How are you “Thinking” about Tomorrow?

I posted this story a year ago, and it is still appropriate for today…2010 will bring new possibilities to all of us…let’s focus on the positive for a better tomorrow!  I found this story a while back about attitude and how it can shape our lives…I don’t know who told this story originally-I definitely appreciate the lesson it taught me, my hope is it helps you or someone you know.

The Hot Dog Vendor

There was an elderly man who had a profitable little business selling hot dogs on a busy street corner in a major city.  He wasn’t particularly well educated, but he sold great hot dogs and his customers loved him.

During the early morning rush hour, he’d wheel his mobile hot dog stand to position it near the exit of the central railway station in town.  A year ago, he’d added a bacon and egg roll to his menu and sold scores of them to the breakfast crowd every day.  At lunchtime, he’d move his stand to a popular park where he had lines of regulars.

In the afternoon he’d be back at the station entrance and then later, most nights he knew a great spot near a nightclub where patrons rushed him off his feet.  He had even installed special lighting and flashing neon sign.  Even people driving by would stop.

He worked hard for years and had done well enough to put his only son through the university and later became a management consultant with a large firm.

One day his son warned him that a recession was on the way.  The old man asked his son what this meant.  Being an educated man his son gave a very detailed explanation of how the recession would severely impact every person in the community, particularly small business people like his father.  There would be enormous unemployment; people would not be able to afford to spend money as they did now.  He painted a gloomy picture of the future and warned his father that it would be wise to cut back on his expenses and “tighten his belt” financially and prepare for the worst.  The old man didn’t know about the economy or interest rates, but he trusted his son.  After all, he was an educated man.  Recession mentality kicked in…

Buy or sell
Buy or sell

The old man began to cut back on the quantity of sausages and bread rolls he bought.  He didn’t want to get caught with stale rolls as business began to drop off.  But it was hard to judge and some days he actually ran out of sausages and rolls earlier than he normally would.  So he went home early and spent more time worrying about this recession that was coming.

Soon he knew that what his son had said was right.  He noticed that his earnings were indeed falling.  This depressed him more and so he tended to get out of bed later each day.  After all, why get to the station so early when obviously more people would be eating at home rather than spending money on breakfast in the city.  He decided that his bacon and egg rolls were too expensive for most people now.  After all, they were twice the price of a hot dog, so he cut them from his menu and his sales continued to plummet.

Wow, his son was right, this recession was hitting hard!

He decided to save more money and not replace the batteries that powered his neon sign and lights at night.  Now, because he was in the dark, fewer people bought from him and soon he decided that it wasn’t even worth his time setting up at night.  Eventually, he decided to sell off his equipment and his trolley.  He was in luck though because the woman who bought his trolley didn’t seem to know how bad business was, or how severe the recession was going to be.  He managed to unload the trolley for more than he thought he would get.  Now day after day he stayed at home, depressed, and occasionally his son would visit him and they would discuss how bad the recession was, and how lucky the old man had been to have an educated son who had warned him in advance about this terrible recession.

So what’s the moral of this story?

Recession mentality starts in one’s own head. With our current state of affairs – Tough times are here and if you believe that times will soon be tough for you, then they will be.  It may be tough for you already.  Like the old man in the story, you’ll start to change your successful behavior patterns and replace them with less resourceful habits.  You’ll sleep in later, take longer lunch breaks, make fewer phone calls, generate less e-mail, and go home earlier.

It needn’t be that way….innovation

Someone else is out there continuing to do what they have been doing and possibly doing a few extra things.  Dig deep, research, make an “educated” decision on what works for you – don’t stop..there is always light at the end of the tunnel if we believe it’s there..BE INNOVATIVE.

Begin the process of working ON your business not IN your business.  Create a “Blueprint for Tomorrow” to enable you business to continue regardless of the recession, you, or any family member that maybe assisting you.  It’s key to plan for our success tomorrow!  Contact me and let’s plan tomorrow’s success!

We become what we think of ourselves and our success..

Celebrate TODAY – STAY positive about TOMORROW.

January 4, 2010  Tags: , , , , ,   Posted in: Uncategorized  No Comments

Let’s Start the New Year Right – What If?

Question buttonHappy New Year to All….I hope this new year brings you much happiness and success.  It is truly the time to evaluate your business and set goals.  It’s a great time to start thinking about What If!

  • What if your key employee quits tomorrow?
  • What happens if someone brings a lawsuit against your company?
  • What if you become ill and can’t work for a week…or a month…or worse, ever?

These are the sort of questions that could keep any entrepreneur up at night. And these are precisely the questions that Nate Sachs, founder of Blueprints For Tomorrow™ aims to resolve.

Sachs has been working in the insurance business for 30 years. In that time, he has worked with hundreds of business owners and learned about their concerns, obstacles and dreams. He has always worked to provide better service to his clients, which currently number about 600, and in that vein he recently changed the focus of his business from transactional to advisory.

He explains, “It is hard to get business owners out of their ‘bunkers’ to work on their businesses instead of in their businesses.”

Sachs’ trademarked the Blueprints For Tomorrow program was his solution. It entails a series of 11 blueprints, which are plans that protect and maintain a business and its owner. The 11 blueprints are based on 11 key worries of business owners: sale of business; internal transition; passive ownership; premature death; disability; retirement; wealth accumulation and asset protections; key employee retention; legacy planning; orderly estate distribution; and prevention of misspent life insurance dollars.

Sachs says, “We want to help business owners protect what they have worked so hard to create, give them an exit strategy, and basically eliminate worries about potential ‘what ifs’ so they can sleep at night.’”

Sachs program runs by charging a flat fee per blueprint. He says, “We don’t charge hourly rates and will work with a company for as long as it takes to create a blueprint that resolves and existing or potential concern.”

Every company does not require the same combination of blueprints, and to determine an individual company’s needs, Sachs begins with a complimentary Starter Session that includes a series of simple exercises that illuminate a business owner’s needs. All sessions are generally scheduled in 45-minute doses so as not to overwhelm or take up too much of an entrepreneur’s precious time.

The ultimate goal is to change the mindset of business owners so they can work “on” their business instead of “in” their business. What Sachs means by that is that owners generally concern themselves with maintaining a company’s day-to-day operations, rather than looking at the big picture and taking steps to “bullet proof” them and their companies against possible future misfortunes.

The big picture is what Sachs’ blueprints control. They take away any worry owners have by addressing those big picture problems, thus, giving time back to them to again concentrate on the day-to-day operations and pursue other interests..

I am a Blueprints expert and can assist you with this process…Why not contact me TODAY so that we can build for your TOMORROW…I specialize in helping business owners just like you!!

January 2, 2010  Tags: , ,   Posted in: business owner  No Comments

Transfering A Business To Insiders

Business shaking handsSelling your business is an important financial transaction that requires a well developed exit strategy. Many owners view their business as much more than an asset. They’ve poured their hearts and souls into it. Maintaining the established business culture motivates them to sell to insiders. In fact, 95% of all sale transactions involve insiders, who may include co-owners, family members, managers and key employees. The insider group that is buying the business is called a key employee group(KEG).

There are four ways to transfer a business to insiders:

1. LONG-TERM INSTALLMENT SALE. The owner holds a promissory note, signed by the KEG, with installment payments over seven to 10 years. The note is secured by the assets and stock of the business and the buyers’ personal collateral, such as a second mortgage or bank loan. Little or no money changes hands at closing. If the KEG does not maintain the company’s profitability; however, the owner might not receive the purchase price.

2. LEVERAGED MANAGEMENT BUYOUT. A leveraged buyout is an attempt to purchase the business with borrowed money. This arrangement is ideal when the KEG can operate the business without the owner’s input and the company has a stable cash flow and a solid, tangible asset base. This method rewards key employees and positions the company for growth, while minimizing or eliminating ongoing risk.

3. EMPLOYEE STOCK OPTION PLAN (ESOP). An ESOP is a tax-qualified program that must invest primarily in the company’s stock. The company’s contributions to the ESOP are tax deductible and tax free to the ESOP. In an ESOP arrangement, the owner is largely cashed out of the business, and perhaps carries only a portion of the purchase price of the stock sold to the KEG.

4. MODIFIED BUYOUT. Most owners prefer a modified buyout. An owner makes a pool of non-voting stock (about 40% of total ownership) available for current and future purchases by the KEG. Employees purchase stock via a stock purchase agreement. After the employees pay for the stock (usually 3 or 4 years), the owner can decise to:

• Sell the balance of the company to key employees at fair market value for cash

• Sell to an outside third party

• Continue to own the company.

The advantages of a modified buyout are:

• Acquiring part of the company at a reduced cost rewards and motivates employees.

• Trusted and knowledgeable key employees will receive the entire business.

• Owner receives the company’s fair market value.

In a modified buyout, the owner does not receive the entire purchase price for three to four years, and usually remains active in the business until the initial employee buy in is complete. The modified buy out is a win-win situation for the buyer and seller because the low initial value allows a buy out with future cash flow, reduces taxes, provides an incentive and sets up a low price for the eventual cash buyout.

Whatever method the seller chooses, the objectives are to maximize the income from the sale and minimize the value of the business to reduce the seller’s capital gains taxes on the sale. It also is critical to provide an “out” so if payments cease, the business can be sold to an outside party.

Leaving behind a self-sustaining company is the epitome of stewardship. When the transfer in final, sellers must accept that the new owners will run the business their own way. The seller may feel sad and should develop outside interests – whether personal or professional – to keep occupied. The sale marks a new beginning for the seller and the buyers of the business.

I specialize in helping my clients with these types of things…if you want to learn more…contact me

December 7, 2009  Tags: , , , , , , ,   Posted in: business owner  No Comments