Sunshine Family News
May 3, 2005 Edition
The content of this 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.
We were blessed to have Charlie and Louise Allred, our sponsors, with us for almost five (5) days! What a joy to spend time with these two. They surprised us with a steel butterfly bench that Charlie made. On the Charleston trip last November, we all saw this gorgeous bench in a store and he had me take some pictures. I guess the rest of us forgot about it, but Charlie began thinking on the project and worked to duplicate the chair.
It arrived with them in Big Red (his Ford F350 truck) and they were here less than one minute when Charlie said he wanted me to see something in the back of the truck. What a surprise! He had drawn out a pattern by hand. Who says he’s not an artist!? Not me!
The bench is gorgeous. See it here with Donna and Charlie on it.
It weighs 250 pounds so it won’t be moved around a lot. I think it’s better than the one in the store because it has a steel base on it to keep it steady and stable on the ground. For comparison, here’s the picture of the original one in the store.
Isn’t Charlie just awesome!?! We are so grateful for all the labor on the bench and while he was here. Charlie’s hands do not remain idle for long. Louise and I put together a 1000-piece puzzle and Charlie whomped Randal in dominoes (as usual ;-). Randal’s looking forward to the TAC cruise to try again.
Sunshine Blessings to Each of You!
Randal and Donna Watkins
Take A Tour of NSP’s Plant
Did you know you can take an online tour of Nature’s Sunshine’s state-of-the-art manufacturing plant? Those of you who are planning to attend the annual convention in Salt Lake City in September will get an up-front-and-personal plant tour, but for those of you who aren’t going to convention this year, this would be a good thing to do.
The more you know about the products you are selling, the more effective and enthusiastic you can be about them. Take the tour.
NSP Product Focus
Thai-Go is definitely taking the marketplace for mangosteen juice. It is also the #1 selling product that Nature’s Sunshine has EVER had! Sales have topped all others they’ve had in the last 33 years.
If you’re not sharing the information about Thai-Go with others, you’re missing out on a great business opportunity and people around you are missing out on a great health product.
If you’re not using Thai-Go yourself, that would be your first step. Read more about it, order it, drink it, and track your progress. Then you will have your own personal "success story" to share with others. Information on Thai-Go
See other success stories that you could share for customers having a specific health issue.
Sharing Sunshine Tips – What’s Working for You?
Stocking Your Product in Retail Businesses
As you are shopping, having your hair done, getting a massage, or taking your dog to the groomer, have you thought about products that you think would sell well at the places you shop and do business? Some of our managers and distributors are building their Nature’s Sunshine business by asking to sell products on consignment.
That means you purchase them, they stock them in their business, and you share the profits. You decide how much they have of the retail profit since you invested the money for the inventory. Don’t forget to consider that you will receive bonus commission on the order when you calculate how to make the deal.
You use and love Tei Fu Lotion and know that others would benefit from it also. Mention it to the massage therapist. They see a lot of people who are in pain. Tei Fu can make a big difference for these folks at home. You could type up an information sheet on whatever product you pick and insert it into one of your herb brochures (that we’ll be happy to get to you in a PDF format to print). Put the brochures with your contact information with the product on the counter and check back for reorders. If things go well, the business owner may be wanting to know more about ordering NSP herself.
Growing Your Business
Six Tips for Building a Successful Home Page
By Andrew Beebe, CEO, Bigstep.com and Terri Lonier, CEO, Working Solo, Inc.
As successful business owners know, you only get one chance to make a positive first impression with a customer. In fact, a recent study from the Technical Assistance Research Program found that 91 percent of customers who have a bad first encounter with a business never return. While that first impression in the offline world may come from any number of sources, in the online world, there’s only one source: your homepage.
With some simple planning, your homepage can deliver your business message with impact. Here are six tips to guide you.
1. Make the page unique.
To do this, first use a search engine to find Web sites of businesses similar to yours:
What do these homepages look like? What products, services, and specials do your competitors’ Web sites offer? How can you distinguish your homepage from theirs? What’s unique about your company’s products or services?
Make sure you display the most popular products and services and the most exceptional facets of your business front and center.
2. Keep the design simple.
Don’t overload your homepage with images, colors, and different sizes of text. Large graphics make your Web pages download slowly over a modem and visitors won’t wait to see what’s on a slow-loading page. Filling a page with different images, colors, and many different font combinations will confuse people who visit your Web site and make them unlikely to spend much time there.
3. Create an easy-to-navigate Web site.
Place navigation links where people expect to find them, and make sure all pages of your Web site have a consistent set of navigation links. (Using an integrated ebusiness service with good design templates makes this kind of decision a snap.) At the least, make sure every page in your Web site includes a link to your homepage.
4. Keep the content fresh.
To show your Web site visitors that your site is worth visiting often, update your homepage frequently — with special offers, information on new products and services, as well as changes to your business operations. Including the date your Web site was last updated at the bottom of your homepage lets visitors know that your Web site is constantly evolving. Fresh content lends credibility to your Web site.
5. Promote your business — online and offline.
List your Web site in the major search engines, and take the time to index your online business with compelling keywords that describe your business. If you use an integrated ebusiness service, these firms will submit your Web site to search engines for you, based on your individual business needs. Also, include your Web address on all your advertising, letterhead, business cards, brochures, and even shopping bags.
6. Connect with your customers.
Make it easy for customers to learn more about your business when they come to your homepage:
List your email address as a link, and create a small footer on every page with information such as your business telephone number, fax number, or address if appropriate. Create a sign-up box that invites people to subscribe to your mailing list so you can send email updates about your Web site to keep them coming back.
With these tips and careful planning, you’ll be well on your way to creating a homepage that supports your business goals and makes a lasting impression.
Andrew Beebe is CEO of Bigstep.com (www.bigstep.com).
Terri Lonier is the author of Working Solo (www.workingsolo.com) and host of the annual SOHO Summit, an executive forum for companies targeting the small business market.
Copyright 1999, 2000 Bigstep.com. This article originally appeared on www.score.org, in partnership with SCORE (Service Corps of Retired Executives).
Business Tax Tips
To Incorporate or Not
By Sandy Botkin, CPA Esq.
Perhaps the single biggest question that I get as a tax lawyer is: "Should I start off as a corporation?" The answer is clear cut…..It depends on a number of factors. Accordingly, this article will serve as a short summary of your choices.
Without question, this is the simplest form or entity around. There is no federal or state unemployment taxes, there is no double tax problems, there are no meetings, such as stockholder meetings, that need to be held, there is no employment number required from the IRS unless you have employees, and the only form that IRS requires is form Schedule C with your Form 1040 that you are filing anyway.
Sole proprietorships also have the advantage of being the best entity to use any losses incurred. If you have losses in your business, which is usually the case in the first year or two, these losses can be used against any form of income on your tax return such as wages, interest, dividends, pensions, rents etc. If the loss exceeds your income, you can carry back all business losses two years or carry forward business losses twenty years and offset the next twenty years of income.
Moreover, sole proprietorships allow some fringe benefits such as 60% deduction for medical insurance that the owner pays for. This can be increase to 100% by hiring a spouse.
With all these advantages, you would think that this should be the entity of choice; however, there are some drawbacks which are substantial.
The major drawback is liability. Sole proprietors have unlimited liability in their business. Although much of the liability can be mitigated with insurance, I believe that any business that has any substantial potential liability should not be a sole proprietor.
TIP: If you have any employees, you have substantial liability because all employers are liable for acts of their employees. Thus, if you have any employees, you should NOT be a sole proprietor.
If however, you don’t have employees and have little liability such as that found with most multi level businesses, this might well be the entity of choice.
The next level in complexity is a partnership. This involves two or more people who are sharing profits in a venture. Here you are required to file a partnership tax return. Moreover, since most partnerships pay salaries to either the partners or staff, you will need a federal ID number and be subject to federal and state employment tax on salaries. Partnerships, however, are pass through entities as sole proprietors. Thus, there is no separate tax at the partnership level and all income and losses pass through to the partners as if they earned them individually.
Unlike sole proprietors, however, losses are limited to the basis in the partnership. Basis is what cash or property you contributed and all loans that you guaranteed or made to the partnership.
The big, big disadvantage is that you are unlimitedly liable for partnership debts and for the acts of your partner. This is a major disadvantage. In fact, it is such a problem that I do not recommend that most people ever become partners.
Regular C Corporation:
Corporations are separate entities that require their own tax return to be filed (IRS form 1120). They are taxed separately on all monies that are not paid out in expenses or bonuses or salaries. If the funds are paid out again in dividends, you could be taxed again. Thus, there is a potential of double taxation.
Corporations are very formal beasts. In fact, based on complexity and formalities involved, they are the biggest headache of all. You must have yearly stockholder meetings even if you are the only stockholder, and yearly Board of Director meetings. You must have separate bank accounts, and you must get an employer ID number from both the IRS and the state. In addition, some states impose some strict taxes on corporations. For example, in California, you pay what their normal tax rate would be or $800 whichever is higher. Thus, if you have a loss, you end up paying California $800. How’s that for an anti-business state!
Corporations, however, do have some advantages. You can deduct 100% of your health insurance premiums and 100% of any disability insurance premiums, which are tax-free benefits to the employees. They also can accumulate (with planning) $50,000 per year for future business needs and have this amount taxed at the 15% rate. If you are in the 40% tax bracket, this is a substantial savings. Probably the main advantage, however, is limited liability. If you maintain the formalities, you liabilities are generally limited to the assets of the corporation with the exception of malpractice suits. In malpractice, the owners may be unconditionally liable regardless of the entity. Corporation also can have many different classes of stock, which is great for estate planning and for raising capital.
TIP: Because liability protection is so important in the decision whether to incorporate, I almost always recommend some form of corporation or LLC if there are employees in the business. As noted above, employers are liable for the acts of their employees: thus, employees are walking liability machines. If you have any employees, you must limit your liability.
These are hybrids of sole-proprietorships and corporations. The main income and losses flow through to the owners; thus, eliminating most of the double taxation problem. S corporations also limit liability just like regular corporations and are subject to the same formality requirements. They also have two other major advantages:
First, the stockholders are taxed on the earnings based on their ownership. Thus, you can have your 17 year old son or daughter taxed on their share of the dividends.
Second: how would you like to eliminate some of your social security taxes? You can with an S corporation. Lets use the following example to illustrate what to do:
Sam earns $70,000 as a sole proprietor, net of his expenses. He pays income tax on the $70,000 and pays 15.3% social security on the $70,000, which is about $10,600 alone! However, if he forms an S corporation and pays himself a reasonable salary of $35,000 and pays the rest in a form of a dividend, he only pays social security on the salary and not the dividend. Dividends are not subject to social security. He’s saving 15.3 % on $35,000,which is a $5,355 saving! This technique can not be accomplished with any other entity.
With all these advantages, one would think that S Corporation would be the ideal entity. However, there are some limitations and disadvantages. There can be no more than 75 stockholders who, for the most part, must be individuals. Moreover, S corporations can’t have several classes of stock; thus, limiting estate planning and reduces the chances of raising capital.
S Corporations have the same formalities and paper work as C Corporations. Certain fringe benefits, however, are not available to S Corporation as they are to C Corporations and even sole proprietorships. For instance S Corporation can only deduct 60% of health insurance and they can not deduct all of their disability insurance premiums.
One final item to note is that with both S corporations and partnerships, you can deduct any losses up to your basis in the stock or partnership. However, with partnerships, any debt that you guarantee is added to your basis. This is NOT true with S corporations. You must contribute property, money or load the money to the corporation, not guarantee a debt.
Limited Liability Companies (LLC):
This is the newest addition to the business party, being a fairly recent innovation. This is like a sole proprietor or partnership, however, there is limited liability like that of a corporation. You can even elect to be treated as a corporation. If there is only one owner, you would file and be taxed as a sole proprietorship. If there are two or more owners, you are taxed as a partnership. LLC work well to both limit liability and not have the formalities of corporation ownership.
One final point is where to incorporate. If you ask five accountants, you will get five different answers. I personally like incorporating in Nevada. Contrary to what most people will tell you, this will not save you taxes. However, Nevada has some strong laws against piercing the corporation for liability protection. In addition, there are some extra privacy considerations available in Nevada that most other states don’t have.
TIP: One big issue of corporations and LLCs is that of multiple owners. What happens if you stop getting along? The result has been some of the most expensive and protracted legal battles around. Be sure to set-up legal agreements ahead of time to handle this possibility.
In short, the way you start up your business can protect you from liabilities and make your life a lot less taxing!
IrsTaxForms.com Copyright 2000
News Within The Family
Robin Sockness Snelgrove:
Robin’s new website (www.banditsbuddies.com) she launched in March is getting hot! It’s the heartworm time of the year and she’s getting a lot of traffic. She had her highest month ever in April: 6900.00 QV. That’s from selling "5 little bottles of herb" as Robin says. She sticks with her focus and it just grows. Not that people don’t order other things as they learn more about NSP, but she gets to specialize in heartworm and earn a good income. She’s going to be cutting down at her full-time job to a 4-day work week and gradually ease into NSP full-time. She’s been refining how she works with people because it’s becoming impossible to do as much one-on-one, so content for the site is a priority. Her next goal is the China trip in 2006. I know she’s going to make it! Congratulations, Robin!
John and Roxanne Howlett:
Congratulations, Divisional Managers! They’ve been building managers monthly and in April, they rose to the level of Divisional Manager (which also helped to put us back at that level). John and Roxanne will soon be seeing their (first) baby which is about due to be born. They’ll be missing the TAC Baltic Cruise, but in reality, they won’t be missing anything with such a precious gift from God. I’m sure there will be pictures, so I’ll get some on our online gallery for you to see in the next issue.
Send me your news for this segment of the monthly newsletter.
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