Tag Archive | "income"

Ask Joe: What is the best way to increase my income by $15,000 a year?

You didn’t say how many units you sell now or how you’re doing, so let’s assume you meant $15k more in the next 7 months.

The math is always first: $15,000 ÷ 7 months means you’ll need an extra $2,142 per month the rest of the year.

If you average $350 in commission, you’d need to sell 6 more per month. Actually, it’s 6 at $357 so you’ll need a bump of $7 to $357 per unit. To earn $7 more at 25% commission, you need to raise your gross $28 per unit.

$28 should be a non-issue. Just use the ‘easy bump close’ (from our 3 Pass Negotiation Process) in your last pass. (Wrap It Up & Final Bump.) As you shake their hand on the deal ask, “My manager said you wouldn’t let $28 bucks stand in the way of getting your new car, was he right?” That’s 50¢ more per month on a 60 month agreement, so you’ll do fine.

Back to the extra 6 units per month. Math again, that’s 1.5 per week, with a lot of different ways to do that.

The easiest way to pull this off, is to sell more of the people you’re already talking to on the lot. The average salesperson talks to 10 people, 8 are buyers, and they only sell 2. Using that math, let’s say a 10 car guy talks to 50 people per month. If 10 is your average, to sell 6 more units, you’ll need to close 32% instead of just 20% of those prospects.

4 easy ways to sell 6 more units…

  • Demo More … 50% who get a good ‘targeted’ demo and presentation on their ‘hot buttons’, buy on the spot.

10 car guys already sell half, and don’t realize it. They only give 40% a quality demo now (4 out of 10), and sell 2.

50 prospects x 40% demo ratio =

20 demos, at 50% closing = 10 sales

50 prospects x 64% demo ratio =

32 demos, at 50% closing = 16 sales

  • Close More … Average closing ratios are 20%. That’s 10 out of 50. To sell 6 more, improve your closing ratio to 32%. 50 x 32% = 16 deliveries.

How? Nothing huge, just go back to page 3 and start improving everything some.

  • Unsold Follow Up … 33% will come back and 67% will buy on the spot.

10 car guys sell 10 and 40 leave. Just get 75% contact info (30). Follow up 30, 10 come back. Deliver 67% of those 10 = 6.7.

  • Or A little of each … Demo just 4 more to sell 2 more units. Improve your closing % by 4% (24%) to sell 2 more. And follow up on just 10 people, 3 will come back and you’ll sell 2 more.

That’s 6 extra units & $2,142 more without breaking a sweat. Or get serious and do all three; improve demos, closing and unsold follow up, and you’ll deliver 18 more.

18 more + 10 you’re selling now would be 28 per month. At $357 per unit plus bonuses, you’d be on track for $120,000 to $150,000 a year.

Tip: plug your own numbers into our calculators so you can really understand your long-term potential from making these ‘no sweat’ improvements. Go to JoeVerde.com/calculators.


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Here’s Where it Pays the Most to be a Small Business Owner

Many small business owners around the country are pretty fed up with Washington, reported the Washington Post.

But for those who actually live in the nation’s capital, there may not be much reason to complain.

Self-employed individuals in Washington, D.C. enjoy a higher median income than their counterparts in the 50 states – and it’s not even close. The median annual haul for District business owners is $91,644, according to new data released Wednesday by the Small Business Administration’s Office of Advocacy. Second on the list is Massachusetts, where the median income for self-employed individuals is $61,434.

Of course, the District of Columbia is comprised of a dense, urban area (compared to the mix of urban and rural areas found in most states) brimming with professional services businesses, which undoubtedly skews the numbers higher. Still, $90,000 is a high median income.

North Dakota ($60,602), New Jersey ($60,089) and Connecticut ($59,067) round out the first five on the list, while Alaska, California, New Hampshire, Rhode Island and Delaware complete the top 10, each with median incomes for small business owners north of $52,000. The median income nationally is $49,363.

Montana’s small business owners make the least, with median annual pay of $38,234. The only other state where self-employed individuals make less than $40,000 a year is Mississippi ($39,953).

The figures come from the SBA Office of Advocacy’s state profiles report, in which the department every year compiles a litany of information concerning the makeup and success of small companies in each state. Here are three other notable rankings from this year’s report.

The survivors: States where the highest percentage of small businesses survived from last year.

  1. Washington state, 87.4 percent
  2. Delaware, 84. 7 percent
  3. Wisconsin, 83.1 percent
  4. Connecticut, 82.1 percent
  5. Utah, 81.8 percent

The exporters: States where small businesses are responsible for the largest share of total exporting value.

  1. Washington, D.C., 78.7 percent
  2. Montana, 70.8 percent
  3. Florida, 68.6 percent
  4. Rhode Island, 63.2 percent
  5. Wyoming, 61 percent

The employers: States where small businesses employ the largest share of the workforce.

  1. Montana, 67.6 percent
  2. Wyoming, 62.3 percent
  3. South Dakota, 59.2 percent
  4. Vermont, 58.9 percent
  5. North Dakota, 58.6 percent

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