the materials, the easier it will be to acquire customers and distributors. They should have multi-colored, glossy, up-scale brochures which contain two elements. First, the brochures should stress benefits offered to the customer, explaining why the products/services are right for the buyer. Second, they should convince the customer through concrete evidence that the company is stable, offers low risk to distributors, and has a history of good management. It is, therefore, important to have some third party credibility such as double blind studies or newspaper articles extolling the virtues of the company.
9. What is the compensation plan offered? After investigating the quality of the products or services offered by a company, one of the most important considerations is the company’s compensation plan. Comparing compensation plans from one company to another is difficult. Companies use a myriad of formulas. One way to simplify the process is to ask:
How difficult is it to make it to the top? Do you need 5 good lines (active distributors under you) or will 2 lines do? What do you get by acquiring customers vs. acquiring distributors? Customers, not distributors should be the focus of the company. Thus the compensation plan for selling product/services should be at least as generous as that of bringing in new distributors. Does the company offer non-cash rewards? Are the numbers doable and realistic?
Are you pushed to buy a lot of inventory up front to make a higher commission rate? It’s better to try a small amount of product first, see how you like it, see if other people are interested in buying it before investing in large inventory.
If you are not satisfied with the compensation plan, you or the people you recruit will not stay long with the company. Even if you stay, you may lose people you have invested time and money in to other companies.
10. What is the customer retention rate? When a company pays 50% of its revenue for commissions, if the customer retention rate on a product is 5%, your net long-term commission is only 2.5%. But, when the company pays only 10% payout, if the customer retention rate is 80%, your long-term commission rate is 8%. The customer retention rate is critical. To investigate the retention rate, you can:
Ask the company if its figures on customer retention rate are available. Test the product/services to see if you would use it regularly. Ask the company for names of satisfied customers. Ask for the names and phone numbers of two or three non-repeat customers. Ask if you can call to find why they didn’t continue to use the product or service. Find out what the competition is offering in the same category and compare the prices. Your product doesn’t have to be the lowest for what it offers, if it offers some value that is not offered elsewhere. It also should be marketed well. What other miscellaneous benefits does the company provide?
Some companies provide distributors with the equivalent of the franchises without a franchise fee. They not only provide marketing materials but also management information, tax information and even an accounting system. Find out what in contained in both the distributor or upgrade kits. Many times the upgrade package may be the much better deal even though it is more exclusive.
You can’t promote and sell what you aren’t convinced is the best. If the answers you get to these questions enable you to find and then believe completely in the product or service and its company, you may be among those who find network marketing to be very lucrative.
Upcoming Untold Truth Seminars for Training
Check this list for areas for friends or family members who may want to go. This is an excellent opportunity to learn natural health solutions for some of today’s most pressing health problems.
01/14/06 Fort Worth, TX
01/21/06 Boise, ID
01/21/06 Portland, OR
01/28/06 Espanola, NM
01/28/06 Oakland, CA
01/28/06 Orange Park, FL
02/04/06 Columbia, SC
02/04/06 Oak Lawn, IL
02/04/06 Yuma, AZ
02/25/06 El Segundo, CA
02/25/06 Omaha, NE
Qualifications for NSP Trips
If you were a Manager at the end of December, you are now earning qualifications for this year’s conventions.
The specifics for Rising Star in Salt Lake City are not available yet, but check this link later for details.
Adding Knowledge and/or Titles
In all professions, there are titles with some of them adding a few initials to the end of your name. The field of natural health is not lacking in these and there are several you may want to consider since winter and a new year are a great time to increase your knowledge and build your NSP business at the same time.
Take a look at what’s offered by Tree of Light Publishing, which is Steven Horne’s company. Correspondence and Live Certification Programs
News Within The Family
Most of the family has been too busy with holiday preparations to check in, but I do know that Robin’s in-laws left a few days ago after three weeks in Atlanta visiting from Wales. They were escorted around in great style and enjoyed the wildife at Robin and Steve’s place. We dropped in the day after they left on our way back to Virginia and we weren’t there even an hour till a big wild turkey came out of the woods to check out my new Nature’s Sunshine car. I guess news travels fast in the woods. He kept strutting around the car looking at his reflection and fanning that big tail of his. Even when I went outside to take some pictures, he was too anamored with himself to care about me being there.
John and Roxanne broke out two managers last month.
Nathan and Kelley broke out a manager.
Dianne Frase added a manager also.
Our Website Resources For You
Our website content is not just for customers. Keep in mind you can find answers there for your own customers. Once you have a customer become a Member, they have an account number tying them into you, so you can send them links to our website with information for them to read themselves.
The Herbs Place has years of archived natural health newsletters and over 1200 web pages with content accessed by the search engine. Need to get some information on a product? Visit now.
Success stories for particular health problems show what others have used. They cannot be shown on The Herbs Place due to FTC/FDA laws, so we provide them on The Frugal Life site.
Healthy Pet Corner has years of archived pet newsletters
Online Training and Support
Whether you’re just beginning your NSP business or been doing it a long time, we all need to keep learning.