Ultimately, every business needs optimal profit margins if it wishes to succeed. 

Juicing your profits isn’t a matter of doing any one thing, but rather it encompasses a number of potential actions: Lowering your cost of goods and of customer acquisition, improving your conversion rates, boosting average order value, and much more.

An oft-overlooked strategy to improve business profitability is choosing the right legal structure for your company. 

There’s not necessarily one right answer here, but for most outside sales businesses it’s the Limited Liability Company, or LLC. As you launch your own outside sales business, it’s helpful to know what an LLC is and how it can pave the way to enhanced profitability.

What does it mean to register your outside sales company as an LLC?

To begin with, understand that any time you start generating income on the basis of self-employment, the government automatically categorizes you as a Sole Proprietor. 

You’ll be categorized in that way unless or until you register as an LLC, Corporation, or some other business type.

There’s nothing wrong with Sole Proprietorships, of course, though this business structure does have some built-in limitations. For example, it’s challenging (though not impossible) for Sole Proprietors to administer payroll or to file income taxes.

Registering as an LLC helps you address some of these problems. That’s largely because LLCs actually establish a new business entity. No longer are you and your business interchangeable. Instead, you and your business are distinct. Your assets can be divided into personal and business columns, with a clear line of separation between them. Same with your liabilities.

This matters for a bunch of reasons, not least personal wealth protection. Simply put, when you run an LLC, you can keep your personal assets off the table when creditors come knocking, or when you’re served with a lawsuit. That’s an important level of risk mitigation, especially in a field like outside sales, where the environment can often be fairly litigious.

Now let’s drill down on the question of how an LLC helps you create a more profitable sales company. There are plenty of advantages that the LLC format offers, but here are a few of the most significant.

One of the most important hallmarks of a profitable business is adaptivity. 

Simply put, you’ve got to be nimble, ready to react to any changes in your industry or in the regulatory environment. This is a key concern for outside sales companies, as laws regarding who does or does not constitute an outside sales employee are always changing.

LLCs are designed to be adaptive, light on their feet, easy to change with the times. 

There’s a ton of built-in flexibility with regard to how you file taxes, how you structure your business, and more. All of this helps you respond to external changes, pivoting when necessary to optimize business profits.

Want to know how the very best sales leaders achieve success? Check out this blog featuring sales experts such as John Barrows, Steve Benson, and Colleen Stanley who provide their top sales growth strategies!

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Every business faces risk, making it essential to be proactive about preserving profitability.

Risk mitigation is an area where the LLC format shines. Again, one of the main benefits of the LLC is that it allows you to keep your business assets and liabilities in one pot, and to safeguard your personal assets and liabilities elsewhere. This allows you to protect things like your retirement account or family bank account, making it possible for you to invest in your business more confidently.

Another important characteristic of profitable businesses is credibility.

Registering your business as an LLC requires you to complete some legal due diligence, making it clear that your business is serious and above-board. In other words, simply gaining LLC status helps you convey to your customers, partners, and potential investors that your business is professional and legit. 

Whether you’re looking to sell more products or to raise capital, this level of credibility is key. And certainly, for outside sales managers, conveying a sense of professionalism is vital for earning customer trust.

Listen to this Outside Sales Talk podcast episode with best selling sales author Shari Levitin to discover how you can sell with authenticity and build trust with anyone!

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If you’re an outside sales business with a team of reps working daily in the field, incorporating a sales route planner such as Badger Maps is a must.

Badger Maps allows sales reps to automatically plan, route, and maximize their time in the field, cutting down driving time by 20%.

With capabilities such as route optimization, lead generation, map visualization, and automated data gathering from the field, Badger Maps helps field sales teams save time on their daily planning, maintain better relationships with customers, and get organized.

Sales-specific features like follow-ups and advanced reporting allow you to keep track of key customer information and be proactive about keeping closely connected with important accounts.

You can add a date for your next follow-up appointment, and set an appointment reminder that will automatically sync to your CRM while you’re in the field. Sales teams have reported that they sell 22% more and drive 20% less when using Badger Maps, in fact, the average team of 10 reps sells $936k more the year they start using the app.

Badger Maps can also allow sales teams to mobilize their CRM, providing instant access to important customer information directly from the field. 

You can also enable a two-way, real-time native integration with the most popular CRMs such as HubSpot, Microsoft Dynamics, Salesforce, Zoho, NetSuite, Insightly, and many more.

Additionally, field sales teams increase their CRM usage by 50% when using Badger Maps.

If you're looking for a route planner tool that you can use with your outside sales business, look no further than Badger Maps. 

Badger Maps reduces sales reps’ average drive time by 20% and frees up an average of 8 hours a week. 

Sign up for a free trial today or schedule a demo to see for yourself!

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There are a few steps required to start an LLC. Note that some of the specifics can vary from state to state.

There are some legal parameters that shape LLC names. For one thing, you have to choose a name that isn’t already in use by an LLC in your state. It’s also important to choose a name that includes either LLC or Limited Liability Company, conveying to customers and investors what type of business you’re running. (See previous point about credibility!)

Every LLC is mandated to choose a Registered Agent. This can be either an individual or an institution, charged with receiving legal and tax documents on your behalf. Make sure you choose an Agent who has a physical mailing address in your state.

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There are a couple of documents you’ll want to have in place to register your LLC. First is the Operating Agreement, which is like a blueprint or charter for your company. Use it to denote how you'll divide profits, how you’ll split managerial duties, and more.

This is the document that you’ll file with your state to actually create the LLC as its own legal entity. When you file, you’ll also need to pay a nominal fee. Depending on the state you’re in, this could be anywhere from $15 to $300.

You’ll ultimately need to get an Employer Identification Number, which will allow you to process payroll and file your income taxes. If you’re a US resident then you can claim your number for free from the IRS.

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Be sure you create a business bank account that’s not linked with your personal checking or savings account.

Depending on the complexity of your outside sales organization, you may or may not need the guidance of a trained LLC coach. Here are some of the best LLC services available right now.

As you consider making your outside sales business more profitable, there are a number of steps you might take. Don’t overlook the potential of registering your company as an LLC!

Author Bio: Amanda E. Clark is a contributing writer to LLC University. She has appeared as a subject matter expert on panels about content and social media marketing.