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What is a Compelling Event?
A Sales Compelling Event is a customer's business pain that needs to be solved/opportunity that must be captured by a certain date, or else.
In other words, a compelling event has an economic owner, a defined date and is a direct response to a business pressure. The action to deliver a significant business result, either to capture opportunity or to reduce pain. The event itself defines the reason for the economic owner to act now.
Why are Compelling Events important?
Merchants have many compelling events (business pressures and opportunities) that are routinely spread across every calendar year. Some are variable (showing up almost unexpectedly) and some are fixed (consistently and predictably occurring at various date-points).
Compelling events trigger buying decisions - drive funding decisions.
Knowing your way through the compelling events that are driving the funding decisions on the specific deal you are working on, as well as those that affect all of your prospects and customers routinely, allows you to consult them that much more effectively as their Trusted Advisor.
This in turn drives your efficiency on shortening sales cycles and helping more customers get funded.
Fiscal Year-End
This compelling trigger event is actually the U.S. Federal Government’s Fiscal Year-End.
The federal government’s fiscal year defines the U.S. government’s budget period and differs from a calendar year, as it runs from October 1 of the budget’s prior year through September 30 of the current year.
So the current fiscal year (FY2020) is represented by:
October 1, 2019 – September 30, 2020
Why does this matter?
Many businesses that do a lot of work with the U.S. government or depend on revenues from government contractors choose a “fiscal year” over a “calendar tax year.”
The Calendar Tax Year, according to the IRS, is the annual accounting period from Jan 1 to Dec 31 of any given year.
Sole Proprietors and single-member LLC’s must abide by this standard calendar tax year, but Corporations (don’t have to but) can choose to use a fiscal year, which is free to really be any 12-month period.
Many choose Oct 1 – Sep 30.
Merchants and other businesses that generate most of their revenue in spring and summer months will also look to use the fiscal year ending on Sep 30, as it has other benefits as well.
Tax liabilities drive relatively fixed compelling events, happening like clockwork every year, triggering demand for funding.
Like farmers keeping track of the sun and the moon in the sky for their harvests, Funding Pros must keep important trigger dates at top of focus to better execute best timing for follow-ups, engaging in effective talk-tracks and getting deals across the finish line.
The ordinary Calendar Tax Year’s important tax dates are as follows:
- 1st Quarterly Estimated Tax Payment - April 15th
- 2nd Quarterly Estimated Tax Payment - June 15th
- 3rd Quarterly Estimated Tax Payment - September 15th
- 4th Quarterly Estimated Tax Payment - January 15th
Then the usual income tax filing date is April 15th, unless you file an extension, while S-Corporations and Partnerships must have their tax returns done by March 16th.
The extension filing date is typically October 15th.
Covid pushed Q1 and Q2’s estimated tax payments to this past July 15th, and we just passed the September 15th date. Coming up real soon is Fiscal Year-End (9/30).
Tax liability implications for small businesses this year have been greatly impacted by Covid and the government’s associated fiscal response.
Many SMB’s are working with their tax pros now and will need their Trusted Advisor on the funding side to be plugged in and ready to go when the time’s right.
How many of your clients are talking taxes with you right now?
-FundingStrategist
https://fundingstrat.com
https://fundingstrat.com/compelling-event-fiscal-year-end/
