California Bulletin #102
“Group Buy” Technique
#BUSINESS SPOTLIGHT
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🧾 LA Cracks Down on Worker Classification
Effective this week, Los Angeles County is increasing random audits on small businesses under AB 5 — specifically looking at how 1099 contractors are used in cleaning, delivery, and creative services.
💥 What’s happening:
The Department of Industrial Relations (DIR) is teaming up with the EDD to identify misclassification patterns using payroll tax data and Unemployment Insurance filings.
🚨 If your contractors:
Work set hours
Use your tools/systems
Don’t serve other clients independently
...they may be considered employees, not 1099s — triggering penalties.
✅ Action:
Review contracts now
Use California’s ABC test to self-check
Consider using legal staffing platforms (like Qwick or Wonolo) that handle classification correctly
Businesses caught misclassifying can face back pay, insurance penalties, and even criminal charges under CA law.
“Group Buy” Technique Driving Inbound Sales
We’re tracking a clever B2B move some small founders in San Diego and Long Beach are using to spark fast demand:
They offer “group pricing” on services — but only if 5+ businesses commit.
🎯 Example:
A local IT security firm pitched a “compliance package” for $250/month (usually $500), but only if 5 companies onboarded by Friday.
They:
Posted in niche LinkedIn groups
Reached out to Slack/Discord founders
Got 7 clients in 48 hours
Why it works:
It creates urgency without sounding desperate — and taps into “this must be popular” psychology.
✅ Tip: Tailor your service to one use case, and offer the bundle only for 72 hours.
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Book your spot now before they’re gone!
Public Service Contractors Seeing Spike in Summer Gigs
With summer programs starting, multiple California counties (Alameda, Kern, Santa Cruz) are quietly hiring small service contractors — especially those offering:
Youth training
Digital literacy workshops
Mental health programs
Small-scale transportation (shuttles, vans)
These contracts are often below the public bidding threshold (under $50K) and go to local vendors with quick turnaround.
🧭 Tip:
Check your local city or county’s procurement or community development pages
Use the term “summer services” or “community engagement”
Even if you’re not a nonprofit, many of these are open to for-profit businesses
✅ A small media creator in Santa Ana got a $12K gig to document a city-run skateboarding program.
Escape Annual SaaS Traps
A quiet strategy some SF consultants are now advising:
Force SaaS vendors onto quarterly plans — even if they push annual contracts.
Here’s how:
Pause auto-renew before your SaaS billing hits
Contact support and say you’re considering canceling but would stay on a shorter plan
Many tools (even big ones like Notion, HubSpot, Loom) offer unlisted quarterly options to reduce churn
💡 One Fresno founder cut their annual tools bill by 38% just by doing this audit.
You’re not “locked in” unless you act like it.